FuboTV Inc. 10-K

Item 9A. Controls and Procedures. A. Limitations on effectiveness of controls and procedures In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. B. Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Annual Report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2021, our disclosure controls and procedures were effective at the reasonable assurance level. C. 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, 2021, management completed an assessment of the Company’s internal control over financial reporting based on the 2013 Committee of Sponsoring Organizations (COSO) framework. Based on that assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2021. KPMG, our independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting, which is included below. 62 D. Attestation Report of the Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors fuboTV Inc.: Opinion on Internal Control Over Financial Reporting We have audited fuboTV Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements), and our report dated February 28, 2022 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the 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 effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP New York, New York February 28, 2022 63 E. Changes in Internal Control over Financial Reporting Except as described below, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. F. Remediation of Material Weaknesses In our Annual Report on Form 10-K/A for our fiscal year ended December 31, 2020, management identified material weaknesses in our internal control over financial reporting with respect to accounting considerations for non-routine transactions and for business combinations and the allocation of consideration to the acquired assets and assumed liabilities. During 2021, management took the necessary steps to remediate these material weaknesses. In 2021, the Company consummated the acquisitions of a sports betting and interactive gaming company, a television streaming company based in France and an AI-powered computer vision platform with patent-pending video recognition technologies based in Bangalore, India. Management took steps to address the internal control deficiencies that contributed to the aforementioned material weakness relating to non-routine transactions, including: ● Extensive financial and legal due diligence performed by various members of the Company and outside legal counsel. Board of Directors reviewed the strategic business case and formally approved the transaction; ● Key model assumptions were supported by detailed documentation of the reasonableness of the assumptions used; ● Evaluated the competency of the valuation specialist engaged to determine the fair value of specific accounts on the opening balance sheet; ● Existence and completeness of assets acquired and liabilities assumed as of the closing date were determined through specific procedures; ● Comprehensive technical accounting memo was prepared that documents the applicable accounting for business combinations; and ● The income tax impact of the acquisition was assessed and documented. During 2021, we also implemented the following for the aforementioned material weakness relating to internal controls over financial reporting, including: ● Hired additional accounting personnel with appropriate GAAP technical accounting expertise; ● Designed additional controls around identification, documentation, and application of technical accounting guidance with particular emphasis on complex and non-routine transactions. These controls 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; ● Hired an experienced tax specialist and implemented specific procedures in the review of tax accounting, designed to enhance our income tax controls; and ● Continued to work with the third-party provider to strengthen our internal controls for compliance with the Sarbanes-Oxley Act. Based on the foregoing remediation measures taken during 2021, management has determined that the material weaknesses in internal control over financial reporting have been remediated as of December 31, 2021. Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not Applicable. 64 Part III Item 10. Directors, Executive Officers and Corporate Governance. Our board of directors has adopted a written Code of Business Conduct and Ethics applicable to all officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of our Code of Business Conduct and Ethics on our investor relations website under the Governance tab at https://ir.fubo.tv . In addition, we intend to post on our website all disclosures that are required by law or the NYSE listing standards concerning any amendments to, or waivers from, any provision of our Code of Business Conduct and Ethics. The information contained on our website is not incorporated by reference into this Annual Report. The remaining information required by this item will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders, and such required information is incorporated herein by reference. Item 11. Executive Compensation. The information required by this Item 11 will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders and such information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by this Item 12 will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders and such information is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by this item will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders, and such information is incorporated herein by reference. Item 14. Principal Accountant Fees and Services. The information required by this item will be included in our definitive proxy statement for our 2022 Annual Meeting of Stockholders, and such information is incorporated herein by reference. 65 PART IV Item 15. Exhibit and Financial Statement Schedules (a)(1) Financial Statements. The following documents are included on pages F-1 through F-40 attached hereto and are filed as part of this Annual Report on Form 10-K. Reference is made to the Index to Consolidated Financial Statements on Page F-1. (a)(2) Financial Statement Schedules. All financial statement schedules are omitted because the information called for is not required or is shown either in the consolidated financial statements or in the notes thereto. 66 (a)(3) Exhibits. The following is a list of exhibits filed as part of this Annual Report on Form 10-K: Incorporated by Reference Filed / Furnished Herewith Exhibit Number Exhibit Description Form File No. Exhibit Filing Date 2.1 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 3/23/2020 3.1(a) Articles of Incorporation dated February 20, 2009 S-1 333-176093 3.1(i) 8/5/2011 3.1(b) Articles of Amendment to Articles of Incorporation dated October 5, 2010 S-1 333-176093 3.1(ii) 8/5/2011 3.1(c) Articles of Amendment to Articles of Incorporation dated December 31, 2014 10-K 000-55353 3.1(iii) 3/31/2015 3.1(d) Articles of Amendment to Articles of Incorporation dated January 11, 2016 8-K 000-55353 3.1 1/29/2016 3.1(e) Certificate of Designation of Series A Preferred Stock dated June 23, 2016 8-K 000-55353 4.1 6/28/2016 3.1(f) Certificate of Designation of Series B Preferred Stock dated June 23, 2016 8-K 000-55353 4.2 6/28/2016 3.1(g) Certificate of Designation of Series C Preferred Stock dated July 21, 2016 8-K 000-55353 4.1 7/26/2016 3.1(h) Second Amended Certificate of Designation of Series C Preferred Stock dated March 3, 2017 8-K 000-55353 3.1 3/6/2017 3.1(i) Articles of Amendment to Articles of Incorporation dated October 17, 2017 8-K 000-55353 3.1 12/5/2017 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 8/6/2018 3.1(k) Articles of Amendment to Articles of Incorporation dated September 9, 2019 8-K 000-55353 3.1 9/11/2019 3.1(l) Articles of Amendment to Articles of Incorporation dated March 16, 2020 8-K 000-55353 3.1 3/23/2020 3.1(m) Certificate of Designation of Series AA Convertible Preferred Stock dated March 20, 2020 8-K 000-55353 3.2 3/23/2020 3.1(n) Articles of Amendment to Articles of Incorporation dated September 29, 2016 10-Q 000-55353 3.1(n) 7/6/2020 3.1(o) Articles of Amendment to Articles of Incorporation dated January 9, 2017 10-Q 000-55353 3.1(o) 7/6/2020 3.1(p) Articles of Amendment to Articles of Incorporation dated May 11, 2017 10-Q 000-55353 3.1(p) 7/6/2020 3.1(q) Articles of Amendment to Articles of Incorporation dated February 12, 2018 10-Q 000-55353 3.1(q) 7/6/2020 3.1(r) Articles of Amendment to Articles of Incorporation dated January 29, 2019 10-Q 000-55353 3.1(r) 7/6/2020 3.1(s) Articles of Amendment to Articles of Incorporation dated July 12, 2019 10-Q 000-55353 3.1(s) 7/6/2020 3.1(t) Articles of Amendment to Articles of Incorporation dated August 10, 2020 8-K 000-55353 3.1 8/13/2020 3.1(u) Articles of Amendment to Articles of Incorporation dated September 29, 2020 S-1 333-249783 3.1(u) 10/30/2020 3.2(a) Bylaws of the registrant S-1 333-176093 3.2 8/5/2011 3.2(b) Amendment to the Bylaws of the registrant dated June 22, 2016 8-K 000-55353 3.1 6/28/2016 67 3.2(c) Amendment to the bylaws of the Company dated July 20, 2016 8-K 000-55353 3.1 7/26/2016 3.2(d) Amendment to the bylaws of the Company dated September 13, 2020 S-1/A 333-243876 3.2(d) 9/15/2020 4.1 Form of Common Stock Certificate 10-K 001-39590 4.1 3/25/2021 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 7/6/2020 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 2/2/2021 4.4 Form of Note, representing fuboTV Inc.’s 3.25% Convertible Senior Notes due 2026 (included in Exhibit 4.3) 8-K 001-39590 4.2 2/2/2021 4.5 Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 10-K 001-39590 4.5 3/25/2021 10.1† fuboTV Inc. 2015 Equity Incentive Plan 10-Q 000-55353 10.2 7/6/2020 10.2† Form of Stock Option Agreement under the fuboTV Inc. 2015 Equity Incentive Plan 10-Q 000-55353 10.3 7/6/2020 10.3† fuboTV Inc. 2020 Equity Incentive Plan, as amended 8-K 001-39590 10.1 12/18/2020 10.4† Form of Stock Option Agreement under the fuboTV Inc. 2020 Equity Incentive Plan, as amended * 10.5† Form of Restricted Stock Unit Award Agreement to the fuboTV Inc. 2020 Equity Incentive Plan, as amended (standard) * 10.6† Form of Restricted Stock Unit Award Agreement to the fuboTV Inc. 2020 Equity Incentive Plan, as amended (key employees) * 10.7† Vigtory, Inc. 2020 Equity Compensation Plan, as amended, and related form agreements S-8 333-253951 4.1 3/5/2021 10.8† Form of Indemnification Agreement by and between fuboTV Inc. and its directors and officers 8-K 000-55353 10.2 4/7/2020 10.9† Employment Agreement, by and between David Gandler and the Company, dated October 8, 2020. 8-K 001-39590 10.1 10/14/2020 10.10 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 3/3/2021 10.11 fuboTV Inc. Outside Director Compensation Policy 10-K 001-39590 10.21 3/25/2021 10.12 Consulting Agreement by and between the Company and Ignacio Figueras dated as of November 25, 2020 10-K 001-39590 10.23 3/25/2021 10.13† Amended and Restated Transition Agreement, dated as of December 31, 2021, between fuboTV Inc. and Simone Nardi, as further amended on February 7, 2022 * 68 10.14 Consulting Agreement, by and among the Company and HC Marketing, LLC, a company controlled by Jordan Fiksenbaum, dated as of March 18, 2021 8-K 001-39590 10.2 3/23/2021 10.15† Offer Letter, dated as of January 3, 2022, by and between fuboTV Inc. and John Janedis * 10.16 Form of Purchase Agreement, by and between the Company and the Purchaser 10-Q 000-55353 10.31 7/6/2020 21.1 List of Significant Subsidiaries of fuboTV Inc. * 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 Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). * 31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). * 32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350. ** 101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. * 101.SCH Inline XBRL Taxonomy Extension Schema Document * 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document * 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document * 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document * 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document * 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * * Filed herewith. ** Furnished herewith. † Indicates management contract or compensatory plan. Item 16. Form 10-K Summary None. 69 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: February 28, 2022 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 John Janedis, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstituting, for him or her and in his or her 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 or she 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 February 28, 2022 David Gandler ( principal executive officer ) /s/ John Janedis Chief Financial Officer February 28, 2022 John Janedis ( principal financial officer and principal accounting officer ) /s/ Edgar Bronfman, Jr. Executive Chairman and Director February 28, 2022 Edgar Bronfman /s/ Daniel Leff Director February 28, 2022 Daniel Leff /s/ Pär-Jörgen Pärson Director February 28, 2022 Pär-Jörgen Pärson /s/ Ignacio Figueras Director February 28, 2022 Ignacio Figueras /s/ Henry Ahn Director February 28, 2022 Henry Ahn /s/ Laura Onopchenko Director February 28, 2022 Laura Onopchenko 70 fuboTV Inc. Index to Consolidated Financial Statements Page Reports of Independent Registered Public Accounting Firms Auditor Name: KPMG LLP (PCAOB ID: 185 ) Auditor Location: New York, NY . Auditor Name: LJ Soldinger Associates, LLC (PCAOB ID: 318 ) Auditor Location: Deer Park, IL F-2 Consolidated Balance Sheets as of December 31, 2021 and 2020 F-4 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2021, 2021 and 2019 F-5 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2021, 2020 and 2019 F-6 Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2020 and 2019 F-7 Notes to the Consolidated Financial Statements F-9 F- 1 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors fuboTV Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of fuboTV Inc. and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended, 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, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 28, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. 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 audits. We are a public accounting firm registered with the 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 audits 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. Our audits 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 audits 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 audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates 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 a critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accounting for certain stock-based compensation awards As discussed in Notes 3 and 15 to the consolidated financial statements, during the year ended December 31, 2021, the Company awarded stock-based compensation including stock options and restricted stock units that have certain performance-based vesting conditions and stock options with market-based vesting conditions. The vesting of certain performance-based options is based upon the achievement of certain annual performance metrics and is subject to the approval of the Board of Directors. The fair value of the market-based awards as well as the expected vesting date were estimated using a Monte Carlo simulation model. The Company reported stock-based compensation expense of $63.8 million for the year ended December 31, 2021. We identified the accounting for certain performance-based and market-based stock compensation awards as a critical audit matter. The audit effort associated with evaluating the Company’s accounting for the determination of the grant date for certain performance-based awards and the evaluation of the model used to determine the fair value and the derived service period for the market-based awards required significant auditor judgement and specialized skills and knowledge. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the accounting for performance-based and market-based stock compensation awards. This included controls related to the determination of the grant date of awards and the valuation and determination of the derived service period for market-based awards. We evaluated the accounting for these stock-based compensation awards by evaluating management’s accounting conclusions with respect to the grant date of the performance-based awards against relevant accounting literature. We involved valuation professionals with specialized skills and knowledge who assisted in evaluating (1) the appropriateness of the model utilized in management’s estimate of the fair value and (2) the calculation of the fair value and the derived service period for the market-based awards by comparing management’s estimate to a separate calculation of the fair value and derived service period. /s/ KPMG LLP We have served as the Company’s auditor since 2020. New York, New York February 28, 2022 F- 2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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 discussed in Note 2 as to which the date is August 10, 2020 We have served as the Company’s auditor since 2020. F- 3 fuboTV Inc. Consolidated Balance Sheets (in thousands, except for share and per share information) December 31, December 31, 2021 2020 ASSETS Current assets Cash and cash equivalents $ 374,294 $ 134,942 Cash reserved for users 579 $ - Accounts receivable, net 34,308 17,495 Prepaid and other current assets 19,324 4,277 Total current assets 428,505 156,714 Property and equipment, net 6,817 1,771 Restricted cash 5,112 1,279 Intangible assets, net 218,186 216,449 Goodwill 630,269 478,406 Right-of-use assets 37,755 4,639 Other non-current assets 43,134 91 Total assets $ 1,369,778 $ 859,349 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 56,460 $ 31,160 Accrued expenses and other current liabilities 219,579 126,393 Notes payable 5,113 4,593 Deferred revenue 44,296 17,428 Warrant liabilities 3,548 22,686 Long-term borrowings - current portion 3,668 24,255 Current portion of lease liabilities 4,633 799 Total current liabilities 337,297 227,314 Convertible notes, net of discount 316,354 - Deferred income taxes 2,431 5,100 Lease liabilities 34,129 3,859 Other long-term liabilities 8,686 128 Total liabilities 698,897 236,401 COMMITMENTS AND CONTINGENCIES (Note 16) - Stockholders’ equity: Series AA Convertible Preferred stock, par value $ 0.0001 , 35,800,000 shares authorized, no shares issued and outstanding at December 31, 2021 and 23,219,613 shares issued and outstanding at December 31, 2020 - 406,665 Common stock par value $ 0.0001 : 400,000,000 shares authorized; 153,950,895 and 92,490,768 shares issued at December 31, 2021 and December 31, 2020, respectively; 153,950,895 and 91,690,768 shares outstanding at December 31, 2021 and December 31, 2020 respectively 16 9 Additional paid-in capital 1,691,206 853,824 Treasury stock, at cost, no shares at December 31, 2021 and 800,000 shares December 31, 2020 - - Accumulated deficit ( 1,009,293 ) ( 626,456 ) Non-controlling interest ( 11,220 ) ( 11,094 ) Accumulated other comprehensive income 172 - Total stockholders’ equity 670,881 622,948 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,369,778 $ 859,349 The accompanying notes are an integral part of these consolidated financial statements. F- 4 fuboTV Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except for share and per share information) For the Years Ended December 31, 2021 2020 2019 Revenues Subscription $ 564,441 $ 184,328 $ - Advertising 73,749 24,904 - Software licenses, net - 7,295 4,271 Other 160 1,219 - Total revenues 638,350 217,746 4,271 Operating expenses Subscriber related expenses 593,241 204,240 - Broadcasting and transmission 55,563 29,542 - Sales and marketing 142,387 63,141 491 Technology and development 60,513 30,189 - General and administrative 108,185 77,635 13,302 Depreciation and amortization 37,881 43,972 20,765 Impairment of intangible assets and goodwill - 248,926 8,598 Total operating expenses 997,770 697,645 43,156 Operating loss ( 359,420 ) ( 479,899 ) ( 38,885 ) Other income (expense) Interest expense and financing costs ( 13,485 ) ( 18,637 ) ( 2,062 ) Amortization of debt discount ( 14,928 ) - - Gain on sale of assets - 7,631 - Loss on extinguishment of debt ( 380 ) ( 24,521 ) - Loss on deconsolidation of Nexway - ( 11,919 ) - Change in fair value of warrant liabilities 2,659 ( 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 ) Loss on investments - - ( 8,281 ) Unrealized gain on equity method investment - 2,614 - Foreign currency exchange loss - ( 1,010 ) ( 18 ) Other income (expense) ( 90 ) 147 726 Total other expense ( 26,224 ) ( 129,153 ) ( 4,514 ) Loss before income taxes ( 385,644 ) ( 609,052 ) ( 43,399 ) Income tax benefit 2,681 9,660 5,272 Net loss ( 382,963 ) ( 599,392 ) ( 38,127 ) Less: Net loss attributable to non-controlling interest 126 29,059 3,767 Net loss attributable to controlling interest ( 382,837 ) ( 570,333 ) ( 34,360 ) Less: Deemed dividend - beneficial conversion feature on preferred stock - ( 171 ) ( 589 ) Less: Deemed dividend on Series D preferred stock - - ( 9 ) Net loss attributable to common stockholders $ ( 382,837 ) $ ( 570,504 ) $ ( 34,958 ) Other comprehensive income (loss) Foreign currency translation adjustment 172 - ( 770 ) Comprehensive loss $ ( 382,665 ) $ ( 570,504 ) $ ( 35,728 ) Net loss per share attributable to common stockholders Basic and diluted $ ( 2.78 ) $ ( 12.82 ) $ ( 1.57 ) Weighted average shares outstanding: Basic and diluted 137,498,077 44,492,975 22,286,060 The accompanying notes are an integral part of these consolidated financial statements. F- 5 fuboTV Inc. Consolidated Statements of Stockholders’ Equity For the years ended December 31, 2021, 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 December 31, 2018 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 and warrants for cash Issuance of common stock and warrants for cash, shares 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 ) Deconsolidation of Nexway Right to receive Series AA Preferred Stock in connection with acquisition of fuboTV Merger Right to receive Series AA Preferred Stock in connection with acquisition of fuboTV Merger, shares Conversion of Series AA Preferred Stock Conversion of Series AA Preferred stock, shares Issuance of common stock in connection with Molotov acquisition Issuance of common stock in connection with Molotov acquisition, shares Issuance of common stock in connection with Edisn acquisition Issuance of common stock in connection with Edisn acquisition, shares Issuance of common stock/At-the-market offering, net of offering costs Issuance of common stock/At-the-market offering, net of offering costs, shares Exercise of warrants Exercise of warrants, shares Issuance of treasury stock in connection with acquisitions Issuance of treasury stock in connection with acquisitions, shares Recognition of debt discount on 2026 Convertible Notes Delivery of common stock underlying restricted stock units Delivery of common stock underlying restricted stock units, shares Shares repurchased in connection with separation agreement Shares repurchased in connection with separation agreement, shares Settlement of share settled liability Settlement of share settled liability, shares Redemption of redemption feature of convertible preferred stock Issuance of common stock to original owners of Facebank AG Issuance of common stock to original owners of Facebank AG, shares Exercise of common stock warrants Exercise of common stock warrants, shares Exercise of stock options Exercise of stock options, shares Reclassification of warrant liabilities Repurchase of common stock, shares Stock-based compensation Stock based compensation, shares 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 ) Other Other, shares 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 Beginning balance, value 23,219,613 $ 406,665 92,490,768 $ 9 $ 853,824 ( 800,000 ) $ - $ ( 626,456 ) - $ ( 11,094 ) $ 622,948 Conversion of Series AA Preferred Stock ( 23,219,613 ) ( 406,665 ) 46,439,226 5 406,660 - - - - - - Issuance of common stock in connection with Molotov acquisition - - 5,690,669 1 98,790 - - - - - 98,791 Issuance of common stock in connection with Edisn acquisition - - 287,768 - 8,262 - - - - - 8,262 Issuance of common stock/At-the-market offering, net of offering costs - - 5,338,607 1 140,394 - - - - - 140,395 Exercise of warrants - - 1,598,234 - 19,991 - - - - - 19,991 Issuance of treasury stock in connection with acquisitions - - - - 8,538 800,000 - - - - 8,538 Recognition of debt discount on 2026 Convertible Notes - - - - 87,946 - - - - - 87,946 Exercise of stock options - - 2,203,381 - 3,013 - - - - - 3,013 Delivery of common stock underlying restricted stock units - - 91,580 - - - - - - - - Shares repurchased in connection with separation agreement - - ( 166,599 ) - - - - - - - - Stock-based compensation - - - - 63,796 - - - - - 63,796 Foreign currency translation adjustment - - - - - - - - 172 - 172 Other - - ( 22,739 ) - ( 8 ) - - - 0 - ( 8 ) Net loss - - - - - - - ( 382,837 ) - ( 126 ) ( 382,963 ) Balance at December 31, 2021 - $ - 153,950,895 $ 16 $ 1,691,206 $ - $ - $ ( 1,009,293 ) $ 172 $ ( 11,220 ) $ 670,881 Ending balance, value - $ - 153,950,895 $ 16 $ 1,691,206 $ - $ - $ ( 1,009,293 ) $ 172 $ ( 11,220 ) $ 670,881 The accompanying notes are an integral part of these consolidated financial statements. F- 6 fuboTV Inc. Consolidated Statements of Cash Flows (in thousands, except for share and per share information) For the Years Ended December 31, 2021 2020 2019 Cash flows from operating activities Net loss $ ( 382,963 ) $ ( 599,392 ) $ ( 38,127 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 37,881 43,972 20,765 Stock-based compensation 63,796 50,739 1,118 Impairment expense intangibles - 100,304 8,598 Impairment expense goodwill - 148,622 - Amortization of gaming licenses and market access fees 326 - - 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 - Loss on extinguishment of debt 380 24,521 - Loss on investments - - 8,281 Common stock issued in connection with note payable - 67 47 Gain on sale of assets - ( 7,631 ) - Amortization of debt discount 14,928 12,327 603 Deferred income tax benefit ( 2,681 ) ( 9,660 ) ( 5,272 ) Change in fair value of derivative liability - 426 ( 815 ) Change in fair value of warrant liabilities ( 2,659 ) 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 investment - ( 2,614 ) - Amortization of right-of-use assets 1,444 681 200 Accrued interest on notes payable - 246 658 Foreign currency loss - 1,010 ( 770 ) Other income related to note conversion - - ( 50 ) Other adjustments 583 ( 620 ) ( 1,304 ) Changes in operating assets and liabilities of business, net of acquisitions: Cash reserved for users ( 579 ) - - Accounts receivable, net ( 15,058 ) ( 12,591 ) 7,705 Prepaid expenses and other assets ( 9,600 ) ( 2,141 ) ( 227 ) Accounts payable 9,420 ( 39,141 ) 5,476 Accrued expenses and other liabilities 66,582 40,761 ( 964 ) Due to related parties - ( 665 ) - Deferred revenue 26,055 8,619 - Lease liabilities ( 456 ) ( 663 ) ( 200 ) Net cash (used in) provided by operating activities ( 192,601 ) ( 149,018 ) 1,731 Cash flows from investing activities 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 ) - Cash paid for acquisitions, net of cash acquired ( 22,894 ) - - Purchases of property and equipment ( 5,054 ) ( 166 ) ( 175 ) Payments of market access and license fee deposits ( 39,800 ) - - Purchase of intangible assets ( 8,424 ) ( 45 ) ( 250 ) 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 Lease security deposit - - ( 21 ) Net cash (used in) provided by investing activities ( 76,172 ) ( 1,457 ) 1,509 The accompanying notes are an integral part of these consolidated financial statements. F- 7 fuboTV Inc. Consolidated Statements of Cash Flows (Continued) (in thousands, except for share and per share information) For the Years Ended December 31, 2021 2020 2019 Cash flows from financing activities Proceeds from sale of common stock and warrants, net of fees 140,446 278,883 3,589 Proceeds from issuance of preferred stock - - 700 Proceeds from convertible note, net of issuance costs 389,446 3,003 847 Repayments of convertible notes - ( 3,913 ) ( 541 ) Proceeds from exercise of stock options 3,013 2,178 - Proceeds from the exercise of warrants 3,762 1,685 - Proceeds from notes payable and long-term borrowings - 33,649 - Repayments of notes payable and long-term borrowings ( 24,709 ) ( 35,400 ) ( 264 ) Proceeds from the issuance of Series D Preferred Stock - 203 - Redemption of Series D Preferred Stock - ( 883 ) ( 337 ) 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 511,958 279,072 4,353 Net increase in cash, cash equivalents and restricted cash 243,185 128,597 7,593 Cash, cash equivalents and restricted cash at beginning of period 136,221 7,624 31 Cash, cash equivalents and restricted cash at end of period $ 379,406 $ 136,221 $ 7,624 Supplemental disclosure of cash flows information: Interest paid $ 8,017 $ 5,372 $ 170 Income tax paid - - - - - - Non cash financing and investing activities: Conversion of Series AA preferred stock to common stock $ 406,665 $ 159,459 $ - Issuance of convertible preferred stock for Merger $ - $ 566,124 $ - Reclassification of warrant liabilities to equity $ - $ 13,535 $ - Issuance of common stock to original owners of Facebank AG $ - $ 12,395 $ - Issuance of common stock in connection with acquisitions $ 107,053 $ - $ 19,950 Reclass of shares settled liability to additional paid-in capital for issuance of common stock $ - $ 9,097 $ - Reclass of shares settled liability for intangible asset to stock-based compensation $ - $ 1,000 $ - Issuance of treasury stock in connection with acquisitions $ 8,538 $ - $ - Cashless exercise of warrants $ 16,480 $ 98,132 $ - Accrued expenses - At-the-market offering $ 51 $ - $ - Common stock issued in connection with note payable $ - $ 259 $ - Issuance of common stock in connection with note conversion $ - $ - $ 50 Issuance of common stock - subsidiary share exchange $ - $ 2,042 $ - Deconsolidation of Nexway $ - $ 1,825 $ - Issuance of common stock in connection with Panda Investment $ - $ - $ 1,918 Long-term borrowings related to investment $ - $ - $ 5,443 Measurement period adjustment on the Evolution AI Corporation acquisition $ - $ - $ 1,921 Common stock issued for lease settlement $ - $ - $ 130 Unpaid financing costs included in accounts payable $ - $ 772 $ - Accrued Series D Preferred Stock dividends $ - $ 17 $ 14 Shares settled liability for intangible asset - Floyd Mayweather $ - $ - $ 1,000 Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock $ - $ 171 $ 589 The accompanying notes are an integral part of these consolidated financial statements. F- 8 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 from “FBNK” to “FUBO.” The Company’s common stock was approved for listing on the New York Stock Exchange (“NYSE”) in connection with a public offering in October 2020 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. Merger with fuboTV Inc. On April 1, 2020, fuboTV Acquisition Corp., a Delaware corporation and our 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”). Nature of Business The Company is focused on developing its technology-driven IP in sports, movies, and live performances. The Company is 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. The Company’s subscription-based streaming services are offered to consumers who can sign-up for accounts through which the Company provides basic plans with the flexibility for consumers to purchase incremental features that include additional content or enhanced functionality (“attachments”) best 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. During the year ended December 31, 2021, the Company launched a business-to-consumer online sports wagering business (“Online Sportsbook”) in the states of Iowa and Arizona. The Company is planning to launch in additional states during 2022 and 2023. During the year ended December 31, 2021 the Company paid $ 44.2 million under market access agreements with third parties in various states (See Note 8) and has not generated any revenue to date. Note 2 - Liquidity, Going Concern and Management Plans The accompanying 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 $ 374.3 million, working capital of $ 91.2 million and an accumulated deficit of $ 1,009.3 million as of December 31, 2021. The Company incurred a net loss of $ 383.0 million for the year ended December 31, 2021. 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. On February 2, 2021, the Company issued $ 402.5 million of convertible notes (“2026 Convertible Notes.”) The 2026 Convertible Notes bear interest from February 2, 2021, at a rate of 3.25 % per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on August 15, 2021. The 2026 Convertible Notes will mature on February 15, 2026, unless earlier converted, redeemed, or repurchased . The net proceeds from this offering were approximately $ 389.4 million, after deducting a discount and offering expenses of approximately $ 13.1 million. F- 9 As discussed further in Note 15, during the year ended December 31, 2021, the Company received net proceeds of approximately $ 140.4 million (after deducting $ 3.5 million in commissions and expenses) from sales of 5,338,607 shares of its common stock, at a weighted average gross sales price of $ 26.96 per share pursuant to an At-The-Market Sales Agreement with its sales agents, Evercore Group L.L.C., Needham & Company, LLC and Oppenheimer & Co. Inc., effective August 13, 2021 (the “Sales Agreement”). As discussed further in Note 4, in December 2021, the Company acquired Molotov SAS (“Molotov”) for an estimated purchase price of € 101.7 million (approximately $ 115.0 million) in a combination of € 14.4 million of cash ($ 16.3 million) and 5.7 million shares of the Company’s common stock. The Company’s current cash and cash equivalents provide us with the necessary liquidity to continue as a going concern for at least one year from the date of issuance 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. Note 3 - Summary of Significant Accounting Policies 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. 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. Those 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 and intangible assets, accruals for contingent liabilities, valuation of warrants, convertible notes, and 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. The Company’s Chief Executive Officer is determined to be the CODM. The CODM reviews financial information and makes resource allocation decisions at the consolidated group level. The Company has two operating segments as of December 31, 2021, streaming and online wagering. F- 10 Cash and Cash Equivalents and Restricted Cash 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. 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 sheets that sum to the total of the same on the consolidated statement of cash flows (in thousands): Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash December 31, 2021 December 31, 2020 Cash and cash equivalents $ 374,294 $ 134,942 Restricted cash 5,112 1,279 Total cash, cash equivalents and restricted cash $ 379,406 $ 136,221 Cash Reserved for Users The Company maintains separate bank accounts to segregate users’ funds from operational funds. As of December 31, 2021, the cash reserved for users totaled approximately $ 0.6 million. Certain Risks and Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of demand deposits and accounts receivable. 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, 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. 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. In February 2021, the Company issued 623,068 shares of treasury stock in connection with the acquisition of Vigtory, Inc. and in December 2021, the Company issued the remaining 176,932 shares of treasury stock in connection with the acquisition of Edisn Inc. See Note 4 for further discussion regarding the acquisitions. 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. F- 11 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. Receivables Reserved for Users Receivables for user deposits not yet received are stated at the amount the Company expects to collect from a payment processor, which includes an allowance for doubtful accounts if appropriate. These receivables arise, primarily, due to process timing between when a user deposits and when the Company receives that deposit from the payment processor. Receivables also arise due to the securitization policies of certain payment processors. The allowance for doubtful accounts is determined based on the Company’s assessment of the probability of the non-payment of the receivable. This provision is netted against the receivable balance with the loss being recognized within general and administrative expenses in the consolidated statements of operations. On assessment that the receivable will not be collected, the associated amount is written off with no impact to the consolidated statements of operations. The provision at December 31, 2021 did not have a material impact on the Company’s consolidated financial statements. As of December 31, 2021, receivables reserved for users totaled $ 16 thousand and is included in prepaid and other current assets on the consolidated balance sheet. 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, 2021 and 2020. No individual customer accounted for more than 10% of revenue for the year ended December 31, 2021, 2020, and 2019. As of December 31, 2021 and 2020, one and three customers, respectively accounted for more than 10% of accounts receivable, respectively. 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. License Fees, Net The Company incurs costs in connection with operating in certain regulated jurisdictions, including applying for licenses, compliance costs and the purchase of business licenses from strategic partners. The cost of purchasing business licenses, minimum royalty payments for strategic partners and subsequent renewals of business licenses are capitalized as an intangible asset and amortized over the estimated useful life of the asset using the straight-line method to cost of goods sold. During the year ended December 31, 2021, the Company capitalized license and market access fees totaling $ 15.0 million (See Note 8). F- 12 Deferred Royalty The Company records liabilities for minimum royalty payments related to licensing and market access agreements. These liabilities are recorded on the balance sheet at the present value of future payments discounted using a rate that reflects the duration of the agreement. The deferred royalty liability is accreted through interest expense in the Company’s consolidated statements of operations. The Company records deferred royalty liabilities as accrued expenses and other current liabilities or other long-term liabilities based on the timing of future payments. As of December 31, 2021, deferred royalties totaled $ 10.5 million (See Note 16). 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 October 1 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 Accounting Standards Update (“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. The Company tested goodwill for impairment as of October 1, 2021. Based on a qualitative analysis, we determined that it was more likely than not that goodwill was not impaired. There were no goodwill impairment charges recorded during the year ended December 31, 2021. 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. Changes in economic and operating conditions and the impact of COVID-19 could result in goodwill impairment in future periods. F- 13 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: Schedule of Intangible Assets Estimated Useful Life Customer relationships 2 years Tradenames 2 - 9 years Software and technology 3 - 9 years Gaming licenses and market access fees 2 - 5 years We capitalize qualifying development costs associated with software that is developed or obtained for internal use, provided that management with the relevant authority authorizes and commits to the funding of the project, it is probable the project will be completed and the software will be used to perform the function intended. Capitalized costs, including costs incurred for enhancements that are expected to result in additional significant functionality are capitalized and amortized on a straight-line basis over the estimated useful life, which approximates three years. Costs related to preliminary project activities and post-implementation operation activities, including training and maintenance, are expensed as incurred. Non-Controlling Interest Non-controlling interest as of December 31, 2021 and 2020 represents PEC stockholders who retained an aggregate 23.4 % and 26 .0%, respectively, 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. 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 then outstanding convertible notes with variable settlement features. As a result of these repayments, the Company is no longer subject to this sequencing policy. Warrant Liabilities 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 and comprehensive loss. The fair value of warrants classified as liabilities has been estimated using the Black-Scholes model. Liabilities to Users The Company records liabilities for user account balances. User account balances consist of user deposits, most promotional awards and user winnings less user withdrawals, tax withholdings and user losses. Cash reserved for users and receivables reserved for users equal or exceed the Company’s liabilities to users at all times. As of December 31, 2021, liabilities reserved for users totaled $13 thousand. 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. F- 14 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 In 2021, 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 and comprehensive loss. Management concluded that the customers are the end user of the subscription services sold by these third-party app stores. 2. Advertising – 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. Online wagering - The Company offers an online sports betting platform whereby sports enthusiasts can place wagers on thousands of live professional and collegiate sporting events using the Company’s mobile app or on the Fubo Sportsbook website. The online gaming customer simultaneously receives and consumes the benefits of the Company’s performance as it provides the gaming/wagering service and the transaction price is constrained until the net win or loss with the customer is known. Sportsbook or sports betting involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts made on users’ winning wagers and incentives awarded to users. The Company recognizes revenue at the point in time that the outcome of the transaction and event or events is known (that is, revenue is recognized when it is settled). During the year ended December 31, 2021, online wagering revenue was immaterial. F- 15 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 $ 593.2 million, $ 204.2 million and $ 0.0 for the years ended December 31, 2021, 2020 and 2019, respectively. 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 $ 115.9 million, $ 48.2 million and $ 0.5 million for the years ended December 31, 2021, 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 over a four- 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. F- 16 Expected Volatility – The Company historically has lacked sufficient company specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based primarily on the historical volatility of a publicly traded set of peer companies with consideration of 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. 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. Foreign Currency The Company’s reporting currency is the U.S. dollar while the functional currencies of non-U.S. subsidiaries is determined based on the primary economic environment in which the subsidiary operates. The financial statements of non-U.S. subsidiaries are translated into United States dollars in accordance with ASC 830, Foreign Currency Matters , using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining other comprehensive income (loss). 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. F- 17 The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Schedule of Calculation of Basic and Diluted Net Loss Per Share 2021 2020 2019 Years Ended December 31, 2021 2020 2019 Basic loss per share: Net loss $ ( 382,963 ) $ ( 599,392 ) $ ( 38,127 ) Less: net loss attributable to non-controlling interest 126 29,059 3,767 Less: deemed dividend - beneficial conversion feature on preferred stock - - ( 9 ) Less: deemed dividend on Series D Preferred Stock - ( 171 ) ( 589 ) Net loss attributable to common stockholders $ ( 382,837 ) $ ( 570,504 ) $ ( 34,958 ) Shares used in computation: Weighted-average common shares outstanding 137,498,077 44,492,975 22,286,060 Basic and diluted loss per share $ ( 2.78 ) $ ( 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: Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share December 31, 2021 2020 2019 Warrants to purchase common stock 565,544 2,535,528 200,007 Series AA convertible preferred shares - 46,439,226 - Series D convertible preferred shares - - 461,839 Stock options 15,908,187 20,908,862 16,667 Unvested restricted stock units 4,685,800 - - Convertible notes variable settlement feature 6,966,078 - 190,096 Total 28,125,609 69,883,616 868,609 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” 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 Company intends to adopt this ASU in January 2022. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements and related disclosures. The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change. 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 eliminating the requirement to separately account for an embedded conversion feature as an equity component in certain circumstances. A convertible debt instrument will be reported as a single liability instrument with no separate accounting for an embedded conversion feature unless separate accounting is required for an embedded conversion feature as a derivative or under the substantial premium model. The ASU simplifies the diluted earnings per share calculation by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. Further, the ASU requires enhanced disclosures about convertible instruments. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. The 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. F- 18 The Company will adopt the ASU on January 1, 2022 using the modified retrospective method. Consequently, financial information was not updated, and the disclosures required under the ASU were not provided for dates and periods before January 1, 2022. Upon adoption at January 1, 2022, the Company will make certain adjustments in our consolidated balance sheet as related to the 2026 Convertible Notes (see Note 11) which consists of an increase of $ 75.3 million in Convertible notes, net of discount, a net decrease of $ 87.9 million in Additional paid-in capital and a net decrease of $ 12.6 million in Accumulated deficit. Additionally, from January 1, 2022, as related to the 2026 Convertible Notes (see Note 11) we will no longer incur non-cash interest expense for the amortization of debt discount related to the previously separated equity component. Note 4 - Acquisitions FuboTV 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. 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. F- 19 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 the streaming reporting unit. Schedule of Assets Acquired and Liabilities Assumed Fair Value Assets acquired: Cash and cash equivalents $ 8,040 Accounts receivable 5,831 Prepaid expenses and other current assets 976 Property and equipment, net 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 Deferred income taxes 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): Schedule of Estimated Useful Lives and Fair Value of the Intangible Assets Acquired 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- 20 Vigtory On February 26, 2021, the Company consummated the acquisition of Vigtory, Inc., (“Vigtory”) a sports betting and interactive gaming company, as a result of the merger of fuboBet Inc., a wholly-owned subsidiary of the Company, into Vigtory, whereby Vigtory continued as the surviving corporation (the “Vigtory Acquisition”) and its name was changed to Fubo Gaming Inc. The purchase price of the Vigtory Acquisition was determined to be $ 10.3 million, including $ 1.7 million of Vigtory’s outstanding convertible notes and other liabilities settled by the Company on the closing date. The Vigtory Acquisition consideration does not include $ 26.9 million fair value of common shares issued to former employee shareholders of Vigtory subject to vesting over future service periods. The Company accounted for the Vigtory Acquisition as a business combination under the acquisition method of accounting. As such, the purchase price was allocated to the net assets acquired with any excess recorded to goodwill. The net assets and liabilities assumed were immaterial and substantially all of the consideration was allocated to goodwill. Goodwill, which is not deductible for tax purposes, primarily represents the benefits expected to result from the assembled workforce of Vigtory. The Company allocated goodwill to its online wagering segment. The results of the Vigtory Acquisition are included in the Company’s operations from February 26, 2021 in the online wagering segment. T he Company recognized $ 0.4 million of acquisition-related costs for the Vigtory Acquisition that were expensed as incurred during the year ended December 31, 2021. These costs are included in general and administrative expense in the consolidated statement of operations and comprehensive loss. Edisn Inc. On December 1, 2021, the Company acquired 100 % of Edisn Inc. (“Edisn”), an AI-powered computer vision platform with patent-pending video recognition technologies based in Bangalore, India, for approximately $ 14.4 million (“Edisn Acquisition”). The consideration paid was cash of $ 6.1 million and 464,700 shares of the Company’s common stock with a fair value of $ 8.3 million as of the date of closing. The Company accounted for the Edisn Acquisition as a business combination under the acquisition method of accounting. As such, the purchase price was allocated to the net assets acquired with any excess recorded to goodwill as follows (in thousands): Schedule of Assets Acquired and Liabilities Assumed Assets acquired: Cash $ 373 Prepaid and other current assets 5 Property and equipment, net 10 Intangible assets 1,500 Goodwill 12,501 Total assets acquired $ 14,389 Liabilities assumed: Deferred income taxes 12 Accrued expenses and other current liabilities 25 Total liabilities assumed $ 37 Net assets acquired $ 14,352 Goodwill, which is not deductible for tax purposes, primarily represents the benefits expected to result from the assembled workforce of Edisn. The Company allocated the goodwill to its streaming segment. The Company recognized $ 0.7 million of acquisition-related costs for the Edisn Acquisition that were expensed as incurred during the year ended December 31, 2021. These costs are included in general and administrative expense in the consolidated statement of operations and comprehensive loss. The estimated useful lives and fair value of the intangible assets acquired are as follows: Schedule of Estimated Useful Lives and Fair Value of the Intangible Assets Acquired Estimated Useful Life (in Years) Fair Value Software and technology 7 $ 1,500 Total $ 1,500 Molotov S.A.S On December 6, 2021, the Company acquired approximately 99 % of the equity interests in Molotov S.A.S (“Molotov”), a television streaming platform located in France, for € 101.7 million or $ 115.0 million (“Molotov Acquisition”). The consideration paid in cash totaled € 14.4 million or $ 16.3 million, and the issuance of 5.7 million shares of the Company’s common stock with a fair value of approximately $ 98.8 million. Molotov is included in the streaming segment and its contribution to revenue and operating loss during the year ended December 31, 2021 was $ 1.4 million and $ 8.1 million, respectively. The Molotov Acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, which requires recognition of assets acquired and liabilities assumed at their respective fair values on the date of acquisition. As of December 31, 2021, the Company has completed a preliminary allocation of the purchase consideration. The Company is gathering information to assess the completeness and accuracy of certain liabilities and related accounts, and therefore the allocation of the purchase price cannot be finalized as of December 31, 2021. The Company expects to finalize the valuation of these assets and liabilities, and consideration transferred, as soon as practicable. Any changes to the preliminary estimates of the fair value of the assets acquired and liabilities assumed will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill. F- 21 Any necessary adjustments will be finalized within one year from the date of acquisition (in thousands): Schedule of Assets Acquired and Liabilities Assumed Assets acquired: Cash $ 818 Accounts receivable, net 1,752 Prepaid and other current assets 6,273 Property and equipment, net 738 Other non-current assets 2,643 Intangible assets 18,429 Goodwill 128,468 Total assets acquired $ 159,121 Liabilities assumed: Accounts payable $ 15,724 Accrued expenses and other current liabilities 23,877 Deferred revenue 812 Long-term borrowings - current portion 3,662 Total liabilities assumed $ 44,075 Net assets acquired $ 115,046 Goodwill, which is not deductible for tax purposes, primarily represents the benefits expected to result from the assembled workforce of Molotov. The Company allocated the goodwill to its streaming segment. The Company recognized $ 2.7 million of acquisition-related costs for the Molotov Acquisition that were expensed as incurred during the year ended December 31, 2021. These costs are included in general and administrative expense in the consolidated statement of operations and comprehensive loss. The preliminary estimated useful lives and fair value of the intangible assets acquired are as follows: Schedule of Estimated Useful Lives and Fair Value of the Intangible Assets Acquired Estimated Useful Life (in Years) Fair Value Customer relationships 2 $ 9,271 Tradenames 2 679 Software and technology 6 8,479 Total $ 18,429 F- 22 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): Schedule of Disaggregated Revenue Years Ended December 31, 2021 2020 2019 Subscription $ 564,441 $ 184,328 $ - Advertising 73,749 24,904 - Software licenses, net - 7,295 4,271 Other 160 1,219 - Total revenues $ 638,350 $ 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, 2021 and 2020. For the year ended December 31, 2021 and 2020, 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, 2021 and 2020. The contract liabilities primarily relate to upfront payments and consideration received from customers for subscription services. As of December 31, 2021 and 2020, the Company’s contract liabilities totaled $ 44.3 million and $ 17.4 million, respectively, and are recorded as deferred revenue on the accompanying consolidated balance sheets. 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): Schedule of Property and Equipment, Net Useful Lives (Years) December 31, 2021 December 31, 2020 Building 20 $ 732 $ - Furniture and fixtures 7 361 573 Computer equipment 3 3,856 801 Leasehold improvements Term of lease 4,495 2,272 Property and Equipment, gross 9,444 3,646 Less: Accumulated depreciation ( 2,627 ) ( 1,875 ) Total property and equipment, net $ 6,817 $ 1,771 Depreciation expense totaled $ 1.0 million, $ 0.4 million, and $ 0.1 million for the years ended December 31, 2021, 2020, and 2019 respectively. F- 23 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 $ 11.9 million calculated as follows (in thousands): Schedule of Deconsolidation of Nexway 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 $ 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 and comprehensive loss. 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): Schedule of Net Carrying Value of Investment and Related Gain on Sale of Investment 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- 24 Note 8 - Intangible Assets and Goodwill Intangible Assets During the year ended December 31, 2021, the Company capitalized $ 19.1 million for intangible assets, consisting of $ 15.0 million for gaming licenses pursuant to market access agreements entered into in order to conduct sports wagering operations in the states of Arizona and Iowa, and $ 4.1 million for software and technology. Included in the $ 15.0 million capitalized for gaming licenses, the Company paid $ 4.4 million for upfront and license fees, and recorded $ 10.6 million for future minimum royalty payments, with the corresponding liability recorded to accrued expenses and other current liabilities and other long-term liabilities on the accompanying consolidated balance sheet. As of December 31, 2021, the Company paid $ 0.1 million of royalty payments (See Note 16). Amortization of gaming licenses and market access agreements commence upon completion of the required regulatory approvals and launch of operations in each respective state. The table below summarizes the Company’s intangible assets at December 31, 2021 and 2020 (in thousands): Schedule of Intangible Assets Useful Weighted Average Remaining December 31, 2021 Lives (Years) Life (Years) Intangible Assets Accumulated Amortization Net Balance Customer relationships 2 2.2 $ 32,965 $ ( 21,105 ) $ 11,860 Tradenames 2 - 9 7.2 38,876 ( 7,455 ) 31,421 Software and technology 3 - 9 8.7 195,852 ( 35,572 ) 160,280 Gaming licenses and market access fees 2 - 5 4.8 14,951 ( 326 ) 14,625 Total $ 282,644 $ ( 64,458 ) $ 218,186 Weighted Average December 31, 2020 Useful Lives (Years) 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 The intangible assets are being amortized over their respective original useful lives, which range from two to nine years. The Company recorded amortization expense of $ 36.9 million, $ 43.6 million, and $ 20.8 million for the years ended December 31, 2021, 2020 and 2019 including amortization related to impaired intangible assets as described below. The Company performed a valuation of its intangible assets of the Facebank reporting unit as of September 30, 2020. The Company determined that the carrying value of the intangible assets exceeded their fair value and recorded an impairment charge of $ 100.3 million during the year ended December 31, 2020. During the year ended December 31, 2019 the Company determined, that because of the continuing losses and poor financial condition of Nexway AG, the intangible assets acquired in the acquisition of Nexway AG were required to be impaired in full and recorded an impairment charge of $ 8.6 million. The estimated future amortization expense associated with intangible assets (excluding gaming licenses and market access fees) is as follows (in thousands): Schedule of Intangible Assets Amortization Expense Future Amortization 2022 38,599 2023 35,129 2024 30,184 2025 28,907 2026 28,675 Thereafter 56,692 Total $ 218,186 F- 25 Prepaid Market Access Agreements During the year ended December 31, 2021, the Company paid $ 39.8 million for gaming licenses pursuant to market access agreements which had not yet commenced operations as of December 31, 2021. The $ 39.8 million is included in other non-current assets on the accompanying consolidated balance sheet as of December 31, 2021. Goodwill The following table is a summary of the changes to goodwill for the years ended December 31, 2021 and 2020 (in thousands): Schedule of Goodwill December 31, 2021 2020 Beginning balance $ 478,406 $ 227,763 Deconsolidation of Nexway - ( 51,168 ) Acquisition of fuboTV - 478,406 Less: Sale of Facebank AG - ( 28,541 ) Impairment expense - ( 148,054 ) Vigtory acquisition 10,683 - Molotov acquisition 128,468 - Edisn acquisition 12,501 Foreign currency translation 211 - Ending balance $ 630,269 $ 478,406 As of December 31, 2021 and 2020, goodwill includes an accumulated impairment charge of $ 148.1 million related to the historical Facebank reporting unit. Note 9 – Accounts Payable, Accrued Expenses and Other Long-Term Liabilities Accounts payable, accrued expenses and other long-term liabilities are presented below (in thousands): Schedule of Accounts Payable and Accrued Expenses December 31, 2021 December 31, 2020 Affiliate fees $ 177,692 $ 102,914 Broadcasting and transmission 15,179 13,297 Selling and marketing 17,750 13,347 Accrued compensation 12,107 2,552 Legal and professional fees 7,316 4,582 Taxes (including value added) 27,316 13,542 Deferred royalty 10,510 - Accrued interest 5,057 - Subscriber related 3,601 1,937 Other 8,197 5,510 Total $ 284,725 $ 157 ,681 Note 10 - Income Taxes The loss before income taxes includes the following components (in thousands): Schedule of loss before income taxes For the Years Ended December 31, 2021 2020 2019 United States $ 377,421 $ 608,950 $ 43,399 International 8,223 102 - Loss before income taxes $ 385,644 $ 609,052 $ 43,399 The benefit of income taxes for the years ended December 31, 2021, 2020 and 2019 consist of the following (in thousands): Schedule of Benefit of Income Taxes For the Years Ended December 31, 2021 2020 2019 U.S. Federal Current $ - $ - - Deferred 2,082 7,930 4,302 State and local Current - - - Deferred 599 1,730 970 Valuation allowance - - - Income tax benefit $ 2,681 $ 9,660 5,272 F- 26 A reconciliation of the statutory federal rate to the Company’s effective tax rate is as follows: Schedule of Effective Income Tax Rate Reconciliation December 31, 2021 2020 2019 Federal rate 21.00 % 21.00 % 21.00 % State income taxes, net of federal benefit 0.16 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 ( 2.42 ) ( 0.38 ) - Change in fair value of derivative, warrant liability, and gain on extinguishment of convertible notes 0.14 ( 3.42 ) 1.16 Amortization of debt discount - - ( 0.13 ) Loss on investments - - ( 1.81 ) Foreign rate differential 0.12 - - Goodwill impairment - ( 5.10 ) - Change in valuation allowance ( 18.80 ) ( 10.27 ) ( 9.49 ) Other 0.50 ( 0.12 ) - Income tax benefit 0.70 % 1.58 % 13.83 % The components of our deferred tax assets are as follows (in thousands): Schedule of Deferred Tax Assets December 31, 2021 2020 Deferred tax assets: Net operating losses $ 234,542 $ 133,281 Accruals and deferrals 7,812 4,419 Stock based compensation 10,280 6,732 Interest expense limitation 11,945 4,409 Leasing assets 8,881 - Other 27 1,965 Total deferred tax assets 273,487 150,806 Less: Valuation allowance ( 219,609 ) ( 102,869 ) Net deferred tax assets $ 53,878 $ 47,937 Deferred tax liabilities: Intangible assets $ 47,503 $ 51,736 Property and equipment 8,651 - Other 155 1,301 Total deferred tax liabilities $ 56,309 $ 53,037 Net deferred tax liabilities $ 2,431 $ 5,100 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, 2021 and 2020, the Company continued to maintain that the realization of its deferred tax assets has not achieved a more likely than not threshold therefore, net deferred tax assets have been offset by a valuation allowance. The valuation allowance increased by $ 116.7 million and $ 102.9 million in the years ended December 31, 2021 and December 31, 2020, respectively. F- 27 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, 2021, the Company had federal net operating loss carryforwards of $ 811.3 million. The federal net operating loss carryforwards of $ 88.1 million generated before January 1, 2018 will begin to expire in 2033, and $ 723.2 million will carryforward indefinitely but are subject to the 80% taxable income limitation. As of December 31, 2021, the Company had state net operating loss carryforwards of $ 420.4 million. The state net operating loss carryforward of $ 329.7 million will begin to expire in 2033 and $ 90.7 million will carryforward indefinitely but are subject to the 80% taxable income limitation. As of December 31, 2021, the Company had foreign net operating loss carryforwards of $ 156.1 million. The foreign net operating loss carryforward will carryforward indefinitely but are subject to a limitation on the amount that can be used to offset taxable income in a given year. 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, 2021 and 2020. 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 no t incurred any material tax interest or penalties as of December 31, 2021 and 2020. The Company does not anticipate any significant change within 12 months of this reporting date of its uncertain tax positions. The Company is subject to taxation in the United States and various state jurisdictions, France, Spain and India. 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 2021 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 2021 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. The Company’s 2021 tax years will remain open for examination by the France and Indian tax authorities. Note 11 - Notes Payable, Long-Term Borrowing, and Convertible Notes Notes payable, long-term borrowing, and convertible notes as of December 31, 2021 consist of the following (in thousands): Schedule of Notes Payable and Long-Term Borrowings Note Stated Interest Rate Principal Balance Capitalized Interest Debt Discount December 31, 2021 2026 Convertible Notes 3.25 % $ 402,500 $ - $ ( 86,146 ) $ 316,354 Note payable 10.0 % 2,700 2,377 - 5,077 BPi France 2.25 % 2,422 - - 2,422 Societe Generale 0.25 % 1,246 - - 1,246 Other 4.0 % 30 6 - 36 $ 408,898 $ 2,383 $ ( 86,146 ) $ 325,135 F- 28 Notes payable and long-term borrowing as of December 31, 2020 consist of the following (in thousands): Note Stated Interest Rate Principal Balance Capitalized Interest Debt Discount December 31, 2020 Senior secured loan LIBOR plus 5.25 % per annum $ 20,000 $ - $ ( 444 ) $ 19,556 Note payable 10.0 % 2,700 1,858 - 4,558 Paycheck Protection Program Loan 1.0 % 4,699 - - 4,699 Other 4.0 % 30 5 - 35 $ 27,429 $ 1,863 $ ( 444 ) $ 28,848 2026 Convertible Notes As disclosed in Note 2, the Company issued $ 402.5 million of convertible notes (“2026 Convertible Notes”) dated February 2, 2021. The initial equivalent conversion price of the 2026 Convertible Notes was $ 57.78 per share of the Company’s common stock. Holders may convert their 2026 Convertible Notes on or after November 15, 2025, until the close of business on the second business day preceding the maturity date or prior to November 15, 2025 under certain circumstances including: (i) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ended on March 31, 2021, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (ii) during the five-business day period after any five consecutive trading day period in which the trading price for each trading day of such five consecutive trading day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (iii) if the Company calls any or all of the 2026 Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events. The Company may also redeem all or any portion of the 2026 Convertible Notes after February 20, 2024 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Upon conversion, the Company can elect to deliver cash or shares or a combination of cash or shares. The Company accounted for the 2026 Convertible Notes using a cash conversion model. In accordance with ASC 470-20, the Company used an effective interest rate of 8.67 % to estimate the fair value of the debt instrument, excluding the equity conversion feature, and recognized a debt discount of $ 90.9 million (representing the difference between the fair value and the net proceeds) with a corresponding increase to additional paid in capital. The underwriting discount and offering expenses totaling $ 13.1 million were allocated between the debt and equity issuance costs in proportion to the allocation of the liability and equity components of the 2026 Convertible Notes. Accordingly, equity issuance costs of $ 3.0 million were recorded as an offset to additional paid-in capital and total debt issuance costs of $ 10.1 million were recorded on the issuance date and are reflected in the consolidated balance sheet as a direct deduction from the carrying value of the associated debt liability. The debt discount and debt issuance costs are being amortized through February 15, 2026, as amortization of debt discount on the accompanying consolidated statement of operations and comprehensive loss. F- 29 During the year ended December 31, 2021, the Company paid $ 7.0 million of interest expense in connection with the 2026 Convertible Notes and recorded amortization expense of $ 14.9 million included in amortization of debt discount in the consolidated statements of operations and comprehensive loss. As of December 31, 2021, the net carrying value of the 2026 Convertible Notes was $ 316.4 million, with unamortized debt discount and issuance costs of $ 86.1 million. The estimated fair value (Level 2) of the 2026 Convertible Notes was $ 326.0 million. 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 made principal repayments of $ 20.0 million during the year ended December 31, 2021. The Term Loan was repaid in full on May 7, 2021. Note payable The Company has recognized, through the consolidation of its subsidiary Evolution AI Corporation (“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 $ 2.4 million. The CAM Digital Note is currently in a default condition due to non-payment of principal and interest. The Company is in negotiation with such holders to resolve the matter. The outstanding balance as of December 31, 2021, including interest and penalties, is $ 5.1 million and is included in notes payable on the accompanying consolidated balance sheet. 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 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 were utilized for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, paid leaves, rent, utilities, and interest on certain other outstanding debt. The Company repaid the outstanding balance of $ 4.7 million on February 26, 2021. Other The Company assumed, through the consolidation of its subsidiary EAI, a $ 30,000 note payable due to a relative of the former Chief Executive Officer, John Textor bearing interest at the rate of 4 % per annum. As of December 31, 2021, the principal balance and accrued interest totaled approximately $ 36,000 . The Company assumed through the acquisition of Molotov, $ 3.7 million in notes bearing interest rates between 0.25 % - 2.25 % per annum. Note 12 – Segments Prior to the third quarter of 2021, the Company operated its business and reported its results through a single reportable segment. As a result of the launch of the Company’s online wagering business, the Company began to operate its business and report its results through two operating and reportable segments: streaming and online wagering. Operating segments are components of the Company for which separate discrete financial information is available to and evaluated regularly by the chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. The CODM assesses a combination of metrics such as revenue and adjusted operating expenses to evaluate the performance of each operating and reportable segment. F- 30 Since we launched online wagering in the states of Iowa and Arizona late in 2021, revenue generated from the online wagering segment was immaterial. Materially, all of our revenues are related to the streaming segment. The following tables set forth our financial performance by reportable segment: Schedule Of Financial Performance By Reportable Segment Streaming Online Wagering Total Total Revenues $ 638,350 - $ 638,350 Adjusted operating expenses Subscriber related expenses 593,170 - 593,170 Broadcasting and transmission 55,563 - 55,563 Sales and marketing 132,751 6,314 139,065 Technology and development 41,666 4,779 46,445 General administrative 52,681 9,169 61,850 Depreciation and amortization 37,666 215 37,881 Total adjusted operating expenses $ 913,497 $ 20,477 $ 933,974 Stock-based compensation $ 63,796 Other expense $ 26,224 Loss before income taxes $ ( 275,147 ) $ ( 20,477 ) $ ( 385,644 ) Total Assets $ 1,293,188 $ 76,590 $ 1,369,778 The following tables set forth our financial performance by geographical location: Total Assets Total Revenue United States $ 1,207,038 $ 634,045 International 162,740 4,305 Total Revenue $ 1,369,778 638,350 Note 13 - Fair Value Measurements Certain of the Company’s warrants are classified as liabilities and measured at fair value on the issuance date, with changes in fair value recognized as other income (expense) in the consolidated statements of operations. The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2021 and 2020 (in thousands): Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Fair valued measured at December 31, 2021 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 $ - $ - $ 3,548 $ 3,548 Total financial liabilities at fair value $ - $ - $ 3,548 $ 3,548 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total 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 F- 31 Derivative Financial Instruments The following table presents changes in Level 3 liabilities measured at fair value (in thousands) for the years ended December 31, 2021, 2020 and 2019. Unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Schedule of Liability for Derivatives and Warrants 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 Change in fair value - - - ( 2,659 ) Redemption - - - ( 16,479 ) Fair value at December 31, 2021 $ - $ - $ - $ 3,548 The Company used a Black-Scholes model to estimate the fair value of the warrant liabilities at December 31, 2021 and 2020 using the following inputs: Schedule of Warrant Liabilities, Change in Using Black Scholes to Monte Carlo Simulation Assumptions December 31, 2021 December 31, 2020 Fair value of underlying common shares $ 15.52 $ 28.00 Exercise price $ 9.25 $ 9.25 Expected dividend yield — % — % Expected volatility 50.9 % - 52.8 % 73.9 % - 75.1 % Weighted average expected volatility 52.7 % 74.35 % Risk free interest rate 0.06 % - 0.06 % 0.10 % - 0.11 % Weighted average risk-free interest rate 0.06 % 0.11 % Expected term (years) 0.14 - 0.15 1.14 - 1.24 Weighted average expected term (years) 0.14 1.19 Note 14 – 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 15 - Stockholders’ Equity 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. 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. F- 32 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 Year ended December 31, 2021 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 26, 2021, the Company issued 623,068 shares of its common stock (treasury stock) in connection with the Vigtory Acquisition. As disclosed in Note 2, on August 13, 2021, the Company entered into the “Sales Agreement” with Evercore Group L.L.C., Needham & Company, LLC and Oppenheimer & Co. Inc., as sales agents (each, a “manager” and together, the “managers”), under which the Company may, from time to time, sell shares of its common stock, par value $ 0.0001 per share, having an aggregate offering price of up to $ 500.0 million through the managers (the “Offering”). Subject to the terms and conditions of the Sales Agreement, each manager will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon the Company’s instructions. The Company will pay the managers a commission for their services in acting as agents in the sale of common stock at a commission rate of up to 3 % of the gross sales price of the shares of the Company’s common stock sold through them pursuant to the Sales Agreement. The Company is not obligated to, and cannot provide any assurances that it will, make any sales of the shares under the Sales Agreement. The Offering of shares of common stock pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the Sales Agreement or (ii) termination of the Sales Agreement in accordance with its terms. During the year ended December 31, 2021, the Company received net proceeds of $ 140.4 million (after deducting $ 3.5 million in commissions and expenses) from sales of 5,338,607 shares of its common stock, at a weighted average gross sales price of $ 26.96 per share pursuant to the Sales Agreement. On December 1, 2021, the Company issued 287,768 shares of its common stock, and 176,932 shares of treasury stock in connection with the Edisn Acquisition. On December 6, 2021, the Company issued 5,690,669 shares its common stock in connection with the Molotov Acquisition. During the year ended December 31, 2021, the Company retired 166,599 shares of its restricted common stock in connection with a separation agreement with one of its executives. Warrants A summary of the Company’s outstanding warrants as of December 31, 2021, are presented below (in thousands, except share and per share amounts): Schedule of Outstanding Warrants Activity Number of Warrants Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2020 2,535,528 $ 8.22 $ 50,560 1.0 Exercised ( 1,962,841 ) $ 7.72 $ - - Expired ( 7,143 ) $ - $ - - Outstanding and exercisable as of December 31, 2021 565,544 $ 9.96 $ 3,546 0.1 During the year ended December 31, 2021, the Company issued 1,598,234 shares of its common stock in connection with the exercise of 1,962,841 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 $ 1.7 million. 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”). 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. F- 33 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. 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. 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. 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. 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 a note purchase agreement with FB Loan. 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. Stock-based compensation The Company’s 2020 Equity Incentive Plan, as amended (the “2020 Plan”) provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares to its employees, directors and consultants. As of December 31 2021, there are 10,436,701 shares available for issuance under the Plan. During the years ended December 31, 2021, 2020 and 2019 the Company recognized stock-based compensation expense as follows: Schedule of Recognized Stock-Based Compensation Expense 2021 2020 2019 Years Ended December 31, 2021 2020 2019 Subscriber related $ 71 $ 32 $ - Sales and marketing 8,171 2,395 - Technology and development 14,068 5,446 - General and administrative 41,486 43,866 1,118 Total Stock-Based Compensation Expense $ 63,796 $ 51,739 $ 1,118 Options The Company provides option grants to employees, directors, and consultants under the 2020 Plan. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The Company historically has lacked sufficient company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based primarily on the historical volatility of a publicly-traded set of peer companies with consideration of the volatility of its own traded stock price. The risk-free interest rate is determined by referencing the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. 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. During the year ended December 31, 2021, the Board of Directors approved a modification to stock option and restricted stock award grants to employees who terminated from the Company. The modifications accelerated the vesting of unvested stock options and restricted stock awards as of the termination date and provided the option holders with an additional months post-termination to exercise their stock options. The modifications resulted in incremental stock-based compensation expense of $ 13.9 million during the year ended December 31, 2021. F- 34 A summary of stock option activity for the year ended December 31, 2021, is as follows (in thousands, except share and per share amounts): Schedule of Stock Option Activity Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2020 13,450,565 $ 5.45 $ 303,036 8.1 Granted 220,099 $ 21.52 Exercised ( 1,990,261 ) $ 1.52 Forfeited or expired ( 225,513 ) $ 7.06 Outstanding as of December 31, 2021 11,454,890 $ 6.40 $ 70,231 7.4 Options vested and exercisable as of December 31, 2021 6,711,404 $ 4.71 $ 51,167 6.8 The following was used in determining the fair value of stock options granted during the years ended December 31, 2021 and 2020: Schedule of Stock Options Assumptions Years ended December 31 2021 2020 Dividend yield - % - % Expected price volatility 44.8 % - 45.2 % 44.4 %- 57.3 % Risk free interest rate 0.6 % - 1.1 % 0.23 %- 0.58 % Expected term (years) 5.8 - 6.1 years 5.3 - 7.5 years There were no options granted during the year ended December 31, 2019. The outstanding stock options as of December 31, 2020 were adjusted from the previously reported amount in the Annual Report to exclude certain option grants subject to discretionary performance conditions, for which a grant date had not occurred as of December 31, 2020. On October 8, 2020, the Company awarded the CEO an option which vests based upon the achievement of certain predetermined goals for each of the five years in the performance period related to stock price, revenue, gross margin, subscribers, new markets launched and new revenue streams between January 1, 2021 and December 31, 2025, which are described in the Company’s annual operating plan. On a given Determination Date (subsequent to the Company’s calendar year end), the Company’s Board of Directors (the “Board”) will review actual performance against the predetermined metrics and determine, in its sole discretion, the amount of any vesting that occurs on a given Determination Date. Any such vesting is subject to the CEO’s continuation in service with the Company through such Determination Date. The Board may determine vesting at, above, or below 20% of the shares subject to the performance option. All shares may be eligible for vesting until the Determination Date following the 2025 calendar year. Because the number of shares to be earned on each Determination Date is subject to the discretion of the Board, the compensation expense is adjusted each reporting period for changes in fair value prorated for the portion of the requisite service period rendered and based on the number of shares expected to be earned. As of December 31, 2021, no portion of the option had vested, and during the year ended December 31, 2021, the Company recognized $ 5.4 million of stock-based compensation expense related to the option. Upon each subsequent Determination Date in 2022, 2023, 2024, and 2025, stock-based compensation expense will be remeasured and adjusted to reflect the grant date fair value. F- 35 As of December 31, 2021, the estimated value of unrecognized stock-based compensation expense related to unvested options was $ 25.8 million to be recognized over a period of 2.2 years. 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 $ 2.2 million. Non-employees During the year ended December 31, 2020, the Company granted options to purchase 280,000 shares of the Company’s common stock at an exercise price of $ 7.20 per share. These options have 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. During the year ended December 31, 2021, 280,000 options were exercised in exchange for 222,962 shares of the Company’s common stock. These options are not included in the table above. 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 table above). Stock-based compensation expense related to unvested non-employee options was immaterial for the year ended December 31, 2020. Other than the options assumed as described above, there were no options granted to non-employees during the year ended December 31, 2021. Market and Service Condition Based Stock Options During the year ended December 31, 2021, 1,375,000 stock options with a fair value of $ 19.2 million were granted to an employee of the Company. The options 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. During the year ended December 31, 2020, 3,078,297 stock options with a fair value of $ 20.9 million were granted to an employee of the Company. The options 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. A summary of activity under the Plan for market and service-based stock options for the year ended December 31, 2021 is as follows (in thousands, except share and per share amounts): Schedule of Stock Option Activity Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2020 3,078,297 $ 9.69 $ 56,351 6.3 Granted 1,375,000 $ 19.59 Outstanding as of December 31, 2021 4,453,297 $ 12.75 $ 17,933 5.7 Options vested and exercisable as of December 31, 2021 3,078,297 $ 9.69 $ 17,933 5.3 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: Schedule of Stock Options Assumptions For the years ended December 31, 2021 2020 Dividend yield - - Expected volatility 71.5 % 76.0 %- 88.1 % Risk free rate 1.3 % 0.24 %- 0.30 % Derived service period 2.0 years 1.6 - 1.9 years F- 36 There were no market and service-based options granted during the year ended December 31, 2019. During the year 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, 2021, there was $ 12.0 million of unrecognized stock-based compensation expense for market and service-based stock options. Time-Based Restricted Stock Units A summary of the Company’s time-based restricted stock unit activity during the year ended December 31, 2021 is as follows: Schedule of Restricted Stock Unit Activity Number of Shares Weighted Average Grant-Date Fair Value Unvested at December 31, 2020 85,000 $ 25.26 Granted 2,883,340 $ 26.12 Vested ( 102,072 ) $ 31.10 Forfeited ( 80,468 ) $ 32.27 Unvested at December 31, 2021 2,785,800 $ 25.73 During the year ended December 31, 2021, the Company granted 2,883,240 time-based restricted stock units which generally vest annually over a four-year period, subject to the recipient’s continuation in service through each applicable vesting date. The fair value of restricted stock units is measured based on their fair value at grant date which totaled $ 75.3 million. During the year ended December 31, 2021, the Company issued 91,580 shares of common stock to members its Board of Directors and employees in settlement of vested restricted stock units. As of December 31, 2021, the estimated value of unrecognized stock-based compensation related to restricted stock units totaled $ 63.5 million, had an aggregate intrinsic value of $ 34.3 million, and a weighted average remaining contractual term of 3.5 years. Performance-Based Restricted Stock Units A summary of the Company’s performance-based restricted stock unit activity during the year ended December 31, 2021 and 2020 is as follows: Schedule of Restricted Stock Unit Activity Number of Shares Weighted Average Grant-Date Fair Value Unvested at December 31, 2020 - $ - Granted 1,900,000 $ 33.87 Unvested at December 31, 2021 1,900,000 $ 33.87 On November 3, 2021, the Company granted 1.9 million performance-based restricted stock units (“PRSUs”) to an employee of the Company. The PRSUs will vest over a period of 5-calendar years through 2025, subject to the achievement of certain established performance metrics including Revenue, Subscribers, New Markets Launched and New Revenue Streams. The determination of the number of awards to be earned is based upon the assessment during each calendar year of the level of the achievement of the Revenue, Subscribers, New Markets Launched, and New Revenue Streams performance metrics as compared to the Company’s annual operating plan. At each reporting period, the Company will make a determination of the most likely outcome for achievement of each performance metric. This may result in a cumulative catch-up as the Company assessments are evaluated. The fair value of the PRSU’s is measured based on their grant date fair value which totaled $ 64.4 million. F- 37 During the year ended December 31, 2021, the Company determined that the performance metrics for 380,000 PRSUs were met, and accordingly, recognized stock-based compensation of $ 5.6 million. As of December 31, 2021, unrecognized stock-based compensation totaled $ 58.8 million. Note 16 - Commitments and Contingencies 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: Schedule of Operating Leases 2021 2020 2019 Years Ended December 31, 2021 2020 2019 Operating leases Operating lease cost $ 2,016 $ 935 $ 259 Other lease cost 287 - 56 Operating lease expense 2,303 935 315 Short-term lease rent expense - - - Total rent expense $ 2,303 $ 935 $ 315 Supplemental cash flow information related to leases were as follows: Schedule of Supplemental Cash Flow Information 2021 2020 2019 Years Ended December 31, 2021 2020 2019 Operating cash flows from operating leases $ 1,029 $ 915 $ 281 Right of use assets exchanged for operating lease liabilities $ 34,560 $ 5,373 $ 3,719 Weighted average remaining lease term - operating leases 12.2 6.3 7.8 Weighted average remaining discount rate - operating leases 7.4 % 5.4 % 8.0 % Maturities of the Company’s operating leases, are as follows (amounts in thousands): Schedule of Future Minimum Payments for Operating Leases Year Ended December 31, 2022 $ 1,761 Year Ended December 31, 2023 4,792 Year Ended December 31, 2024 5,922 Year Ended December 31, 2025 5,604 Year Ended December 31, 2026 4,933 Thereafter 40,970 Total 63,982 Less present value discount ( 25,220 ) Operating lease liabilities $ 38,762 On February 23, 2021, the Company entered into a lease agreement (the “Lease”) for approximately 55,042 rentable square feet located at 1290 Avenue of the Americas, New York, New York 10104. This location is the Company’s new corporate headquarters. The Lease term is twelve years and commenced during the quarter ended December 31, 2021. The annual fixed rent under the Lease will be: ● $ 4,128,150 for the first four years; ● $ 4,403,360 for years five through eight; ● $ 4,678,570 for years nine through twelve. F- 38 The Company has an option to extend the term of the Lease for an additional five years , at a fixed annual rate that is the fair market rent as of the beginning of the extension term as agreed to by the parties or determined by a neutral arbitration process. On March 19, 2021, the Company entered into a sublease agreement for approximately 28,300 square feet located at One North Dearborn Avenue, Chicago, Illinois. The sublease term is four years and commenced May 1, 2021. The annual fixed rent will be $ 932,747 for the first year; $ 953,741 for the second year, $ 974,936 for the third year and $ 996,130 for the fourth year. This lease is included in the tables above. Other Contractual Obligations The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ( in thousands): Schedule of Future Minimum Payments for Operating Leases Market Access Agreements Year Ended December 31, 2022 $ 2,500 Year Ended December 31, 2023 2,500 Year Ended December 31, 2024 2,500 Year Ended December 31, 2025 2,500 Year Ended December 31, 2026 2,375 Sub-total 12,375 Less present value discount ( 1,865 ) Total $ 10,510 Schedule of Future Minimum Payments for Operating Leases Annual Sponsorship Agreements Year Ended December 31, 2022 $ 5,363 Year Ended December 31, 2023 $ 6,131 Year Ended December 31, 2024 $ 5,830 Year Ended December 31, 2025 $ 6,010 Year Ended December 31, 2026 $ 3,325 Thereafter 19,675 Total $ 46,334 Contingencies The Company is subject to certain legal proceedings and claims that arise from time to time in the ordinary course of its business, including relating to business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. 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. The Company is engaged in discussions with certain third parties regarding patent licensing matters. The Company is not able to reasonably estimate whether it will be able to reach an agreement with these parties or the amount of potential licensing fees, if any, it may agree to pay in connection with these discussions, but it is possible that any such amount could be material. From time to time, we enter into business arrangements with vendors for technology services in the ordinary course of business. We are currently engaged in discussions with a vendor surrounding the scope of the parties’ relationship and underlying obligations under the terms of their contract. This includes, among other things, the type and range of services to be provided by this vendor to the Company, the corresponding expenditures by the Company payable under the agreement, and the vendor’s compliance with its good faith express and implied obligations under the contract. Accordingly, we are not able to reasonably estimate the amount of the Company’s potential expenditures, if any, under our arrangement with this vendor, but it is possible that the amounts that the Company may pay for services under the contract could be material. 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. F- 39 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.) (consolidated as In re fuboTV Inc. Securities Litigation, No. 21-cv-01412 (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, prospects, future profitability, seasonality factors, cost escalations, ability to generate advertising revenue, valuation, and 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. On February 24, 2021, putative shareholder Steven Lee filed a nearly identical class action lawsuit against the same Defendants. On April 29, 2021, the court consolidated Said-Ibrahim v. fuboTV Inc., David Gandler, Edgar M. Bronfman Jr., & Simone Nardi , Case No. 21-cv-01412 (S.D.N.Y) and Lee v. fuboTV, Inc., David Gandler, Edgar M. Bronfman Jr., & Simone Nardi , Case No. 21-cv-01641 (S.D.N.Y.) under In re FuboTV Inc. Securities Litigation, No. 1:21-cv-01412 (S.D.N.Y.). The court also appointed putative shareholder Nordine Aamchoune as lead plaintiff. On July 12, 2021, Lead Plaintiff filed an Amended Class Action Complaint. Lead Plaintiff seeks to pursue this claim on behalf of himself 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. The Class Action Defendants filed a motion to dismiss the Amended Class Action Complaint on September 10, 2021. Lead Plaintiff filed an opposition on November 9, 2021. Class Action Defendants’ filed their reply in support of the motion to dismiss on December 9, 2021. 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. On April 21, 2021, Derivative Defendants filed a Motion to Dismiss the Original Complaint. In light of the arguments made in Derivative Defendants’ Motion, Plaintiff filed his Amended Verified Shareholder Derivative Complaint on May 12, 2021. Derivative Defendants filed a Motion to Dismiss the Amended Complaint on June 2, 2021. On June 23, 2021, after thoroughly considering Derivative Defendants’ arguments in their Motion, Plaintiff concluded that Derivative Defendants’ arguments were well founded and he jointly, with Derivative Defendants, asked the Court to voluntarily dismiss the derivative action with prejudice, following a proposed Notice of the dismissal to current shareholders. On June 25, 2021, the court entered an order approving the form of the proposed Notice of dismissal to current shareholders and ordering fuboTV to file the Notice with the SEC and post the Notice to the investor relations section of fuboTV’s corporate website. On June 28, 2021, fuboTV filed the Notice with the SEC and posted the Notice to the investor relations section of fuboTV’s corporate website. On July 28, 2021, the court entered an order dismissing with prejudice the derivative lawsuit filed by Robert Rosenfeld. 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 and on January 19, 2021, the Company filed a motion to dismiss all claims asserted against it. That motion has been fully submitted and is pending resolution by the court. A court conference was held on November 15, 2021, and the court confirmed that the motion to dismiss was fully submitted. F- 40