Risk Factors.
−Removed: You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, including our consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If any of the risks actually occur, our business, financial condition, results of operations, and prospects could be adversely affected.
+Added: You should carefully consider the risks and uncertainties described below, together with all of the other information in this Annual Report, including our consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our business, financial condition, results of operations, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material.
+Added: If any of the risks actually occur, our business, financial condition, results of operations, and prospects could be adversely affected.
In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
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Our net loss on continuing operations for the year ended December 31, 2024 was $177.8 million.
−Removed: We expect that expanding our operations will cause our future operating expenses to increase.
+Added: We expect that expanding our operations and pursuing growth opportunities will cause our future operating expenses to increase.
If our revenue does not grow at a greater rate than our operating expenses, we will not be able to achieve and maintain profitability.
1 unchanged sentence
If we are not able to either reduce these fixed obligations or other expenses or maintain or grow our revenue, our near-term operating losses may increase.
−Removed: Additionally, we may encounter unforeseen operating or legal expenses, difficulties, complications, delays and other factors that may result in losses in future periods.
+Added: Additionally, we may encounter unforeseen operating or legal expenses, difficulties, complications, delays and other factors, including, without limitation, in connection with the Business Combination, that may result in losses in future periods.
If our expenses exceed our revenue, we may never achieve or maintain profitability and our business may be harmed.
We may require additional capital to meet our financial obligations and support planned business growth, and this capital might not be available on acceptable terms or at all.
−Removed: We have made, and intend in the future to make, significant investments to support planned business growth and may require additional funds to respond to business challenges, including the need to develop new features or enhance our existing platform, products and services, expand into additional markets around the world, improve our operating infrastructure or acquire complementary businesses, personnel and technologies.
+Added: We have made, and intend in the future to make, significant investments to support planned business growth and may require additional funds to respond to business challenges, including the need to develop new features or enhance our existing platform, products and services, increase marketing efforts to acquire and retain subscribers, expand into additional markets around the world, improve our operating infrastructure or merge with or acquire complementary businesses, personnel and technologies.
Accordingly, we may need to secure additional funds.
If we raise additional funds through future issuances of equity or convertible debt securities, including pursuant to our shelf registration statements on Form S-3, our then existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.
−Removed: Any debt financing we secure could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
−Removed: If we were to violate the restrictive covenants contained in the indenture governing our 2029 Secured Convertible Notes (the “2029 notes indenture”) or in any future document governing our indebtedness, we could incur penalties, increased expenses and an acceleration of the payment terms of our outstanding debt, which could in turn harm our business.
+Added: Any debt financing we secure, including the senior unsecured term loan available to us on January 5, 2026 and described elsewhere in this Annual Report (the “Facility”), could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.
+Added: If we were to violate the restrictive covenants contained in the indenture governing our 2029 Convertible Notes (the “2029 notes indenture”) or in any future document governing our indebtedness, we could incur penalties, increased expenses and an acceleration of the payment terms of our outstanding debt, which could in turn harm our business.
+Added: In addition, if the Business Combination is completed as contemplated as of the date hereof and as described elsewhere in this Annual Report, we will be required to offer to repurchase any of our outstanding 3.25% senior convertible notes due 2026 (the “2026 Convertible Notes”) and convertible senior secured notes due 2029 (the “2029 Convertible Notes”) at a repurchase price equal to 100% of the principal amount of such notes to be repurchased, plus accrued and unpaid interest, if any.
+Added: We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2026 Convertible Notes or 2029 Convertible Notes surrendered therefor.
We may not be able to obtain additional financing on terms favorable to us, if at all, due to unfavorable market conditions, including rising interest rates, or otherwise.
−Removed: In addition, the 2029 notes indenture, and the exchange agreement entered into in connection with the issuance of the 2029 Secured Convertible Notes (the “Exchange Agreement), restrict our ability to incur certain indebtedness and issue certain equity securities.
+Added: In addition, the 2029 notes indenture, and the exchange agreement entered into in connection with the issuance of the 2029 Convertible Notes (the “Exchange Agreement”), restrict our ability to incur certain indebtedness and issue certain equity securities.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.
1 unchanged sentence
In the event of failure of any of the financial institutions where we maintain our cash, cash equivalents and restricted cash, there can be no assurance that we will be able to access uninsured funds in a timely manner or at all, and we may be obligated to seek alternative sources of liquidity.
−Removed: Table o f Contents
Our revenue is subject to seasonality, and if subscriber behavior during certain seasons falls below our expectations, our business may be harmed.
7 unchanged sentences
We anticipate that this seasonal impact on revenue is likely to continue, and any shortfall in expected revenue due to macroeconomic conditions, a decline in the effectiveness of our promotional activities, actions by our competitors, or for any other reason, would cause our results of operations to suffer significantly.
−Removed: For example, the COVID-19 pandemic created significant volatility, uncertainty, and economic disruption and, in addition, mounting inflationary cost pressures and potential recession indicators have negatively impacted the global economy.
+Added: For example, inflationary cost pressures and potential recession indicators have negatively impacted the global economy.
If these factors continue, or worsen, our revenue may be materially impacted.
7 unchanged sentences
We have experienced ownership changes in the past, and therefore a portion of our net operating loss carryforwards are subject to an annual limitation under Section 382 of the Code.
−Removed: In addition, we may experience ownership changes in the future as a result of subsequent changes in our stock ownership, including as a result of conversions of the 2026 Convertible Notes and 2029 Secured Convertible Notes, some of which may be outside of our control.
+Added: In addition, we may experience an ownership change for purposes of Section 382 of the Code with the Business Combination.
+Added: Even if the Business Combination is not consummated, we may experience ownership changes in the future as a result of subsequent changes in our stock ownership, including as a result of conversions of the 2026 Convertible Notes and 2029 Convertible Notes, some of which may be outside of our control.
A past or future ownership change that materially limits our ability to use our historical net operating loss and tax credit carryforwards may harm our future operating results by effectively increasing our future tax obligations.
−Removed: Table o f Contents
Our financial condition and results of operations could be adversely affected if we do not effectively manage our current or future debt.
−Removed: As of December 31, 2023, we had $405.4 million of outstanding indebtedness on a consolidated basis which included $397.5 million of 2026 Convertible Notes and other notes outstanding with an aggregate principal of approximately $7.9 million.
−Removed: In January 2024, the Company exchanged 2026 Convertible Notes with an aggregate principal of $205.8 million for 2029 Secured Convertible Notes with an aggregate principal of $177.5 million.
−Removed: Additionally, the terms of the 2029 notes indenture allow for interest payments on the 2029 Secured Convertible Notes to be paid-in-kind.
−Removed: If we choose to pay interest on the 2029 Secured Convertible Notes in kind, the aggregate principal amount of 2029 Secured Convertible Notes outstanding will increase.
+Added: As of December 31, 2024, we had $330.3 million of outstanding indebtedness on a consolidated basis which included $144.8 million of 2026 Convertible Notes, $177.5 million of 2029 Convertible Notes, and other notes outstanding with an aggregate principal of approximately $8.1 million.
+Added: Additionally, the terms of the 2029 notes indenture allow for interest payments on the 2029 Convertible Notes to be paid in kind.
+Added: If we choose to pay interest on the 2029 Convertible Notes in kind, the aggregate principal amount of 2029 Convertible Notes outstanding will increase.
Our obligations related to our outstanding or any future indebtedness could adversely affect our ability to take advantage of corporate opportunities, which could adversely affect our business, financial condition, and results of operations, including, but not limited to, the following:
4 unchanged sentences
• if we fail to make required debt payments or to comply with other covenants in our debt agreements, we would be in default under the terms of these agreements, which could permit our creditors to accelerate repayment of the debt and could cause cross-defaults under other debt agreements.
−Removed: For example, our failure to repay or refinance our 2026 Convertible Notes upon or prior to maturity may trigger an event of default under our 2029 Secured Convertible Notes.
−Removed: We may also incur additional indebtedness to meet future financing needs.
+Added: For example, our failure to repay or refinance our 2026 Convertible Notes upon or prior to maturity may trigger an event of default under our 2029 Convertible Notes.
+Added: We may also incur additional indebtedness to meet future financing needs, including pursuant to the Facility.
If we incur any additional debt, the related risks that we and our subsidiaries face could intensify.
1 unchanged sentence
To the extent we are in non-compliance with the terms of such debt instruments, we may be required to make payments to the holders of such instruments, those holders may be entitled to the issuance of stock by us, and the holders of such stock may be entitled to registration or other investor rights.
−Removed: Table o f Contents
Servicing our indebtedness will require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our substantial indebtedness.
−Removed: Our ability to make scheduled payments of the principal and interest when due, or to refinance our borrowings under our debt agreements, will depend on our future performance and our ability to raise further equity financing, which is subject to economic, financial, competitive and other factors beyond our control.
+Added: Our ability to make scheduled payments of the principal and interest when due, or to refinance our borrowings under our debt agreements, will depend on our future performance and our ability to raise further equity or debt financing, which is subject to economic, financial, competitive and other factors beyond our control.
Our business may not generate cash flow from operations in the future sufficient to both (i) satisfy our existing and future obligations to our creditors and (ii) allow us to make necessary capital expenditures.
−Removed: If we are unable to generate such cash flow or raise further equity financing, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing or obtaining additional equity capital on terms that may be onerous or highly dilutive.
−Removed: Additionally, the terms of the 2029 notes indenture allow for interest payments on the 2029 Secured Convertible Notes to be paid-in-kind.
−Removed: If we choose to pay interest on the 2029 Secured Convertible Notes in kind, the aggregate principal amount of 2029 Secured Convertible Notes outstanding will increase.
+Added: If we are unable to generate such cash flow or raise further financing, we may be required to adopt one or more alternatives, such as reducing or delaying investments or capital expenditures, selling assets, refinancing or obtaining additional capital on terms that may be onerous or highly dilutive.
+Added: Additionally, the terms of the 2029 notes indenture allow for interest payments on the 2029 Convertible Notes to be paid-in-kind.
+Added: If we choose to pay interest on the 2029 Convertible Notes in kind, the aggregate principal amount of 2029 Convertible Notes outstanding will increase.
We may need or desire to repay, refinance, restructure or defease our existing indebtedness, including prior to its maturity, in one or more transactions, which may involve the payment of cash or the issuance of additional debt or equity securities.
2 unchanged sentences
In addition, the terms of the 2029 notes indenture and the Exchange Agreement restrict our ability to incur certain indebtedness and issue certain equity securities.
−Removed: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our current or future debt agreements.
+Added: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our current or future debt agreements, including the Facility.
Our operating results may fluctuate, which makes our results difficult to predict.
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• our ability to pursue and appropriately time our entry into new geographic or content markets and, if pursued, our management of this expansion;
−Removed: Table o f Contents
−Removed: • costs associated with defending any litigation, including intellectual property infringement litigation;
+Added: • costs associated with litigation, including antitrust and intellectual property infringement litigation;
• the impact of general economic conditions on our revenue and expenses;
12 unchanged sentences
We have been expanding our operations internationally, and as our international offering evolves, we are managing and adjusting our business to address varied content offerings, consumer customs and practices, in particular those dealing with e-commerce and streaming video, as well as differing legal and regulatory environments.
+Added: Risks Relating to the Business Combination
+Added: The Business Combination may not be completed on the terms or timeline currently contemplated, or at all, and failure to complete the Business Combination may result in material adverse consequences to Fubo’s business and operations.
+Added: The Business Combination is subject to several closing conditions, including (i) the approval of the Business Combination Agreement (as defined below) and other proposals related to the Business Combination by Fubo’s shareholders, (ii) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder, and the clearance or obtainment of applicable consents of any specified governmental entity required to be obtained with respect to the Business Combination under the Business Combination Agreement, (iii) no enactment, issuance, promulgation or grant of any law or order, as applicable, by any governmental entity that is in effect and that has the effect of making the Business Combination illegal or prohibiting or otherwise preventing the consummation of the Business Combination, (iv) completion of certain internal reorganization transactions by Hulu, LLC ("Hulu") and Fubo, in each case, in accordance with the Business Combination Agreement and the documents contemplated therein, (v) the acceptance of documents related to the conversion of Fubo from a Florida corporation to a Delaware corporation by the Secretary of State of the State of Florida and the Secretary of State of the State of Delaware, (vi) the accuracy of the other party’s representations and warranties as of the date of the Business Combination Agreement, subject to certain customary materiality standards set forth in the Business Combination Agreement and the delivery by each party to the other party of a certificate certifying the same, (vii) compliance by each party, in all material respects, with its applicable obligations under the Business Combination Agreement prior to the closing of the Business Combination (the "Closing"), and (viii) delivery by each party to the other party of certain other closing deliverables, as specified in the Business Combination Agreement.
+Added: The parties have not yet obtained all regulatory clearances, consents and approvals required to complete the Business Combination.
+Added: Governmental or regulatory agencies could still seek to block or challenge the Business Combination or could impose restrictions they deem necessary or desirable in the public interest as a condition to approving the Business Combination.
+Added: If these approvals are not received, then neither Fubo nor The Walt Disney Company ("Disney") will be obligated to complete the Business Combination.
+Added: If the approvals could be received, but the applicable regulatory agency requires Hulu to (i) (a) sell, divest, license or hold separate any rights, equity interests or other assets or any portion of any business of Hulu or any of its respective affiliates or (b) agree to other restrictions or limitations on any business, operations, assets, properties or contractual freedoms of any businesses or operations of Hulu or its respective affiliates, or (ii) agree to sell, divest, license or hold separate any rights, equity interests or other assets or any portion of any business of Fubo or its subsidiaries, Hulu is not required to undertake such action and neither Hulu nor Fubo would be obligated to complete the Business Combination.
+Added: If Fubo’s shareholders do not approve the Business Combination Agreement or if the Business Combination is not completed for any other reason, Fubo would be subject to a number of risks, including the following:
+Added: • Fubo and its shareholders would not realize the anticipated benefits of the Business Combination, including any anticipated synergies from combining Hulu Live and Fubo;
+Added: • Fubo may be required to pay a $50 million termination fee following termination of the Business Combination Agreement in certain circumstances, including if Fubo terminates the Business Combination Agreement to accept a superior acquisition proposal or if Hulu terminates the Business Combination Agreement because our Board of Directors effected certain changes to its recommendation to Fubo shareholders;
+Added: • the trading price of Fubo common stock may experience increased volatility or decrease to the extent that the current market prices reflect a market assumption that the Business Combination will be completed.
+Added: The occurrence of any of these events individually or in combination could have a material adverse effect on the results of operations of Fubo or the trading price of Fubo common stock.
+Added: Fubo is also exposed to general competitive pressures and risks, which may be increased if the Business Combination is not completed.
+Added: Fubo and Hulu will be subject to business uncertainties and contractual restrictions while the Business Combination is pending that could adversely affect either of them or, in the event the Business Combination is completed, Newco.
+Added: Uncertainty about the effect of the Business Combination on employees, business partners and customers may have an adverse effect on (i) either of Fubo or Hulu, regardless of whether the Business Combination is eventually completed, and, (ii) in the event the Business Combination is completed, on Newco (as defined below).
+Added: These uncertainties may impair Fubo’s and Hulu’s ability to attract, retain and motivate key personnel until the Business Combination is completed, or the Business Combination Agreement is terminated, and for a period of time thereafter, and could cause customers, business partners and others that deal with Fubo or Hulu to seek to change existing business relationships with Fubo or Hulu.
+Added: The pursuit of the Business Combination and the preparation for the integration of Fubo and Hulu Live have placed, and will continue to place, a significant burden on the management and internal resources of both Fubo and Hulu.
+Added: There is a significant degree of difficulty and management distraction inherent in the process of closing the Business Combination and integrating Fubo and Hulu, which could cause an interruption of, or loss of momentum in, the activities of each company’s existing businesses, regardless of whether the Business Combination is eventually completed.
+Added: Before and immediately following the Closing, the management teams of Fubo and Hulu will be required to devote considerable amounts of time to this integration process, which will decrease the time they will have to manage their respective existing businesses, service existing business partners, attract new customers and develop new products, technologies, services or strategies.
+Added: One potential consequence of such distractions could be the failure of management to realize other opportunities that could be beneficial to Fubo or Hulu, respectively.
+Added: If Fubo’s or Hulu’s senior management is not able to effectively manage the process leading up to and immediately following Closing, or if any significant business activities are interrupted as a result of the integration process, the business of Fubo, Hulu or, in the event the Business Combination is completed, Newco could suffer.
+Added: Employee retention and recruitment may also be challenging for Fubo and Hulu during the pendency of the Business Combination, as employees and prospective employees may experience uncertainty about their future roles with Newco.
+Added: For each of Fubo and Hulu, the departure of existing key employees or the failure of potential key employees to continue employment with Newco or one of its subsidiaries, despite Fubo’s and Hulu’s retention and recruiting efforts, could have a material adverse impact on Fubo’s and Hulu’s business, financial condition and operating results, regardless of whether the Business Combination is eventually completed and, in the event the Business Combination is completed, could have a material adverse impact on Newco’s business, financial condition and operating results.
+Added: In addition, the Business Combination Agreement restricts Fubo from making certain acquisitions, entering into certain partnerships and joint ventures and taking certain other specified actions without the consent of Hulu until the Business Combination is consummated, or the Business Combination Agreement is terminated.
+Added: These restrictions may prevent Fubo from pursuing otherwise attractive business opportunities and making other changes to its business before completion of the Business Combination or termination of the Business Combination Agreement.
+Added: The Business Combination Agreement contains provisions that may discourage other companies from trying to acquire Fubo.
+Added: The Business Combination Agreement contains provisions that may discourage third parties from submitting business combination proposals to Fubo that might result in greater value to Fubo shareholders than the Business Combination.
+Added: The Business Combination Agreement generally prohibits Fubo from soliciting any competing acquisition proposal.
+Added: In addition, if the Business Combination Agreement is terminated by Fubo or Hulu in circumstances that obligate Fubo to pay a termination fee to Hulu, Fubo’s financial condition may be adversely affected as a result of the payment of the termination fee, which might deter third parties from proposing alternative business combination proposals.
+Added: Fubo has incurred, and will continue to incur, direct and indirect costs as a result of the Business Combination.
+Added: Fubo has incurred, and will continue to incur, significant costs and expenses, including regulatory costs, fees for professional services, and other transaction costs in connection with the Business Combination.
+Added: There are a number of factors beyond Fubo’s control that could affect the total amount or the timing of these costs and expenses.
+Added: Many of these fees and costs will be payable by us even if the Business Combination is not completed and may relate to activities that we would not have undertaken other than to complete the Business Combination.
+Added: Litigation challenging the Business Combination Agreement and the Business Combination may prevent the Business Combination from being consummated within the expected timeframe or at all.
+Added: Lawsuits may be filed against Fubo, our Board of Directors or the other parties to the Business Combination Agreement challenging the Business Combination Agreement or the Business Combination or making other claims in connection therewith.
+Added: Such lawsuits may be brought by our purported shareholders and may seek, among other things, to enjoin consummation of the Business Combination.
+Added: One of the conditions to the consummation of the Business Combination is that there is no enactment, issuance, promulgation or grant of any law or order, as applicable, by any governmental entity that is in effect and that has the effect of making the Business Combination illegal or prohibiting or otherwise preventing the consummation of the Business Combination.
+Added: As such, if the plaintiffs in such potential lawsuits are successful in obtaining an injunction prohibiting the defendants from completing the Business Combination on the agreed upon terms, then such injunction may prevent the Business Combination from becoming effective, or from becoming effective within the expected timeframe.
+Added: Our principal asset after the completion of the Business Combination will be our interest in Newco, and, accordingly, we will depend on distributions from Newco to pay our taxes and expenses, including payments under the contemplated Tax Receivables Agreement, and to pay dividends.
+Added: Newco’s ability to make such distributions may be subject to various limitations and restrictions.
+Added: Upon the completion of the Business Combination, we will be a holding company and will have no material assets other than our ownership of Newco Units.
+Added: As such, we will have no independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses or declare and pay dividends in the future will be dependent upon the financial results and cash flows of Newco and its subsidiaries and distributions we receive from Newco.
+Added: Newco and its subsidiaries may not generate sufficient cash flow to distribute funds to us and applicable state law and contractual restrictions, including negative covenants in our debt instruments, may not permit such distributions.
+Added: We anticipate that Newco will be treated as a partnership for U.S.
+Added: federal income tax purposes and, as such, will not be subject to any entity-level U.S.
+Added: federal income tax.
+Added: Instead, taxable income will be allocated to us and Hulu (as the holders of Newco Units).
+Added: Accordingly, we will incur income taxes on our allocable share of any net taxable income of Newco.
+Added: Under the terms of the contemplated Newco operating agreement (the “Newco Operating Agreement”), as disclosed in the Business Combination Agreement, Newco will be obligated, subject to various limitations and restrictions, including with respect to any applicable credit agreements, to make tax distributions to us and Hulu (as the holders of Newco Units).
+Added: In addition to tax expenses, we will also incur expenses related to our operations, including payments under the Tax Receivables Agreement contemplated under the Business Combination Agreement (the “Tax Receivables Agreement”), which we expect could be significant.
+Added: We intend, as its managing member, to cause Newco to make (i) pro rata tax distributions to us and Hulu (as the holders of Newco Units) in an amount sufficient to fund all or part of our tax obligations in respect of taxable income allocated to us and to cover our tax obligations, including payments due under the Tax Receivables Agreement, and (ii) distributions to us to pay our operating expenses.
+Added: However, Newco’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which Newco is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering Newco insolvent.
+Added: If we do not have sufficient funds to pay our tax or other liabilities or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders.
+Added: To the extent that we are unable to make timely payments under the Tax Receivables Agreement for any reason, such payments generally will be deferred and will accrue interest until paid.
+Added: Under the Newco Operating Agreement, we intend to cause Newco, from time to time, to make pro rata distributions in cash to us and Hulu (as the holders of Newco Units) in amounts at least sufficient to cover the taxes imposed on our allocable shares of net taxable income of Newco.
+Added: While tax distributions are intended to be set according to our tax liabilities (including the Tax Receivable Agreement), it is possible that as a result of (i) potential differences in the amount of net taxable income allocable to us and Hulu and (ii) certain tax benefits that we anticipate from (a) future purchases or redemptions of Newco Units from Hulu and (b) payments under the Tax Receivables Agreement, these cash distributions may be in amounts that exceed our actual tax liabilities with respect to the relevant taxable year, including our obligations under the Tax Receivables Agreement.
+Added: In such case, our board of directors will determine the appropriate uses for any such excess cash, which may include, among other uses, the payment of obligations under the Tax Receivables Agreement and the payment of other expenses.
+Added: We will have no obligation to distribute such cash (or other available cash) to our stockholders.
+Added: No adjustments to the exchange ratio for Newco Units and corresponding shares of the Company’s publicly traded common stock following the completion of the Business Combination (“Class A Common Stock”) will be made as a result of any cash distribution by us or any retention of cash by us, and in any event the ratio will remain one-to-one.
+Added: To the extent we do not distribute such excess cash as dividends on our stock we may take other actions with respect to such excess cash, for example, holding such excess cash, or lending it (or a portion thereof) to Newco, which may result in shares of our Class A Common Stock increasing in value relative to the value of Newco Units.
+Added: Following such loan or a contribution of such excess cash to Newco, we may, but are not required to, make an adjustment to the outstanding number of Newco Units held by Hulu.
+Added: In the absence of such adjustment, Hulu may benefit from any value attributable to such cash and/or loan balances if it acquires shares of Class A Common Stock in exchange for its Newco Units, notwithstanding that Hulu may have participated previously as a holder of Newco Units in distributions that resulted in such excess cash balances.
+Added: The Tax Receivables Agreement with Hulu will require us to make cash payments to Hulu in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make will be substantial.
+Added: Upon the closing of the Business Combination, we will enter into a Tax Receivables Agreement with Newco and Hulu.
+Added: Under the Tax Receivables Agreement, we will be required to make cash payments to Hulu for certain tax benefits realized (or, in connection with an acceleration upon our election to terminate the Tax Receivables Agreement, deemed realized) by us.
+Added: We will be generally obligated to pay Hulu a percentage of the benefit realized by us from our use of certain historic net operating loss carryforwards (“NOLs”) in an amount equal to the lesser of (i) 70% and (ii) Hulu’s ownership percentage of Newco as of the date the NOL is utilized.
+Added: We will also be generally obligated to pay Hulu 70% of the tax benefit as a result of (i) tax basis adjustments expected to be obtained by us resulting from (a) any future redemptions or exchanges of Newco Units from Hulu, (b) certain distributions (or deemed distributions) by Newco, and (c) payments made under the Tax Receivables Agreement.
+Added: and (ii) deductions attributable to imputed interest and other payments of interest by us pursuant to the Tax Receivables Agreement.
+Added: We will depend on cash distributions from Newco to make payments under the Tax Receivables Agreement.
+Added: Any payments made by us to Hulu under the Tax Receivables Agreement will generally reduce the amount of cash that might have otherwise been available to us.
+Added: Due to the uncertainty of various factors, we cannot precisely quantify the likely tax benefits we will realize as a result of the purchase of Newco Units and Class A Common Stock exchanges, and the resulting amounts we are likely to pay out to Hulu pursuant to the Tax Receivables Agreement;
+Added: however, we estimate that such payments will be substantial.
+Added: The payment obligation under the Tax Receivables Agreement will be an obligation of the Company and not of Newco.
+Added: Any payments made by us to Hulu under the Tax Receivables Agreement will not be available for reinvestment in our business and will generally reduce the amount of overall cash flow that might have otherwise been available to us.
+Added: To the extent that we are unable to make timely payments under the Tax Receivables Agreement for any reason, such payments will be deferred and will accrue interest until paid by us.
+Added: Payments under the Tax Receivables Agreement are not conditioned upon Hulu maintaining a continued ownership interest in Newco or us.
+Added: In addition, decisions we make in the course of running our business, such as with respect to mergers, asset sales, other forms of business combinations or other changes in control, may influence the timing and amount of payments made under the Tax Receivables Agreement.
+Added: For example, the earlier disposition of assets following a redemption or exchange of Newco Units may accelerate the recognition of associated tax benefits for which we would be required to make payments under the Tax Receivables Agreement and increase the present value of such payments, and the disposition of assets before a redemption or exchange of Newco Units may increase the tax liability of Hulu without giving rise to any rights to receive payments under the Tax Receivables Agreement with respect to tax attributes associated with such assets.
+Added: The ability to generate tax assets covered by the Tax Receivables Agreement, and the actual use of any resulting tax benefits, as well as the amount and timing of any payments under the Tax Receivables Agreement, will vary depending upon a number of factors, including the timing of redemptions or exchanges of Newco Units by, or purchases of Newco Units from, Hulu, the price of our Class A Common Stock at the time of the redemption, exchange or purchase;
+Added: the extent to which such redemptions, exchanges or purchases are taxable or cause a limitation on our ability to utilize our net operating losses;
+Added: the amount and timing of the taxable income allocated to us or otherwise generated by us in the future;
+Added: the tax rates and laws then applicable and the portion of our payments under the Tax Receivables Agreement constituting imputed interest.
Risks Related to Our Relationships with Content Providers, Customers and Other Third Parties
6 unchanged sentences
Payment terms for certain content commitments, such as content we directly produce, will typically require more up-front cash payments than other content licenses or arrangements whereby we do not fund the production of such content.
−Removed: Table o f Contents
To the extent subscriber and/or revenue growth do not meet our expectations, our liquidity and results of operations could be adversely affected as a result of content commitments and payment requirements of certain agreements.
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Our results may be adversely affected if long-term content contracts are not renewed on sufficiently favorable terms.
−Removed: We typically enter into long-term contracts for both the acquisition and the distribution of media content, including contracts for the acquisition of content rights for sporting events and other programs.
+Added: We typically enter into long-term contracts for both the acquisition and the distribution of media content, including contracts for the acquisition of content rights for sporting events and other programs, as well as the distribution of content on connected TV platforms.
As these contracts expire, we must renew or renegotiate the contracts, and if we are unable to renew them on acceptable terms, we may lose content rights or distribution rights.
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If our efforts to satisfy our existing subscribers are not successful, we may not be able to attract subscribers, and as a result, our ability to maintain and/or grow our business will be adversely affected.
−Removed: Table o f Contents
−Removed: If consumers perceive a reduction in the value of our platform because, for example, we introduce new or adjust existing features, adjust pricing or platform offerings, or change the mix of content in a manner that is not favorably received by them, we may not be able to attract and retain subscribers.
+Added: If consumers perceive a reduction in the value of our platform because, for example, we introduce new or adjust existing features, adjust pricing or platform offerings, or change the mix or packaging of content in a manner that is not favorably received by them, we may not be able to attract and retain subscribers.
Subscribers cancel their subscription for many reasons, including due to a perception that they do not use the platform sufficiently, the need to cut household expenses, the availability of content is unsatisfactory, competitive services provide a better value or experience and customer service issues are not satisfactorily resolved.
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If current or future content partners refuse to grant our subscribers access to stream certain channels or sporting events, or make their content available on their own DTC platform or our competitors’ platforms, whether exclusively or at more attractive pricing, this could adversely affect our ability to acquire and retain subscribers, which could materially and adversely affect our business, financial condition and results of operation.
−Removed: In addition, if popular local sports programming, which has historically had limited carriage and distribution via regional sports networks, continues to shift to national broadcast networks and as a result continues to become more widely available on competitor platforms, including those that have not previously carried regionalized sports programming, it could adversely impact our ability to acquire this content, or to do so in cost-effective manner, or our ability to compete with current and new competitors.
+Added: In addition, Regional Sports Networks (“RSNs”) have been a significant driver of subscription growth for us.
+Added: Recently, certain RSNs have been experiencing financial challenges, which may impact their ability to maintain or enhance their sports programming and, in turn, could adversely affect our future subscriber growth and retention.
+Added: If popular local sports programming, which has historically had limited carriage and distribution via RSNs, continues to shift to national broadcast networks and as a result continues to become more widely available on competitor platforms, including those that have not previously carried regionalized sports programming, it could adversely impact our ability to acquire this content, or to do so in cost-effective manner, or our ability to compete with current and new competitors.
If we are unable to successfully compete with current and new competitors in both retaining our existing subscribers and attracting new subscribers, our business could be adversely affected.
Further, if excessive numbers of subscribers cancel our service, we may be required to incur significantly higher marketing expenditures than we currently anticipate replacing these subscribers with new subscribers.
−Removed: We are actively taking steps in response to actions by competitors that we believe are harmful to competition within the industry and to consumers.
−Removed: For example, in February 2024, Disney, Fox and WBD announced the proposed formation of the Network JV, a forthcoming sports streaming service.
−Removed: As announced on February 20, 2024, we have filed an antitrust lawsuit against the parties to the Network JV and certain of their affiliates, challenging the formation of the Network JV and their past business practices on antitrust grounds, and seeking injunctive relief to stop the proposed Network JV and other practices, and damages.
−Removed: There can be no assurance, however, that we will be successful in this lawsuit.
−Removed: If we are not successful in obtaining an injunction and defendants are permitted to operate the Network JV, and/or maintain certain business practices, our business, financial condition and results of operations could be materially and adversely affected.
Our agreements with certain distribution partners may contain parity obligations which limit our ability to pursue unique partnerships.
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In addition, delays in technical developments across our distribution partners puts us at risk of breaching our parity obligations with such distribution platforms, which threatens the certainty of our agreements with distribution partners.
−Removed: Table o f Contents
If we are unable to maintain an adequate supply of ad inventory on our platform, our business may be harmed.
−Removed: We may fail to attract content providers that generate sufficient ad content hours on our platform and continue to grow our video ad inventory.
+Added: We may fail to attract content providers that generate a sufficient quantity or quality of ad content hours on our platform and continue to grow our video ad inventory.
Our business model depends on our ability to grow video ad inventory on our platform and sell it to advertisers.
We grow ad inventory by adding and retaining content providers on our platform with ad-supported channels that we can monetize.
+Added: Additionally, our ad inventory may be limited by restrictive ad requirements imposed by content providers.
If we are unable to grow and maintain a sufficient supply of quality video advertising inventory at reasonable costs to keep up with demand, our business may be harmed.
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The license periods and the terms and conditions of such licenses vary, and we may be operating outside the terms of some of our current licenses.
−Removed: As content providers develop their own streaming services, they may be unwilling to provide us with access to certain content, including popular series or movies.
+Added: As content providers develop their own streaming services or elect to license content exclusively to third-party services, they may be unwilling to provide us with access to certain content, including popular series, movies or sporting events.
If the content providers and other rights holders are not or are no longer willing or able to license us content upon terms acceptable to us, our ability to stream content to our subscribers may be adversely affected and/or our costs could increase.
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Certain provisions in these agreements could become a challenge to comply with if we were to lose rights under agreements with key programmers.
−Removed: Table o f Contents
In addition, our content partners generally impose requirements on us to treat them at least as favorably as other major providers in various ways, such as equal treatment with respect to content recommendations, displays on user interfaces, the marketing and promotion of content and streaming quality standards.
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We also may face potential liability for content used in promoting our service, including marketing materials.
−Removed: We are devoting more resources toward the development, production, marketing and distribution of original programming, including Fubo Sports Network and the Maximum Effort Channel.
+Added: We are devoting more resources toward the development, production, marketing and distribution of original programming, including Fubo Sports Network.
We believe that original and exclusive programming can help differentiate our service from other offerings, enhance our brand and otherwise attract and retain subscribers.
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As we have expanded our original programming, we have become responsible for production costs and other expenses, such as ongoing guild payments.
−Removed: We also take on risks associated with production, such as completion and key talent risk, which risks were heightened during COVID-19.
+Added: We also take on risks associated with production, such as completion and key talent risk.
Further, negotiations or renewals related to entertainment industry collective bargaining agreements could negatively impact timing and costs associated with our productions.
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Litigation to defend these claims could be costly and the expenses and damages arising.
−Removed: Table o f Contents
If our efforts to build a strong brand and to maintain customer satisfaction and loyalty are not successful, we may not be able to attract or retain subscribers, and our business may be harmed.
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Google (through YouTube TV) and, to a lesser extent, Amazon (through Amazon Prime) compete with us and, if Google or Amazon were to use GCP or AWS, respectively, in such a manner as to gain competitive advantage against our service, it could harm our business.
−Removed: Table o f Contents
Risks Related to Our Financial Reporting and Disclosure
−Removed: If we may identify material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, investors could lose confidence in the accuracy and completeness of our financial reports.
+Added: If we identify material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, investors could lose confidence in the accuracy and completeness of our financial reports.
As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control.
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Using such estimates has the potential to negatively impact the results we report which could negatively impact our stock price.
−Removed: Table o f Contents
In addition, from time to time, we release guidance regarding our future performance.
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Impairment in the carrying value of goodwill or long-lived assets could negatively affect our operating results.
−Removed: We have a significant amount of goodwill and long-lived assets on our condensed consolidated balance sheet.
+Added: We have a significant amount of goodwill and long-lived assets on our consolidated balance sheet.
Under generally accepted accounting principles, annually, and upon the identification of a triggering event, management is required to perform an evaluation of the recoverability of goodwill and long-lived assets.
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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.
−Removed: In August 2022, the Company initiated a strategic review of Fubo Sportsbook, and in October 2022 ceased operations of Fubo Sportsbook in connection with the dissolution of Fubo Gaming.
−Removed: As a result, the Company recorded a non-cash impairment charge of $87.4 million for the wagering segment during the year ended December 31, 2022.
−Removed: The impairment charge represented all of the goodwill and long-lived assets of Fubo Sportsbook.
+Added: We have recorded material non-cash goodwill and long-lived asset impairment charges in prior periods.
While management cannot predict if or when additional future goodwill or long-lived asset impairments may occur, additional impairments could have material adverse effects on the Company’s operating income, net assets, and/or the Company’s cost of, or access to, capital.
−Removed: Table o f Contents
−Removed: Risks Related to Our Products and Technologies
+Added: Risks Related to Our Products and Technologies and Competition
TV streaming is highly competitive and many companies, including large technology and entertainment companies, TV brands, and service operators, are actively focusing on this industry.
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Effective monetization requires us to continue to update the features and functionality of our streaming platform for subscribers and advertisers.
−Removed: Companies such as AT&T, Comcast, Cox and Altice, along with virtual multichannel video programming distributors, such as YouTube TV, Hulu Live and Sling TV, offer TV streaming products that compete with our platform.
+Added: Companies such as DirecTV, Comcast, Cox and Altice, along with virtual multichannel video programming distributors, such as YouTube TV, Hulu Live, DirecTV Stream, Philo and Sling TV, offer TV streaming products that compete with our platform.
In many cases, these competitors have the financial resources to subsidize the cost of their streaming services in order to promote their other products and services making it harder for us to acquire new subscribers and increase hours streamed.
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Some of these companies also promote their brands through traditional forms of advertising, such as TV commercials, as well as Internet advertising or website product placement, and have greater resources than us to devote to such efforts.
−Removed: In addition, many TV manufacturers, such as LG Electronics Inc., Samsung Electronics Co., Ltd.
+Added: In addition, many TV manufacturers, such as Roku, Inc., Amazon.com, Inc., LG Electronics Inc., Samsung Electronics Co., Ltd.
and VIZIO, Inc., offer their own TV streaming solutions pre-installed on their TVs.
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In addition, many of our competitors have longer operating histories, greater name recognition, larger customer bases and significantly greater financial, technical, sales, marketing and other resources than us, which provide them with advantages in developing, marketing or servicing new products and offerings.
−Removed: As a result, they may be able to respond more quickly to market demand, devote greater resources to the development, promotion and sales of their products or the distribution of their content, and influence market acceptance of their products better than we can.
+Added: As a result, they may be able to respond more quickly to market demand, devote greater resources to the development, promotion and sales of their products or the distribution of their content, secure more favorable rates for their content, and influence market acceptance of their products better than we can.
These competitors may also be able to adapt more quickly to new or emerging technologies or standards and may be able to deliver products and services at a lower cost.
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In addition, our competitors may enter into business combinations or alliances that strengthen their competitive positions.
+Added: Even if the Business Combination is consummated, we may not be able to sustain or strengthen our competitive position.
Increased competition could reduce our market share, revenue and operating margins, increase our operating costs, harm our competitive position and otherwise harm our business.
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If we do not introduce relevant advertisements, audience development campaigns and other promotional advertising or such advertisements, audience development campaigns and other promotional advertising are overly intrusive and impede the use of our TV streaming platform, our subscribers may stop using our platform which will harm our business.
−Removed: Table o f Contents
Our future growth depends on the acceptance and growth of OTT advertising and OTT advertising platforms.
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If advertisers do not perceive meaningful benefits of TV streaming advertising, then this market may develop more slowly than we expect, which could adversely impact our operating results and our ability to grow our business.
−Removed: Table o f Contents
Changes in competitive offerings for entertainment video, including the potential rapid adoption of piracy-based video offerings, could adversely impact our business.
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Companies also may enter into business combinations or alliances that strengthen their competitive positions.
−Removed: If we are unable to successfully compete with current and new competitors, our business could be materially and adversely affected, and we may not be able to increase or maintain market share or revenues.
+Added: If we are unable to successfully compete with current and new competitors, our business will be adversely affected, and we may not be able to increase or maintain market share or revenues.
Our products and services related to sports wagering subjected our business to a variety of related gaming laws, many of which are unsettled and still developing, and which could subject us to claims or otherwise harm our business.
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Such proceedings could have a material adverse effect on our business, financial condition, results of operations, and prospects, as well as impact our reputation.
−Removed: Table o f Contents
If the technology we use in operating our business fails, is unavailable, or does not operate to expectations, our business and results of operation could be adversely impacted.
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Our business utilizes internally developed and third party artificial intelligence ("AI") and machine learning technologies, including in connection with offering interactive functionality on our platform.
−Removed: In December 2021, we completed the acquisition of Edisn, an AI-powered computer vision platform with patent-pending video recognition technologies based in Bangalore, India.
+Added: For example, in December 2021, we completed the acquisition of Edisn, an AI-powered computer vision platform with patent-pending video recognition technologies based in Bangalore, India.
We are, and plan in the future, to evaluate the further investment in and/or use artificial intelligence and machine learning technologies, including potential utilization by our business.
As with many technological innovations, artificial intelligence presents risks and challenges that could affect our ability to effectively use such technologies, and therefore our business.
−Removed: If our AI tools are inadequately or incorrectly designed, improperly trained or used, or the data used to train them is incomplete, inadequate or biased in some way, our use of AI may inadvertently reduce our efficiency or cause unintentional or unexpected outputs that are incorrect, do not match our business goals, do not comply with our policies or standards or adversely affect our financial condition, business and reputation.
−Removed: Table o f Contents
+Added: If our AI tools are inadequately or incorrectly designed, improperly trained or used, or the data used to train or refine them is incomplete, inadequate or biased in some way or is data to which we or the providers of such AI technologies do not have sufficient rights, our use of AI may inadvertently reduce our efficiency or cause unintentional or unexpected outputs that are incorrect, do not match our business goals, do not comply with our policies or standards or adversely affect our financial condition, business and reputation.
+Added: In addition to our proprietary AI technologies, we use AI technologies licensed from third parties in our business.
+Added: Our ability to continue to use such technologies at the scale we need may be dependent on access to specific third-party software and infrastructure.
+Added: We cannot control the availability or pricing of such third-party AI technologies, especially in a highly competitive environment, and we may be unable to negotiate favorable economic terms with the applicable providers.
+Added: If any such third-party AI technologies become incompatible with our solutions or unavailable for use, or if the providers of such models unfavorably change the terms on which their AI technologies are offered or terminate their relationship with us, our solutions may become less appealing to our customers and our business will be harmed.
+Added: In addition, to the extent any third party AI technologies are used as a hosted service, any disruption, outage, or loss of information through such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the affected provider.
Artificial intelligence and machine learning technologies are complex and rapidly evolving, and we face significant competition from other companies in our industry as well as an evolving regulatory landscape.
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Changes to existing regulations, their interpretation or implementation or new regulations could impede our use of artificial intelligence and machine learning technology and also may increase the burden and cost of research and development in this area.
−Removed: For example, in Europe, on December 8, 2023, the EU legislators reached a political agreement on the EU Artificial Intelligence Act (“EU AI Act”), which establishes a comprehensive, risk-based governance framework for artificial intelligence in the EU market.
−Removed: The EU AI Act is expected to enter into force in 2024, and the majority of the substantive requirements will apply two years later.
−Removed: The EU AI Act will apply to companies that develop, use and/ or provide artificial intelligence in the EU and includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose artificial intelligence and foundation models, and proposes fines for breach of up to 7% of worldwide annual turnover.
−Removed: In addition, on 28 September 2022, the European Commission proposed two Directives seeking to establish a harmonized civil liability regime for artificial intelligence in the EU, in order to facilitate civil claims in respect of harm caused by artificial intelligence and to include artificial intelligence-enabled products within the scope of the EU’s existing strict liability regime.
−Removed: Once fully applicable, the EU AI Act will have a material impact on the way artificial intelligence is regulated in the EU, and together with developing guidance and/ or decisions in this area, may affect our use of artificial intelligence and our ability to provide and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition.
+Added: For example, in Europe, the EU Artificial Intelligence Act (“EU AI Act”) entered into force in August 2024 and establishes a comprehensive, risk-based governance framework for artificial intelligence in the EU market, and the majority of the substantive requirements will apply two years later.
+Added: The EU AI Act applies to companies that develop, use and/ or provide artificial intelligence in the EU and includes requirements around transparency, conformity assessments and monitoring, risk assessments, human oversight, security, accuracy, general purpose artificial intelligence and foundation models, and proposes fines for breach of up to 7% of worldwide annual turnover.
+Added: In addition, the revised EU Product Liability Directive came into force in December 2024, to be implemented into EU member state national law by December 2026.
+Added: This Directive extends the EU’s existing strict product liability regime to AI and machine learning technologies, and facilitates civil claims in respect of harm caused by AI.
+Added: Once fully applicable, the EU AI Act and the EU Product Liability Directive will have a material impact on the way artificial intelligence is regulated in the EU, and together with developing guidance and/ or decisions in this area, may affect our use of artificial intelligence and our ability to provide and to improve our services, require additional compliance measures and changes to our operations and processes, result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition.
+Added: In the United States, there has been uncertainty regarding the applicable regulations that will apply to the development and use of AI technologies.
+Added: For instance, in January 2025, the current administration rescinded an executive order from the prior administration relating to the safe and secure development of AI technologies.
+Added: The current administration then issued a new interim executive order that, among other things, requires certain agencies to specifically review and, if possible, rescind rulemaking taken pursuant to the rescinded prior administration executive order.
+Added: Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to promote compliance or remain competitive.
+Added: legislation related to AI technologies has also been introduced at the federal level and is advancing at the state level.
+Added: Such additional regulations may impact our ability to develop, use, procure and commercialize AI technologies in the future.
In addition to regulatory developments, there is an increase in litigation in a number of jurisdictions, including the United States, relating to the use of artificial intelligence, particularly generative artificial intelligence.
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We will be subject to regulatory investigations, which could cause us to incur substantial costs or require us to change our business practices in a materially adverse manner.
−Removed: We expect to receive formal and informal inquiries from government authorities and regulators from time to time, including securities authorities, tax authorities and, potentially, gaming regulators, regarding our compliance with laws and other matters.
+Added: We expect to receive formal and informal inquiries from government authorities and regulators from time to time, including securities authorities, and tax authorities regarding our compliance with laws and other matters.
We expect to continue to be the subject of investigations and audits in the future as we continue to grow and expand our operations.
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If government regulations relating to the Internet or other areas of our business change, we may need to alter the manner in which we conduct our business and we may incur greater operating expenses.
−Removed: We are subject to general business regulations and laws, as well as regulations and laws specific to the Internet, which may include laws and regulations related to user privacy, data protection, information security, consumer protection, payment processing, taxation, intellectual property, electronic contracts, Internet access and content restrictions.
+Added: We are subject to general business regulations and laws, as well as regulations and laws specific to the Internet and the television broadcasting industry, which may include laws and regulations related to user privacy, data protection, information security, consumer protection, payment processing, taxation, intellectual property, electronic contracts, Internet access and content restrictions.
We cannot guarantee that we have been or will be fully compliant in every jurisdiction.
Litigation and regulatory proceedings are inherently uncertain, and the laws and regulations governing issues such as privacy, payment processing, taxation and consumer protection related to the Internet continue to develop.
−Removed: Table o f Contents
As our streaming service and others like us gain traction in the United States and international markets, governments are increasingly looking to introduce new or extend legacy regulations to these services, in particular those related to broadcast media and tax.
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There can be no assurance that we will remedy our delinquent filings sufficiently, and we may face penalties and fees which could adversely affect our operating results and investors’ confidence in our internal operations.
−Removed: Table o f Contents
We could be required to collect additional sales and other similar taxes or be subject to other tax liabilities that may increase the costs our customers would have to pay for our subscriptions and adversely affect our operating results.
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government may enact significant changes to the taxation of business entities including, among others, an increase in the corporate income tax rate.
−Removed: Recently, the U.S.
+Added: In 2022, the U.S.
enacted the Inflation Reduction Act, which, among other changes, introduced a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by United States corporations.
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We are currently unable to predict whether such changes will occur and, if so, the ultimate impact on our business.
+Added: We may be subject to fines or other penalties imposed by the Federal Communications Commission.
+Added: We distribute our Fubo Sports owned & operated linear network on over-the-air (“OTA”) stations nationwide, which subjects us to the FCC regulations, including regulations concerning indecency and profanity.
+Added: There is no guarantee that our programming will not violate the FCC’s regulations due to the vagueness of the FCC’s indecency/profanity definition, coupled with the spontaneity of live programming.
+Added: Violation of indecency rules could lead to fines or penalties which may adversely affect our business.
Risks Related to Our Operations
−Removed: We could be subject to claims or have liability based on defects with respect to certain historical corporate transactions that were not properly authorized or documented.
−Removed: We have determined that there have been defects with respect to certain historical corporate transactions relating to FaceBank Group, Inc., including transactions that were not or may not have been properly approved by our board of directors, transactions that may have breached our organizational documents, or transactions that may not have been adequately documented.
−Removed: While we have attempted to narrow potential future claims by taking certain remedial corporate actions, the scope of liability with respect to such defects is uncertain and we cannot be sure that these actions will entirely remediate these defects or that we will not receive claims in the future from other persons asserting rights to shares of our capital stock, to stock options, or to amounts owed under other equity or debt instruments or investment contracts.
−Removed: To the extent any such claims are successful, the claims could result in dilution to existing shareholders, payments by us to note holders or security holders, us having to comply with registration or other investor rights, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Table o f Contents
Legal proceedings could cause us to incur unforeseen expenses and could occupy a significant amount of our management’s time and attention.
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In addition, certain of our shareholders have filed related derivative lawsuits against certain of our officers and directors alleging certain federal securities law violations and that the officers and directors breached their fiduciary duties and committed corporate waste.
−Removed: The securities class action litigations described above remain pending;
−Removed: however, the derivative lawsuits were dismissed with prejudice in June 2021.
−Removed: Further, following the dissolution of Fubo Gaming in October 2022, we have received communications from several commercial partners of Fubo Gaming, alleging breach by Fubo Gaming of applicable agreements.
−Removed: Certain of these parties have also asserted that the Company is responsible for Fubo Gaming’s debts, such as by matter of law or through guaranty of Fubo Gaming’s obligations under applicable agreements.
−Removed: On May 2, 2023, one such party (comprising two related plaintiff entities, Dynamo Stadium, LLC and Dynamo Soccer, LLC) filed Demands for Arbitration with the AAA against Fubo Gaming, alleging breaches by Fubo Gaming of a sports betting agreement and a sponsorship agreement, as well as against the Company for alleged guaranty obligations under the sports betting agreement.
−Removed: On February 5, 2024, the AAA dismissed the arbitration relating to the sponsorship agreement, and, on February 27, 2024, the AAA dismissed without prejudice the arbitration relating to the sports betting agreement.
+Added: The securities class action litigations described above were dismissed with prejudice in April 2024 and the derivative lawsuits were dismissed with prejudice in June 2021.
+Added: Further, following the dissolution of Fubo Gaming in October 2022, we resolved disputes with several commercial partners of Fubo Gaming that alleged breach by Fubo Gaming of applicable agreements.
Additional allegations, or litigation, may arise 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.
In addition, from time to time, we may pursue litigation against third parties, including antitrust claims in response to actions by certain competitors that we believe are harmful to competition within the industry and to consumers.
−Removed: For example, on February 20, 2022, we filed a lawsuit against the parties to the Network JV and certain of their affiliates, challenging the formation of the Network JV and the parties' past business practices on anticompetitive grounds, and seeking injunctive relief to stop the proposed Network JV and other practices, as well as damages.
+Added: For example, on February 20, 2024, we filed a lawsuit against the parties to the Network JV (as defined below) and certain of their affiliates, challenging the formation of the Network JV and the parties' past business practices on anticompetitive grounds, and seeking injunctive relief to stop the proposed Network JV and other practices, as well as damages.
+Added: This lawsuit was settled in January 2025.
Litigation disputes, including the disputes we are currently facing and/or pursuing, could cause us to incur unforeseen expenses, result in content unavailability, and otherwise occupy a significant amount of our management’s time and attention, any of which could negatively affect our business operations and financial position.
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A high level of support is necessary to acquire and retain our customers.
−Removed: As we currently, or in the future, migrate from one business process outsourcing ("BPO") provider and/or location to new third party providers and/or geographies, we are presented with the challenges of effectively transitioning and ramping up new BPO operations and locations, while closing and phasing out existing operations.
+Added: As we rely on business process outsourcing ("BPO") providers and/or third-party providers for our customer support operations, we are presented with the challenges of effectively managing and training these third-party organizations to provide adequate support to our customers.
This presents a significant challenge and risk to our overall ability in the short term to provide the level of customer support necessary and could adversely affect our ability to service new and current subscribers, which in turn could materially and adversely affect our business, financial condition and results of operations.
−Removed: Table o f Contents
We may be unable to successfully expand our international operations and our international expansion plans, if implemented, will subject us to a variety of economic, political, regulatory and other risks.
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• compliance with laws such as the Foreign Corrupt Practices Act, UK Bribery Act and other anti-corruption laws, export controls and economic sanctions, and local laws prohibiting corrupt payments to government officials;
−Removed: • compliance with various privacy, data transfer, data protection, accessibility, consumer protection and child protection laws in the EU and other international markets that we operate in;
+Added: • compliance with various privacy, data transfer, data protection, accessibility, consumer protection and child protection laws in the European Union and other international markets that we operate in;
• difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions, including local ownership requirements for streaming content providers and laws and regulations relating to privacy, data protection and information security, and the risks and costs of non-compliance with such laws, regulations and customs;
• regulatory requirements or government action against our service, whether in response to enforcement of actual or purported legal and regulatory requirements or otherwise, that results in disruption or non-availability of our service or particular content in the applicable jurisdiction;
−Removed: Table o f Contents
• adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, and the related application of judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given the ultimate tax determination is uncertain;
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If one or more of these individuals leave, we may not be able to fully integrate new executives or replicate the current dynamic and working relationships that have developed among our senior management and other key personnel, and our operations could suffer.
−Removed: Table o f Contents
The impact of worldwide economic conditions may adversely affect our business, operating results, and financial condition.
−Removed: Our financial performance is subject to worldwide economic conditions, including rising levels of inflation, and their impact on levels of advertising spending.
+Added: Our financial performance is subject to worldwide economic conditions, including inflation trends, and their impact on levels of advertising spending.
Expenditures by advertisers generally tend to reflect overall economic conditions, and to the extent that the economy continues to stagnate, reductions in spending by advertisers could have a material adverse impact on our business.
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To the extent we promote our content inefficiently or ineffectively, we may not obtain the expected acquisition and retention benefits and our business may be adversely affected.
−Removed: We have pursued and may in the future engage in strategic acquisitions and investments, which involve a number of risks, and if we are unable to address and resolve these risks successfully, such acquisitions and investments could harm our business.
−Removed: From time to time, we acquire or invest in businesses, products or technologies to expand our offerings and capabilities, subscriber base and business.
−Removed: The risks associated with such acquisitions or investments include:
+Added: We have pursued and may in the future engage in strategic transactions, including acquisitions and investments, which involve a number of risks, and if we are unable to address and resolve these risks successfully, such acquisitions and investments could harm our business.
+Added: From time to time, we acquire or invest in businesses, products or technologies, or partner with other companies, to expand our offerings and capabilities, subscriber base and business.
+Added: The risks associated with such strategic transactions include:
the difficulty of integrating solutions, operations, and personnel;
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We have evaluated, and expect in the future to evaluate, a wide array of potential strategic transactions.
−Removed: Any acquisition could be material to our financial condition and results of operations.
−Removed: Also, any anticipated benefits from a given acquisition, including, but not limited to, the acquisition of Vigtory, Inc.
−Removed: in February 2021 and Edisn Inc.
+Added: Any such transaction could be material to our financial condition and results of operations.
+Added: Also, any anticipated benefits from a given transaction, including, but not limited to, the proposed Business Combination and the acquisitions of Edisn Inc.
and Molotov in December 2021, may never materialize.
In addition, the process of integrating any businesses, products or technologies acquired by us may create unforeseen operating difficulties and expenditures and we may have difficulties retaining key employees.
−Removed: Acquisitions in international markets, including Edisn Inc.
+Added: Transactions in international markets, including Edisn Inc.
and Molotov, involve additional risks, including those related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with specific countries.
−Removed: We may not be successful in overcoming such risks, and such acquisitions and investments may negatively impact our business.
−Removed: In addition, if we do not complete an announced acquisition transaction or integrate an acquired business successfully and in a timely manner, we may not realize the benefits of the acquisition to the extent anticipated.
−Removed: Acquisitions and investments may contribute to fluctuations in our quarterly financial results.
+Added: We may not be successful in overcoming such risks, and such transactions may negatively impact our business.
+Added: In addition, if we do not complete an announced transaction or integrate an acquired business successfully and in a timely manner, we may not realize the benefits of the transaction to the extent anticipated.
+Added: Strategic transactions may contribute to fluctuations in our quarterly financial results.
These fluctuations could arise from transaction-related costs and charges associated with eliminating redundant expenses or write-offs of impaired assets recorded in connection with acquisitions and investments and could negatively impact our financial results.
−Removed: Table o f Contents
Risks Related to Privacy, Consumer Protection and Cybersecurity
1 unchanged sentence
Various international, federal, and state laws and regulations govern the processing of personal information, including the collection, use, retention, transfer, sharing and security of the data we receive from and about our subscribers and other individuals.
−Removed: The regulatory environment for the collection and processing of data relating to individuals, including subscriber and other consumer data, by online service providers, content distributors, advertisers and publishers is unsettled in the United States and internationally.
+Added: The global data protection landscape for the collection and processing of data relating to individuals, including subscriber and other consumer data, by online service providers, content distributors, advertisers and publishers is rapidly evolving in the United States and internationally.
Privacy groups and government bodies, including the Federal Trade Commission ("FTC"), increasingly have scrutinized issues relating to the use, collection, storage, disclosure, and other processing of data, including data that is associated with personal identities or devices, and we expect such scrutiny to continue to increase.
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In addition to government regulation, self-regulatory standards and other industry standards may legally or contractually apply to us, be argued to apply to us, or we may elect to comply with such standards or facilitate compliance by content publishers, advertisers, or others with such standards.
−Removed: For example, in the United States, the CCPA became operative on January 1, 2020.
−Removed: The CCPA requires covered businesses to provide new disclosures to California consumers, and to afford such consumers the ability to access and delete their personal information, opt out of certain personal information activities, and receive details about how their personal information is used.
−Removed: The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that has increased the likelihood of, and risks associated with, data breach litigation.
−Removed: California voters also approved a modification of the CCPA, the CPRA, which went into effect on January 1, 2023.
−Removed: The CPRA significantly expands the rights granted to consumers under the CCPA.
−Removed: The CCPA and CPRA and other similar state laws may increase our compliance costs and exposure to liability.
−Removed: For example, Virginia, Colorado, Connecticut and Utah adopted information privacy laws that went into effect in 2023.
+Added: For example, in the United States, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act (collectively, the “CCPA”) requires covered businesses that process the personal information of California residents to, among other things:
+Added: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information;
+Added: (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information;
+Added: and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
+Added: The CCPA and other similar state laws may increase our compliance costs and exposure to liability.
+Added: For example, Virginia, Colorado, Indiana, Tennessee, Montana, Connecticut, Iowa and Utah adopted similar data protection laws.
These laws grant consumers certain rights with respect to their personal information, have notice obligations, and require consent in some circumstances, among other things.
−Removed: While there is no private right of action under these laws, they empower the attorneys general in the various states to enforce the laws.
−Removed: As with the CCPA and the CPRA, these laws may increase our compliance costs and exposure to liability.
states have passed or are considering adopting and/or enforcing similar laws and regulations and there remains increased interest at the federal level as well.
−Removed: Additionally, our use of subscriber data to deliver relevant advertising on our platform places us and our content publishers at risk for claims under a number of other laws, including but not limited to the Video Privacy Protection Act ("VPPA"), and we have been subject to such claims to date related to our practices with subscriber data.
+Added: The enactment of such laws could have potentially conflicting requirements that would make compliance challenging.
+Added: Additionally, our use of certain commonly used digital trackers to deliver relevant advertising to our website visitors and on our platform places us and our advertising partners at risk for claims under a number of other laws, including but not limited to the Video Privacy Protection Act ("VPPA"), the California Invasion of Privacy Act (“CIPA”), and Cal.
+Added: Civil Code § 1799.3 and other state and federal laws, and we have been subject to such claims to date related to our digital advertising practices.
In a recent trend, some content publishers have been engaged in litigation over alleged violations of the VPPA relating to activities on online platforms in connection with advertising provided by unrelated third parties, the results of which may impact our business.
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More generally, the FTC and various state regulatory agencies are aggressively investigating and bringing enforcement actions that are focused on companies' collection, use, processing and sharing of consumer data, such as browsing information, for various uses, including but not limited to advertising.
−Removed: Table o f Contents
−Removed: In the EU and its member states, the GDPR imposes stringent obligations relating to data protection and security for processing the personal data of individuals within the European Economic Area ("EEA") or in the context of our activities within the EEA.
−Removed: Further, the departure of the United Kingdom (“UK”) from the EU has created a separate regime with similarly onerous obligations under the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”).
+Added: In the EU and its member states, the European Union General Data Protection Regulation ("GDPR") imposes stringent obligations relating to data protection and security for processing the personal data of individuals within the European Economic Area ("EEA") or in the context of our activities within the EEA.
+Added: Further, since the beginning of 2021, after the end of the transition period following the departure of the United Kingdom (“UK”) from the EU, the UK has created a separate regime with similarly onerous obligations under the United Kingdom General Data Protection Regulation and Data Protection Act 2018 (collectively, the “UK GDPR”).
The GDPR and UK GDPR each authorize regulators to impose sanctions, including changes to data processing, and each allow for fines of up to 4% of the global annual revenue or €20 million (£17.5 million) of a noncompliant undertaking, whichever is greater, for certain violations.
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The GDPR also imposes conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology.
−Removed: In addition, European court decisions and regulatory guidance are driving increased attention to cookies and tracking technologies.
+Added: In addition, recent European court decisions and regulatory guidance are driving increased attention to cookies and tracking technologies.
If the trend of increasing enforcement by regulators of the strict approach to opt-in consent for all but essential use cases, as seen in recent guidance and decisions continues, this could lead to substantial costs, require significant systems changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, and subject us to additional liabilities.
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We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to develop new features could be limited.
−Removed: Table o f Contents
Any actual or perceived inability to adequately address privacy, consumer protection, data protection or security-related concerns, even if unfounded, or to successfully negotiate privacy, consumer protection, data protection or security-related contractual terms with content publishers, card associations, advertisers, or others, or to comply with applicable laws, regulations and other obligations relating to privacy, data protection, and security, could result in additional cost and liability to us.
Any significant interruptions, delays or discontinuations in service or disruptions in or unauthorized access to our information technology systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized disclosure of data, including subscriber and corporate information, or theft of intellectual property, including digital content assets, which could adversely impact our business.
+Added: We collect and maintain information in digital form that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business, including our mobile and web-based applications, our streaming platform and our enterprise software.
+Added: In the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information (collectively, “Confidential Information”) of subscribers and our employees and contractors.
+Added: It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such Confidential Information.
Our reputation and ability to attract, retain and serve our subscribers is dependent upon the reliable performance and security of our computer networks and information technology systems and those of third parties that we utilize in our operations.
−Removed: These systems may be subject to attack, damage or interruption from, among other things, earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, war, sophisticated nation-state and nation-state supported-actors, employee theft or misuse or employees who are inattentive or careless and cause security vulnerabilities, fraud, power loss, telecommunications failures, and cybersecurity risks (for example, ransomware).
+Added: These systems have been in the past, and may in the future be, subject to attack, damage or interruption from, among other things, earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, war, sophisticated nation-state and nation-state supported-actors, employee theft or misuse or employees who are inattentive or careless and cause security vulnerabilities, fraud, power loss, telecommunications failures, or cybersecurity risks (for example, ransomware).
Interruptions in these systems, or with the Internet in general, could make our service unavailable or degraded or otherwise hinder our ability to deliver our service.
Service interruptions, errors in our software or the unavailability of information technology systems used in our operations could diminish the overall attractiveness of our subscription to existing and potential subscribers.
−Removed: Our information technology systems and those of third parties we use in our operations are subject to cybersecurity threats, including cyber-attacks such as computer viruses, and malware, malicious code, denial or degradation of service attacks, hacking, phishing attacks and other social engineering schemes, physical or electronic break-ins and similar disruptions.
−Removed: These systems periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of personal information and other data, content, confidential information, trade secrets or intellectual property.
−Removed: Additionally, outside parties may attempt to induce employees or subscribers to disclose sensitive or confidential information, or to take advantage of software or hardware bugs and vulnerabilities, in order to gain access to data.
+Added: Our information technology systems and those of third parties we use in our operations are subject to cybersecurity threats, including cyber-attacks such as computer viruses, and malware (e.g.
+Added: ransomware), misconfigurations, “bugs” or other vulnerabilities, malicious code, denial or degradation of service attacks, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, physical or electronic break-ins and similar disruptions.
+Added: These systems periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of personal information and other Confidential Information.
+Added: Additionally, outside parties may attempt to induce employees or subscribers to disclose Confidential Information, or to take advantage of software or hardware bugs and vulnerabilities, in order to gain access to data.
Any attempt by hackers to obtain our data (including subscriber and corporate information) or intellectual property (including digital content assets), disrupt our service, or otherwise access our systems, or those of third parties we use could harm our business, be expensive to remedy and damage our reputation.
−Removed: We and certain of our third-party providers regularly experience cyberattacks and other incidents, and we expect such attacks and incidents to continue.
+Added: We and certain of our third-party providers regularly experience cyberattacks and other incidents, some of which have led to unauthorized access to subscriber data, and we expect such attacks and incidents to continue.
As previously disclosed, we suffered one such incident on December 14, 2022, when we experienced service outage as a result of a criminal cyber-attack.
6 unchanged sentences
Problems faced by us or our third-party cloud computing or other network providers, including technological or business-related disruptions, as well as cybersecurity threats and regulatory interference, could adversely impact the experience of our users.
−Removed: Table o f Contents
+Added: We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our Confidential Information.
We have implemented certain systems and processes designed to thwart hackers and protect our data and systems, but the techniques used to gain unauthorized access to data, systems, and software are constantly evolving, and we may be unable to anticipate or prevent unauthorized access, and we may be delayed in detecting unauthorized access or other security breaches and other incidents.
−Removed: There is no assurance that hackers may not have a material impact on our service or systems in the future or that security breaches or other incidents may not occur due to these or other causes.
+Added: The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased and evolved.
+Added: If we or our third-party vendors were to experience a significant cybersecurity breach of our or their information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counter-parties and data subjects could be material.
+Added: In addition, our remediation efforts may not be successful.
+Added: If we do not allocate and effectively manage the resources necessary to build and sustain the proper technology and cybersecurity infrastructure, we could suffer significant business disruption, including transaction errors, supply chain or manufacturing interruptions, processing inefficiencies, data loss or the loss of or damage to intellectual property or other proprietary information.
+Added: There can also be no assurance that our and our third-party service providers’, strategic partners’, contractors’, consultants’, and collaborators’ cybersecurity risk management program and processes, including policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems, networks and Confidential Information.
+Added: Further, there is no assurance that hackers may not have a material impact on our service or systems in the future or that security breaches or other incidents may not occur due to these or other causes.
Efforts and technologies to prevent disruptions to our service and unauthorized access to our systems are expensive to develop, implement and maintain.
1 unchanged sentence
Additionally, disruption to our service and data security breaches and other incidents may occur as a result of employee or contractor error.
+Added: Any adverse impact to the availability, integrity or confidentiality of our or third-party systems or Confidential Information can result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts that cause us to lose existing or future subscribers, and/or significant incident response, business interruption, system restoration or remediation and future compliance costs.
Any significant disruption to our service or access to our systems or any data that we or those who provide services for us maintain or otherwise process, or the perception that any of these have occurred, could result in a loss of subscriptions, harm to our reputation, and adversely affect our business and results of operations.
Further, a penetration of our systems or a third-party’s systems on which we depend or any loss of or unauthorized access to, use, alteration, destruction, or disclosure of personal information or other data could subject us to business, regulatory, contractual, litigation and reputation risk, which could have a negative effect on our business, financial condition and results of operations.
−Removed: With the increase in remote work during the COVID-19 pandemic and continued hybrid working environment, we and the third parties we use in our operations face increased risks to the security of infrastructure and data, and we cannot guarantee that our or their security measures will prevent security breaches.
−Removed: We also may face increased costs relating to maintaining and securing our infrastructure and data that we maintain and otherwise process.
+Added: We may also be exposed to a risk of loss or litigation and potential liability, which could materially and adversely affect our business, results of operations or financial condition.
Additionally, we cannot be certain that our insurance coverage will be adequate for data security liabilities actually incurred, will cover any indemnification claims against us relating to any incident, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
3 unchanged sentences
Third parties have previously asserted, and may in the future assert, that we have infringed, misappropriated, or otherwise violated their patent, trademark, copyright, or other intellectual property rights.
−Removed: Due to a large number of patents in the streaming field, it is not economically feasible to predict whether any product or component will infringe the patent rights of others.
+Added: Due to a large number of patents in the streaming field, it is not economically feasible to undertake efforts to try to predict whether any product or component will infringe the patent rights of others.
Defending ourselves against intellectual property infringement claims, whether or not they have merit, could be costly and could result in the diversion of resources and management time and attention, even if we are ultimately successful in the defending the claim.
5 unchanged sentences
The occurrence of any of the foregoing events could harm our business.
−Removed: In addition, while the existence of our patent portfolio may deter some plaintiffs from asserting claims against us, from time to time we have faced, and expect in the future to face, allegations from “non-practicing entities.” Because these non-practicing entities have no relevant product revenue, and they exist primarily for the purpose of monetizing their patent portfolio through licensing and litigation, they may not be deterred by our own issued patents and pending patent applications in bringing intellectual property rights claims against us
−Removed: Table o f Contents
+Added: In addition, while the existence of our patent portfolio may deter some plaintiffs from asserting claims against us, from time to time we have faced, and expect in the future to face, allegations from “non-practicing entities.” Because these non-practicing entities have no relevant product revenue, and they exist primarily for the purpose of monetizing their patent portfolio through licensing and litigation, they may not be deterred by our own issued patents and pending patent applications in bringing intellectual property claims against us.
As a result of intellectual property infringement claims, or to avoid potential claims, we have previously chosen to, and may in the future choose or be required to, seek licenses from third parties.
1 unchanged sentence
Even if we are able to obtain a license, the license would likely obligate us to pay license fees, royalties or other consideration, and the rights granted to us might be nonexclusive, with the potential for our competitors to gain access to the same intellectual property.
−Removed: Furthermore, an adverse outcome of a dispute may require us to pay damages, potentially including treble damages and attorneys’ fees, if we are found to have willfully infringed a party’s intellectual property.
+Added: Furthermore, an adverse outcome of a dispute may require us to pay damages, potentially including treble damages and attorneys’ fees, if we are found to have willfully infringed another party’s intellectual property.
We may also be required to cease making, licensing or using technologies that are alleged to infringe or misappropriate the intellectual property of others, and as a result may need to expend additional development resources to redesign our solutions;
5 unchanged sentences
If our content suppliers have not secured public performance or communication to the public licenses on a through to the viewer basis, then we could be liable to copyright owners or their agents copyright infringement.
−Removed: If our content suppliers are unable to secure such rights from copyright owners, then we may have to secure licenses in our own name.
+Added: If our content suppliers are unable to secure such rights from copyright owners and/or as we explore expansion into types of content distribution beyond streaming, then we may have to secure licenses in our own name.
We cannot guarantee that our content providers or we have or will be able to obtain all of the licenses we need to stream our content, as the process of obtaining such licenses involves many rights holders, some of whom are unknown, and myriad complex legal issues across many jurisdictions, including open questions of law as to when and whether particular licenses are needed.
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Further, these agreements do not prevent our competitors or partners from independently developing technologies that are substantially equivalent or superior to our platform.
−Removed: Table o f Contents
We have filed and we expect to file from time to time for trademark and patent applications.
1 unchanged sentence
Furthermore, third parties may oppose our applications, or challenge the validity or enforceability of any patents or other intellectual property issued or registered to, or otherwise held by us.
−Removed: Third parties may also knowingly or unknowingly infringe our intellectual property rights, and litigation or proceedings before governmental authorities and administrative bodies may be necessary in the future to protect and enforce our patents, trademarks, trade secrets and other intellectual property rights, to protect our patent rights and to challenge the validity or scope of the proprietary rights of others.
+Added: Third parties may also knowingly or unknowingly infringe our intellectual property rights, and litigation or proceedings before governmental authorities and administrative bodies may be necessary to protect and enforce our patents, trademarks, trade secrets and other intellectual property rights, to protect our patent rights and to challenge the validity or scope of the proprietary rights of others.
Our efforts to enforce or protect our proprietary rights may be ineffective and could result in substantial costs and diversion of resources and management time, each of which could substantially harm our operating results.
9 unchanged sentences
In addition, certain open source licenses require that source code for software programs that are subject to the license (including, in certain cases, source code of proprietary software that is distributed with or linked to open source software) be made available to licensees or the public, and that any modifications or derivative works to such software continue to be licensed under potentially unfavorable terms or at no or minimal cost.
−Removed: Although we monitor our use of open-source software in an effort both to comply with the terms of the applicable open source licenses and to avoid subjecting our software to conditions we do not intend, the terms of many open-source licenses have not been interpreted by U.S.
+Added: Although we monitor our use of open-source software in an effort both to comply with the terms of the applicable open source licenses and to avoid subjecting our proprietary software to conditions we do not intend, the terms of many open-source licenses have not been interpreted by U.S.
courts, and there is a risk that these licenses could be construed in a way that could impose unanticipated conditions or restrictions on our ability to commercialize our platform.
−Removed: By the terms of certain open source licenses, we could be required to release the source code of our software and to make our software available under open source licenses, if we combine or distribute or link our software with open source software in certain manners.
−Removed: In the event that portions of our software are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code, re-engineer all, or a portion of, that software or otherwise be limited in the licensing of our software, each of which could negatively impact the value of our platform.
+Added: By the terms of certain open source licenses, we could be required to release the source code of our proprietary software and to make our software available under open source licenses, if we combine or distribute or link our proprietary software with open source software in certain manners.
+Added: In the event that portions of our proprietary software are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code, re-engineer all, or a portion of, that software or otherwise be limited in the licensing of our software, each of which could negatively impact the value of our platform.
While we are selective in our use of open source software and we have taken precautions to reduce the risk of subjecting our software to problematic “copyleft” open source license terms, many of the of the risks associated with usage of open source software cannot be eliminated, and could negatively affect our business, results of operations and financial condition.
4 unchanged sentences
If we are unable to obtain necessary third-party licenses, we may be required to obtain substitute technologies with lower quality or performance standards, or at a greater cost, any of which could harm the competitiveness of our platform and our business.
−Removed: Table o f Contents
Risks Related to the 2026 Convertible Notes
4 unchanged sentences
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of all or a portion of the 2026 Convertible Notes surrendered therefor or pay cash with respect to notes being converted or at their maturity.
+Added: If the Business Combination is completed as contemplated as of the date hereof and as described elsewhere in this Annual Report, we will be required to offer to repurchase any of our outstanding 2026 Convertible Notes at a repurchase price equal to 100% of the principal amount of such notes to be repurchased, plus accrued and unpaid interest, if any.
+Added: We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2026 Convertible Notes surrendered therefor.
In addition, our ability to repurchase the 2026 Convertible Notes or to pay cash upon conversions of all or a portion of the 2026 Convertible Notes or at their maturity may be limited by law, regulatory authority or agreements governing our future indebtedness.
−Removed: Our failure to repurchase all or a portion of the 2026 Convertible Notes at a time when the repurchase is required by the indenture governing the 2026 Convertible Notes (the “2026 notes indenture”) or to pay cash upon conversions of all or a portion of the 2026 Convertible Notes or at their maturity as required by the 2026 notes indenture would constitute a default under the 2026 notes indenture.
−Removed: A default under the 2026 notes indenture or the fundamental change itself could also lead to a default under agreements governing our existing or future indebtedness, including the 2029 notes indenture.
−Removed: Moreover, the occurrence of a fundamental change under the 2026 notes indenture could constitute an event of default under any such agreement.
+Added: Our failure to repurchase all or a portion of the 2026 Convertible Notes at a time when the repurchase is required by the indenture or to pay cash upon conversions of all or a portion of the 2026 Convertible Notes or at their maturity as required by the indenture would constitute a default under the indenture.
+Added: A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our future indebtedness.
+Added: Moreover, the occurrence of a fundamental change under the indenture could constitute an event of default under any such agreement.
+Added: A default under the indenture or the fundamental change itself could also lead to a default under agreements governing our existing or future indebtedness.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or make cash payments upon conversions thereof.
2 unchanged sentences
If one or more holders elect to convert 2026 Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.
−Removed: In addition, even if holders of the 2026 Convertible Notes do not elect to convert their 2026 Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2026 Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
The accounting method for convertible debt securities that may be settled in cash, such as the 2026 Convertible Notes, could have a material effect on our reported financial results.
3 unchanged sentences
The Company adopted the ASU on January 1, 2022.
−Removed: Table o f Contents
Provisions in the indenture for the 2026 Convertible Notes may deter or prevent a business combination that may be favorable to you.
3 unchanged sentences
These and other provisions in the indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable to you.
−Removed: Risks Related to the 2029 Secured Convertible Notes
−Removed: We may not have the ability to raise the funds necessary to settle conversions of the 2029 Secured Convertible Notes in cash or to repurchase the 2029 Secured Convertible Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2029 Secured Convertible Notes.
−Removed: Holders of the 2029 Secured Convertible Notes will have the right to require us to repurchase all or a portion of the 2029 Secured Convertible Notes upon the occurrence of a fundamental change before the maturity date at a repurchase price equal to 100% of the principal amount of the 2029 Secured Convertible Notes to be repurchased, plus accrued and unpaid cash interest, if any.
−Removed: In addition, upon conversion of the 2029 Secured Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the notes being converted.
−Removed: Moreover, we will be required to repay the 2029 Secured Convertible Notes in cash at their maturity unless earlier converted or repurchased.
−Removed: However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of all or a portion of the 2029 Secured Convertible Notes surrendered therefor or pay cash with respect to notes being converted or at their maturity.
−Removed: In addition, our ability to repurchase the 2029 Secured Convertible Notes or to pay cash upon conversions of all or a portion of the 2029 Secured Convertible Notes or at their maturity may be limited by law, regulatory authority or agreements governing our future indebtedness.
−Removed: Our failure to repurchase all or a portion of the 2029 Secured Convertible Notes at a time when the repurchase is required by the 2029 notes indenture or to pay cash upon conversions of all or a portion of the 2029 Secured Convertible Notes or at their maturity as required by the 2029 notes indenture would constitute a default under the 2029 notes indenture.
+Added: Risks Related to the 2029 Convertible Notes
+Added: We may not have the ability to raise the funds necessary to settle conversions of the 2029 Convertible Notes in cash or to repurchase the 2029 Convertible Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the 2029 Convertible Notes.
+Added: Holders of the 2029 Convertible Notes will have the right to require us to repurchase all or a portion of the 2029 Convertible Notes upon the occurrence of a fundamental change before the maturity date at a repurchase price equal to 100% of the principal amount of the 2029 Convertible Notes to be repurchased, plus accrued and unpaid cash interest, if any.
+Added: In addition, upon conversion of the 2029 Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the notes being converted.
+Added: Moreover, we will be required to repay the 2029 Convertible Notes in cash at their maturity unless earlier converted or repurchased.
+Added: However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of all or a portion of the 2029 Convertible Notes surrendered therefor or pay cash with respect to notes being converted or at their maturity.
+Added: If the Business Combination is completed as contemplated as of the date hereof and as described elsewhere in this Annual Report, we will be required to offer to repurchase any of our outstanding 2029 Convertible Notes at a repurchase price equal to 100% of the principal amount of such notes to be repurchased, plus accrued and unpaid interest, if any.
+Added: We may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2029 Convertible Notes surrendered therefor.
+Added: In addition, our ability to repurchase the 2029 Convertible Notes or to pay cash upon conversions of all or a portion of the 2029 Convertible Notes or at their maturity may be limited by law, regulatory authority or agreements governing our future indebtedness.
+Added: Our failure to repurchase all or a portion of the 2029 Convertible Notes at a time when the repurchase is required by the 2029 notes indenture or to pay cash upon conversions of all or a portion of the 2029 Convertible Notes or at their maturity as required by the 2029 notes indenture would constitute a default under the 2029 notes indenture.
A default under the 2029 notes indenture or the fundamental change itself could also lead to a default under agreements governing our existing or future indebtedness, including the 2026 notes indenture.
1 unchanged sentence
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or make cash payments upon conversions thereof.
−Removed: The conditional conversion feature of all or a portion of the 2029 Secured Convertible Notes, if triggered, may adversely affect our financial condition and operating results.
−Removed: In the event the conditional conversion feature of any or all of the 2029 Secured Convertible Notes is triggered, holders of the 2029 Secured Convertible Notes will be entitled to convert their 2029 Secured Convertible Notes at any time during specified periods at their option.
−Removed: If one or more holders elect to convert 2029 Secured Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.
−Removed: In addition, even if holders of the 2029 Secured Convertible Notes do not elect to convert their 2029 Secured Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2029 Secured Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
−Removed: Table o f Contents
−Removed: Provisions in the indenture for the 2029 Secured Convertible Notes may deter or prevent a business combination that may be favorable to you.
−Removed: If a fundamental change occurs prior to the maturity date of the 2029 Secured Convertible Notes, holders of the 2029 Secured Convertible Notes will have the right, at their option, to require us to repurchase all or a portion of their 2029 Secured Convertible Notes.
−Removed: In addition, if a make-whole fundamental change occurs prior the maturity date, we will in some cases be required to increase the conversion rate for a holder that elects to convert all or a portion of their 2029 Secured Convertible Notes in connection with such make-whole fundamental change.
−Removed: Furthermore, the 2029 notes indenture will prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2029 Secured Convertible Notes.
+Added: The conditional conversion feature of all or a portion of the 2029 Convertible Notes, if triggered, may adversely affect our financial condition and operating results.
+Added: In the event the conditional conversion feature of any or all of the 2029 Convertible Notes is triggered, holders of the 2029 Convertible Notes will be entitled to convert their 2029 Convertible Notes at any time during specified periods at their option.
+Added: If one or more holders elect to convert 2029 Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation in cash, which could adversely affect our liquidity.
+Added: In addition, even if holders of the 2029 Convertible Notes do not elect to convert their 2029 Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2029 Convertible Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
+Added: Provisions in the indenture for the 2029 Convertible Notes may deter or prevent a business combination that may be favorable to you.
+Added: If a fundamental change occurs prior to the maturity date of the 2029 Convertible Notes, holders of the 2029 Convertible Notes will have the right, at their option, to require us to repurchase all or a portion of their 2029 Convertible Notes.
+Added: In addition, if a make-whole fundamental change occurs prior the maturity date, we will in some cases be required to increase the conversion rate for a holder that elects to convert all or a portion of their 2029 Convertible Notes in connection with such make-whole fundamental change.
+Added: Furthermore, the 2029 notes indenture will prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2029 Convertible Notes.
These and other provisions in the 2029 notes indenture could deter or prevent a third party from acquiring us even when the acquisition may be favorable to you.
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If we raise additional capital through debt financing, the terms of any new debt could further restrict our ability to operate our business.
−Removed: The 2029 Secured Convertible Notes are senior, secured obligations of us and our wholly-owned subsidiaries guaranteeing the notes (the “2029 Notes Guarantors”), secured by substantially all of our and 2029 Notes Guarantors’ assets (including intellectual property), in each case, excluding certain excluded assets and immaterial subsidiaries, and senior in right of payment to our existing and future indebtedness that is expressly subordinated to the 2029 Secured Convertible Notes.
−Removed: Subject to certain exceptions, our future material wholly-owned domestic subsidiaries are required to become guarantors of the 2029 Secured Convertible Notes and grant security interests in their assets securing the obligations in respect of the 2029 Secured Convertible Notes.
−Removed: The 2029 notes indenture restricts our ability to, among other restrictions, incur additional secured indebtedness, pursue certain dispositions, mergers or acquisitions, transfer certain assets to any of our subsidiaries that are not guarantors under the 2029 Secured Convertible Notes, and engage in certain other business transactions.
−Removed: If we fail to comply with these or any of the other covenants under the 2029 notes indenture and are unable to obtain a waiver or amendment, the holders of the 2029 Secured Convertible Notes may, among other things, declare all of the 2029 Secured Convertible Notes due and payable and exercise rights with respect to collateral securing the 2029 Secured Convertible Notes, each of which could significantly harm our business, financial condition and prospects and could cause the price of our common stock to decline.
+Added: The 2029 Convertible Notes are senior, secured obligations of us and our wholly-owned subsidiaries guaranteeing the notes (the “2029 Notes Guarantors”), secured by substantially all of our and 2029 Notes Guarantors’ assets (including intellectual property), in each case, excluding certain excluded assets and immaterial subsidiaries, and senior in right of payment to our existing and future indebtedness that is expressly subordinated to the 2029 Convertible Notes.
+Added: Subject to certain exceptions, our future material wholly-owned domestic subsidiaries are required to become guarantors of the 2029 Convertible Notes and grant security interests in their assets securing the obligations in respect of the 2029 Convertible Notes.
+Added: The 2029 notes indenture restricts our ability to, among other restrictions, incur additional secured indebtedness, pursue certain dispositions, mergers or acquisitions, transfer certain assets to any of our subsidiaries that are not guarantors under the 2029 Convertible Notes, and engage in certain other business transactions.
+Added: If we fail to comply with these or any of the other covenants under the 2029 notes indenture and are unable to obtain a waiver or amendment, the holders of the 2029 Convertible Notes may, among other things, declare all of the 2029 Convertible Notes due and payable and exercise rights with respect to collateral securing the 2029 Convertible Notes, each of which could significantly harm our business, financial condition and prospects and could cause the price of our common stock to decline.
In addition, pursuant to the terms of the Exchange Agreement, we agreed, among other things, to grant the exchanging investors identified therein certain rights with respect to us and certain of our subsidiaries, including a right of first refusal with respect to the incurrence of additional secured indebtedness, participation rights with respect to the incurrence of unsecured indebtedness, and preemptive rights with respect to the issuance of certain equity securities, in each case subject to the terms set forth in the Exchange Agreement.
If we raise any additional debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.
−Removed: Table o f Contents
Risks Related to Ownership of our Common Stock
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A decline in the price of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities.
−Removed: Table o f Contents
We also filed Form S-8 registration statements to register shares reserved for future issuance under our equity compensation plans.
As a result, subject to the satisfaction of applicable exercise periods, the shares issued upon exercise of outstanding stock options will be available for immediate resale in the United States in the open market.
−Removed: Further, we have filed two effective shelf registration statements on Form S-3 under each of which we may offer from time to time in one or more offerings any combination of common and preferred stock, debt securities, warrants, purchase contracts and units of up to $750.0 million in the aggregate.
+Added: Further, we have filed three effective shelf registration statements on Form S-3 under each of which we may offer from time to time in one or more offerings any combination of common and preferred stock, debt securities, warrants, purchase contracts and units.
Additionally, certain of our employees, executive officers, and directors have already entered into, or may in the future enter into Rule 10b5-1 trading plans providing for sales of shares of our common stock from time to time.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.