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, 2022, 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, 2022, 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, 2022. KPMG, our independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting, which is included below. D. Attestation Report of the Registered Public Accounting Firm E. Changes in Internal Control over Financial Reporting 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, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 72 Table of Conte nts Report of Independent Registered Public Accounting Firm To the Shareholders 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, 2022, 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, 2022, 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, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated February 27, 2023 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 27, 2023 73 Table of Conte nts Item 9B. Other Information. None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not Applicable. 74 Table of Conte nts 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 2023 Annual Meeting of Shareholders, 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 2023 Annual Meeting of Shareholders and such information is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholders Matters. The information required by this Item 12 will be included in our definitive proxy statement for our 2023 Annual Meeting of Shareholders 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 2023 Annual Meeting of Shareholders, 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 2023 Annual Meeting of Shareholders, and such information is incorporated herein by reference. 75 Table of Conte nts PART IV Item 15. Exhibit and Financial Statement Schedules (a)(1) Financial Statements. The following documents are included on pages F-1 through F-51 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. 76 Table of Conte nts (a)(3) Exhibits. The following is a list of exhibits filed as part of this Annual Report on Form 10-K: Exhibit Number Incorporated by Reference Filed / Furnished Herewith 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 77 Table of Conte nts 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 2 5 , 2020 S-1 333-249783 3.1(u) 10/30/2020 3.1(v) Articles of Amendment to Articles of Incorporation dated June 9, 2022 S-3 333-266557 3.1(v) 8/5/2022 3.2 Amended and Restated Bylaws of the Company, dated March 1, 2022 8-K 001-39590 3.1 3/2/2022 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 * 10.1† 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-K 001-39590 10.4 3/1/2022 10.5† Form of Restricted Stock Unit Award Agreement to the fuboTV Inc. 2020 Equity Incentive Plan, as amended (standard) 10-K 001-39590 10.5 3/1/2022 10.6† Form of Restricted Stock Unit Award Agreement to the fuboTV Inc. 2020 Equity Incentive Plan, as amended (key employees) 10-K 001-39590 10.6 3/1/2022 10.7† Vigtory, Inc. 2020 Equity Compensation Plan, as amended, and related form agreements S-8 333-253951 4.1 3/5/2021 78 Table of Conte nts 10.8† fuboTV Inc. 2022 Employment Inducement Equity Incentive Plan 10-Q 001-39590 10.1 8/8/2022 10.9† Form of Restricted Stock Unit Award Agreement to the fuboTV Inc. 2022 Employment Inducement Equity Incentive Plan (standard) 10-Q 001-39590 10.2 8/8/2022 10.10† Form of Restricted Stock Unit Award Agreement to the fuboTV Inc. 2022 Employment Inducement Equity Incentive Plan (key employee) 10-Q 001-39590 10.3 8/8/2022 10.11† Form of Stock Option Award Agreement to the fuboTV Inc. 2022 Employment Inducement Equity Incentive Plan 10-Q 001-39590 10.4 8/8/2022 10.12† Form of Indemnification Agreement by and between fuboTV Inc. and its directors and officers 8-K 000-55353 10.2 4/7/2020 10.13† Employment Agreement, by and between David Gandler and the Company, dated October 8, 2020. 8-K 001-39590 10.1 10/14/2020 10.14 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 10.15 fuboTV Inc. Outside Director Compensation Policy 10-K 001-39590 10.21 3/25/2021 10.16 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 10.17† Offer Letter, dated as of January 3, 2022, by and between fuboTV Inc. and John Janedis 10-K 001-39590 10.15 3/1/2022 10.18 Form of Purchase Agreement, by and between the Company and the Purchaser 10-Q 000-55353 10.31 7/6/2020 10.19 Sales Agreement, dated August 4, 2022, by and between fuboTV Inc., Evercore Group L.L.C., Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Needham & Company, LLC. 8-K 001-39590 10.10 8/5/2022 21.1 List of Significant Subsidiaries of fuboTV Inc. * 23.1 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. ** 79 Table of Conte nts 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. 80 Table of Conte nts 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 27, 2023 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. 81 Table of Conte nts 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 27, 2023 David Gandler ( principal executive officer ) /s/ John Janedis Chief Financial Officer February 27, 2023 John Janedis ( principal financial officer and principal accounting officer ) /s/ Edgar Bronfman, Jr. Executive Chairman and Director February 27, 2023 Edgar Bronfman /s/ Ignacio Figueras Director February 27, 2023 Ignacio Figueras /s/ Julie Haddon Director February 27, 2023 Julie Haddon /s/ Daniel Leff Director February 27, 2023 Daniel Leff /s/ Laura Onopchenko Director February 27, 2023 Laura Onopchenko Pär-Jörgen Pärson Director February 27, 2023 Pär-Jörgen Pärson 82 Table of Conte nts 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 . F- 2 Consolidated Balance Sheets as of December 31, 202 2 and 2021 F- 4 Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 202 2 , 2021 and 2020 F- 5 Consolidated Statements of S hareholders ’ Equity for the Years Ended December 31, 202 2 , 202 1 and 2020 F- 7 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 2 , 202 1 and 2 020 F- 9 Notes to the Consolidated Financial Statements F- 12 F-1 Report of Independent Registered Public Accounting Firm To the Shareholders 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, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2022, 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, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, 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, 2022, 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 27, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Change in Accounting Principle As discussed in Note 3 to the consolidated financial statements, the Company has changed its method of accounting for the 2026 Convertible Notes as of January 1, 2022 due to the adoption of Accounting Standards Update (ASU) 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. 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. F-2 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. Goodwill impairment assessment for the streaming reporting unit As discussed in Notes 3 and 8 to the consolidated financial statements, the Company’s goodwill balance for the streaming reporting unit is $618.5 million as of December 31, 2022. Since October 1, 2022, the Company experienced sustained decreases in its stock price and market capitalization. As a result, the Company conducted an impairment test of its goodwill as of December 31, 2022, estimating the fair value of its streaming reporting unit by weighting results from a market approach and an income approach. The results of the impairment test showed that the fair value was in excess of the carrying value of the reporting unit. Therefore, it was determined that goodwill is not impaired. We identified the assessment of the fair value of the streaming reporting unit for purposes of the December 31, 2022 goodwill impairment test as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate certain assumptions used in the income approach. Specifically, the Company’s determination of the revenue growth, subscriber related expenses and discount rate used in the test were challenging as they represented subjective determinations of future market and economic conditions. Changes in these assumptions could have had a significant effect on the Company’s assessment of the fair value of the streaming reporting unit. Additionally, the audit effort associated with the discount rate required 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 Company’s goodwill impairment assessment process, including controls related to the revenue growth, subscriber related expenses and discount rate used. We evaluated the reasonableness of the Company’s revenue growth by comparing it to historical results, analyst reports and the Company’s underlying business strategies and growth plans. We evaluated the reasonableness of subscriber related expenses by comparing them to historical results and distribution rights arrangements with content providers. To assess the Company’s ability to accurately project revenue growth and subscriber related expenses, we compared the Company’s historical projections to actual results. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in developing an estimate of the discount rate using inputs from publicly available market data and comparing the result to the Company's discount rate assumption. /s/ KPMG LLP We have served as the Company’s auditor since 2020. New York, New York February 27, 2023 F-3 fuboTV Inc. Consolidated Balance Sheets (in thousands, except for share and per share information) December 31, 2022 December 31, 2021 ASSETS Current assets Cash and cash equivalents $ 337,087 $ 370,968 Accounts receivable, net 43,996 34,297 Prepaid sports rights 37,668 3,284 Prepaid and other current assets 13,508 13,595 Assets of discontinued operations 4,643 6,361 Total current assets 436,902 428,505 Property and equipment, net 4,975 5,114 Restricted cash 6,139 5,112 Intangible assets, net 171,832 203,561 Goodwill 618,506 619,587 Right-of-use assets 35,888 34,654 Other non-current assets 3,532 3,017 Assets of discontinued operations — 70,228 Total assets $ 1,277,774 $ 1,369,778 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable $ 66,952 $ 55,767 Accrued expenses and other current liabilities 264,415 215,285 Notes payable 5,687 5,113 Deferred revenue 65,370 44,296 Warrant liabilities — 3,548 Long-term borrowings - current portion 1,986 3,668 Current portion of lease liabilities 1,763 3,825 Liabilities of discontinued operations 32,581 5,795 Total current liabilities 438,754 337,297 Convertible notes, net of discount 394,094 316,354 Deferred income taxes 765 2,431 Lease liabilities 39,266 31,682 Other long-term liabilities 1,565 — Liabilities of discontinued operations — 11,133 Total liabilities 874,444 698,897 COMMITMENTS AND CONTINGENCIES (Note 16) Redeemable non-controlling interest 1,648 — Shareholders’ equity: Common stock par value $ 0.0001 : 400,000,000 shares authorized; 209,684,548 and 153,950,895 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively 21 16 Additional paid-in capital 1,972,006 1,691,206 Accumulated deficit ( 1,558,088 ) ( 1,009,293 ) Non-controlling interest ( 11,662 ) ( 11,220 ) Accumulated other comprehensive income ( 595 ) 172 Total shareholders’ equity 401,682 670,881 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,277,774 $ 1,369,778 The accompanying notes are an integral part of these consolidated financial statements. F-4 Table of Contents fuboTV Inc. Consolidated Statements of Operations and Comprehensive Loss (in thousands, except for share and per share information) For the Years Ended December 31, 2022 2021 2020 Revenues Subscription $ 905,886 $ 564,441 $ 184,328 Advertising 101,739 73,749 24,904 Software licenses, net — — 7,295 Other 1,071 180 1,219 Total revenues 1,008,696 638,370 217,746 Operating expenses Subscriber related expenses 976,415 593,241 204,240 Broadcasting and transmission 73,377 55,563 29,542 Sales and marketing 183,615 135,720 63,141 Technology and development 69,264 55,418 30,189 General and administrative 81,151 89,039 77,635 Depreciation and amortization 36,731 37,666 43,972 Impairment of goodwill and intangible assets — — 248,926 Total operating expenses 1,420,553 966,647 697,645 Operating loss ( 411,857 ) ( 328,277 ) ( 479,899 ) Other income (expense) Interest expense and financing costs ( 11,696 ) ( 13,451 ) ( 18,637 ) Amortization of debt discount ( 2,476 ) ( 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 ( 1,701 ) 2,659 ( 83,338 ) Change in fair value of shares settled liability — — ( 1,665 ) Change in fair value of derivative liability — — ( 426 ) Change in fair value of profit share liability — — 1,971 Unrealized gain on equity method investment — — 2,614 Foreign currency exchange loss — — ( 1,010 ) Other income (expense) 1,019 ( 90 ) 147 Total other expense ( 14,854 ) ( 26,190 ) ( 129,153 ) Loss from continuing operations before income taxes ( 426,711 ) ( 354,467 ) ( 609,052 ) Income tax benefit 1,666 2,681 9,660 Net loss from continuing operations ( 425,045 ) ( 351,786 ) ( 599,392 ) Discontinued operations Loss from discontinued operations before income taxes ( 136,874 ) ( 31,177 ) — Income tax benefit — — — Net loss from discontinued operations ( 136,874 ) ( 31,177 ) — Net loss ( 561,919 ) ( 382,963 ) ( 599,392 ) F-5 Table of Contents fuboTV Inc. Consolidated Statements of Operations and Comprehensive Loss (Continued) (in thousands, except for share and per share information) For the Years Ended December 31, 2022 2021 2020 Less: Net loss attributable to non-controlling interest 442 126 29,059 Net loss attributable to controlling interests ( 561,477 ) ( 382,837 ) ( 570,333 ) Less: Deemed dividend - beneficial conversion feature on preferred stock — — ( 171 ) Net loss attributable to common shareholders $ ( 561,477 ) $ ( 382,837 ) $ ( 570,504 ) Other comprehensive income (loss) Foreign currency translation adjustment ( 767 ) 172 — Comprehensive loss attributable to common shareholders $ ( 562,244 ) $ ( 382,665 ) $ ( 570,504 ) Net loss per share attributable to common shareholders Basic and diluted loss per share from continuing operations $ ( 2.33 ) $ ( 2.56 ) $ ( 12.82 ) Basic and diluted loss per share from discontinued operations $ ( 0.75 ) $ ( 0.23 ) $ — Basic and diluted loss per share $ ( 3.08 ) $ ( 2.78 ) $ ( 12.82 ) Weighted average shares outstanding: Basic and diluted 182,472,069 137,498,077 44,492,975 The accompanying notes are an integral part of these consolidated financial statements. F-6 Table of Contents fuboTV Inc. Consolidated Statements of Shareholders’ Equity For the years ended December 31, 2022, 2021 and 2020 (in thousands except for share information) Preferred stock Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Non-controlling Interest - Total Shareholders’ Equity Shares Amount Shares Amount Shares Amount 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 F-7 Table of Contents fuboTV Inc. Consolidated Statements of Shareholders’ Equity (Continued) For the years ended December 31, 2022, 2021 and 2020 (in thousands except for share information) Preferred stock Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Non-controlling Interest - Total Shareholders’ Equity Shares Amount Shares Amount Shares Amount Balance at December 31, 2020 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 Issuance of common stock/At-the-market offering, net of offering costs — — 50,620,577 5 292,150 — — — — — 292,155 Reclassification of the equity components of the 2026 Convertible Notes to liability upon adoption of ASU 2020-06 — — — — ( 87,946 ) — — 12,682 — — ( 75,264 ) Exercise of common stock warrants — — 540,541 — 10,249 — — — — — 10,249 Exercise of stock options — — 616,304 — 829 — — — — — 829 Delivery of common stock underlying restricted stock units — — 1,956,231 — — — — — — — — Issuance of restricted stock — — 2,000,000 — — — — — — — — Stock-based compensation — — — — 65,518 — — — — — 65,518 Foreign currency translation adjustment — — — — — — — — ( 767 ) — ( 767 ) Net loss attributable to non-controlling interest — — — — — — — — — ( 442 ) ( 442 ) Net loss — — — — — — — ( 561,477 ) — — ( 561,477 ) Balance at December 31, 2022 — $ — 209,684,548 $ 21 $ 1,972,006 $ — $ — $ ( 1,558,088 ) $ ( 595 ) $ ( 11,662 ) $ 401,682 The accompanying notes are an integral part of these consolidated financial statements. F-8 Table of Contents fuboTV Inc. Consolidated Statements of Cash Flows (in thousands, except for share and per share information) For the Years Ended December 31, 2022 2021 2020 Cash flows from operating activities Net loss $ ( 561,919 ) $ ( 382,963 ) $ ( 599,392 ) Less: Loss from discontinued operations, net of tax ( 136,874 ) ( 31,177 ) — Net loss from continuing operations ( 425,045 ) ( 351,786 ) ( 599,392 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 36,731 37,666 43,972 Stock-based compensation 52,454 53,150 50,739 Impairment of intangible assets — — 100,304 Impairment expense goodwill — — 148,622 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 Common stock issued in connection with note payable — — 67 Gain on sale of assets — — ( 7,631 ) Amortization of debt discount 2,476 14,928 12,327 Deferred income tax benefit ( 1,666 ) ( 2,681 ) ( 9,660 ) Change in fair value of derivative liability — — 426 Change in fair value of warrant liabilities 1,701 ( 2,659 ) 83,338 Change in fair value of shares settled liability — — 1,665 Change in fair value of profit share liability — — ( 1,971 ) Unrealized gain on investment — — ( 2,614 ) Amortization of right-of-use assets 3,078 954 681 Accrued interest on notes payable — — 246 Foreign currency loss — — 1,010 Other adjustments 1,155 583 ( 620 ) Changes in operating assets and liabilities of business, net of acquisitions: Accounts receivable, net ( 9,778 ) ( 15,047 ) ( 12,591 ) Prepaid expenses and other assets ( 950 ) ( 3,554 ) ( 2,141 ) Prepaid sports rights ( 34,384 ) ( 3,284 ) — Accounts payable 12,014 8,727 ( 39,141 ) Accrued expenses and other liabilities 50,116 64,792 40,761 Due to related parties — — ( 665 ) Deferred revenue 21,102 26,055 8,619 Lease liabilities 1,210 ( 120 ) ( 663 ) Net cash used in operating activities - continuing operations ( 289,786 ) ( 171,896 ) ( 149,018 ) Net cash used in operating activities - discontinued operations ( 26,915 ) ( 24,031 ) — Net cash used in operating activities ( 316,701 ) ( 195,927 ) ( 149,018 ) F-9 Table of Contents fuboTV Inc. Consolidated Statements of Cash Flows (Continued) (in thousands, except for share and per share information) For the Years Ended December 31, 2022 2021 2020 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 short term investments ( 100,000 ) — — Proceeds from maturity of short term investments 100,000 — — Purchases of property and equipment ( 1,130 ) ( 3,409 ) ( 166 ) Capitalization of internal use software ( 4,857 ) ( 4,074 ) ( 45 ) Net cash used in investing activities - continuing operations ( 5,987 ) ( 30,377 ) ( 1,457 ) Net cash used in investing activities - discontinued operations ( 6,436 ) ( 45,795 ) — Net cash used in investing activities ( 12,423 ) ( 76,172 ) ( 1,457 ) Cash flows from financing activities Proceeds from sale of common stock and warrants, net of fees 292,123 140,446 278,883 Proceeds from convertible note, net of issuance costs — 389,446 3,003 Repayments of convertible notes — — ( 3,913 ) Proceeds from exercise of stock options 829 3,013 2,178 Proceeds from the exercise of warrants 5,000 3,762 1,685 Proceeds from notes payable and long-term borrowings — — 33,649 Repayments of notes payable and long-term borrowings ( 1,682 ) ( 24,709 ) ( 35,400 ) Proceeds from the issuance of Series D Preferred Stock — — 203 Redemption of Series D Preferred Stock — — ( 883 ) Repayments to related parties — — ( 333 ) Net cash provided by financing activities - continuing operations 296,270 511,958 279,072 Net cash provided by financing activities - discontinued operations — — — Net cash provided by financing activities 296,270 511,958 279,072 Net increase (decrease) in cash, cash equivalents and restricted cash ( 32,854 ) 239,859 128,597 Cash, cash equivalents and restricted cash at beginning of period 376,080 136,221 7,624 Cash, cash equivalents and restricted cash at end of period $ 343,226 $ 376,080 $ 136,221 Supplemental disclosure of cash flows information: Interest paid $ 13,786 $ 8,017 $ 5,372 F-10 Table of Contents fuboTV Inc. Consolidated Statements of Cash Flows (Continued) (in thousands, except for share and per share information) For the Years Ended December 31, 2022 2021 2020 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 $ — Reclassification of the equity components of the 2026 Convertible Notes to liability upon adoption of ASU 2020-06 $ 75,264 $ — $ — 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 $ 5,249 $ 16,480 $ 98,132 Accrued expenses - At-the-market offering $ 18 $ 51 $ — Common stock issued in connection with note payable $ — $ — $ 259 Issuance of common stock - subsidiary share exchange $ — $ — $ 2,042 Deconsolidation of Nexway $ — $ — $ 1,825 Unpaid financing costs included in accounts payable $ — $ — $ 772 Accrued Series D Preferred Stock dividends $ — $ — $ 17 Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock $ — $ — $ 171 The accompanying notes are an integral part of these consolidated financial statements. F-11 fuboTV Inc. Notes to the Consolidated Financial Statements (in thousands, except for share and per share information) Note 1 - Organization and Nature of Business Incorporation fuboTV Inc. (“Fubo” 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, “Fubo,” “fuboTV,” “we,” “us,” “our,” and the “Company” refers to the Company 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 principally focused on offering consumers a leading live TV streaming platform for sports, news, and entertainment through its streaming platform. The Company’s revenues are almost entirely derived from the sale of subscription services and the sale of advertisements in the United States, though the Company has expanded into several international markets, with operations in Canada, Spain and France. 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 Fubo 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 (“Fubo Sportsbook”) in the states of Iowa and Arizona, and in the state of New Jersey during the third quarter of 2022. On October 17, 2022, the Company ceased operation of Fubo Sportsbook in connection with the dissolution of Fubo Gaming Inc. ("Fubo Gaming") (see Note 4). 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, cash equivalents, and restricted cash of $ 343.2 million, working capital of $ 26.1 million (excluding discontinued operations) and an accumulated deficit of $ 1,558.1 million as of December 31, 2022. The Company incurred a net loss from continuing operations of $ 425.0 million for the year ended December 31, 2022. 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. F-12 Table of Contents 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. As discussed further in Note 14, during the year ended December 31, 2022, the Company received net proceeds of approximately $ 292.1 million (after deducting $ 6.6 million in commissions and expenses) from sales of 50,620,577 shares of its common stock, at a weighted average gross sales price of $ 5.90 per share, pursuant to at-the-market sales agreements with its sales agents. As discussed further in Note 5, 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 believes that its current cash and cash equivalents provide it 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 and other macroeconomic factors, including inflationary cost pressures and potential recession indicators. Based upon the Company’s current assessment, it does not expect the impact of the COVID-19 pandemic and other macroeconomic factors to materially impact the Company’s operations. However, the Company is continuing to assess the impact that the spread of COVID-19 and other macroeconomic factors 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. Unless otherwise indicated, amounts provided in these Notes pertain to continuing operations only (see Note 4 for information on discontinued operations). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. 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, equity instruments issued in share-based payment arrangements, and accounting for income taxes, including the valuation allowance on deferred tax assets. F-13 Table of Contents 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. As discussed in Note 1, the Company ceased operations of Fubo Sportsbook in connection with the dissolution of Fubo Gaming in October 2022. Consequently, the wagering reportable segment has been eliminated. Subsequent to the dissolution of Fubo Gaming, the CODM reviews financial information and makes resource allocation decisions at the consolidated group level. The Company has one operating segment as of December 31, 2022, the streaming business. Cash , 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): December 31, 2022 December 31, 2021 Cash and cash equivalents $ 337,087 $ 370,968 Restricted cash 6,139 5,112 Total cash, cash equivalents and restricted cash $ 343,226 $ 376,080 Certain Risks and Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of demand deposits, time-based 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 Google Cloud Platform and Amazon Web Services, which cannot be easily switched to another cloud service provider. As such, any disruption of the Company’s interference with Google Cloud Platform and Amazon Web Services could 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 shareholders’ equity. During the year ended December 31, 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 5 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-14 Table of Contents Fair Value of Financial Instruments The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and Level 3 — assets and liabilities whose significant value drivers are unobservable. Accounts Receivable, net The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectible 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 credit losses was not necessary as of December 31, 2022 and 2021. No individual customer accounted for more than 10% of revenue for the year ended December 31, 2022, 2021, and 2020. As of December 31, 2022 and 2021, one customer, 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. Licensed Content The Company entered into various license agreements to obtain rights to certain live sports events. Costs incurred in acquiring certain rights to live sporting events are accounted for in accordance with ASC 920, Entertainment—Broadcasters (“ASC 920”). These program rights are expensed in a manner consistent with how it expects to monetize the licensed content, which is primarily based on subscription revenue and is included in subscriber related expenses. Cash flows for licensed content are presented within operating activities in the consolidated statements of cash flows. 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. F-15 Table of Contents In August 2022 the Company initiated a strategic review of Fubo Sportsbook, exploring a possible sale or partnership transaction, or possible dissolution. This represented a triggering event in that there would be a significant change in the extent and manner in which the long-lived assets of Fubo Sportsbook would be used, and there was an expectation that the assets would be sold or otherwise disposed of. T he Company ceased operation of Fubo Sportsbook in connection with the dissolution of Fubo Gaming in October 2022. For the year ended December 31, 2022, the Company determined the carrying value of the asset groups, within Fubo Sportsbook, exceeded future undiscounted cash flows. The Company then calculated the fair value of the asset groups as the present value of the estimated future cash flows and determined that the carrying value exceeded the fair value in certain instances. Based on this analysis, the Company recognized an aggregate non-cash impairment charge of $ 76.7 million which represented substantially all of the long-lived assets of Fubo Sportsbook (see Note 4) which is recorded in loss from discontinued operations in the consolidated statement of operations and comprehensive loss. 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. Exit and Disposal Costs The Company accounts for exit or disposal activities, including termination of a line of business or restructuring, in accordance with ASC 420 , Exit or Disposal Cost Obligations. The Company defines a business restructuring as an exit or disposal activity that includes but is not limited to a program which is planned and controlled by management and materially changes either the scope of a business or the manner in which that business is conducted. Under ASC 420 , a liability for a cost associated with an exit or disposal activity is measured at its fair value and recognized as incurred. Business restructuring charges may include (i) contract termination costs and (ii) other related costs associated with exit or disposal activities. Contract termination costs include costs to terminate a contract or costs that will continue to be incurred under the contract without benefit to the Company. A liability is recognized and measured at its fair value when the Company either terminates the contract or ceases using the rights conveyed by the contract. The Company estimated the fair value using a probability-weighted cash flow approach. A subsequent change resulting from a revision to either the timing or the amount of estimated cash flows is recognized as an adjustment to the liability in the period of the change. During the year ended December 31, 2022 , the Company recognized liabilities in connection with the dissolution of Fubo Gaming (See Note 4), including termination of certain contracts and severance and other employee related costs. 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. F-16 Table of Contents Intangible Assets, net The Company’s intangible assets represent definite lived intangible assets, which are being amortized on a straight-line basis over their estimated useful lives as follows: Customer relationships 2 years Trade names 2 - 9 years Software and technology 3 - 9 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, 2022 and 2021 represents Pulse Evolution Corp. shareholders who retained an aggregate 23.4 % and 23.4 %, respectively, interest in that entity following the Company's 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. 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. There were no warrant liabilities outstanding as of December 31, 2022. Leases 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-17 Table of Contents 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 2022, 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. F-18 Table of Contents 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 $ 976.4 million, $ 593.2 million and $ 204.2 million for the years ended December 31, 2022, 2021 and 2020, 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 $ 133.2 million, $ 111.9 million and $ 48.1 million for the years ended December 31, 2022, 2021 and 2020, 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 the fair value of restricted stock units using the closing market price of its common stock on the date of the grant. 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 F-19 Table of Contents contractual term. The simplified method was used because the Company does not have sufficient historical exercise data to provide a reasonable basis for an estimate of expected term. Expected Volatility – The Company historically has lacked 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). F-20 Table of Contents Net Loss Per Share Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data): Years Ended December 31, 2022 2021 2020 Basic loss per share: Loss from continuing operations $ ( 425,045 ) $ ( 351,786 ) $ ( 599,392 ) Less: net loss attributable to non-controlling interest 442 126 29,059 Less: deemed dividend on Series D Preferred Stock — — ( 171 ) Loss from continuing operations available to common shareholders ( 424,603 ) ( 351,660 ) ( 570,504 ) Loss from discontinued operations, net of tax ( 136,874 ) ( 31,177 ) — Net loss attributable to common shareholders $ ( 561,477 ) $ ( 382,837 ) $ ( 570,504 ) Shares used in computation: Weighted-average common shares outstanding 182,472,069 137,498,077 44,492,975 Basic and diluted loss per share from continuing operations $ ( 2.33 ) $ ( 2.56 ) $ ( 12.82 ) Basic and diluted loss per share from discontinued operations $ ( 0.75 ) $ ( 0.23 ) $ — Basic and diluted loss per share $ ( 3.08 ) $ ( 2.78 ) $ ( 12.82 ) The following common share equivalents are excluded from the calculation of weighted average common shares outstanding because their inclusion would have been anti-dilutive: December 31, 2022 2021 2020 Warrants to purchase common stock 166,670 565,544 2,535,528 Series AA convertible preferred shares — — 46,439,226 Stock options 15,517,069 15,908,187 16,808,862 Unvested restricted stock units 14,575,629 4,685,800 — Convertible notes variable settlement feature 6,966,078 6,966,078 — Total 37,225,446 28,125,609 65,783,616 Recently Adopted Accounting Standards In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 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 Company adopted the ASU 2020-06 on January 1, 2022 using the modified retrospective method. Upon adoption at January 1, 2022, the Company made certain adjustments in its consolidated balance sheets 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 $ 12.7 million in Accumulated deficit. F-21 Table of Contents Additionally, from January 1, 2022, as related to the 2026 Convertible Notes, we will no longer incur non-cash interest expense for the amortization of debt discount related to the previously separated equity component. After adoption, the Company accounts for the 2026 Convertible Notes as single liability measured at amortized cost. The Company did not elect the fair value option. The Company will apply the if-converted methodology in computing diluted earnings per share if and when profitability is achieved. The following table summarizes the adjustments made to the Company’s consolidated balance sheet as of January 1, 2022 as a result of applying the modified retrospective method in adopting ASU 2020-06 (in thousands): As Reported ASU 2020-06 As Adjusted December 31, 2021 Adjustments January 1, 2022 2026 Convertible Notes $ 316,354 $ 75,264 $ 391,618 Additional paid-in capital $ 1,691,206 $ ( 87,946 ) $ 1,603,260 Accumulated deficit $ ( 1,009,293 ) $ 12,682 $ ( 996,611 ) Under the modified retrospective method, the Company does not need to restate the comparative periods in transition and will continue to present financial information and disclosures for periods before January 1, 2022 in accordance with guidance under ASC 470-20, Debt: Debt with Conversion and Other Options (ASC 470-20). The adoption did not impact previously reported amounts in the Company’s consolidated statements of operations and comprehensive loss, cash flows and the basic and diluted net loss per share amounts. 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. The Company adopted this ASU in January 2022 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. In March 2019, the FASB issued ASU 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters-Intangibles-Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. The amendments also require that an entity reassess estimates of the use of a film for a film in a film group and account for any changes prospectively. In addition, this guidance requires an entity to test for impairment a film or license agreement within the scope of ASC 920-350 at the film group level, when the film or license agreement is predominantly monetized with other films and/or licensed agreements. The Company adopted this ASU in January 2022, and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recently Issued Accounting Standards 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. F-22 Table of Contents Note 4 - Discontinued Operations Dissolution of Fubo Gaming As discussed in Note 1, on October 17, 2022, the Company dissolved its wholly owned subsidiary Fubo Gaming. In connection with the dissolution of Fubo Gaming, the Company concurrently ceased operation of Fubo Sportsbook. Net loss from Fubo Gaming's discontinued operations consists of the following for the years ended December 31, 2022 and 2021: Years Ended December 31, 2022 2021 Revenues Wagering $ ( 759 ) $ ( 20 ) Total revenues ( 759 ) ( 20 ) Operating expenses Sales and marketing 9,976 6,667 Technology and development 9,220 5,095 General and administrative 28,481 19,146 Depreciation and amortization 433 215 Impairment of goodwill, intangible assets, and other long-lived assets, net 87,365 — Total operating expenses 135,475 31,123 Operating loss ( 136,234 ) ( 31,143 ) Other income (expense) Interest expense and financing costs ( 598 ) — Other income (expense) ( 42 ) ( 34 ) Total other expense ( 640 ) ( 34 ) Net loss ( 136,874 ) ( 31,177 ) During the year ended December 31, 2022 the Company incurred non-cash impairment charges totaling $ 87.4 million primarily consisting of prepaid market access agreements, intangible assets and goodwill. Included in the table above, during the years ended December 31, 2022 and 2021, the Company recorded $ 15.9 million and $ 10.6 million, respectively, of stock-based compensation expense. The Company incurred certain immaterial charges in connection with the dissolution, primarily related to severance and other employee-related costs. F-23 Table of Contents The carrying amounts of the major classes of assets and liabilities classified as discontinued operations as of December 31, 2022 and 2021 are as follows: December 31, 2022 December 31, 2021 ASSETS Current assets Cash and cash equivalents $ 3,277 $ 3,326 Cash reserved for users — 579 Accounts receivable, net — 11 Prepaid and other current assets 1,366 2,445 Total current assets 4,643 6,361 Property and equipment, net — 1,703 Intangible assets, net — 14,625 Goodwill — 10,682 Right-of-use assets — 3,101 Other non-current assets — 40,117 Total assets - discontinued operations $ 4,643 $ 76,589 LIABILITIES Current liabilities Accounts payable $ 4,347 $ 693 Accrued expenses and other current liabilities 25,787 4,294 Lease liabilities 2,447 808 Total current liabilities 32,581 5,795 Lease liabilities — 2,447 Other long-term liabilities — 8,686 Total liabilities - discontinued operations $ 32,581 $ 16,928 As of December 31, 2022, the Company's accrued expenses and other current liabilities of its discontinued operations included $ 24.7 million, primarily related to contract termination costs. F-24 Table of Contents 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): 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 third 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): Investment in Nexway $ 4,989 Financial assets at fair value 1,965 Goodwill 28,541 Total assets 35,495 Loan payable 56,140 Net carrying amount ( 20,645 ) Issuance of common stock to original owners of Facebank AG 12,395 Cash paid to former owners of Facebank AG 619 Gain on sale of investment in Facebank AG $ ( 7,631 ) F-25 Table of Contents Note 5 - Acquisitions 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 wagering segment. The results of the Vigtory Acquisition were included in the Company’s operations from February 26, 2021, until the Company ceased operation of Fubo Sportsbook in connection with the dissolution of Fubo Gaming (See Note 4). The 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 loss from discontinued operations in the consolidated statement of operations and comprehensive loss. F-26 Table of Contents 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): 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 reporting unit. 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 were 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 (in thousands): 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 98.5 % 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”). In the first quarter of 2023, the Company acquired the remaining 1.5 % of the equity interests in Molotov. 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. F-27 Table of Contents During the year ended December 31, 2022, the Company finalized its purchase price allocation of the assets acquired and liabilities assumed in the December 6, 2021 acquisition of Molotov based on new information obtained about facts and circumstances that existed as of the acquisition date. During the year ended December 31, 2022 , the Company recorded measurement period adjustments to its acquisition date goodwill to record the non-controlling interest o f $ 1.8 million for the remaining 1.5 % of Molotov’s equity interest and adjustments to right of use assets, lease liabilities, accounts payable, and accrued expenses based on additional information obtained about conditions that existed as of the acquisition date. 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 (in thousands): 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 127,971 Right-of-use assets 4,566 Total assets acquired 163,190 Liabilities assumed: Accounts payable 15,724 Accrued expenses and other current liabilities 21,628 Deferred revenue 812 Long-term borrowings - current portion 3,662 Lease liabilities 4,566 Total liabilities assumed 46,392 Redeemable non-controlling interest 1,752 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 were 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: 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-28 Table of Contents Note 6 - 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): Years Ended December 31, 2022 2021 2020 Subscription $ 905,886 $ 564,441 $ 184,328 Advertising 101,739 73,749 24,904 Software licenses, net — — 7,295 Other 1,071 180 1,219 Total revenues $ 1,008,696 $ 638,370 $ 217,746 The following tables summarize subscription revenue and advertising revenue by region for the year ended December 31, 2022, 2021 and 2020 (in thousands): Subscription Years Ended December 31, 2022 2021 2020 United States and Canada (North America) $ 882,679 $ 562,991 $ 184,137 Rest of world 23,207 1,450 191 Total subscription revenues $ 905,886 $ 564,441 $ 184,328 Advertising Years Ended December 31, 2022 2021 2020 United States and Canada (North America) $ 100,605 $ 73,538 $ 24,904 Rest of world 1,134 211 — Total advertising revenues $ 101,739 $ 73,749 $ 24,904 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, 2022, 2021 and 2020. For the year ended December 31, 2022, 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, 2022 and 2021. The contract liabilities primarily relate to upfront payments and consideration received from customers for subscription services. As of December 31, 2022 and 2021, the Company’s contract liabilities totaled $ 65.4 million and $ 44.3 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. F-29 Table of Contents Note 7 - Property and equipment, net Property and equipment, net, is comprised of the following (in thousands): Useful Lives (Years) December 31, 2022 December 31, 2021 Furniture and fixtures 7 $ 441 $ 357 Computer equipment 3 - 5 2,922 2,764 Leasehold improvements Term of lease 5,136 4,405 8,499 7,526 Less: Accumulated depreciation ( 3,524 ) ( 2,412 ) Total property and equipment, net $ 4,975 $ 5,114 Depreciation expense totaled $ 1.2 million, $ 0.7 million, and $ 0.4 million for the years ended December 31, 2022, 2021, and 2020 respectively. Note 8 - Intangible Assets and Goodwill Intangible Assets The table below summarizes the Company’s intangible assets at December 31, 2022 and 2021 (in thousands): Useful Lives (Years) Weighted Average Remaining Life (Years) December 31, 2022 Intangible Assets Accumulated Amortization Net Balance Customer relationships 2 1.2 $ 32,433 $ ( 28,421 ) $ 4,012 Trade names 2 - 9 6.2 38,837 ( 12,018 ) 26,819 Software and technology 3 - 9 5.8 200,222 ( 59,221 ) 141,001 Total $ 271,492 $ ( 99,660 ) $ 171,832 Useful Lives (Years) Weighted Average Remaining Life (Years) December 31, 2021 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 Total $ 267,693 $ ( 64,132 ) $ 203,561 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 $ 35.5 million, $ 36.9 million, and $ 43.6 million for the years ended December 31, 2022, 2021 and 2020 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. F-30 Table of Contents The estimated future amortization expense associated with intangible assets is as follows (in thousands): Future Amortization 2023 35,775 2024 30,283 2025 25,729 2026 24,651 2027 24,651 Thereafter 30,743 Total $ 171,832 Goodwill The following table is a summary of the changes to goodwill for the years ended December 31, 2022 and 2021 (in thousands): December 31, 2022 2021 Beginning balance $ 619,587 $ 478,406 Molotov acquisition ( 497 ) 128,468 Edisn acquisition — 12,501 Foreign currency translation ( 584 ) 212 Ending balance $ 618,506 $ 619,587 The Company performed its annual test for goodwill impairment for the streaming reporting unit as of October 1, 2022. Based on a qualitative analysis, it was determined that it was more likely than not that goodwill was not impaired. Since October 1, 2022, the Company experienced sustained decreases in its stock price and market capitalization. As a result, the Company conducted an impairment test of its goodwill and long-lived assets as of December 31, 2022. The Company estimated the fair value by weighting results from a market approach and an income approach. Significant assumptions inherent in the valuation methodologies included, but are not limited to, prospective financial information (including revenue growth and subscriber related expenses), a long-term growth rate, discount rate, and comparable multiples from publicly-traded companies in the same industry. The results of the impairment test showed that the fair value of the streaming reporting unit was in excess of its carrying value. Therefore, it was determined that goodwill is not impaired. The process of determining the fair value of a reporting unit is highly subjective and involves the use of significant estimates and assumptions. The Company’s December 31, 2022 goodwill impairment test reflected an allocation of 50% and 50% between income and market-based approaches, respectively. The income-based approach also takes into account the future growth and profitability expectations. Significant inputs into the valuation models included the control premium, discount rate, and revenue market multiples as follows: December 31, 2022 Control premium 35 % Discount rate 31 % Revenue multiples 0.34 x - 0.52 x For the year ended December 31, 2020, we recorded an impairment charge of $ 148.1 million related to the historical Facebank reporting unit . F-31 Table of Contents 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): December 31, 2022 December 31, 2021 Affiliate fees $ 218,367 $ 177,692 Broadcasting and transmission 15,732 15,179 Selling and marketing 26,907 17,248 Accrued compensation 9,838 11,080 Legal and professional fees 3,712 6,235 Sales tax 37,934 27,310 Accrued interest 4,773 5,057 Subscriber related 3,101 3,601 Shares settled liability 2,860 — Other 9,708 7,650 Total $ 332,932 $ 271,052 Note 10 - Income Taxes The loss before income taxes on continuing operations includes the following components (in thousands): For the Years Ended December 31, 2022 2021 2020 United States $ 399,941 $ 346,244 $ 608,950 International 26,770 8,223 102 Loss before income taxes $ 426,711 $ 354,467 $ 609,052 The benefit of income taxes on continuing operations for the years ended December 31, 2022, 2021 and 2020 consist of the following (in thousands): December 31, 2022 2021 2020 U.S. Federal Current $ — $ — $ — Deferred 1,351 2,082 7,930 State and local Current — — — Deferred 315 599 1,730 Foreign Current — — — Deferred — — — Valuation allowance — — — Income tax benefit $ 1,666 $ 2,681 $ 9,660 F-32 Table of Contents A reconciliation of the statutory federal rate on continuing operations to the Company’s effective tax rate on continuing operations is as follows: December 31, 2022 2021 2020 Federal rate 21.00 % 21.00 % 21.00 % State income taxes, net of federal benefit 0.07 0.17 0.28 Nexway activity and deconsolidation — — ( 0.40 ) Incentive stock options ( 0.67 ) ( 2.25 ) ( 0.38 ) Change in fair value of derivative, warrant liability, and gain on extinguishment of convertible notes ( 0.08 ) 0.16 ( 3.42 ) Amortization of debt discount ( 0.67 ) — — Foreign rate differential 0.34 0.13 — Goodwill impairment — — ( 5.10 ) Change in valuation allowance ( 18.94 ) ( 18.99 ) ( 10.27 ) Other ( 0.66 ) 0.54 ( 0.12 ) Income tax benefit 0.39 % 0.76 % 1.59 % The components of our deferred tax assets are as follows (in thousands): December 31, 2022 2021 Deferred tax assets: Net operating losses $ 324,256 $ 234,542 Accruals and deferrals 11,032 7,812 Stock based compensation 10,225 10,280 Interest expense limitation 13,959 11,945 Leasing assets 9,125 8,881 Other 49 27 Total deferred tax assets 368,646 273,487 Less: Valuation allowance ( 322,989 ) ( 219,609 ) Net deferred tax assets $ 45,657 $ 53,878 Deferred tax liabilities: Intangible assets $ 38,929 $ 47,503 Property and equipment 7,391 8,651 Other 102 155 Total deferred tax liabilities $ 46,422 $ 56,309 Net deferred tax liabilities $ 765 $ 2,431 F-33 Table of Contents 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, 2022 and 2021, 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 $ 103.4 million and $ 116.7 million in the years ended December 31, 2022 and December 31, 2021, respectively. As of December 31, 2022, the Company had federal net operating loss carryforwards of $ 1,207.3 million. The federal net operating loss carryforwards of $ 88.1 million generated before January 1, 2018 will begin to expire in 2033, and $ 1,119.3 million will carryforward indefinitely but are subject to the 80% taxable income limitation. As of December 31, 2022, the Company had state net operating loss carryforwards of $ 475.0 million. The state net operating loss carryforward of $ 462.7 million will begin to expire in 2033 and $ 12.3 million will carryforward indefinitely but are subject to the 80% taxable income limitation. As of December 31, 2022, the Company had foreign net operating loss carryforwards of $ 162.5 million. With the exception of the loss carryforwards attributable to the Company’s Indian subsidiary which may be carried for eight years, the foreign net operating loss carryforwards 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 shareholders 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 shareholders’ 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, 2020 and 2021. 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, 2022 and 2021. 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 and comprehensive loss. The Company had not incurred any material tax interest or penalties as of December 31, 2022 and 2021. 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 2021, 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 2022 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 2019 to 2022 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 2020 - 2022 tax years remain open for examination in France. The Company's 2021-2022 tax years are open for examination by the Indian tax authority. F-34 Table of Contents Note 11 - Notes Payable, Long-Term Borrowing, and Convertible Notes Notes payable, long-term borrowings, and convertible notes as of December 31, 2022 consist of the following (in thousands): Note Stated Interest Rate Principal Balance Capitalized Interest Debt Discount December 31, 2022 2026 Convertible Notes 3.25 % $ 402,500 $ — $ ( 8,406 ) $ 394,094 Note payable 10.0 % 2,700 2,950 — 5,650 BPi France 2.25 % 1,986 — — 1,986 Other 4.0 % 30 7 — 37 $ 407,216 $ 2,957 $ ( 8,406 ) $ — $ 401,767 Notes payable and long-term borrowings as of December 31, 2021 consist of the following (in thousands): 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 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. F-35 Table of Contents 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. During the year ended December 31, 2022, the Company paid $ 13.4 million of interest expense in connection with the 2026 Convertible Notes and recorded amortization expense of $ 2.5 million included in amortization of debt discount in the consolidated statements of operations and comprehensive loss. As of December 31, 2022, the net carrying value of the 2026 Convertible Notes was $ 394.1 million, with unamortized debt discount and issuance costs of $ 8.4 million. The estimated fair value (Level 2) of the 2026 Convertible Notes was $ 183.1 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 2021. 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 10.0 % per annum that was due on October 1, 2018 (“CAM Digital Note”). The cumulative accrued interest on the CAM Digital Note amounts to $ 2.7 million. The CAM Digital Note is currently in a default condition due to non-payment of principal and interest. The outstanding balance as of December 31, 2022, including interest and penalties, is $ 5.7 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 4.0 % per annum. As of December 31, 2022, the principal balance and accrued interest totaled approximately $ 37,000 . The Company assumed through the acquisition of Molotov, $ 3.7 million in notes bearing interest rates between 0.25 % - 2.25 % per annum. During the year ended December 31, 2022, the Company repaid principal and interest of approximately $ 1.7 million. As of December 31, 2022, the principal balance totaled approximately $ 2.0 million and is included in long-term borrowings-current portion on the accompanying consolidated balance sheet. F-36 Table of Contents 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 Fubo Sportsbook, the Company began to operate its business and report its results through two operating and reportable segments: streaming and wagering. During the fourth quarter of 2022, the Company ceased operation of its wagering segment and Fubo Sportsbook in connection with the dissolution of Fubo Gaming which is reported as a discontinued operation for all period presented (See Note 4). As a result, the Company will begin to report its results through a single reportable segment effective in the fourth quarter of 2022. The following tables set forth our financial performance by geographical location: December 31, 2022 2021 Total long-lived assets - United States 197,673 224,672 Total long-lived assets - Rest of world 15,022 18,657 December 31, 2022 2021 2020 United States $ 972,220 $ 634,065 $ 217,555 Rest of world 36,476 4,305 191 Total Revenue $ 1,008,696 $ 638,370 $ 217,746 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 and comprehensive loss. The following table classifies the Company’s assets and liabilities measured at fair value on a recurring basis into the fair value hierarchy as of December 31, 2022 and 2021 (in thousands): Fair valued measured at December 31, 2022 Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Total Financial assets at fair value: Cash and cash equivalents Money market securities $ 50,010 $ — $ — $ 50,010 Total financial assets at fair value $ 50,010 $ — $ — $ 50,010 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 F-37 Table of Contents Derivative Financial Instruments The following table presents changes in Level 3 liabilities measured at fair value (in thousands) for the years ended December 31, 2022, 2021 and 2020. Unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Derivative - Convertible Notes Profits Interests Sold Embedded Put Option Warrant liabilities Fair value at December 31, 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 Change in fair value — — — 1,701 Redemption — — — ( 5,249 ) Fair value at December 31, 2022 $ — $ — $ — $ — The Company used a Black-Scholes model to estimate the fair value of the warrant liabilities at December 31, 2021 using the following inputs: December 31, 2021 Fair value of underlying common shares $ 15.52 Exercise price $ 9.25 Expected dividend yield — % Expected volatility 50.9 % - 52.8 % Weighted average expected volatility 52.7 % Risk free interest rate 0.06 % - 0.06 % Weighted average risk-free interest rate 0.06 % Expected term (years) 0.14 - 0.15 Weighted average expected term (years) 0.14 F-38 Table of Contents Note 14 - Shareholders’ 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, 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. As of December 31, 2022 and 2021, there were no shares of Series AA Preferred Stock outstanding. Common Stock Activity At-the-Market Sales Agreements 2021 ATM Offering On August 13, 2021, the Company entered into an at-the-market sales agreement (the "2021 Sales Agreement") with Evercore Group L.L.C., Needham & Company, LLC and Oppenheimer & Co. Inc., as sales agents (each, a “prior manager” and together, the “prior managers”), pursuant to which the Company, from time to time, sold shares of its common stock having an aggregate offering price of up to $ 500.0 million through the prior managers. The Company paid the prior managers a commission of up to 3.0 % of the aggregate gross proceeds the Company received from all sales of the Company’s common stock under the 2021 ATM Offering. Effective August 4, 2022, the Company terminated the 2021 ATM Offering. 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 2021 Sales Agreement. F-39 Table of Contents 2022 ATM Offering On August 4, 2022, the Company entered into an at-the market sales agreement (the "2022 Sales Agreement," and, together with the 2021 Sales Agreement, the "ATM Sales Agreements") with Evercore Group L.L.C., Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Needham & Company, LLC, as sales agents (each, a “manager” and together, the “managers”) pursuant to which the Company may, from time to time, sell shares of its common stock, having an aggregate offering price of up to $ 350.0 million through the managers (the “2022 ATM Offering”). Upon delivery of a placement notice and subject to the terms and conditions of the 2022 Sales Agreement, the managers may sell the shares by methods deemed to be an “at-the-market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. Subject to the terms and conditions of the 2022 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 3.0 % of the gross sales price of the shares of the Company’s common stock sold through them pursuant to the 2022 Sales Agreement. The Company is not obligated to, and cannot provide any assurances that it will, make any sales of the shares under the 2022 Sales Agreement. The offering of shares of common stock pursuant to the 2022 Sales Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the 2022 Sales Agreement or (ii) termination of the 2022 Sales Agreement in accordance with its terms. During the year ended December 31, 2022, the Company received net proceeds of approximately $ 292.1 million (after deducting $ 6.6 million in commissions and expenses) from sales of 50,620,577 shares of its common stock, at a weighted average gross sales price of $ 5.90 per share pursuant to the ATM Sales Agreements. As of December 31, 2022, there was $ 275.9 million of common stock remaining available for sale under the 2022 Sales Agreement. Year ended December 31, 2022 Framework Agreement with MEP FTV On August 2, 2022 (the "MEP Effective Date"), Fubo Studios Inc. (formerly known as Fubo Entertainment Inc.), a subsidiary of the Company, entered into a binding framework agreement (the “MEP Framework Agreement”) with MEP FTV Holdings, LLC (“MEP FTV”) and Maximum Effort Productions, Inc. (“MEP” and, together with MEP FTV, “Maximum Effort”), memorializing the parties’ collaboration on a forthcoming Maximum Effort linear channel and original programming for launch on Fubo. Maximum Effort is a premiere entertainment production company led by Ryan Reynolds and George Dewey. Pursuant to the MEP Framework Agreement, the Company and Maximum Effort desire to work together to (1) develop scripted and unscripted television programs intended for initial distribution on Fubo’s platform (the “MEP Projects”) and (2) create a new television channel with unique content, features and functionality (the “MEP Network”). In connection with the MEP Framework Agreement, as consideration for Maximum Effort’s participation in the collaboration, the Company entered into a Restricted Stock Award Agreement dated August 12, 2022 (the “MEP RSA Agreement”) pursuant to which it has agreed to issue to MEP FTV (i) 2,000,000 shares of restricted common stock, of the Company, within 10 business days after the MEP Effective Date; (ii) a number of shares of common stock determined by dividing $ 10.0 million by the 30 -day volume weighted average closing price of common stock for the 30 trading days preceding the first anniversary of the MEP Effective Date, within 10 business days after the first anniversary of the MEP Effective Date; and (iii) a number of shares of common stock determined by dividing $ 10.0 million by the 30 -day volume weighted average closing price of common stock for the 30 trading days preceding the second anniversary of the MEP Effective Date, within 10 business days after the second anniversary of the MEP Effective Date (collectively, the “MEP Shares”). The MEP Shares will be subject to transfer restrictions until various time- and performance-based milestones are met, and, during this restricted period, will be subject to potential forfeiture if the MEP Framework Agreement is terminated under certain conditions. The parties agreed that 80 % of the equity grant shall be allocated as consideration for the MEP Projects and 20 % of the equity grant shall be allocated as consideration for the MEP Network. Because shares of the Company’s common stock will be issued as consideration for the MEP Framework Agreement, the Company accounted for the MEP RSA Agreement pursuant to the non-employee guidance in ASC 718, Compensation - Stock Compensation. F-40 Table of Contents Warrants Pursuant to the MEP Framework Agreement, on August 12, 2022, the Company issued MEP FTV a warrant to acquire 166,667 shares of the Company’s common stock with an exercise price of $ 15.00 per share. The warrant is exercisable on or prior to August 2, 2032, provided that the price per share of the Company’s common stock equals or exceeds a 30 -trading day volume weighted average closing price of $ 30.00 at any time prior to third anniversary of the grant date. The fair value of the warrant was measured on August 12, 2022, using the Monte Carlo valuation model, and the fair value totaled approximately $ 0.4 million. The derived service period was determined to be 1.7 years. As of December 31, 2022, the unrecognized stock-based compensation totaled $ 0.3 million. A summary of the Company’s outstanding warrants as of December 31, 2022, are presented below (in thousands, except share and per share amounts): Number of Warrants Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2021 565,544 $ 9.96 $ 3,546 0.1 Granted 166,667 $ 15.00 $ — 9.8 Exercised ( 540,541 ) $ 9.25 $ — 0 Expired ( 25,000 ) $ 9.25 $ — 0 Outstanding and exercisable as of December 31, 2022 166,670 $ 17.40 $ — 9.6 The Company estimated the fair value of the warrants granted during the year ended December 31, 2022 using the Monte Carlo valuation model as follows: December 31, 2022 Dividend yield — Expected price volatility 107.0 % Risk free interest rate 2.8 % Expected term (years) 10.0 F-41 Table of Contents 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. During the year ended December 31, 2021, the Company issued 5,978,437 shares of its common stock and 800,000 shares of treasury stock in connection with acquisitions. 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. 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, 2021, 1,980,419 options to purchase shares of the Company’s common stock were exercised for cash of $ 3.0 million. Year ended December 31, 2020 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. During the year ended December 31, 2020 the Company issued 1,398,789 shares of its common stock for consulting and other services rendered. During the year ended December 31, 2020, the Company received net proceeds of approximately 203,262 through the issuance of 22,664,464 shares of its common stock in connection with private placement transactions and a public offering. During the year ended December 31, 2020, the Company entered into purchase agreements pursuant to which the Company sold an aggregate of 9,119,066 shares of its common stock and issued warrants to the investors covering a total of 5,039,108 shares of the Company's common stock. 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 issued 2,753,819 shares of its common stock in exchange for 17,950,055 shares of its subsidiary Pulse Evolution Corp., respectively. 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. F-42 Table of Contents Note 15 - Stock-Based Compensation Equity Incentive Plans On April 1, 2020, the Company approved the establishment of the Company’s 2020 Equity Incentive Plan, as amended (the “2020 Plan”). On November 20, 2022 the Company amended the 2020 Plan to increase the maximum aggregate number of shares available for issuance under the 2020 Plan by 2,500,000 shares (the “Pool Increase”). The Pool Increase is conditional upon shareholder approval at the next annual meeting of shareholders. 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 2022, there are 3,054,448 shares available for future issuance under the 2020 Plan. In connection with the Merger, the Company assumed the fuboTV Inc. 2015 Equity Incentive Plan, and in connection with the Company's acquisition of Vigtory, the Company assumed the Vigtory, Inc. 2020 Equity Compensation Plan, as amended (collectively, the "Assumed Plans"). No shares are available for future issuance under the Assumed Plans. On August 3, 2022, the Board approved the adoption of the 2022 Employment Inducement Equity Incentive Plan (the “Inducement Plan”), which was adopted without shareholder approval pursuant to Rule 303A.08 of the New York Stock Exchange Listed Company Manual. The Inducement Plan provides for the grant of equity-based awards, including non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares, and its terms are substantially similar to the 2020 Plan, with the exception that awards can only be made to new employees in connection with their commencement of employment. As of December 31, 2022, there are 2,898,116 shares available for future issuance under the Inducement Plan. During the years ended December 31, 2022, 2021 and 2020 the Company recognized stock-based compensation expense as follows: Years Ended December 31, 2022 2021 2020 Subscriber related $ 144 $ 71 $ 32 Sales and marketing 22,198 7,818 2,395 Technology and development 9,998 13,752 5,446 General and administrative 20,114 31,509 43,866 $ 52,454 $ 53,150 $ 51,739 During the year ended December 31, 2022, in connection with the MEP Framework Agreement (See Note 14), the Company recorded approximately $ 2.9 million of stock-based compensation expense to shares settled liability which is included in accrued expenses and other current liabilities and other long-term liabilities on the consolidated balance sheet. Stock 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. F-43 Table of Contents A summary of stock option activity for the year ended December 31, 2022, is as follows (in thousands, except share and per share amounts): Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2021 11,454,890 $ 6.40 $ 70,231 7.4 Exercised ( 616,304 ) $ 1.34 Forfeited or expired ( 594,814 ) $ 11.16 Outstanding as of December 31, 2022 10,243,772 $ 6.43 $ 1,956 6.0 Options vested and exercisable as of December 31, 2022 8,118,408 $ 5.76 $ 1,956 5.7 There were no options granted during the year ended December 31, 2022. During the year ended December 31, 2021, the Company granted options to purchase 220,099 shares of common stock with an aggregate fair value of $ 3.2 million. The following was used in determining the fair value of stock options granted during the year ended December 31, 2021: Dividend yield — % Expected price volatility 44.8 %- 45.2 % Risk free interest rate 0.6 %- 1.1 % Expected term (years) 5.8 - 6.1 years As of December 31, 2022, the estimated value of unrecognized stock-based compensation expense related to unvested options was $ 9.3 million to be recognized over a period of 1.3 years. Performance-Based Stock Options On October 8, 2020, the Company awarded the CEO an option to purchase up to 4,100,000 shares of the Company's common stock 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 2026 calendar year. Because the number of shares to be earned on each Determination Date is subject to the discretion of the Board, a grant date will not occur until then. As such, 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, 2022, 820,000 shares of the option had vested, and during the year ended December 31, 2022 the Company recognized $ 2.2 million of stock-based compensation benefit related to the options. Upon each subsequent Determination Date in 2023, 2024, 2025, and 2026, total stock-based compensation expense for each vested tranche will be remeasured and adjusted to reflect the grant date fair value. F-44 Table of Contents Modification of Options and Restricted Stock Units During the years ended December 31, 2022 and 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 $ 2.1 million and $ 10.6 million during the years ended December 31, 2022 and December 31, 2021, respectively. 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 $ 1.0 million, 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. 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 years ended December 31, 2022 and 2021. Market and Service Condition Based Stock Options A summary of activity under the Plan for market and service-based stock options for the year ended December 31, 2022 is as follows (in thousands, except share and per share amounts): Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2021 4,453,297 $ 12.75 $ 17,933 5.7 Outstanding as of December 31, 2022 4,453,297 $ 12.75 $ — 4.7 Options vested and exercisable as of December 31, 2022 3,536,630 $ 10.98 $ — 4.5 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: December 31, 2021 Dividend yield — Expected volatility 71.5 % Risk free rate 1.3 % Derived service period 2.0 years There were no market and service-based options granted during the year ended December 31, 2022. F-45 Table of Contents 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, 2022 and 2021, the Company recognized $ 7.8 million and $ 7.2 million, respectively, of stock-based compensation related to its market and service-based stock options. As of December 31, 2022, there was $ 4.2 million of unrecognized stock-based compensation expense for market and service-based stock options. 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. During the year ended December 31, 2020, the pre-established parameters related to the Company’s stock performance were achieved, the 3,078,297 options were fully vested, and the Company recognized $ 20.9 million of stock-based compensation related to these market and service-based stock options. Service-based Restricted Stock Awards MEP Framework Agreement - MEP Project Restricted Stock Awards In connection with the MEP Framework Agreement, stock-based compensation cost for MEP Project restricted stock awards (the "MEP Project RSAs") totaling approximately $ 23.0 million measured as the fair value of the 1,600,000 shares issued for the first tranche issued on August 12, 2022 at $ 7.0 million, plus the fixed monetary amount of $ 8.0 million settleable in shares on August 2, 2023, and the fixed monetary amount of $ 8.0 million settleable in shares on August 2, 2024. Compensation cost will be recognized on a straight-line basis over the term of the three-year service period as if the Company paid cash for the services. The second two tranches are liability classified because they are a fixed monetary amount, settleable in shares. As compensation cost is recognized for these tranches, a corresponding credit to share-based liabilities will be recorded and reclassified to equity upon issuance of the related shares. In connection with the MEP Project RSAs, as of December 31, 2022 the unrecognized stock-based compensation totaled $ 20.0 million, and $ 2.1 million of shares liability in accrued expenses and other current liabilities and other long-term liabilities was recorded on the consolidated balance sheet. Performance-based Restricted Stock Awards MEP Framework Agreement - MEP Network Restricted Stock Awards The restricted stock awards allocated as consideration for the MEP Network (“MEP Network RSAs”) are performance-based RSAs. The performance condition consists of creating a new television channel with unique content, features and functionality. Compensation cost is measured on the grant date for shares that vest based upon the achievement of the performance condition are recognized when probable over the requisite service period, that is the implicit service period over which the performance conditions are probable of achievement. Stock-based compensation cost for the MEP Network RSAs totaling approximately $ 5.7 million is measured as the fair value of the 400,000 shares issued for the first tranche issued on August 12, 2022 at $ 1.7 million, plus the fixed monetary amount of $ 2.0 million, settleable in shares on August 2, 2023, plus the fixed monetary amount of $ 2.0 million, settleable in shares on August 2, 2024 The MEP Network RSAs are subject to forfeiture until launch of the MEP Network. The Company determined the that it is probable that the Network will be launched by the end of the two-year service agreement. The Company will recognize the total fair value of $ 5.7 million ratably over the two-year period. Should the performance condition not be achieved, the Company will reverse any stock-based compensation cost recognized for the MEP Network RSAs. In connection with the MEP Network RSAs, as of December 31, 2022, the unrecognized stock-based compensation totaled $ 4.6 million, and $ 0.8 million of shares liability in accrued expenses and other current liabilities and other long-term liabilities was recorded on the consolidated balance sheet. F-46 Table of Contents Time-Based Restricted Stock Units A summary of the Company’s time-based restricted stock unit activity during the year ended December 31, 2022 is as follows: Number of Shares Weighted Average Grant-Date Fair Value Unvested at December 31, 2021 2,785,800 $ 25.73 Granted 12,803,284 $ 3.68 Vested ( 1,611,348 ) $ 23.25 Forfeited ( 922,107 ) $ 13.82 Unvested at December 31, 2022 13,055,629 $ 5.25 During the year ended December 31, 2022, the Company granted 12,803,284 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 $ 47.2 million. During the year ended December 31, 2022, the Company issued 1,576,231 shares of common stock to its Board of Directors and employees in settlement of vested restricted stock units. 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 its Board of Directors and employees in settlement of vested restricted stock units. As of December 31, 2022, the estimated value of unrecognized stock-based compensation related to restricted stock units totaled $ 63.6 million, had an aggregate intrinsic value of $ 22.7 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, 2022 and 2021 is as follows: Number of Shares Weighted Average Grant-Date Fair Value Unvested at December 31, 2021 1,900,000 $ 33.87 Vested ( 380,000 ) $ 33.87 Unvested at December 31, 2022 1,520,000 $ 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 2026, 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 PRSUs is measured based on their grant date fair value which totaled $ 64.4 million. F-47 Table of Contents During the year ended December 31, 2022, the Company determined the performance metrics were met for 286,667 PRSUs and 93,333 PRSUs were forfeited. The Company recognized stock-based compensation of $ 14.6 million during the year ended December 31, 2022, and as of December 31, 2022, unrecognized stock-based compensation totaled $ 41.0 million. 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. 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: Years Ended December 31, 2022 2021 2020 Operating leases Operating lease cost $ 5,711 $ 1,387 $ 935 Other lease cost 239 287 — Operating lease expense 5,950 1,674 935 Short-term lease rent expense 167 — — Total rent expense $ 6,117 $ 1,674 $ 935 Supplemental cash flow information related to leases were as follows: Years Ended December 31, 2022 2021 2020 Operating cash flows from operating leases $ 1,421 $ 553 $ 915 Right of use assets exchanged for operating lease liabilities $ 4,312 $ 30,968 $ 5,373 Weighted average remaining lease term - operating leases 11.3 13.0 6.3 Weighted average remaining discount rate - operating leases 7.4 % 7.6 % 5.4 % Maturities of the Company’s operating leases from continuing operations, are as follows (amounts in thousands): Year Ended December 31, 2023 $ 4,777 Year Ended December 31, 2024 5,921 Year Ended December 31, 2025 5,921 Year Ended December 31, 2026 5,921 Year Ended December 31, 2027 4,831 Thereafter 36,141 Total 63,512 Less present value discount ( 22,483 ) Operating lease liabilities $ 41,029 F-48 Table of Contents 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. 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 discontinued operations. During the year ended December 31, 2022 the Company recorded an impairment charge of approximately $ 2.3 million for the right of use asset balances recorded in connection with Fubo Gaming (See Note 4). 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): Annual Sponsorship Agreements Year Ended December 31, 2023 $ 3,050 Year Ended December 31, 2024 3,225 Year Ended December 31, 2025 3,275 Year Ended December 31, 2026 3,325 Year Ended December 31, 2027 3,425 Thereafter 16,250 Total $ 32,550 Sports Rights Agreements The Company entered into various sports right agreements to obtain programming rights to certain live sporting events. Future payments under these agreements are as follows: Year Ended December 31, 2023 $ 41,235 Year Ended December 31, 2024 25,613 Year Ended December 31, 2025 13,748 Year Ended December 31, 2026 13,748 Year Ended December 31, 2027 13,748 Thereafter 4,583 Total $ 112,675 During the year ended December 31, 2022, the Company made upfront payments totaling approximately $ 54.7 million, which are recorded in prepaid sports rights on the consolidated balance sheet. F-49 Table of Contents 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. Following the dissolution of Fubo Gaming in October 2022, the Company has received communications from several commercial partners of Fubo Gaming, alleging breach by Fubo Gaming of applicable agreements. Additional allegations, or litigation, may arise against Fubo Gaming or the Company in the future related to the dissolution of Fubo Gaming, including potential breach of contract claims by other commercial partners of Fubo Gaming or claims related to guarantees by the Company of Fubo Gaming’s contractual obligations. 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. 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. F-50 Table of Contents 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. F-51