UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~June 30, 2020

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number: 000-55353

~~FaceBank Group,~~fuboTV Inc.

(Exact Name of Registrant as Specified in Its Charter)

Florida

26-4330545

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)


1330 Avenue of the Americas, New York, NY		10019
(Address of Principal Executive Offices)		(Zip Code)

(212) 672-0055

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of exchange on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[X]	Smaller reporting company	[X]
Emerging growth company	[ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of ~~July 2,~~August 7, 2020, there were ~~38,684,136~~42,064,459 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

~~EXPLANATORY NOTE~~

FaceBank Group, Inc. (the “Company” or “FaceBank”) is filing this quarterly report on Form 10-Q after the May 15, 2020 deadline (the “Original Due Date”) applicable for the filing of a Form 10-Q for the quarter ended March 31, 2020 (the “Quarterly Report”) in reliance on the 45-day extension provided by an order issued by the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”) under Section 36 of the Securities Exchange Act of 1934 Granting Exemptions From Specified Provisions of the Exchange Act of 1934 and Certain Rules Thereunder dated March 4, 2020 (Release No. 34-88318), as modified and superseded by a new Commission order issued on March 25, 2020 (Release No. 34-88465) (collectively, the “Order”).

As disclosed in the Company’s Current Report on Form 8-K filed with the Commission on May 15, 2020, the Company was unable to file this Quarterly Report within the prescribed time period due to the global COVID-19 pandemic. As a result of the pandemic, management’s full efforts have been focused on operating its business and evaluating available funding. The Company has been following the recommendations of local health authorities in the U.S. and Europe, where one of its operating subsidiaries is located, to minimize exposure risk for its employees, including temporarily closing its offices and requiring its employees to work remotely to the extent possible. As a result, the Company’s books and records were not easily accessible, resulting in delays in preparation and completion of its financial statements. Further, the various governmental mandatory closures of businesses have precluded the Company’s personnel, particularly its senior accounting staff, from obtaining access to its European subsidiaries’ books and records necessary to prepare the Company’s financial statements that, once audited, comprise the essence of the Quarterly Report.

These unforeseen circumstances resulted in the Company being unable to file its Quarterly Report during the prescribed period without undue hardship and expense to the Company. As such, the Company is filing this Quarterly Report within 45 days of the Original Due Date in reliance on the Order.

~~FaceBank Group,~~fuboTV Inc.

INDEX

		Page

	PART I - FINANCIAL INFORMATION	4

Item 1.	Financial Statements	4

	Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2020 (unaudited) and December 31, 2019	4

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019 (unaudited)	5

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2020 and 2019 (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2744

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3153

Item 4.	Controls and Procedures	3153

	PART II - OTHER INFORMATION	53

Item 1.	Legal Proceedings	3153

Item 1A.	Risk Factors	3154

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3174

Item 3.	Defaults Upon Senior Securities	3275

Item 4.	Mine Safety Disclosures	3275

Item 5.	Other Information	3275

Item 6.	Exhibits	3276

Signatures		3679

FORWARD-LOOKING STATEMENTS

As used in this Quarterly Report, unless expressly indicated or the context otherwise requires, references to ~~“FaceBank,~~“fuboTV Inc.,” “fuboTV,” “we,” “us,” “our,” “the Company,” and similar references refer to ~~FaceBank Group,~~fuboTV Inc., a Florida corporation and its consolidated subsidiaries, including fuboTV Inc., ~~or fuboTV.~~a Delaware corporation (“fuboTV Sub”).

This Quarterly Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ~~or the Securities Act of 1933,~~(the “Securities Act”), and the Securities Exchange Act of 1934, as ~~amended.~~amended (the “Exchange Act”). These forward-looking statements, which are subject to a number of risks, uncertainties, and assumptions, generally relate to future events or our future financial or operating performance. In some cases, you can identify these statements by forward-looking words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “target,” “project,” “contemplate,” or the negative version of these words and other comparable terminology that concern our expectations, strategy, plans, intentions, or projections. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

●	market conditions and global economic factors beyond our control, including the potential adverse effects of the ongoing global COVID-19 pandemic on our business and results of operations, on live sports and entertainment, and on the global economic environment;

●	our ability to access debt and equity financing;

●	our efforts to maintain proper and effective internal controls;

●	factors relating to our business, operations and financial performance, including:

	○	our ability to effectively compete in the live TV streaming and entertainment industries;

	○	our ability to successfully integrate new operations;

	○	our ability to maintain and expand our content offerings;

	○	our ability to recognize deferred tax assets and tax loss carryforwards;

●	the impact of management changes and organizational restructuring;

●	our ability to uplist the combined company to a national stock exchange;

●	the anticipated effects of the Merger (as hereinafter defined);

●	changes in applicable laws or regulations;

●	litigation and our ability to adequately protect our intellectual property rights;

●	our success in retaining or recruiting officers, key employees or directors; and

●	the possibility that we may be adversely affected by other economic, business and/or competitive factors.

We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in ~~the section~~Section 1A titled “Risk ~~Factors” in our Annual Report on Form 10-K as filed with the Commission under the Exchange Act.~~Factors.” These risks are not exhaustive. Other sections of this Quarterly Report include additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements and you should not place undue reliance on our forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. The forward-looking statements in this Quarterly Report do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that had not been completed as of July 6, 2020. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. You should read this Quarterly Report in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2019 included in our Annual Report on Form ~~10-K.~~10-K/A filed with the SEC on August 10, 2020.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

~~FaceBank Group,~~

fuboTV Inc.

Condensed Consolidated Balance Sheets

(in thousands, except for share and per share information)

March 31 December 31,
2020 2019
(Unaudited) *
ASSETS
Current assets
Cash $ 81 $ 7,624
Accounts receivable, net - 8,904
Notes Receivable - FuboTV 10,000 -
Inventory - 49
Prepaid expenses 130 1,396
Total current assets 10,211 17,973

Property and equipment, net - 335
Deposits 24 24
Investment in Nexway at fair value 2,374 -
Financial assets at fair value 1,965 1,965
Intangible assets 111,459 116,646
Goodwill 148,054 148,054
Right-of-use assets 37 3,519
Total assets $ 274,124 $ 288,516

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable 3,406 $ 36,373
Accrued expenses 4,337 20,402
Due to related parties 305 665
Notes payable, net of discount 5,207 4,090
Notes payable - related parties 446 368
Convertible notes, net of $945 and $456 discount as of March 31, 2020 and December 31, 2019, respectively 1,962 1,358
Shares settled liability for intangible asset - 1,000
Shares settled liability for note payable 7,515 -
Profit share liability 1,971 1,971
Warrant liability - subsidiary 39 24
Warrant liability 15,987 -
Derivative liability 389 376
Current portion of lease liability 37 815
Total current liabilities 41,601 67,442

Deferred income taxes 28,679 30,879
Other long-term liabilities 1 41
Lease liability - 2,705
Long term borrowings 55,130 43,982
Total liabilities 125,411 145,049

COMMITMENTS AND CONTINGENCIES (Note 14)

Series D Convertible Preferred stock, par value $0.0001, 2,000,000 shares authorized, 456,000 and 456,000 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $463 and $462 as of March 31, 2020 and December 31, 2019, respectively 463 462

Stockholders’ equity:
Series AA Preferred stock, par value $0.00001, 35,800,000 shares authorized, 0 shares issued and outstanding as of December 31, 2019 - -
Series A Preferred stock, par value $0.0001, 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2019 - -
Series B Convertible Preferred stock, par value $0.0001, 1,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2019 - -
Series C Convertible Preferred stock, par value $0.0001, 41,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2019 - -
Series X Convertible Preferred stock, par value $0.0001, 1,000,000 shares authorized, 0 and 1,000,000 shares issued and outstanding as of December 31, 2019 - -
Common stock par value $0.0001: 400,000,000 shares authorized; 32,307,663 and 28,912,500 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively 3 3
Additional paid-in capital 270,397 257,002
Accumulated deficit (140,134 ) (135,832 )
Non-controlling interest 17,984 22,602
Accumulated other comprehensive loss - (770 )
Total stockholders’ equity 148,250 143,005
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY $ 274,124 $ 288,516

	June 30, 2020			December 31, 2019
	(unaudited)			*
ASSETS
Current assets:
Cash and cash equivalents	$	7,356		$	7,624
Accounts receivable, net		4,112			8,904
Prepaid expenses and other current assets		2,839			1,445
Assets held for sale (Note 7)		35,494			—
Total current assets		49,801			17,973
Property and equipment, net		1,933			335
Restricted cash		1,330			—
Financial assets at fair value		—			1,965
Intangible assets, net		340,785			116,646
Goodwill		710,962			227,763
Operating leases – right-of-use assets		5,152			3,519
Other non-current assets		403			24

Total assets	$	1,110,366		$	368,225

Liabilities, convertible preferred stock and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and other current liabilities	$	109,404		$	56,775
Accounts payable – due to related parties		17,010			665
Accrued expenses – due to related parties		43,170			—
Notes payable, net of discount		16,542			4,090
Note payable – related parties		539			368
Convertible notes, net of $2,027 and $710 discount as of June 30, 2020 and December 31, 2019, respectively		4,407			1,358
Shares settled liability for intangible asset		—			1,000
Deferred revenue		8,855			—
Profit share liability		2,119			1,971
Warrant liability – subsidiary		21			24
Warrant liabilities		40,617			—
Derivative liabilities		163			376
Long term borrowings – current portion		8,154			—
Current portion of operating lease liabilities		970			815
Liabilities held for sale (Note 7)		56,137			—

Total current liabilities		308,108			67,442

Deferred income taxes		90,794			30,879
Operating lease liability		4,189			2,705
Long term borrowings		19,197			43,982
Other long-term liabilities		1			41

Total liabilities		422,289			145,049

Commitments and contingencies (Note 19)

Series D Convertible Preferred stock, $0.0001 par value, 2,000,000 shares authorized, 203,000 and 456,000 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $208 and $462 as of June 30, 2020 and December 31, 2019, respectively		208			462

Stockholders’ equity:
Series AA Convertible Preferred stock, par value $0.0001, 35,800,000 shares authorized, 27,412,193 and 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		566,124			—
Series A Preferred stock, par value $0.0001, 5,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		—			—
Series B Convertible Preferred stock, par value $0.0001, 1,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		—			—
Series C Convertible Preferred stock, par value $0.0001, 41,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		—			—
Series X Convertible Preferred stock, par value $0.0001, 1,000,000 shares authorized, 0 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		—			—
Common stock par value $0.0001: 400,000,000 shares authorized; 38,684,514 and 28,912,500 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		4			3
Additional paid-in capital		315,871			257,002
Accumulated deficit		(210,540	)		(56,123	)
Non-controlling interest		16,410			22,602
Accumulated other comprehensive loss		—			(770	)

Total stockholders’ equity		687,869			222,714

TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY	$	1,110,366		$	368,225

* Derived from audited ~~information.~~information

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~FaceBank Group,~~

fuboTV Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(~~unaudited;~~ in thousands, except ~~for~~ share and per share ~~information)~~amounts)

For the Three Months Ended
March 31,
2020 2019
Revenues
Revenues, net $ 7,295 $ -
Total revenues 7,295 -
Operating expenses
General and administrative 20,203 1,037
Amortization of intangible assets 5,217 5,153
Depreciation 3 5
Total operating expenses 25,423 6,195
Operating loss (18,128 ) (6,195 )

Other income (expense)
Interest expense and financing costs (2,581 ) (446 )
Gain on deconsolidation of Nexway 39,249 -
Loss on issuance of notes, bonds and warrants (24,053 ) -
Other expense (436 ) -
Change in fair value of warrant liability (366 ) -
Change in fair value of subsidiary warrant liability (15 ) 2,477
Change in fair value of shares settled liability (180 ) -
Change in fair value of derivative liability 297 128
Total other income 11,915 2,159
Loss before income taxes (6,213 ) (4,036 )
Income tax benefit (1,038 ) (1,169 )
Net loss (5,175 ) (2,867 )
Less: net loss attributable to non-controlling interest 873 599
Net loss attributable to controlling interest $ (4,302 ) $ (3,466 )
Less: Deemed dividend - beneficial conversion feature on preferred stock (171 ) -
Net loss attributable to common stockholders $ (4,473 ) $ (3,466 )

Net loss per share attributable to common stockholders
Basic $ (0.15 ) $ (0.27 )
Diluted $ (0.15 ) $ (0.27 )
Weighted average shares outstanding:
Basic 30,338,073 12,883,381
Diluted 30,338,073 12,883,381

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenues, net
Subscriptions	$	39,511		$	—		$	39,511		$	—
Advertisements		4,323			—			4,323			—
Software licenses, net		—			—			7,295			—
Other		338			—			338			—

Total Revenues	$	44,172		$	—		$	51,467		$	—

Operating expenses:
Subscriber related expenses		53,087			—			53,087			—
Broadcasting and transmission		9,492			—			9,492			—
Sales and marketing		7,577			111			11,256			324
Technology and development		9,551			—			9,551			—
General and administrative		17,338			693			33,862			1,517
Depreciation and amortization		14,417			5,158			19,637			10,316

Total operating expenses		111,462			5,962			136,885			12,157

Operating loss		(67,290	)		(5,962	)		(85,418	)		(12,157	)

Other income (expense):
Interest expense and financing costs		(13,325	)		(454	)		(15,906	)		(900	)
Loss on deconsolidation of Nexway		—			—			(11,919	)		—
Loss on issuance of notes, bonds and warrants		(26,753	)		—			(50,806	)		—
Change in fair value of warrant liabilities		4,966			—			4,600			—
Change in fair value of subsidiary warranty liability		18			1,124			3			3,601
Change in fair value of shares settled liability		(1,485	)		—			(1,665	)		—
Change in fair value of derivative liabilities		(823	)		890			(526	)		1,018
Change in fair value of profit share liability		(148	)		—			(148	)		—
Unrealized gain on equity method investment		2,614			—			2,614			—
Other expense		(1,010	)		—			(1,446	)		—

Total other (expense) income		(35,946	)		1,560			(75,199	)		3,719

Loss before income taxes		(103,236	)		(4,402	)		(160,617	)		(8,438	)
Income tax benefit		3,481			1,037			4,519			2,206

Net loss	$	(99,755	)	$	(3,365	)	$	(156,098	)	$	(6,232	)
Less: net (loss) income attributable to non-controlling interest		(682	)		2,182			(1,555	)		2,781

Net loss attributable to controlling interest	$	(99,073	)	$	(5,547	)	$	(154,543	)	$	(9,013	)

Less: Deemed divided – beneficial conversion feature on preferred stock		—			—			171			—

Net loss attributable to common stockholders	$	(99,073	)	$	(5,547	)	$	(154,714	)	$	(9,013	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(2.82	)	$	(0.24	)	$	(4.77	)	$	(0.50	)

Weighted average shares outstanding:
Basic and diluted		35,045,390			22,964,199			32,390,829			17,952,188

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

~~FaceBank Group,~~fuboTV Inc.

Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity

(Unaudited)

(~~unaudited;~~ in thousands, except ~~for~~ share and per share ~~information)~~amounts)

~~Three Months Ended March 31, 2020~~

For the three and six months ended June 30, 2020	Series AA Convertible Preferred Stock				Common Stock				Additional Paid in			Accumulated			Accumulated Other Comprehensive			Noncontrolling			Total Stockholders’ Equity
(unaudited):	Shares		Amount		Shares		Amount		Capital			Deficit			Loss			Interest			(Deficit)

Balance at December 31, 2019		—	$	—		28,912,500	$	3	$	257,002		$	(56,123	)	$	(770	)	$	22,602		$	222,714
Issuance of common stock for cash		—		—		795,593		—		2,297			—			—			—			2,297
Issuance of common stock - subsidiary share exchange		—		—		1,552,070		—		1,150			—			—			(1,150	)		—
Common stock issued in connection with note payable		—		—		7,500		—		67			—			—			—			67
Stock-based compensation		—		—		1,040,000		—		10,061			—			—			—			10,061
Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock		—		—		—		—		(171	)		—			—			—			(171	)
Accrued Series D Preferred Stock dividends		—		—		—		—		(9	)		—			—			—			(9	)
Deconsolidation of Nexway		—		—		—		—		—			—			770			(2,595	)		(1,825	)
Net loss		—		—		—		—		—			(55,470	)		—			(873	)		(56,343	)

Balance at March 31, 2020		—	$	—		32,307,663	$	3	$	270,397		$	(111,593	)	$	—		$	17,984		$	176,791

Issuance of common stock and warrants for cash		—		—		3,906,313		1		26,629			—			—			—			26,630
Issuance of common stock - subsidiary share exchange		—		—		1,201,749		—		892			—			—			(892	)		—
Common stock issued in connection with note payable		—		—		25,000		—		192			—			—			—			192
Right to receive Series AA Preferred Stock in connection with acquisition of fuboTV Pre-Merger		32,324,362		566,124		—		—		—			—			—			—			566,124
Settlement of share settled liability		—		—		900,000		—		9,054			—			—			—			9,054
Stock-based compensation		—		—		343,789		—		8,715			—			—			—			8,715
Redemption of redemption feature of convertible preferred stock		—		—		—		—		—			126			—			—			126
Accrued Series D Preferred Stock dividends		—		—		—		—		(8	)		—			—			—			(8	)
Net loss		—		—		—		—		—			(99,073	)		—			(682	)		(99,755	)

Balance at June 30, 2020		32,324,362	$	566,124		38,684,514	$	4	$	315,871		$	(210,540	)	$	—		$	16,410		$	687,869

Accumulated
Additional Other Total
Common Stock Paid-In Accumulated Comprehensive Noncontrolling Stockholders’
Shares Amount Capital Deficit Loss Interest Equity
Balance at December 31, 2019 28,912,500 $ 3 $ 257,002 $ (135,832 ) $ (770 ) $ 22,602 $ 143,005
Issuance of common stock for cash 795,593 - 2,297 - - - 2,297
Issuance of common stock - subsidiary share exchange 1,552,070 - 1,150 - - (1,150 ) -
Common stock issued in connection with note payable 7,500 - 67 - - - 67
Stock based compensation 1,040,000 - 10,061 - - - 10,061
Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock - - (171 ) - - - (171 )
Accrued Series D Preferred Stock dividends - - (9 ) - - - (9 )
Deconsolidation of Nexway - - - - 770 (2,595 ) (1,825 )
Net loss - - - (4,302 ) - (873 ) (5,175 )
Balance at March 31, 2020 32,307,663 $ 3 $ 270,397 $ (140,134 ) $ - $ 17,984 $ 148,250

~~Three Months Ended March 31, 2019~~

For the three and six months ended June 30, 2019																					Series AA Convertible Preferred Stock					Common Stock				Additional Paid in			Accumulated			Noncontrolling		Total Stockholders’ Equity
(unaudited):																					Shares			Amount		Shares		Amount		Capital			Deficit			Interest		(Deficit)
	Series X Convertible									Additional								Total
	Preferred stock					Common Stock				Paid-In			Accumulated			Noncontrolling		Stockholders’
	Shares			Amount		Shares		Amount		Capital			Deficit			Interest		Equity
Balance at January 1, 2019		1,000,000		$	-		7,532,776	$	1	$	227,570		$	(21,763	)	$	26,742	$	232,550
Balance at December 31, 2018																						1,000,000		$	—		7,532,776	$	1	$	227,570		$	(21,763	)	$	26,742	$	232,550
Issuance of common stock for cash		-			-		378,098		-		1,778			-			-		1,778			—			—		378,098		—		1,778			—			—		1,778
Preferred stock converted to common stock		(1,000,000	)		-		15,000,000		1		(1	)		-			-		-			(1,000,000	)		—		15,000,000		1		(1	)		—			—		—
Common stock issued for lease settlement		-			-		18,935		-		130			-			-		130			—			—		18,935		—		130			—			—		130
Issuance of subsidiary common stock for cash		-			-		-		-		65			-			-		65			—			—		—		—		65			—			—		65
Additional shares issued for reverse stock split		-			-		1,374		-		-			-			-		-			—			—		1,374		—		—			—			—		—
Net loss		-			-		-		-		-			(3,466	)		599		(2,867	)		—			—		—		—		—			(3,466	)		599		(2,867	)

Balance at March 31, 2019		-		$	-		22,931,183	$	2	$	229,542		$	(25,229	)	$	27,341	$	231,656			—		$	—		22,931,183	$	2	$	229,542		$	(25,229	)	$	27,341	$	231,656

Issuance of common stock for cash																						—			—		386,792		—		422			—			—		422
Net loss																						—			—		—		—		—			(5,547	)		2,182		(3,365	)

Balance at June 30, 2019																						—		$	—		23,317,975	$	2	$	229,964		$	(30,776	)	$	29,523	$	228,713

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~

~~FaceBank Group, Inc.~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(unaudited; in thousands, except for share and per share information)~~

For the Three Months Ended March 31,
2020 2019
Cash flows from operating activities
Net loss $ (5,175 ) $ (2,867 )

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets 5,217 5,153
Depreciation 3 5
Stock-based compensation 9,061 -
Gain on deconsolidation of Nexway, net of cash retained by Nexway (42,604 ) -
Common stock issued in connection with note payable 67 -
Loss on issuance of notes, bonds and warrants 24,053 -
Amortization of debt discount 1,664 234
Deferred income tax benefit (1,038 ) (1,169 )
Change in fair value of derivative liability (297 ) (128 )
Change in fair value of warrant liability 366 -
Change in fair value of subsidiary warrant liability 15 (2,477 )
Change in fair value of shares settled liability 180 -
Amortization of right-of-use assets 13 6
Accrued interest on note payable 112 144
Other adjustments (55 ) -
Changes in operating assets and liabilities of business, net of acquisitions:
Accounts receivable (927 ) -
Notes Receivable (179 ) -
Prepaid expenses 1,102 (23 )
Accounts payable 1,295 172
Accrued expenses (277 ) 374
Due from related parties (60 ) -
Lease liability (14 ) (6 )
Net cash used in operating activities (7,478 ) (582 )

Cash flows from investing activities
Investment in Panda Productions (HK) Limited - (1,000 )
Sale of profits interest in investment in Panda Productions (HK) Limited - 212
Advance to fuboTV $ (2,421 )
Lease security deposit - (13 )
Net cash used in investing activities (2,421 ) (801 )

Cash flows from financing activities
Proceeds from issuance of convertible notes 900 -
Repayments of convertible notes (550 ) (203 )
Proceeds from the issuance of Series D Preferred Stock 203 -
Proceeds from sale of common stock and warrants 2,297 1,778
Proceeds from sale of subsidiary’s common stock - 65
Redemption of Series D Preferred Stock (272 ) -
Proceeds from related parties notes 78 -
(Repayments) proceeds from (to) related parities (300 ) 18
Net cash provided by financing activities 2,356 1,658

Net (decrease) increase in cash (7,543 ) 275
Cash at beginning of period 7,624 31
Cash at end of period 81 $ 306

Supplemental disclosure of cash flows information:
Interest paid $ 170 $ 68
Income tax paid $ - $ -

Non cash financing and investing activities:
Reclass of shares settled liability for intangible asset to stock-based compensation $ 1,000 $ -
Issuance of common stock - subsidiary share exchange $ 1,150 $ -
Lender advanced loan proceeds direct to fuboTV $ 7,579 $ -
Accrued Series D Preferred Stock dividends $ 9 $ -
Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock $ 171 $ -
Common stock issued for lease settlement $ - $ 130
Measurement period adjustment on the Evolution AI Corporation acquisition $ - $ 1,920

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

fuboTV Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands, except share and per share amounts)

	Six Months Ended June 30,
	2020			2019

Operating activities
Net loss	$	(156,098	)	$	(6,232	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		19,637			10,316
Stock-based compensation		17,776			—
Loss on deconsolidation of Nexway, net of cash retained by Nexway		8,564			—
Common stock issued in connection with note payable		67			—
Loss on issuance of notes, bonds and warrants		50,806			—
Non-cash expense relating to issuance of warrants and common stock		2,208			—
Amortization of debt discount		10,981			454
Deferred income tax benefit		(4,519	)		(2,206	)
Change in fair value of derivative liabilities		526			(1,018	)
Change in fair value of warrant liabilities		(4,600	)		—
Change in fair value of subsidiary warrant liability		(3	)		(3,601	)
Change in fair value of shares settled liability		1,665			—
Change in fair value of profit share liability		148			—
Unrealized gain on investment		(2,614	)		—
Amortization of right-of-use assets		167			26
Foreign exchange loss		1,010			—
Accrued interest on note payable		246			295
Other, net		(31	)		—
Changes in operating assets and liabilities:
Accounts receivable		792			—
Prepaid expenses and other current and long-term assets		(614	)		(15	)
Due to related parties		10,889			—
Accounts payable, accrued expenses and other current and long-term liabilities		799			459
Operating lease liabilities		(162	)		(26	)
Deferred revenue		46			—

Net cash used in operating activities		(42,314	)		(1,548	)

Investing activities
Capital expenditures		(70	)		(9	)
Investment in Panda Productions (HK) Limited		—			(1,000	)
Advance to fuboTV Pre-Merger		(10,000	)		—
Acquisition of fuboTV’s Pre-Merger cash and cash equivalents and restricted cash		9,373			—
Sale of profit interest in investment in Panda Productions (HK) Limited		—			655
Lease security deposit		—			(20	)

Net cash used in investing activities		(697	)		(374	)

Financing activities
Proceeds from issuance of convertible notes		3,003			—
Repayments of convertible notes		(1,140	)		(523	)
Proceeds from issuance Series D Preferred Stock		203			—
Proceeds from sale of common stock		28,926			2,199
Proceeds from sale of subsidiary’s common stock		—			65
Redemption of Series D Preferred Stock		(611	)		—
Proceeds from short-term borrowings		18,950			—
Repayments of short-term borrowings		(8,407	)		—
Proceeds from long-term borrowings		4,699			—
Repayments of long-term borrowings		(1,250	)		—
Proceeds from related parties		—			410
Repayments to related parties		(300	)		(109	)

Net cash provided by financing activities		44,073			2,042

Net increase in cash and cash equivalents and restricted cash		1,062			120
Cash and cash equivalents and restricted cash, beginning of period		7,624			31

Cash and cash equivalents and restricted cash, end of period	$	8,686		$	151

The accompanying notes are an integral part of these condensed consolidated financial statements.

~~FaceBank Group,~~fuboTV Inc.

Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements

~~Note 1 – Organization and Nature of Business~~

1.	Organization and Nature of Business

Incorporation

~~FaceBank Group,~~fuboTV Inc. ~~(the~~(“fuboTV” or the “Company” ~~or “FaceBank”~~) was incorporated under the laws of the State of Florida in February 2009 under the name York Entertainment, Inc. OnThe Company changed its name to FaceBank Group, Inc. on September 30, ~~2019,~~2019. On August 10, 2020, the Company changed its name to fuboTV Inc. (the “Name Change”) and as of May 1, 2020, the Company’s ~~name~~trading symbol was changed to “FUBO.” The Company has filed a Notice of Corporate Action (the “Action”) with FINRA regarding the Name Change. The Action is pending FINRA approval at this time.

Unless the context otherwise requires, “fuboTV,” “we,” “us,” “our,” and the “Company” refers to fuboTV and its subsidiaries on a consolidated basis, and “fuboTV Pre-Merger” refers to fuboTV Inc., a Delaware corporation, prior to the Merger, and “fuboTV Sub” refers to fuboTV Inc., a Delaware corporation, and the Company’s wholly-owned subsidiary following the Merger. “FaceBank Pre-Merger” refers to FaceBank Group, Inc. prior to the Merger and its subsidiaries prior to the closing of the Merger, and “fuboTV Pre-Merger” refers to fuboTV Inc., a Delaware corporation and its subsidiaries prior to the Merger.

Merger with fuboTV ~~Inc.~~Pre-Merger

On April 1, 2020, fuboTV Acquisition Corp., a Delaware corporation and ~~our~~FaceBank Pre-Merger’s wholly-owned subsidiary (“Merger Sub”) merged with and into fuboTV ~~Inc., a Delaware corporation (“fuboTV”),~~Pre-Merger, whereby fuboTV Pre-Merger continued as the surviving corporation and became our wholly-owned subsidiary pursuant to the terms of the Agreement and Plan of Merger and Reorganization dated as of March 19, 2020, by and among us, Merger Sub and fuboTV Pre-Merger (the “Merger Agreement” and such transaction, the “Merger”) (See Note ~~15)~~4).

In accordance with the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), all of the capital stock of fuboTV Pre-Merger was converted into ~~the right to receive~~ shares of our newly-created class of Series AA Convertible Preferred Stock, par value $0.0001 per share (the “Series AA Preferred Stock”) (See Note ~~12)~~17). Each share of Series AA Convertible Preferred Stock is entitled to 0.8 votes per share and is convertible into two ~~(2)~~ shares of our common stock, only in connection with ~~a bona fide transfer to a third party~~the sale of such shares on an arms’-length basis either pursuant to an exemption from registration under Rule ~~144.~~144 promulgated under the Securities Act or pursuant to an effective registration statement under the Securities Act. Until the time we are able to uplist to a national securities exchange, the Series AA Convertible Preferred Stock benefits from certain protective provisions that, for example, require us to obtain the approval of a majority of the shares of outstanding Series AA Convertible Preferred Stock, voting as a separate class, before undertaking certain matters.

~~As a result of~~Prior to the Merger, ~~fuboTV, a leading live TV streaming platform for sports, news,~~ the Company was, and ~~entertainment, became a wholly-owned subsidiary of~~after the ~~Company. Before the~~ Merger ~~Facebank Group was and~~ continues to be, a character-based virtual entertainment company and a leading developer of digital human likeness for celebrities and consumers, focused on applications in traditional entertainment, sports entertainment, live events, social networking, mixed reality (AR/VR) and artificial intelligence. ~~Following~~As a result of the Merger, we operate our business under the name “fuboTV” and we are in the process of changing the name of FaceBank Group, Inc. to fuboTV, Inc. On May 1, 2020, the Company’s trading symbol was changed to “FUBO”. Unless the context otherwise requires, “we,” “us,” “our,” and the “Company” refers to FaceBank and its subsidiaries on a consolidated basis, and fuboTV Pre-Merger, ~~refers to fuboTV Inc. prior to~~a leading live TV streaming platform for sports, news, and entertainment, became a wholly-owned subsidiary of the ~~Merger.~~Company.

In connection with the Merger, on March 11, 2020, ~~FaceBank~~the Company and HLEE Finance S.a r.l. (“HLEE”) entered into a Credit Agreement, dated as of March 11, 2020, pursuant to which HLEE provided ~~FaceBank~~the Company with a ~~$100,000,000~~$100.0 million revolving line of credit (the “Credit Facility”). The Credit Facility is secured by substantially all the assets of ~~FaceBank.~~the Company. As of ~~July 6,~~June 30, 2020, there ~~are~~were no amounts outstanding under the Credit ~~Facility, and the Company does not intend to draw down on this Credit~~ Facility. See Note ~~8 of the Notes to the Unaudited Condensed Consolidated Financial Statements~~13 for more information about the Credit Facility. The Credit Facility was terminated on July 8, 2020.

On March 19, 2020, ~~FaceBank,~~the Company, Merger Sub, Evolution AI Corporation (“EAI”) and Pulse Evolution Corporation (“~~PEC��~~PEC” and collectively with EAI, Merger Sub and ~~FaceBank,~~the Company, the “Initial Borrower”) and FB Loan Series I, LLC (“FB Loan”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”), pursuant to which the Initial Borrower sold to FB Loan senior secured promissory notes in an aggregate principal amount of ~~$10,050,000~~$10.1 million (the “Senior Notes”). The Company received proceeds of $7.4 million, net of an original issue discount of ~~$2.65~~$2.7 million. In connection with the FB Loan, ~~FaceBank,~~the Company, fuboTV Sub and certain of their respective subsidiaries granted a lien on substantially of their assets to secure the obligations under the Senior Notes. See Note ~~8 of the Notes to the Unaudited Condensed Consolidated Financial Statements~~13 for more information about the Note Purchase Agreement.

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

Prior to the Merger, fuboTV Pre-Merger and its subsidiaries were party to a Credit and Guaranty Agreement, dated as of April 6, 2018 (the “AMC Agreement”), with AMC Networks Ventures LLC as lender, administrative agent and collateral agent (“AMC Networks Ventures”). fuboTV Pre-Merger previously granted AMC Networks Ventures a lien on substantially all of its assets to secure its obligations thereunder. The AMC Agreement survived the Merger and, as of the Effective Time, there was ~~$24.9~~$23.6 million outstanding under the AMC Agreement, net of debt issuance costs. In connection with the Merger, ~~FaceBank~~the Company guaranteed the obligations of fuboTV Pre-Merger under the AMC Agreement on an unsecured basis. The liens of AMC Networks Ventures on the assets of fuboTV Pre-Merger are senior to the liens in favor of FB Loan and FaceBank Pre-Merger securing the Senior Notes.

Nature of Business after the Merger

~~The~~Prior to the Merger, the Company ~~is a leading digital entertainment company, combining fuboTV Pre-Merger’s direct-to-consumer live TV streaming, or vMVPD, platform with FaceBank Pre-Merger’s~~focused on developing its technology-driven IP in sports, movies and live performances. We expect that this business combination will create a content delivery platform for traditional and future-form IP. We plan to leverage FaceBank’ IP sharing relationships with leading celebrities and other digital technologies to enhance its already robust sports and entertainment offerings.

Since the ~~Merger, while we continue our previous business operations,~~acquisition of fuboTV Pre-Merger, we are principally focused on offering consumers a leading live TV streaming platform for sports, news and entertainment through fuboTV. ~~fuboTV~~The Company’s revenues are almost entirely derived from the sale of subscription services and ~~advertising~~the sale of advertisements in the United States, though fuboTV has started to assess expansion opportunities into international markets, with operations in Canada and the launch in late 2018 of its first ex-North America offering of streaming entertainment, to consumers in Spain.States.

Our subscription-based streaming services are offered to consumers who can sign-up for accounts ~~at https://fubo.tv~~, through which we provide basic plans with the flexibility for consumers to purchase the add-ons and features best suited for them. Besides the website, consumers can also sign-up via some TV-connected devices. The fuboTV platform provides ~~what we believe to be, a superior viewer experience, with~~ a broad suite of unique features and personalization tools such as multi-channel viewing capabilities, favorites lists and a dynamic recommendation engine as well as 4K streaming and Cloud DVR offerings.

82.	Liquidity, Going Concern and Management Plans

~~FaceBank Group, Inc.~~

~~Notes to the Unaudited Condensed Consolidated Financial Statements~~

~~Note 2 – Liquidity, Going Concern and Management Plans~~

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

The Company had cash and cash equivalents of ~~$0.1~~$7.4 million, a working capital deficiency of ~~$31.4~~$258.3 million and an accumulated deficit of ~~$140.1~~$210.5 million ~~at March 31, 2020 and fuboTV had~~as of June 30, 2020. The Company incurred a $156.1 million net loss ~~of $173.7 million~~ for the ~~year~~six months ended ~~December 31, 2019.~~June 30, 2020. The Company expects to continue incurring losses in the foreseeable future and will need to raise additional capital to fund its operations, meet its obligations in the ordinary course of business and execute its longer-term business plan. ~~These~~Our obligations include liabilities assumed ~~in acquisition~~from acquisitions that are in arrears and payable on demand. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date that these financial statements are issued. The unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including its ability to successfully attract and retain subscribers, develop new technologies that can compete in a rapidly changing market with many competitors and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings.

Management believes that the Company has access to capital resources through potential issuances of debt and equity securities. The ability of the Company to continue as a going concern is dependent on the Company’s ability to execute its strategy and raise additional funds. Management is currently seeking additional funds, primarily through the issuance of equity securities for cash, to operate its business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of an equity financing. In addition to the foregoing, based on the Company’s current assessment, the Company does not expect any material impact on its long-term development timeline and its liquidity due to the worldwide spread of a novel strain of coronavirus (“COVID 19”). However, the Company is continuing to assess the effect on its operations by monitoring the spread of COVID-19 and the actions implemented to combat the virus throughout the world.Given the daily evolution of the COVID-19 outbreak and the global response to curb its spread, COVID-19 may affect the Company’s results of operations, financial condition or liquidity.

fuboTV Inc.

~~Note 3 – Summary of Significant Accounting Policies~~Notes to Condensed Consolidated Financial Statements

3.	Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts, as of ~~March 31,~~June 30, 2020, of the Company, its wholly-owned subsidiaries and its 99.7%-owned operating subsidiary EAI, which, until the Merger, was the Company’s principal operating subsidiary; inactive subsidiaries York Production LLC and York Production II LLC; wholly-owned subsidiaries Facebank AG, StockAccess Holdings SAS (“SAH”) and FBNK Finance Sarl (“FBNK Finance”); its 70.0% ownership in Highlight Finance Corp. (“HFC”); and its 76% ownership in Pulse Evolution Corporation (“PEC”). Subsequent to the Merger, fuboTV Pre-Merger became our wholly owned subsidiary. All ~~significant~~ inter-company balances and transactions have been eliminated in consolidation.

Investments in business entities in which we lack control but have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method. We have elected the fair value option to account for our equity method investments.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the ~~“Commission”~~“SEC”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments ~~(except for~~and events in the current period such as the Nexway ~~deconsolidation),~~deconsolidation and acquisition of fuboTV Pre-Merger, considered necessary for a fair presentation of such interim results.

The results for the unaudited condensed consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2020 or for any future interim period. The unaudited condensed consolidated balance sheet as at December 31, 2019 has been derived from the audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2019 and notes thereto included in the Company’s Annual Report on Form ~~10-K~~10-K/A filed with the SEC on ~~May 29,~~August 10, 2020 along with the consolidated financial statements for fuboTV Pre-Merger for the year ended December 31, 2019 and notes thereto included on Form 8-K/A filed with the SEC on June 17, 2020.

Reclassifications

~~FaceBank Group, Inc.~~

~~Notes~~For the three and six months ended June 30, 2019, the Company has reclassified certain prior year amounts on the face of the financial statements in order to conform to the ~~Unaudited Condensed Consolidated Financial Statements~~current year presentation. These reclassifications had no effect on the Company’s consolidated financial position, results of operations, or liquidity.

Use of Estimates

The preparation of financial statements in conformity with ~~generally accepted accounting principles~~U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. The significant estimates and assumptions include allocating the fair value of purchase consideration ~~issued~~to assets acquired and liabilities assumed in business acquisitions, useful lives of property and equipment and intangible assets, ~~analysis~~recoverability of ~~impairments of recorded intangible~~goodwill, long-lived assets, and investments, accruals for ~~potential~~contingent liabilities, ~~assumptions made in valuing~~valuations of derivative liabilities and ~~assumptions made when estimating the fair value of~~ equity instruments issued in share-based payment arrangements and fair value of equity method ~~investees.~~investees, and accounting for income taxes, including the valuation allowance on deferred tax assets.

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

Significant Accounting Policies

For a detailed discussion about the Company’s significant accounting policies, see the Company’s Annual Report on Form ~~10-K~~10-K/A filed with the SEC on ~~May 29,~~August 10, 2020.

Segment Information

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. A committee consisting of the Company’s executives are determined to be the CODM. The CODM reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has one operating segment.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with remaining maturities at the date of purchase of three months or less to be cash equivalents, including balances held in the Company’s money market account. The Company also classifies amounts in transit from payment processors for customer credit card and debit card transactions as cash equivalents. Restricted cash primarily represents cash on deposit with financial institutions in support of a letter of credit outstanding in favor of the Company’s landlord for office space. The restricted cash balance has been excluded from the cash balance and is classified as restricted cash on the condensed consolidated balance sheets. The following table provides a reconciliation of cash, cash equivalents and restricted cash within the consolidated balance sheet that sum to the total of the same on the consolidated statement of cash flows:

	June 30,		December 31,
	2020		2019

Cash and cash equivalents	$	7,356	$	7,624
Restricted cash		1,330		—

Total cash, cash equivalents and restricted cash	$	8,686	$	7,624

Certain Risks and Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of demand deposits. The Company maintains cash deposits with financial institutions that at times exceed applicable insurance limits.

The majority of the Company’s software and computer systems utilizes data processing, storage capabilities and other services provided by Amazon Web Services, or AWS, which cannot be easily switched to another cloud service provider. As such, any disruption of the Company’s interference with AWS would adversely impact the Company’s operations and business.

Fair Value of Financial Instruments

The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 — assets and liabilities whose significant value drivers are unobservable.

Accounts Receivable, net

The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectable accounts. The Company’s accounts receivable balance includes subscription fees billed by, but not yet received from, third-party app stores and amounts due from the sale of advertisements. In evaluating our ability to collect outstanding receivable balances, we consider many factors, including the age of the balance, collection history, and current economic trends. Bad debts are written off after all collection efforts have ceased. Based on the Company’s current and historical collection experience, management concluded that an allowance for doubtful accounts was not necessary as of June 30, 2020 or December 31, 2019.

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

No individual customer accounted for more than 10% of revenue for the three and six months ended June 30, 2020 and 2019. Three customers accounted for more than 10% of accounts receivable as of June 30, 2020. No customers accounted for more than 10% of accounts receivable as of December 31, 2019.

Property and Equipment, net

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the assets. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the consolidated statements of operations and comprehensive loss in the period realized. Maintenance and repairs are expensed as incurred.

Acquisitions and Business Combinations

The Company allocates the fair value of purchase consideration issued in business combination transactions to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets and certain liabilities. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from: (a) acquired technology, (b) trademarks and trade names, and (c) customer relationships, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Revenue From Contracts With Customers

The Company recognizes revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers (the “revenue standard”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. The following five steps are applied to achieve that core principle:

	●	Step 1: Identify the contract with the customer
	●	Step 2: Identify the performance obligations in the contract
	●	Step 3: Determine the transaction price
	●	Step 4: Allocate the transaction price to the performance obligations in the contract
	●	Step 5: Recognize revenue when the company satisfies a performance obligation

The Company generates revenue from the following sources:

Subscriptions – The Company sells various subscription plans through its website and third-party app stores. These subscription plans provide different levels of streamed content and functionality depending on the plan selected. Subscription fees are fixed and paid in advance by credit card on a monthly, quarterly or annual basis. A subscription customer executes a contract by agreeing to the Company’s terms of service. The Company considers the subscription contract legally enforceable once the customer has accepted terms of service and the Company has received credit card authorization from the customer’s credit card company. The terms of service allow customers to terminate the subscription at any time, however, in the event of termination, no prepaid subscription fees are refundable. The Company recognizes revenue at a point in time when it satisfies a performance obligation by transferring control of the promised services to the customers. Upon the customer agreeing to the Company’s terms and conditions and authorization of the credit card, the customer simultaneously receives and consumes the benefits of the streamed content ratably throughout the term of the contract. Subscription services sold through third-party app stores are recorded gross in revenue with fees to the third-party app stores recorded in subscriber related expenses in the consolidated statement of operations. Management concluded that the customers are the end user of the subscription services sold by these third-party app stores.

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

	2.	Advertisements – The Company executes agreements with advertisers that want to display ads (“impressions”) within the streamed content. The Company enters into individual insertion orders (“IOs”) with advertisers, which specify the term of each ad campaign, the number of impressions to be delivered and the applicable rate to be charged. The Company invoices advertisers monthly for impressions actually delivered during the period. Each executed IO provides the terms and conditions agreed to in respect of each party’s obligations. The Company recognizes revenue at a point in time when it satisfies a performance obligation by transferring control of the promised services to the advertiser, which generally is when the advertisement has been displayed.

	3.	Software licenses, net –Revenue from the sale of software licenses are recognized as a single performance obligation at the point in time that the software license is delivered to the customer. The Company under its contracts is required to provide its customers with 30 days to return the license for a full refund, regardless of reason, and the Company will be provided a refund in full of its cost to sell the license. Therefore, for Nexway, the Company acts as an agent and recognizes revenue on a net basis.

	4.	Other – The Company has an annual contract to sub-license its rights to broadcast certain international sporting events to a third party. The Company recognizes revenue under this contract at a point in time when it satisfies a performance obligation by transferring control of the promised services to the third party, which generally is when the third party has access to the programming content.

Subscriber Related Expenses

Subscriber related expenses consist primarily of affiliate distribution rights and other distribution costs related to content streaming. The cost of affiliate distribution rights is generally incurred on a per subscriber basis and are recognized when the related programming is distributed to subscribers. The Company has certain arrangements whereby affiliate distribution rights are paid in advance or are subject to minimum guaranteed payments. An accrual is established when actual affiliate distribution costs are expected to fall short of the minimum guaranteed amounts. To the extent actual per subscriber fees do not exceed the minimum guaranteed amounts, the Company will expense the minimum guarantee in a manner reflective of the pattern of benefit provided by these subscriber related expenses, which approximates a straight-line basis over each minimum guarantee period within the arrangement. Subscriber related expenses also include credit card and payment processing fees for subscription revenue, customer service, certain employee compensation and benefits, cloud computing, streaming, and facility costs. The Company receives advertising spots from television networks for sale to advertisers as part of the affiliate distribution agreements.

Broadcasting and Transmission

Broadcasting and transmission expenses are charged to operations as incurred and consist primarily of the cost to acquire a signal, transcode, store, and retransmit it to the subscribers.

Sales and Marketing

Sales and marketing expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, agency costs, advertising campaigns and branding initiatives. All sales and marketing costs are expensed as they are incurred. Advertising expense totaled $4.5 million for the three and six months ended June 30, 2020 and $0.1 million and $0.3 million in advertising expense was incurred for the three and six months ended June 30, 2019, respectively.

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

Technology and Development

Technology and development expenses are charged to operations as incurred. Technology and development expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, technical services, software expenses, and hosting expenses.

General and Administrative

General and administrative expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, corporate insurance, office expenses, professional fees, as well as travel, meals, and entertainment costs.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share excludes the potential impact of the Company’s convertible notes, convertible preferred stock, common stock options and warrants because their effect would be ~~anti-dilutive~~.anti-dilutive.

The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019

Basic loss per share:
Net loss		(99,755	)		(3,365	)		(156,098	)		(6,232	)
Less: net (loss) income attributable to non-controlling interest		(682	)		2,182			(1,555	)		2,781
Less: Deemed dividend - beneficial conversion feature on preferred stock		—			—			171			—
Add: gain on redemption of Series D Preferred Stock		126			—			126			—
Net loss attributable to common stockholders		(98,947	)		(5,547	)		(154,588	)		(9,013	)

Shares used in computation:
Weighted-average common shares outstanding		35,045,390			22,964,199			32,390,829			17,952,188

Basic and diluted loss per share		(2.82	)		(0.24	)		(4.77	)		(0.50	)

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

The following common share equivalents are excluded from the calculation of weighted average common shares outstanding because their inclusion would have been anti-dilutive:

March 31, March 31,
2020 2019
Common stock purchase warrants 200,007 200,007
Series D Preferred Stock shares 456,000 -
Stock options 16,667 16,667
Convertible notes variable settlement feature 311,111 577,503
Total 983,785 794,177

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019

Common stock purchase warrants		603,576		200,007		1,147,844		200,007
Convertible preferred shares		64,355,375		—		32,405,688		—
Stock options		6,377,997		16,667		6,361,982		16,667
Convertible notes variable settlement feature		536,164		524,945		536,164		524,945

Total		71,873,112		741,619		40,451,678		741,619

~~Deferred Tax Liability~~

~~The following is a rollforward of the Company’s deferred tax liability from January 1, 2020 to March 31, 2020 (in thousands):~~

March 31, 2020
Beginning balance $ 30,879
Income tax benefit (associated with the amortization of intangible assets) (1,038 )
Deconsolidation of Nexway (1,162 )
Ending balance $ 28,679

~~FaceBank Group, Inc.~~

~~Notes to the Unaudited Condensed Consolidated Financial Statements~~

Recently Issued Accounting Standards

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The amendments in ASU 2018-13 modify the disclosure requirements on fair value measurements based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating ASU 2018-13 and its impact on its condensed consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the impact of this standard on its condensed consolidated financial statements and related disclosures.

4.	Acquisitions

On April 1, 2020, we completed the Merger, as described in Note ~~4 – Investments~~1. In accordance with the terms of the Merger Agreement, all of the capital stock of fuboTV Pre-Merger was converted, at a stock exchange ratio of 1.82, into the right to receive 32,324,362 shares of Series AA Convertible Preferred Stock, a newly-created class of our Preferred Stock. Pursuant to the Series AA Certificate of Designation, each share of Series AA Convertible Preferred Stock is convertible into two shares of the Company’s common stock only in connection with the sale of such shares on an arms’-length basis either pursuant to an exemption from registration under Rule 144 promulgated under the Securities Act or pursuant to an effective registration statement under the Securities Act. As of June 30, 2020, 27,412,393 shares of Series AA Convertible Preferred Stock were issued. In addition, each outstanding option to purchase shares of common stock of fuboTV Pre-Merger was assumed by FaceBank Pre-Merger and converted into options to acquire FaceBank Pre-Merger’s common stock at a stock exchange ratio of 3.64. In addition, in accordance with the terms of the Merger Agreement, the Company assumed 8,051,098 stock options issued and outstanding under the fuboTV Pre-Merger’s 2015 Equity Incentive Plan (the “2015 Plan”) with a weighted-average exercise price of $1.32 per share. From and after the Effective Time, such options may be exercised for shares of the Company’s common stock under the terms of the 2015 Plan.

The preliminary purchase price for the merger was determined to be $576.1 million, which consists of (i) $530.1 million market value ($8.20 per share stock price of the Company as of April 1, 2020) of 64.6 million common shares, (ii) $36.0 million related to the fair value of outstanding options vested prior to the Merger and (iii) $10.0 million related to the effective settlement of a preexisting loan receivable from fuboTV Pre-Merger. No gain or loss was recognized on the settlement as the loan was effectively settled at the recorded amount. Transaction costs of $0.9 million were expensed as incurred.

The Company accounted for the Merger as a business combination under the acquisition method of accounting. FaceBank Pre-Merger was determined to be the accounting acquirer based upon the terms of the Merger Agreement and other factors including: (i) FaceBank Pre-Merger’s stockholders own approximately 57% of the voting common shares of the combined company immediately following the closing of the Acquisition (54% assuming the exercise of all vested stock options as of the closing of the transaction) and (ii) directors appointed by FaceBank Pre-Merger will hold a majority of board seats in the combined company.

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

The following table presents a preliminary allocation of the purchase price to the net assets acquired, inclusive of intangible assets, with the excess fair value recorded to goodwill. The goodwill, which is not deductible for tax purposes, is attributable to the assembled workforce of fuboTV Pre-Merger, planned growth in new markets, and synergies expected to be achieved from the combined operations of FaceBank Pre-Merger and fuboTV Pre-Merger. The goodwill established will be included within a new fuboTV reporting unit. These estimates are provisional in nature and adjustments may be recorded in future periods as appraisals and other valuation reviews are finalized. Any necessary adjustments will be finalized within one year from the date of acquisition (in thousands).

	Fair Value

Assets acquired:
Cash and cash equivalents	$	8,040
Accounts receivable		5,831
Prepaid expenses and other current assets		976
Property & equipment		2,042
Restricted cash		1,333
Other noncurrent assets		397
Operating leases - right-of-use assets		5,395
Intangible assets		243,612
Goodwill		562,908

Total assets acquired	$	830,534

Liabilities assumed
Accounts payable	$	51,687
Accounts payable – due to related parties		14,811
Accrued expenses and other current liabilities		50,249
Accrued expenses and other current liabilities – due to related parties		34,109
Long term borrowings - current portion		5,625
Operating lease liabilities		5,395
Deferred revenue		8,809
Long-term debt, net of issuance costs		18,125
Deferred tax liabilities		65,613

Total liabilities assumed	$	254,423

Net assets acquired	$	576,111

The fair values of the intangible assets acquired were determined using the income and cost approaches. The fair value measurements were primarily based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in ASC 820. The relief from royalty method was used to value the software and technology and tradenames. The relief from royalty method is an application of the income method and estimates fair value for an asset based on the expected cost to license a similar asset from a third-party. Projected cash flows are discounted at a required rate of return that reflects the relative risk of achieving the cash flow and the time value of money. The cost approach, which estimates value by determining the current cost of replacing an asset with another of equivalent economic utility, was used for customer relationships. The cost to replace a given asset reflects the estimated reproduction or replacement cost for these customer related assets. The estimated useful lives and fair value of the intangible assets acquired are as follows (in thousands):

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

	Estimated Useful Life (in Years)	Fair Value

Software and technology	9	$	181,737
Customer relationships	2		23,678
Tradenames	9		38,197

Total		$	243,612

The deferred tax liabilities represent the deferred tax impact associated with the differences in book and tax basis, including incremental differences created from the preliminary purchase price allocation and acquired net operating losses. Deferred taxes associated with estimated fair value adjustments reflect an estimated blended federal and state tax rate, net of tax effects on state valuation allowances. For balance sheet purposes, where U.S. tax rates were used, rates were based on recently enacted U.S. tax law. The effective tax rate of the combined company could be significantly different (either higher or lower) depending on post-merger activities, including cash needs, the geographical mix of income, and changes in tax law. This determination is preliminary and subject to change based upon the final determination of the fair value of the acquired assets and assumed liabilities of fuboTV Pre-Merger.

For the three month period ended June 30, 2020, our condensed consolidated statement of operations included $44.2 million of revenues and a $47.7 million operating loss, which included $9.1 million of intangible asset amortization, from the acquisition of fuboTV Pre-Merger. Net loss attributable to common stockholders for the six months ended June 30, 2020 reflects $10.1 million of interest expense associated with a short-term loan issued in connection with the Merger. The following unaudited pro forma consolidated results of operations assume that the acquisition of fuboTV Pre-Merger was completed as of January 1, 2019 (in thousands, except per share data).

	Six months ended June 30
	2020			2019

Total revenues		102,514			62,680
Net loss attributable to common stockholders		(190,672	)		(81,828	)
Basic and diluted net loss per share attributable to common stockholders		(1.96	)		(0.99	)

Pro forma data may not be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented, nor is it intended to be a projection of future results.

fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

~~Nexway~~

5.	Revenue from contracts with customers

Disaggregated revenue

The following table presents the Company’s revenues disaggregated into categories based on the nature of such revenues (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019

Subscriptions	$	39,511	$	—	$	39,511	$	—
Advertisements		4,323		—		4,323		—
Software licenses, net – Nexway eCommerce Solutions		—		—		7,295		—
Other		338		—		338		—
Total revenue	$	44,172	$	—	$	51,467	$	—

Transaction price allocated to remaining performance obligations

The Company does not disclose the transaction price allocated to remaining performance obligations since subscription and advertising contracts have an original expected term of one year or less.

6.	Property and equipment, net

Property and equipment, net, is comprised of the following (in thousands):

	Estimated	June 30,			December 31,
	useful lives	2020			2019

Furniture and fixtures	5 years	$	293		$	338
Computer equipment	3 years		199			—
Leasehold improvements	Lesser of useful life or lease term		1,572			—
			2,064			338
Less: Accumulated depreciation			(131	)		(3	)
Total property and equipment, net		$	1,933		$	335

7.	FaceBank AG and Nexway - Assets Held For Sale

Through its ownership in FaceBank AG, the Company had an equity investment of 62.3% in Nexway AG (“Nexway”), which it acquired on September 16, 2019. The equity investment in Nexway was a controlling financial interest and the Company consolidated its investment in Nexway under ASC 810, Consolidation.

On March 31, 2020, the Company relinquished 20% of the total Nexway shareholder votes associated with its investment, which reduced the Company’s voting interest in Nexway to 37.6%. As a result of the Company’s loss of control in Nexway, the Company deconsolidated Nexway as of March 31, 2020 as it no longer has a controlling financial interest.

~~As of March 31, 2020, the fair value of the Nexway shares owned by the Company is approximately $2.4 million, calculated as follows (dollars in thousands, except per share value):~~

Price per share Euros € 5.28
Exchange rate 1.1032
Price per share USD $ 5.82
Nexway shares held by the Company 407,550
Fair value - investment in Nexway $ 2,374

1118

~~FaceBank Group,~~fuboTV Inc.

Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements

The deconsolidation of Nexway resulted in a ~~gain~~loss of approximately ~~$39.2~~$11.9 million calculated as ~~follows:~~follows (in thousands):

Cash	$	5,776		$	5,776
Accounts receivable		9,831			9,831
Inventory		50			50
Prepaid expenses		164			164
Goodwill					51,168
Property and equipment, net		380			380
Right-of-use assets		3,594			3,594
Total assets	$	19,795		$	70,963
Less:
Accounts payable		34,262			34,262
Accrued expenses		15,788			15,788
Lease liability		3,594			3,594
Deferred income taxes		1,161			1,161
Other liabilities		40			40
Total liabilities	$	54,845		$	54,845
Non-controlling interest		2,595			2,595
Foreign currency translation adjustment		(770	)		(770	)
Net deficit		(36,875	)
Less: fair value of shares owned by Facebank		2,374
Gain on deconsolidation of Nexway	$	39,249
Loss before fair value – investment in Nexway					14,293
Less: fair value of shares owned by the Company					2,374
Loss on deconsolidation of Nexway				$	11,919

As of June 30, 2020, the Company’s voting interest in Nexway was further diluted to 31.2% as a result of an additional financing which the Company did not participate in. The fair value of the Nexway shares owned by the Company as of June 30, 2020 is approximately $5.0 million, calculated as follows (dollars in thousands, except per share value):

~~Panda Interests~~

Price per share Euros	€	10.90
Exchange rate		1.123
Price per share USD	$	12.24
Nexway shares held by the Company		407,550
Fair value - investment in Nexway	$	4,988

As of June 30, 2020, the Company committed to a plan to sell its investment in FaceBank AG and Nexway and expects the sale of these investments to be completed within one year and to recognize a gain on sale. The long-lived assets which consist of the investments, financial assets and goodwill and a loan payable are classified as held for sale. These assets and liabilities are carried at the lower of carrying value or fair value less costs to sell and no additional depreciation is being recognized. As of June 30, 2020, the carrying amounts totaled ($20.6) million. The Company has determined this disposition did not constitute a strategic shift of the Company’s operations.

The following are assets and liabilities held of sales (in thousands):

	June 30,
	2020

Investment in Nexway	$	4,988
Financial assets		1,965
Goodwill		28,541

Total assets	$	35,494

Loan payable	$	56,137

Total liabilities	$	56,137

Net carrying amount	$	(20,643	)

8.	*Panda Interests*

In March 2019, the Company entered into an agreement to finance and co-produce Broadway Asia’s theatrical production of DreamWorks’ Kung Fu Panda Spectacular Live at the Venetian Theatre in Macau ~~Hong Kong~~ (“Macau Show”). The Company determined the fair value of the profits interest sold to certain investors to be approximately ~~$1.7~~$1.8 million as of the date of this transaction and $2.1 million and $2.0 million as of ~~March 31,~~June 30, 2020 and December 31, ~~2019.~~2019, respectively.

The table below summarizes the Company’s profits interest ~~at March 31, 2020 and December 31, 2019~~since the date of the transaction (in thousands except for unit and per unit information):

Panda units granted 26.2
Fair value per unit on grant date $ 67,690
Grant date fair value $ 1,773
Change in fair value of Panda interests $ 198
Fair value at December 31, 2019 $ 1,971
Change in fair value of Panda interests -
Fair value at March 31, 2020 $ 1,971

Panda units granted		26.2
Fair value per unit on grant date	$	67,690

Grant date fair value	$	1,773
Change in fair value of Panda interests		198

Fair value at December 31, 2019	$	1,971
Change in fair value of Panda interests		—

Fair value at March 31, 2020	$	1,971
Change in fair value of Panda interests		148

Fair value at June 30, 2020	$	2,119

1220

~~FaceBank Group,~~fuboTV Inc.

Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements

9.	Intangible Assets and Goodwill

~~Note 5 –~~ Intangible Assets

The table below summarizes the Company’s intangible assets at ~~March~~June 30, 2020 and December 31, ~~2020~~2019 (in thousands):

	Useful		Weighted Average		March 31, 2020							Useful	Weighted Average		June 30, 2020
	Lives (Years)		Remaining Life (Years)		Intangible Assets		Accumulated Amortization			Net Balance		Lives (Years)	Remaining Life (Years)		Intangible Assets		Accumulated Amortization			Net Balance
Human animation technologies		7		6	$	123,436		(29,054	)	$	94,382	7		5.1	$	123,436		(33,463	)	$	89,973
Trademark and trade names		7		6		7,746		(1,826	)		5,920	7		5.1		7,746		(2,102	)		5,644
Animation and visual effects technologies		7		6		6,016		(1,418	)		4,598	7		5.1		6,016		(1,633	)		4,383
Digital asset library		5-7		5.5		7,536		(1,610	)		5,926	5-7		4.9		7,536		(1,897	)		5,639
Intellectual Property		7		6		828		(195	)		633	7		5.1		828		(225	)		603
Customer relationships												2		1.8		23,678		(2,960	)		20,718
fuboTV Tradename												9		8.8		38,197		(1,061	)		37,136
Software and technology												9		8.8		181,737		(5,048	)		176,689
Total					$	145,562	$	(34,103	)	$	111,459				$	389,174	$	(48,389	)	$	340,785

				December 31, 2019
	Useful Lives (Years)	Weighted Average Remaining Life (Years)		Intangible Assets	Intangible Asset Impairment			Accumulated Amortization			Net Balance
Human animation technologies	7		6	$123,436	$	—		$	(24,646	)	$	98,790
Trademark and trade names	7		6	9,432		(1,686	)		(1,549	)		6,197
Animation and visual effects technologies	7		6	6,016		—			(1,203	)		4,813
Digital asset library	5-7		5.5	7,505		—			(1,251	)		6,254
Intellectual Property	7		6	3,258		(2,430	)		(236	)		592
Customer relationships	11		11	4,482		(4,482	)		—			—
Total				$154,129	$	(8,598	)	$	(28,885	)	$	116,646

~~Amortization~~fuboTV Inc.

Notes to Condensed Consolidated Financial Statements

The Company recorded amortization expense ~~for~~of $14.3 million and $5.2 million during the three months ended ~~March 31,~~June 30, 2020 and 2019, ~~was $5.2~~respectively, and $19.5 million ~~in each period,~~and $10.3 million during the six months ended June 30, 2020 and 2019, respectively.

The estimated future amortization expense associated with intangible assets is as follows (in thousands):

	Future Amortization		Future Amortization
2020	$	15,652	$	28,572
2021		20,868		57,144
2022		20,868		48,266
2023		20,868		45,306
2024		20,795		45,233
Thereafter		12,408		116,264
Total	$	111,459	$	340,785

~~Note 6 –~~ Goodwill

The following table is a summary of the changes to goodwill for the three and six months ended June 30, 2020 (in thousands):

Balance – December 31, 2019 $ 227,763
Deconsolidation of Nexway (51,168 )
Balance – March 31, 2020 $ 176,595
Acquisition of fuboTV Pre-Merger 562,908
Less: transfer to asset held for sale
(28,541
)
Balance – June 30, 2020 $ 710,962
10. Accounts Payable and Accrued Expenses and Other Current Liabilities
Accrued payable and accrued expenses and other current liabilities are presented below (in thousands):
June 30, 2020 December 31, 2019

Suppliers — $ 37,508
Affiliate fees 61,883 —
Broadcasting and transmission 17,960 —
Selling and marketing 5,735 —
Payroll taxes (in arrears) 1,308 1,308
Accrued compensation 1,553 3,649
Legal and professional fees 3,379 3,936
Accrued litigation loss 524 524
Taxes (including value added) 8,118 5,953
Subscriber related 2,694 —
Other 6,250 3,897
Total 109,404 $ 56,775
22
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
11. Income Taxes
During the three and six months ended June 30, 2020, the Company recorded a deferred tax liability of $65.6 million associated with the difference in book and tax basis, including incremental differences created from the preliminary purchase price allocation and acquired net operating losses, in connection with the acquisition of intangible assets of fuboTV Pre-Merger (See Note 4). The Company recorded income tax benefits associated with the amortization of intangible assets of $3.5 million and $1.0 million during the three months ended June 30, 2020 and 2019, respectively, and $4.5 million and $2.2 million during the six months ended June 30, 2020 and 2019, respectively. The Company’s provision for income taxes consists of state and foreign income taxes and is immaterial in all periods presented.
The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, loss carryback and tax-planning strategies. Generally, more weight is given to objectively verifiable evidence, such as the cumulative loss in recent years, as a significant piece of negative evidence to overcome. At June 30, 2020 and December 31, 2019, the Company continued to maintain that the realization of its deferred tax assets has not achieved a more likely than not threshold therefore, the net deferred tax assets have been fully offset by a valuation allowance. The following is a rollforward of the Company’s deferred tax liability from January 1, 2020 to June 30, 2020 (in thousands):
Balance – December 31, 2019 $ 30,879
Income tax benefit (associated with the amortization of intangible assets) (1,038 )
Deconsolidation of Nexway (1,162 )
Balance – March 31, 2020 28,679
Acquisition of fuboTV Pre-Merger 65,613
Income tax benefit (associated with the amortization of intangible assets) (3,498 )
Balance – June 30, 2020 $ 90,794
12. Related Parties

Accounts payable and accrued expenses due to related parties as of ~~March 31,~~June 30, 2020 and December 31, 2019 consist of the following (in thousands):

March 31, December 31,
2020 2019
Suppliers $ - $ 37,508
Payroll taxes (in arrears) 1,308 1,308
Accrued compensation 2,124 3,649
Legal and professional fees 1,797 3,936
Accrued litigation loss 524 524
Taxes - 5,953
Other 1,990 3,897
Total $ 7,743 $ 56,775
13
June 30, 2020 December 31, 2019
Affiliate fees $ 59,651 $ —
Alexander Bafer, Executive Chairman 256 $ 20
John Textor, Chief Executive Officer and affiliated companies 264 592
Other 9 53
Total $ 60,180 $ 665
~~FaceBank Group,~~The Company has entered into affiliate distribution agreements with CBS Corporation and related entities, New Univision Enterprises, LLC, AMC Network Ventures, LLC, Viacom International, Inc.
~~Notes~~ and Discovery, Inc. and related entities which are holders of the Company’s convertible preferred stock. AMC Networks Ventures, LLC is also the lender to the ~~Unaudited Condensed Consolidated Financial Statements~~
senior secured loan (see Note 713). The accrued fees payable under the affiliate distribution agreements are classified as accounts payables – ~~Related Parties~~due to related parties and accrued expenses – due to related parties in the accompanying condensed consolidated balance sheet. The aggregate affiliate distribution fees recorded to subscriber related expenses for related parties were $23.0 million and $0 for the three and six months ended June 30, 2020, respectively, and $0 for the three and six months ended June 30,2019, respectively.

~~Amounts owed to and due from related parties as of March~~On July 31, 2020, ~~and December 31, 2019 consist~~Alexander Bafer resigned as a member of the ~~following (in thousands):~~
March 31, December 31,
2020 2019
Alexander Bafer, former Executive Chairman $ 20 $ 20
John Textor, former Chief Executive Officer and affiliated companies 292 592
Other (7 ) 53
Total $ 305 $ 665
~~Our former Chairman~~Company’s Board of Directors and ~~current Director,~~as an executive officer of the Company. The amounts due to Mr. Bafer ~~advanced~~represent an unsecured, non-interest-bearing loan to the Company which is payable on demand.
On July 31, 2020, John Textor resigned as a member of the Board of Directors of the Company. Mr. Textor will continue as Head of Studio, which the Company has determined is not an executive officer position. The amounts due to ~~John~~Mr. Textor ~~former Chief Executive Officer and Executive Chairman and our current Head of Studio and a Director, represents~~represent an unpaid compensation liability assumed in the acquisition of EAI.
The amounts due to other related parties also represent financing obligations assumed in the acquisition of EAI.

During the year ended December 31, 2019, the Company received a $300,000 advance (the “FaceBank Advance”) from FaceBank, Inc., a development stage company controlled by Mr. Textor. Mr. Textor is our current Head of Studio and, at the time of the transaction, was our Chief Executive Officer. During the quarter ended June 30, 2020, the Company repaid the FaceBank Advance in full to FaceBank, Inc. No further amounts are due and payable by the Company under the FaceBank Advance.
23
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
Notes Payable – Related Parties

On August 8, 2018, the Company assumed a $172,000 note payable due to a relative of the then-Chief Executive Officer, John Textor. The note has three-month roll-over provision and different maturity and repayment amounts if not fully paid by its due date and bears interest at 18% per annum. The Company has accrued default interest for additional liability in excess of the principal amount. The note ~~is currently~~was in ~~default.~~default as of June 30, 2020. Accrued interest and penalties as of ~~March 31,~~June 30, 2020 and December 31, 2019 related to this note was ~~$102,000~~$0.5 million and ~~$85,000, respectively.~~$0.3 million, respectively, and were recognized as note payable – related parties on the accompanying condensed consolidated balance sheet. On August 3, 2020, the maturity date was extended to December 31, 2020 and is no longer in default.
24
fuboTV Inc.

~~Note 8 -~~ Notes ~~Payable~~to Condensed Consolidated Financial Statements
13. Notes Payable
Senior Secured Loan
In April 2018, fuboTV pre-Merger entered into a senior secured term loan with AMC Networks Ventures, LLC (the “Term Loan”) with a principal amount of $25.0 million, bearing interest equal to LIBOR (London Interbank Offered Rate) plus 5.25% per annum and with scheduled principal payments beginning in 2020. The Company recorded this loan at its fair value of $23.8 million in connection with its acquisition of fuboTV Pre-Merger on April 1, 2020. The Company has made principal repayments of $1.3 million during the three months ended June 30, 2020. The outstanding balance of the Term Loan is $22.5 million as of June 30, 2020.
The Term Loan matures on April 6, 2023, has certain financial covenants and requires the Company to maintain a certain minimum subscriber level. The Company was in compliance with all covenants at June 30, 2020.

Evolution AI Corporation

The Company has ~~recorded,~~recognized, through the accounting consolidation of EAI, a $2.7 million note payable bearing interest at the rate of 10% per annum that was due on October 1, ~~2018.~~2018 (“EAI Note”). The cumulative accrued interest on the ~~note~~EAI Note amounts to ~~$1.5~~$1.6 million. The ~~note~~EAI Note is currently in a default condition due to non-payment of principal and interest. The ~~note~~EAI Note relates to the acquisition of technology from parties who, as a result of the acquisition of EAI, own 15,000,000 shares of the Company’s common stock (after the conversion of 1,000,0000 shares of Series X Convertible Preferred Stock during the year ended December 31, 2019). ~~Such~~The holders of the EAI Note have agreed not to declare the ~~note~~EAI Note in default and to forbear from exercising remedies which would otherwise be available in the event of a default, while the ~~note~~EAI Note continues to accrue interest. The Company is currently in negotiation with such holders to resolve the ~~matter.~~matter and the outstanding balance as of June 30, 2020, including interest and penalties, is $4.3 million.

FBNK Finance SarL

On February 17, 2020, FBNK Finance issued EUR ~~50,000,000~~50.0 million of bonds (or ~~$55.1~~$56.1 million as of ~~March 31,~~June 30, 2020). There were 5,000 notes with a nominal value EUR 10,000 per note. The bonds were issued at par with 100% redemption price. The maturity date of the bonds is February 15, 2023 and the bonds have a 4.5% annual fixed rate of interest. Interest is payable semi-annually on August 15 and February 15^th.15. The majority of the proceeds was used for the redemption of the bonds issued by SAH, HFC and Nexway SAS. The bonds are unconditional and unsubordinated obligations of the FBNK Finance. As part of this transaction, the Company recorded a $11.1 million loss on extinguishment during the three months ended March 31, ~~2020.~~2020 as component of other income/(expense) in loss on issuances of notes, bonds and warrants. During the three months ended June 30, 2020, the Company recorded a $1.0 foreign exchange loss upon remeasurement to USD.
25
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
Credit and Security Agreement

As described in Note 1, on March 11, 2020, the Company and HLEEF entered into the Credit ~~Agreement, pursuant to which HLEEF extended the Credit~~ Facility ~~to FaceBank.~~with HLEEF. The Credit Facility is secured by substantially all the assets of ~~FaceBank.~~the Company. As of ~~July 6,~~June 30, 2020, there ~~are~~were no amounts outstanding under the Credit ~~Facility, and the Company does not intend to draw down on this Credit~~ Facility.
As described in Note 1, in connection with the Credit Agreement, FaceBank and HLEEF entered into the HLEEF Security Agreement, pursuant to which FaceBank granted to HLEEF a security interest in all substantially all assets of FaceBank as security for the prompt and complete payment and performance of all of the obligations under the Credit Agreement and the related promissory note.

The Credit Facility contains customary affirmative and negative covenants, including restrictions on the ability of ~~FaceBank~~the Company to incur indebtedness in excess of ~~$50,000,000,~~$50.0 million, subject to certain exceptions, to make loans in excess of $250,000 to directors or officers of ~~FaceBank~~the Company or to any subsidiary other than fuboTV Sub, and to declare and pay any distributions, subject to certain exceptions. The Credit Facility also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other material indebtedness, covenant defaults, change of control defaults, judgment defaults, and bankruptcy and insolvency defaults. If an event of default exists, the lenders may require the immediate payment of all obligations under the Credit Facility, and may exercise certain other rights and remedies provided for under the Credit Facility, the HLEEF Security Agreement, the other loan documents and applicable law.

14
On July 8, 2020, this Credit Agreement was terminated. Refer to Subsequent Events footnote for details surrounding this Termination and Release Agreement.

~~FaceBank Group, Inc.~~
~~Notes to the Unaudited Condensed Consolidated Financial Statements~~
Note Purchase Agreement

OnAs described in Note 1, on March 19, 2020, the ~~Initial Borrower~~Company and ~~FB Loan~~the other parties thereto entered into the Note Purchase Agreement, pursuant to which the ~~Initial Borrower~~Company sold to FB Loan the Senior Notes. On April 2, 2020, fuboTV and Sports Rights Management, LLC, a Delaware limited liability company (“SRM”), also joined the Note Purchase Agreement as borrowers (fuboTV Sub, SRM and the Initial Borrower, collectively, the “Borrower”). In connection with the Company’s acquisition of fuboTV Pre-Merger, the proceeds of $7.4 million, net of an original issue discount of ~~$2.65~~$2.7 million, were ~~sent~~received directly toby fuboTV ~~(see Note 15).~~Pre-Merger.

Each Borrower’s obligations under the Senior Notes are secured by substantially all of the assets of each such Borrower pursuant to a Security Agreement, dated as of March 19, 2020, by and among Borrower and FB Loan (the “Security Agreement”).

The Note Purchase Agreement contains customary affirmative and negative covenants, including covenants limiting the ability of the Borrower and its subsidiaries to, among other things, incur debt, grant liens, make certain restricted payments, make certain loans and other investments, undertake certain fundamental changes, enter into restrictive agreements, dispose of assets, and enter into transactions with affiliates, in each case, subject to limitations and exceptions set forth in the Note Purchase Agreement. The Note Purchase Agreement also contains customary events of default that include, among other things, certain payment defaults, cross defaults to other material obligations, covenant defaults, change of control defaults, judgment defaults, and bankruptcy and insolvency defaults. If an event of default exists, the lenders may require the immediate payment of all obligations under the Note Purchase Agreement, and may exercise certain other rights and remedies provided for under the Note Purchase Agreement, the Security Agreement, the other loan documents and applicable law. The Company was in compliance with all covenants at June 30, 2020.

Interest on the Senior Notes shall accrue until full and final repayment of the principal amount of the Senior Note at a rate of 17.39% per annum. On the first business day of each calendar month in which the Senior Note is outstanding, beginning on April 1, 2020, Borrower shall pay in arrears in cash to FB Loan accrued interest on the outstanding principal amount of the Senior Note. The maturity date of the Senior Notes is the earlier to occur of (i) July 8, 2020 and (ii) the date the Borrower receives the proceeds of any financing. The Borrower may prepay or redeem the Senior Note in whole or in part without penalty or premium.
In connection with the Note Purchase Agreement, the Company issued FB Loan a warrant to purchase 3,269,231 shares of its common stock at an exercise price of $5.00 per share (the “FB Loan Warrant”) and 900,000 shares of its common stock. The fair value of the warrant on the Senior Notes issuance date was approximately $15.6 million and is recorded as a warrant liability in the accompanying condensed consolidated balance sheet with subsequent changes in fair value recognized in earnings each reporting period (see Note 9)14). The fair value of the 900,000 common stock issued was based upon the closing price of the Company’s common stock as of March 19, 2020 (or $8.15 per share or $7.3 million). Since the fair value of the warrants and common stock exceeded the principal balance of the Senior Notes, the Company recorded a loss on issuance of the Senior Notes totaling $12.9 million and is reflected in the accompanying condensed consolidated statement of operations.

26
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
The 900,000 shares were valued at $8.15 per share at March 19, 2020 and $7.5 million set forth on the balance sheet for shares settled payable for note payable reflects the fair value of 900,000 shares to be issued at $8.35 per share as of March 31, 2020. On April 28, 2020, these shares were issued at $10.00 per share. The Company recorded change in fair value of shares settled payable of ~~$0.2~~$1.5 million and $1.7 million during the three and six months ended ~~March 31, 2020.~~June 30, 2020, respectively.

The carrying value of the Senior Notes as of ~~March 31,~~June 30, 2020 is comprised of the ~~following:~~following (in thousands):

March 31, 2020 June 30, 2020
Principal value of Senior Note $ 10,050 $ 10,050
Original issue discount (2,650 ) (2,650 )
Discount resulting from allocation of proceeds to warrant liability (7,400 ) (7,400 )
Amortization of discount 1,005 9,183
Principal repayment (7,500 )
Net carrying value of Senior Note $ 1,005 $ 1,683
Pursuant to the Note Purchase Agreement, the Borrower agreed, among other things that (i) ~~FaceBank~~the Company shall file a registration statement with the Commission regarding the purchase and sale of 900,000 shares of ~~FaceBank’s~~the Company’s common stock issued to FB Loan in connection with the Note Purchase Agreement (the “Shares”) and any shares of capital stock issuable upon exercise of the FB Loan Warrant (the “Warrant Shares)”); and (ii) ~~FaceBank~~the Company shall have filed an application to list ~~FaceBank’s~~the Company’s Common Stock for trading on the NASDAQ exchange, on or before the date that is thirty (30) days following the closing date of the Note Purchase Agreement.
~~As of July 3, 2020,~~ Refer to the ~~Company had repaid~~Amendments to the ~~Senior Notes in full ($10.05 million) plus accrued interest.~~Note Purchase Agreements section below for further details.

Amendments to the Note Purchase Agreement

On April 21, 2020, the Company and the other parties to the Note Purchase Agreement entered into an Amendment to the Note Purchase Agreement to (i) extend the deadline for registration of the resale of the Shares and the Warrant Shares to May 25, 2020 and (ii) provide that in lieu of the obligation under the Note Purchase Agreement to apply to list on NASDAQ within thirty (30) days of March 19, 2020, ~~FaceBank~~the Company shall have initiated the process to list its capital stock on a national exchange on or before the date that is thirty (30) days following March 19, 2020. The Company has initiated this process.

Subsequently, on May 28, 2020, the Company and ~~FB Loan~~the other parties to the Note Purchase Agreement entered into a Consent and Second Amendment to the Note Purchase Agreement (the “Second Amendment”), pursuant to which, among other things, FB Loan agreed to extend the deadline for registration for of the Shares and the Warrant Shares for resale to July 1, 2020. In addition:

(i) FB Loan consented to the May 11, 2020 sale by the Company of capital stock for aggregate consideration in the amount of ~~$7,409,045;~~$7.5 million; and
(ii) the provision requiring that following receipt by any loan party or any subsidiary of proceeds of any financing, the Borrower must prepay the Senior Note in an amount equal to 100% of the cash proceeds of such financing, was removed.

~~Finally,~~ Further, on July 1, 2020, the Company and ~~FB Loan~~the other parties to the Note Purchase Agreement entered into a Third Amendment to Note Purchase Agreement (the “Third Amendment”), pursuant to which (i) the deadline for registration of the Shares and the Warrant Shares for resale was extended to July 8, 2020 and (ii) the deadline for the redemption of the Senior Notes by the Borrower was amended to be the earlier to occur of (y) July 8, 2020 and (z) the date the Borrower receives the proceeds of any financing.

Finally, on August 3, 2020, pursuant to the Fourth Amendment to the Note Purchase Agreement (the “Fourth Amendment”), the Company agreed (i) to file a registration statement on Form S-1 (the “Registration Statement”) prior to August 7, 2020 that shall include the Shares, (ii) that within 91 days after the effective date of the Registration Statement, the Company shall file a registration statement with the Commission registering the Shares and the Warrant Shares, and (iii) that the Company shall have been approved to list its capital stock on a national exchange prior to the effective date of the Registration Statement.
The Company made a $7.5 million payment on the Note Purchase Agreement on May 28, 2020 and paid the remaining balance of $2.6 million and all accrued interest on July 3, 2020.
27
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
Joinder Agreement and Guaranty Agreement

On April 30, 2020, fuboTV Sub and SRM entered into a joinder agreement (the “Joinder Agreement”) in favor of FB Loan in connection with the Note Purchase Agreement. The Joinder Agreement is effective as of April 2, 2020.

Pursuant to the Joinder Agreement, (a) fuboTV Sub joined the Note Purchase Agreement, became an issuer of notes and a borrower thereunder, assumed all obligations of the Borrower in connection therewith, and granted a lien on substantially all of its assets to secure its obligations under the Note Purchase Agreement and any notes issued pursuant thereto and (b) SRM guaranteed the obligations of the Borrower and fuboTV Sub under the Note Purchase Agreement and any notes issued pursuant thereto and granted a security interest in substantially all of its assets to secure its guaranty obligations.

On April 30, 2020, in connection with the Joinder Agreement, SRM entered into a guaranty agreement (the “Guaranty Agreement”) in favor of FB Loan, pursuant to which SRM guaranteed the obligations of Borrower under fuboTV Sub under the Note Purchase Agreement. The Guaranty Agreement is effective as of April 2, 2020.

Paycheck Protection Program Loan
On April 21, 2020, the Company received a loan in the amount of $4.7 million from JPMorgan Chase Bank, N.A. (the “Loan”), pursuant to the Paycheck Protection Program (the “PPP”) administered by the United States Small Business Administration (the “SBA”). The PPP is part of the Coronavirus Aid, Relief, and Economic Security Act (the “Cares Act”), which provides for forgiveness of up to the full principal amount and accrued interest of qualifying loans guaranteed under the PPP.
The Loan was granted under a note payable (the “Note”) dated April 21, 2020 issued by the Company. The Note matures on April 21, 2022 and bears interest at a rate of 0.98% per annum. Principal and accrued interest are payable monthly in equal installments through the maturity date, commencing on November 21, 2020, unless forgiven as described below. The Note may be prepaid at any time prior to maturity with no prepayment penalties. Loan proceeds may be used only to retain workers and maintain payroll or make mortgage payments, lease payments, and utility payments.
Forgiveness of the Loan is only available for principal that is used for the limited purposes that qualify for forgiveness under SBA requirements. To obtain forgiveness, the Company must request it, provide documentation in accordance with the SBA requirements, and certify that the amounts requested to be forgiven qualify under those requirements. There is no guarantee that the Loan will be forgiven by the SBA and therefore the Company has recorded the $4.7 million as a loan on the June 30, 2020 condensed consolidated balance sheet. Of this amount, $1.9 million has been recorded as a current liability to reflect the amount due within twelve months from the balance sheet.
Revenue Participation Agreement
On May 15, 2020, the Company entered into a revenue participation agreement with Fundigo, LLC for $10.0 million (the “Purchase Price”). The Company received net proceeds of $9.5 million, net of an original issue discount of $0.5 million, in exchange for participation in all of the Company’s future accounts, contract rights, and other obligations arising from or relating to the payment of monies from the Company’s customers and/or third party payors (the “Revenues”), until an amount equal to 145% of the Purchase Price, or $14.5 million (the “Revenue Purchased Amount”). The repayment amount is reduced under the following circumstances.
(i) If the Company pays $12.0 million of the Revenue Purchased Amount to Fundigo LLC before June 15, 2020, such payments shall constitute payment in full of the Revenue Purchased Amounts and no additional debits will be made.
(ii) If the Company pays $13.0 million of the Revenue Purchased Amount to Fundigo LLC before July 4, 2020, such payments shall constitute payment in full of the Revenue Purchased Amounts and no additional debits will be made.
1528

~~FaceBank Group,~~fuboTV Inc.
Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements

This Agreement shall continue until Fundigo, LLC receives the full Revenue Purchased Amount, or earlier if terminated pursuant to any provision of the agreement. The Company accounted for this agreement as a loan and had an outstanding principal balance of $9.1 million as of June 30, 2020. Interest expense incurred on the loan was $2.7 million for the three months ending June 30, 2020. All outstanding amounts were repaid on July 6, 2020.
~~Note 9 – Fair Value Measurements~~Century Venture
On May 15, 2020, the Company entered into a loan agreement (the “Loan”) with Century Venture, SA, receiving proceeds of $1.6 million to use for working capital and general corporate purposes. The Loan will bear interest at a rate of 8% per annum, payable in arrears on the 15^th day of each month. In the event the Company fails to make a payment within ten (10) days after the due date, the Company shall pay interest on any overdue payment at the highest rate allowed by applicable law.
All remaining unpaid principal together with interest accrued and unpaid shall be due and payable upon the earlier of (a) completion of any debt or equity financing of the Company, which results in proceeds of at least $50 million, or (b) May 14, 2021. The entire $1.6 million remained outstanding as of June 30, 2020 and interest expense incurred on the loan for the three months ended June 30, 2020 was immaterial.
14. Fair Value Measurements

The Company holds investments in equity securities and limited partnership interests, which are accounted for at fair value and classified within financial assets at fair value on the condensed consolidated balance sheet, with changes in fair value recognized as investment ~~gain/~~gain / loss in the condensed consolidated statements of operations. The Company also has an investment in Nexway common stock that is publicly traded on the Frankfurt Exchange. Additionally, the Company’s convertible notes, derivatives and warrants were classified as liabilities and measured at fair value on the issuance date, with changes in fair value recognized as other income/expense in the condensed consolidated statements of operations.

Fair valued measured at March 31, 2020
Quoted prices in active markets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3)
Financial Assets at Fair Value:
Investment in Equity/Debt Funds $ - $ 1,965 $ -
Investment in Nexway at fair value 2,374 - -
Total Financial Assets at Fair Value $ 2,374 $ 1,965 $ -

Financial Liabilities at Fair Value:
Derivative liability - convertible notes $ - $ - $ 1,692
Profits interest sold - - 1,971
Embedded put option - - 389
Warrant liability - Subsidiary - - 39
Warrant liability - - 15,987
Total Financial Liabilities at Fair Value $ - $ - $ 20,078
The following table classifies the Company’s assets and liabilities measured at fair value on a recurring basis into the fair value hierarchy as of June 30, 2020 and December 31, 2019 (in thousands):

Fair Value measured at December 31, 2019

Quoted prices
in active
markets
(Level 1)

Significant
other
observable
inputs
(Level 2)

Significant unobservable
inputs (Level 3)

Derivative liability – convertible notes $ - $ - $ 1,203
Profits interest - - 1,971
Embedded put option - - 376
Warrant Liability - Subsidiary - - 24
Total Financial Liabilities at Fair Value $ - $ - $ 3,574
June 30, 2020
Total Level 1 Level 2 Level 3

Financial Liabilities at Fair Value:
Convertible notes $ 3,661 $ — $ — $ 3,661
Profit share liability 2,119 $ — — 2,119
Derivative liability 163 — — 163
Warrant liability – subsidiary 21 — — 21
Warrant liabilities 40,617 — — 40,617
Total $ 46,581 $ — $ — $ 46,581

29
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
December 31, 2019
Total Level 1 Level 2 Level 3

Financial Assets at Fair Value:
Financial assets at fair value $ 1,965 $ — $ 1,965 $ —
Total $ 1,965 $ — $ 1,965 $ —

Financial Liabilities at Fair Value:
Convertible notes $ 1,203 $ — $ — $ 1,203
Profit share liability 1,971 — — 1,971
Derivative liability 376 — — 376
Warrant liability - subsidiary 24 — — 24
Total $ 3,574 $ — $ — $ 3,574
Derivative Financial Instruments

The following table presents changes in Level 3 liabilities measured at fair value (in thousands) for the ~~year~~three and six months ended ~~December 31, 2019.~~June 30, 2020. Unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.

Convertible Notes Warrant Liability - Subsidiary Profits Share Liability Warrant Liabilities Derivative Liability
Fair value at December 31, 2019 $ 1,203 $ 24 $ 1,971 $ — $ 376
Change in fair value (200 ) 15 — 366 (97 )
Additions 689 — — 15,621 172
Redemption — — — — (62 )
Fair value at March 31, 2020 $ 1,692 $ 39 $ 1,971 $ 15,987 $ 389
Change in fair value (925 ) (18 ) 148 (4,966 ) (23 )
Additions 2,894 — — 29,596 —
Redemption — — — — (203 )
Fair value at June 30, 2020 $ 3,661 $ 21 $ 2,119 $ 40,617 $ 163
1630

~~FaceBank Group,~~fuboTV Inc.
Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements

Derivative - Convertible Notes Warrants (assumed from subsidiary) Profits Interests Sold Warrant Liability Embedded Put Option
Fair value at December 31, 2019 $ 1,203 $ 24 $ 1,971 $ - $ 376
Change in fair value (200 ) 15 - 366 (97 )
Additions 689 - - 15,621 172
Redemption - - - - (62 )
Fair value at March 31, 2020 $ 1,692 $ 39 $ 1,971 $ 15,987 $ 389
Warrant Liability - Subsidiary - The Company assumed liability for a warrant issued by PEC that expires on January 28, 2023. The ~~fair value of the warrant liability, totaled $39,000 on March 31, 2020 and $24,000 on December 31, 2019, resulting in a~~ change in fair value of ~~$15,000 that~~the subsidiary warrant liability is reported as a component of other income/(expense) in the condensed consolidated statement of ~~operations for the three months ended March 31, 2020.~~
~~Subsidiary Warrant Liability~~ –operations. The Company used a Monte Carlo simulation model to estimate the fair value of the warrant liability with the following assumptions at ~~March 31,~~June 30, 2020 and December 31, 2019:

March 31,
2020
December 31, 2019 June 30,
2020 December 31,
2019
Exercise price $ 0.75 $ 0.75 $ 0.75 $ 0.75
Stock price – subsidiary $ 0.03 $ 0.02 $ 0.05 $ 0.02
Discount applied 0 % 0 %
Fair value of stock price $ 0.00 $ 0.00 $ — $ —
Risk free rate 0.28 % 1.62 % 0.17 % 1.62 %
Contractual term (years) 2.83 3.08 2.58 3.08
Expected dividend yield 0 % 0 % — % — %
Expected volatility 83.7 % 83.7 % 69.2 % 83.7 %
Number of subsidiary warrants outstanding 48,904,037 48,904,037 48,904,037 48,904,037

In arriving at the fair value of stock price as of June 30, 2020 and December 31, 2019, ~~and March 31, 2020,~~ no discount was applied to the trading price of the PEC stock, as a result of illiquidity in the volumes being traded on the OTC markets. Risk-free interest rate was based on rates established by the Federal Reserve Bank. The volatility rate was based on stock prices of comparable companies.

~~Profits Interest~~Profit Share Liability –- The fair value of the profits interest sold related to the Panda investment was determined using an expected cash flow analysis. The change in fair value of profit share liability of $0.1 million for the three and six months ended June 30, 2020 is reported as a component of other income/(expense) in the condensed consolidated statement of operations.

Warrant ~~Liability~~Liabilities –
FB Loan Warrant
In connection with its Note Purchase Agreement (see Note 8)13), the Company issued the FB Loan Warrant and utilized the Black-Scholes pricing model. Absent the Company’s sequencing policy as disclosed in the Company’s Annual Report on Form ~~10-K~~10-K/A filed with the SEC on ~~May 29,~~August 10, 2020, the Company would have recorded these warrants as equity classified. The warrant liability was recorded at the date of grant at fair ~~value with subsequent~~value. Subsequent changes in fair value ~~recognized in earnings each reporting period. The fair value of~~for the ~~warrant liability at grant date totaled $15.6~~three and six months ended June 30, 2020 was ($5.5) million and ~~on March 31, 2020 the fair value of the warrant liability totaled $16.0~~($5.1) million, ~~resulting in a change in fair value of $0.4 million that is reported~~respectively and was recorded as ~~a component of~~ other ~~income/(expense)~~expense in the condensed consolidated statement of ~~operations for the three months ended March 31, 2020.~~operations.

The significant assumptions used in the valuation are as follows:

June 30, 2020
Fair value of underlying common shares $ 10.45
Exercise price $ 5.00
Expected dividend yield — %
Expected volatility 50.5 %
Risk free rate 0.17 %
Expected term (years) 4.72
March 31, 2020
Fair value of underlying common shares $ 4.78 - 4.97
Exercise price $ 5.00
Dividend yield - %
Historical volatility 52.6% - 52.8 %
Risk free interest rate 0.14% – 0.66 %
Purchase Agreements with Investors
Between May 11, 2020 and June 8, 2020, the Company entered into Purchase Agreements with certain investors (the “Investors”), pursuant to which the Company sold an aggregate of 3,735,922 shares (the “Purchased Shares”) of the Company’s common stock and issued 3,735,922 warrants to the Investors. See Note 17.

1731

~~FaceBank Group,~~fuboTV Inc.
Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements

The warrant liability was recorded at the date of grant at fair value using a Monte Carlo simulation model. Subsequent changes in fair value for the three and six months ended June 30, 2020 were $10.4 million and was recorded as other income in the condensed consolidated statement of operations. The Company used a Monte Carlo simulation model to estimate the fair value of the warrant liability at June 30, 2020:
June 30, 2020
Fair value of underlying common shares $ 10.45
Exercise price $ 7.00
Expected dividend yield — %
Expected volatility 68.9 – 70.2 %
Risk free rate 0.16 %
Expected term (years) 1.37 – 1.44
ARETE Wealth Management
On May 25, 2020, the Company issued to ARETE Wealth Management a warrant to purchase 275,000 shares of the Company’s common stock for investment services. Absent the Company’s sequencing policy as disclosed in the Company’s Annual Report on Form 10-K/A filed with the SEC on August 10, 2020, the Company would have recorded these warrants as equity classified. The warrant liability was recorded at the date of grant at fair value. Subsequent changes in fair value for the three and six months ended June 30, 2020 was $0.4 million and was recorded as other income in the condensed consolidated statement of operations.
The significant assumptions used in the valuation are as follows:
June 30, 2020
Fair value of underlying common shares $ 10.45
Exercise price $ 5.00
Expected dividend yield — %
Expected volatility 50.4 %
Risk free rate 0.28 %
Expected term (years) 4.9
~~Embedded Put Option~~Derivative Liability – The Series D Convertible Preferred Stock (the “Series D Preferred Stock”) contains a contingent put option and, accordingly, the Company considered it to be a liability and accounted for it at fair value using Level 3 inputs. Subsequent changes in fair value for the three and six months ended June 30, 2020 was $23,000 and $0.1 million and was recorded as other income in the condensed consolidated statement of operations. The Company determined the fair value of this liability using the Monte Carlo simulation model with the following inputs:

March 31, 2020 December 31, 2019 June 30,
2020 December 31,
2019
Stock price $ 8.35 – $9.20 $ 8.91 – $9.03 $ 10.45 $ 8.91 – 9.03
Fixed conversion price $ 0.25 $ 0.25 $ 0.25 $ 0.25
Risk free rate 0.2 – 0.4 % 1.6 % 0.16 % 1.6 %
Contractual term (years) 1.2 – 1.5 1.2 – 1.5 1.0 – 1.2 1.2 – 1.5
Expected dividend yield 8.0 % 8.0 % 8.0 % 8.0 %
Expected volatility 87.2% - 94.8 % 89.2% - 90.4 % 72.3% - 76.3 % 89.2% - 90.4 %
32
fuboTV Inc.

Notes to Condensed Consolidated Financial Statements
~~Note 10 – Convertible Notes Payable~~
15. Convertible Notes Payable

At ~~March 31,~~June 30, 2020 and December 31, 2019, the carrying amounts of the convertible notes including the remaining principal balance plus the fair value of the derivative liabilities associated with the variable share settlement feature and unamortized discounts is as follows (in thousands):

Issuance Date Stated Interest Rate Maturity Date Principal Unamortized Discount Variable Share Settlement Feature at Fair Value Carrying amount Issuance Date Stated Interest Rate Maturity Date Principal Unamortized Discount Variable Share Settlement Feature at Fair Value Carrying amount
Convertible notes
JSJ Investments (2) 12/6/2019 10 % 12/6/2020 $ 255 $ (174 ) $ 443 $ 524
Eagle Equities (3) 12/12/2019 12 % 12/12/2020 210 (147 ) 297 360
BHP Capital (4) 12/20/2019 10 % 12/20/2020 125 (85 ) 120 160
GS Capital Partners (5) 1/17/2020 10 % 1/17/2021 150 (120 ) 210 240 1/17/2020 10 % 1/17/2021 150 (82 ) 196 264
EMA Financial, LLC (6) 2/6/2020 10 % 11/6/2020 125 (100 ) 204 229 2/6/2020 10 % 11/6/2020 125 (59 ) 187 253
Adar Alef, LLC (7) 2/10/2020 12 % 2/10/2021 150 (129 ) 220 241 2/10/2020 12 % 2/10/2021 150 (92 ) 196 254
BHP Capital (8) 3/24/2020 10 % 3/24/2020 100 (95 ) 99 104 3/24/2020 10 % 3/24/2020 100 (71 ) 90 119
Jefferson Street Capital, LLC (9) 3/24/2020 10 % 3/24/2020 100 (95 ) 99 104 3/24/2020 10 % 3/24/2020 100 (71 ) 90 119
Balance at March 31, 2020 $ 1,215 $ (945 ) $ 1,692 $ 1,962
Auctus Fund (10) 4/1/2020 10 % 3/30/2021 1,100 (825 ) 1,663 1,938
Eagle Equities (11) 4/2/2020 10 % 3/31/2021 275 (207 ) 351 419
Platinum Point (12) 4/2/2020 10 % 3/31/2021 103 (69 ) 92 126
Platinum Point (13) 4/2/2020 10 % 4/20/2021 420 (340 ) 381 461
EMA Financial, LLC (14) 5/5/2020 10 % 5/5/2020 250 (211 ) 415 454
Balance at June 30, 2020 $ 2,773 $ (2,027 ) $ 3,661 $ 4,407

Issuance
Date Stated
Interest
Rate Maturity
Date Principal Unamortized
Discount Variable
Share
Settlement
Feature at
Fair Value Carrying
amount
Convertible notes
Adar Bays – Alef (1) 7/30/2019 10 % 7/30/2020 275 (159 ) 379 495
JSJ Investments (2) 12/06/2019 10 % 12/6/2020 255 (238 ) 422 439
Eagle Equities (3) 12/12/2019 12 % 12/12/2020 210 (199 ) 285 296
BHP Capital (4) 12/20/2019 10 % 12/20/2020 125 (114 ) 117 128

Balance at December 31, 2019 $ 865 $ (710 ) $ 1,203 $ 1,358
18
~~FaceBank Group, Inc.~~
~~Notes to the Unaudited Condensed Consolidated Financial Statements~~

Issuance
Date
Stated
Interest
Rate
Maturity
Date
Principal Unamortized
Discount
Variable
Share
Settlement
Feature at
Fair Value
Carrying
amount
Convertible notes
Adar Bays - Alef (1) 7/30/2019 10 % 7/30/2020 $ 275 $ (159 ) $ 379 $ 495
JSJ Investments (2) 12/6/2019 10 % 12/6/2020 255 (238 ) 422 439
Eagle Equities (3) 12/12/2019 12 % 12/12/2020 210 (199 ) 285 296
BHP Capital (4) 12/20/2019 10 % 12/20/2020 125 (114 ) 117 128

Balance at December 31, 2019 $ 865 $ (710 ) $ 1,203 $ 1,358

The derivative ~~liability~~liabilities results from the variable share settlement provision featured within the convertible notes issued by the Company. The fair value of the derivative liabilities was estimated using ~~a Binomial Lattice~~the Monte Carlo simulation model on the dates that the notes were issued and were subsequently revalued at ~~March 31,~~June 30, 2020 and December 31, 2019, ~~using the Monte Carlo simulation model~~ with the following weighted average assumptions:

March 31, 2020 December 31, 2019 June 30, 2020 December 31, 2019

Stock Price $ 7.74 – 9.45 $ 8.91 – 10.15 $ 7.00 – 12.10 $ 8.91 – 10.15
Risk Free Interest Rate 0.12 – 1.56 % 1.52 - 1.60 % 0.13 – 0.19 % 1.52 – 1.60 %
Expected life (years) 0.33 – 1.00 0.58 – 1.00 0.08 – 1.00 0.58 – 1.00
Expected dividend yield 0 % 0 % — % — %
Expected volatility 91.3 – 134.0 % 90.0 – 95.3 % 73.5 – 79.9 % 90.0 – 95.3 %

Fair Value – Note Variable Share Settlement Feature (in thousands) $ 1,692 $ 1,203
Fair Value - Note Variable Share Settlement Feature (in thousands) $ 3,661 $ 1,203
33
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements

(1)
On July 30, 2019, the Company issued a convertible promissory note to Adar Alef, LLC in the amount of $275,000. The note accrues interest at a rate of 12% per annum and matures on July 30, 2020. The note is not convertible until the six month anniversary of the note, at which time if the note has not already been repaid by the Company, the note holder shall be entitled to convert all or part of the note into shares of the Company’s common stock, at a price per share equal to 53% of the lowest trading price of the common stock for the twenty prior trading days upon which the conversion notice is received by the Company.
On January 20, 2020, the Company repaid the principal balance of $275,000 and accrued interest of approximately $16,000.

(2)
On December 6, 2019, the Company issued a convertible promissory note to JSJ Investments with a principal balance of $255,000. The Company received net proceeds of $250,000. The note matures on December 6, 2020 and bears interest at 10% per annum. The Company may prepay this note and unpaid interest on or prior to July 3, 2020. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 47% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.
On June 2, 2020, the Company repaid the principal balance of $255,000 and accrued interest of approximately $12,000.

(3)
On December 12, 2019, the Company issued a convertible promissory note to Eagle Equities, LLC with a principal balance of $210,000. The Company received net proceeds of $200,000. The note matures on December 12, 2020 and bears interest at 12% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock, at any time after the six month anniversary of the note, at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.
On June 10, 2020, the Company repaid the principal balance of $210,000 and accrued interest of approximately $13,000.

(4)
On December 20, 2019, the Company issued a convertible promissory note to BHP Capital NY Inc. with a principal balance of $125,000. The Company received net proceeds of $122,500. The note matures on December 20, 2020 and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date. In connection with the promissory note, the Company issued 5,000 shares of its restricted common stock with a fair value of approximately $47,000. The Company ~~will have~~had the option to buy back the shares 180 days from the issue date, for a one-time payment of $8.00 per share. This option was not exercised and has expired as of June 30, 2020.
On June 17, 2020, the Company repaid the principal balance of $125,000 and accrued interest of approximately $6,000.
19

~~FaceBank Group, Inc.~~
~~Notes to the Unaudited Condensed Consolidated Financial Statements~~
(5) On January 17, 2020, the Company issued a convertible promissory note to GS Capital Partners, LLC. with a principal balance of $150,000. The note matures on January 17, 2021 and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.
On July 15, 2020, the Company repaid the principal balance of $150,000 and accrued interest of approximately $7,000.

(6) On February 6, 2020, the Company issued a convertible promissory note to EMA Financial, LLC. with a principal balance of $125,000. The note matures on November 6, 2020 and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock equal to the lower of (i) the lowest closing price of the common stock during the preceding twenty (20) day trading period ending on the latest trading day prior to the note issuance date or (ii) at a rate of 50% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.

(7) On February 10, 2020, the Company issued a convertible promissory note to Adar Alef, LLC. with a principal balance of $150,000. The note matures on February 10, 2021 and bears interest at 12% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.
34
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
(8) On March 24, 2020, the Company issued a convertible promissory note to BHP Capital NY Inc. with a principal balance of $100,000. The note matures on demand and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date.

(9)
On March 24, 2020, the Company issued a convertible promissory note to Jefferson Street Capital, LLC. with a principal balance of $100,000. The note matures on demand and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date.
(10) On ~~January 29,~~April 1, 2020, the Company issued a convertible promissory note to Auctus Fund, LLC. with a principal balance of ~~$275,000.~~$1.1 million. The note matures on ~~November 29, 2020~~March 30, 2021 and bears interest at 10% per annum. The ~~loan~~note and any accrued interest may be converted into shares of the Company’s common stock at a rate of 50% multiplied by the lowest trading price during the previous ~~twenty five (25)~~thirty (30) day trading period ending on the latest complete trading day prior to the conversion date. In connection with this convertible promissory note, the Company issued 142,118 warrants and 30,000 shares of common stock. See Note 17.
(11) On ~~March 19,~~April 2, 2020, the Company issued a convertible promissory note to Eagle Equities, LLC. with a principal balance of $275,000. The note matures on March 31, 2021 and bears interest at 10% per annum. The note and any accrued interest may be converted into shares of the Company’s common stock at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.
(12) On April 2, 2020, the Company issued a convertible promissory note to Platinum Point Capital, LLC. with a principal balance of $103,000. The note matures on March 31, 2021 and bears interest at 10% per annum. The note and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date.
(13) On April 23, 2020, the Company issued a convertible promissory note to Platinum Point Capital, LLC. with a principal balance of $420,000. The note matures on April 20, 2021 and bears interest at 10% per annum. The note and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date. In connection with this convertible promissory note, the Company issued 55,172 warrants and 25,000 shares of common stock. See Note 17.
(14) On May 11, 2020, the Company issued a convertible promissory note to EMA Financial, LLC. with a principal balance of $250,000. The note matures on May 5, 2021 and bears interest at 10% per annum. The note and any accrued interest may be converted into shares of the Company’s common stock equal to the lower of (i) the lowest closing price of the common stock during the preceding twenty (20) day trading period ending on the latest trading day prior to the note issuance date or (ii) at a rate of 50% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.
In addition to the above convertible promissory notes, on January 29, 2020, the Company issued a convertible promissory note to Auctus Fund, LLC. with a principal balance of $275,000. The note matures on November 29, 2020 and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 50% multiplied by the lowest trading price during the previous twenty five (25) day trading period ending on the latest complete trading day prior to the conversion date. On March 19, 2020, the Company repaid in full the principal balance and interest of approximately $4,000.

2035
~~FaceBank Group,~~fuboTV Inc.
Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements
~~Note 11 – Temporary Equity~~
16. Temporary Equity

Series D Convertible Preferred Stock

On March 6, 2020, the Company (i) entered into a stock purchase agreement to issue 203,000 shares of its Series D Preferred Stock, for proceeds of $203,000 and (ii) redeemed the 203,000 shares of Series D Preferred Stock previously issued on September 6, 2019.
On June 16, 2020, the Company redeemed 253,000 shares of its Series D Preferred Stock previously issued on December 19, 2019 in exchange for $339,174. As a result, the total number of shares of Series D Preferred Stock outstanding as of ~~March 31,~~June 30, 2020 was ~~456,000 (see Note 16).~~203,000.

The following table summarizes the Company’s Series D Preferred Stock activities for the three and six months ended ~~March 31,~~June 30, 2020 (dollars in thousands):
Series D Preferred Stock
Shares Amount
Total temporary equity as of December 31, 2019 461,839 $ 462
Issuance of Series D convertible preferred stock for cash 203,000 203
Offering cost related to issuance of Series D convertible preferred stock - (3 )
Deemed dividends related to immediate accretion of offering cost - 3
Accrued Series D preferred stock dividends 8,868 9
Bifurcated redemption feature of Series D convertible preferred stock - (171 )
Deemed dividends related to immediate accretion of bifurcated redemption feature of Series D convertible preferred stock - 171
Redemption of Series D preferred stock (including accrued dividends) (210,831 ) (211 )
Total temporary equity as of March 31, 2020 462,876 $ 463
Series D Preferred Stock
Shares Amount
Total temporary equity as of December 31, 2019 461,839 $ 462
Issuance of Series D convertible preferred stock for cash 203,000 203
Offering cost related to issuance of Series D convertible preferred stock — (3 )
Deemed dividends related to immediate accretion of offering cost — 3
Accrued Series D preferred stock dividends 8,868 9
Bifurcated redemption feature of Series D convertible preferred stock — (171 )
Deemed dividends related to immediate accretion of bifurcated redemption feature of Series D convertible preferred stock — 171
Redemption of Series D preferred stock (including accrued dividends) (210,831 ) (211 )
Total temporary equity as of March 31, 2020 462,876 $ 463
Accrued Series D preferred stock dividends 8,330 8
Redemption of Series D preferred stock (including accrued dividends) (263,037 ) (263 )
Total temporary equity as of June 30, 2020 208,169 $ 208

The redemption of the 203,000 shares of Series D Preferred Stock (previously issued on September 6, ~~2020)~~2019) on March 6, 2020 occurred as follows (amounts in thousands except share and per share values):
Series D preferred stock issued 203,000
Per share value $ 1.00
Series D preferred stock value $ 203
Accrued dividends $ 8
Total Series D preferred stock $ 211
Redemption percentage $ 1.29
Total redemption $ 272
36
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
Series D preferred stock issued 203,000
Per share value $ 1.00
$ 203
Accrued dividends $ 8
$ 211
Redemption percentage $ 1.29
Total $ 272
The redemption of the 253,000 shares of Series D Preferred Stock (previously issued on December 19, 2019) on June 16, 2020 occurred as follows (amounts in thousands except share and per share values):
Series D preferred stock issued 253,000
Per share value $ 1.00
Series D preferred stock value $ 253
Accrued dividends $ 10
Total Series D preferred stock value $ 263
Redemption percentage 1.29 %
Total redemption $ 339

Holders of shares of the Series D Preferred Stock are entitled to receive, cumulative cash dividends at the rate of 8% on $1.00 per share of the Series D Preferred Stock per annum (equivalent to $0.08 per annum per share), subject to adjustment. The dividends are payable solely upon redemption, liquidation or conversion. The Company recorded approximately ~~$9,000~~$5,000 accrued dividend as of ~~March 31,~~June 30, 2020.

The Series D Preferred Stock is being classified as temporary equity because it has redemption features that are outside of the Company’s control upon certain triggering events, such as a Market Event. A “Market Event” is defined as any trading day during the period which shares of the Series D Preferred Stock are issued and outstanding, where the trading price for such date is less than $0.35. In the event of a Market Event, the Series D Preferred Stock shall be subject to mandatory redemption and the stated value shall immediately be increased to $1.29 per share of Series D Preferred Stock. The Market Event is considered to be outside the control of the Company, resulting in classification of the Series D Preferred Stock as temporary equity.

The initial discounted carrying value resulted in recognition of a bifurcated redemption feature of ~~$171,000,~~$0.2 million, further reducing the initial carrying value of the shares of Series D Preferred Stock. The discount to the aggregate stated value of the shares of Series A Convertible Preferred Stock, resulting from recognition of the bifurcated redemption feature was immediately accreted as a reduction of additional paid-in capital and an increase in the carrying value of the Series D Shares. The accretion is presented in the condensed consolidated statement of operations as a deemed dividend, increasing net loss to arrive at net loss attributable to common stockholders.

2117. Stockholders’ Equity/ (Deficit)
~~FaceBank Group, Inc.~~
~~Notes to the Unaudited Condensed Consolidated Financial Statements~~
~~Note 12 – Stockholders’ Equity / (Deficit)~~

Preferred Stock Designations

On March 20, 2020, FaceBank Pre-Merger amended its Articles of Incorporation to withdraw, cancel and terminate the previously-filed (i) Certificate of Designation of with respect to 5,000,000 shares of its Series A Preferred Stock, par value $0.0001 per share, (ii) Certificate of Designation with respect to 1,000,000 shares of its Series B Preferred Stock, par value $0.0001 per share, (iii) Certificate of Designation with respect to 41,000,000 shares of its Series C Preferred Stock, par value $0.0001 per share and (iv) Certificate of Designation with respect to 1,000,000 shares of its Series X Preferred Stock, par value $0.0001 per share. Upon the withdrawal, cancelation and termination of such designations, all shares previously designated as Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series X Preferred Stock were returned to the status of authorized but undesignated shares of ~~FaceBank’s~~the Company’s Preferred Stock, par value $0.0001 per share.

On March 20, 2020, in connection with the Merger, FaceBank Pre-Merger filed an amendment to its Articles of Incorporation to designate 35,800,000 of its authorized preferred stock as “Series AA Convertible Preferred Stock” pursuant to a Certificate of Designation of Series AA Convertible Preferred Stock (the “Series AA Preferred Stock Certificate of Designation”). The Series AA Convertible Preferred Stock (the “Series AA Preferred Stock”) has no liquidation preference. The Series AA Preferred Stock is entitled to receive dividends and other distributions as and when paid on the Common Stock on an as converted basis. Each share of Series AA Preferred Stock is initially convertible into two shares of Common Stock, subject to adjustment as provided in the Series AA Preferred Stock Certificate of Designation and shall only be convertible immediately following the sale of such shares on an arms’-length basis either pursuant to an exemption from registration under Rule 144 promulgated under the Securities Act or pursuant to an effective registration statement under the Securities Act. Each share of Series AA Preferred Stock shall have 0.8 votes per share (the “Voting Rate”) on any matter submitted to the holders of the Common Stock for a vote and shall vote together with the Common Stock on such matters for as long as the Series AA Preferred Stock is outstanding. The Voting Rate shall be subject to adjustment in the event of stock splits, stock combinations, recapitalizations reclassifications, extraordinary distributions and similar events. There are 4,912,069 shares reserved for issuance to certain shareholders of fuboTV Pre-Merger in connection with the Merger.
37
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements

Common Stock Activity

Issuance of Common Stock for Cash

The Company raised approximately $2.3 million through issuances of an aggregate of 795,593 shares of its common stock in private placement transactions during the three months ended March 31, 2020 towith investors.
The Company raised approximately $0.5 million through issuances of an aggregate of 170,391 shares of its common stock in private placement transactions during the three months ended June 30, 2020 with investors.
Issuance of Common Stock and Warrants for Cash
Between May 11, 2020 and June 8, 2020, the Company entered into Purchase Agreements Investors, pursuant to which the Company sold an aggregate of 3,735,922 shares of the Company’s common stock at a purchase price of $7.00 per share and issued warrants to the Investors covering a total of 3,735,922 shares of the Company’s common stock for an aggregate purchase price of $26.1 million.
Issuance of Common Stock Related to PEC Acquisition

During the ~~three-months~~three and six months ended ~~March 31,~~June 30, 2020, the Company has issued ~~1,552,070~~1,201,749 and 4,928,829 shares of its common stock in exchange for ~~3,727,080~~14,222,975 and 17,950,055 shares of its subsidiary ~~PEC.~~PEC, respectively. The interests exchange in PEC were previously recorded within noncontrolling interests and the ~~transaction was~~transactions were accounted for as a reduction of ~~$1.1~~$0.9 million and $2.0 million of noncontrolling interests for the carrying value of those noncontrolling interests at the date of exchange with an offsetting increase in Additional paid-in ~~capital.~~
22
~~FaceBank Group, Inc.~~
~~Notes to~~capital, during the ~~Unaudited Condensed Consolidated Financial Statements~~three and six months ended June 30, 2020.

Issuance of Common Stock for Services Rendered

On January 1, 2020, the Company entered into the first amendment to a joint business development agreement and issued 200,000 shares of its restricted common stock with a fair value of $1.8 million in exchange for business development services.

During the three months ended March 31, 2020, the Company issued 275,000 shares of its common stock with a fair value of $2.3 million in exchange for consulting services.

During the three months ended March 31, 2020, the Company issued 62,500 shares of its common stock with a fair value of approximately $0.6 million in exchange for services rendered in connection with the Company’s amended Digital Likeness Development Agreement by and among Floyd Mayweather, the Company and FaceBank, Inc., effective as of July 31, 2019, as amended (the “Mayweather Agreement”).

During the three months ended March 31, 2020, the Company issued 2,500 shares of its common stock with a fair value of $26,000 in exchange for consulting services.

During the three months ended June 30, 2020, the Company issued 343,789 shares of its common stock with a fair value of $3.1 million in exchange for consulting services.
Issuance of Common Stock for Employee Compensation

On February 20, 2020, the Company issued 300,000 shares of its common stock to an officer of the Company at a fair value of $2.7 million, or $9.00 per share.
During the three months ended March 31, 2020, the Company issued 200,000 shares of its common stock with a fair value of $1.6 million as compensation to service providers for services rendered.
38
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
The Company did not issue any common stock for employee compensation during the three months ended June 30, 2020.

Issuance of Common Stock in Connection with Convertible Notes
During the three and six months ended ~~March 31,~~June 30, 2020, the Company issued ~~7,500~~25,000 and 62,500 shares of its common stock with a fair value of approximately ~~$0.1~~$0.2 million and $0.3 million, respectively, in connection with the issuance of convertible notes.

Equity Compensation Plan Information

The Company’s 2014 Equity Incentive Stock Plan (the “2014 Plan”) provides for the issuance of up to ~~166,667~~16,667 incentive stock options and nonqualified stock options to the Company’s employees, officers, directors, and certain consultants. The 2014 Plan is administered by the Company’s Board and has a term of 10 years.

Contemporaneous with the closing of the Merger, the Company assumed 8,051,098 stock options issued and outstanding under the fuboTV ~~Inc.~~Pre-Merger 2015 Equity Incentive Plan (the “2015 Plan”) with a weighted-average exercise price of $1.32 per share. From ~~an after~~ the Effective Time, such options may be exercised for shares of our common stock under the terms of the 2015 Plan.

On April 1, 2020, the Company approved the establishment of the ~~FaceBank~~Company’s 2020 Equity Incentive ~~Plan.~~Plan (the “Plan”). The Company created an incentive option pool of 12,116,646 shares of ~~FaceBank~~the Company’s Common Stock under the Plan.

On May 21, 2020, we established our Outside Director Compensation Policy to set forth guidelines for the compensation of our non-employee directors for their service on our Board of Directors.
Options

The fair value of the Company’s common stock was based upon the publicly quoted price on the date that the final approval of the awards was obtained. The Company does not expect to pay dividends in the foreseeable future so therefore the expected dividend yield is 0%. The expected term for stock options granted with service conditions represents the average period the stock options are expected to remain outstanding and is based on 10 years. The Company obtained the risk-free interest rate from publicly available data published by the Federal Reserve. The Company uses a methodology in estimating its volatility percentage from a computation that was based on a comparison of average volatility rates of similar companies to a computation based on the standard deviation of the Company’s own underlying stock price’s daily logarithmic returns. Due to the changes in the Company subsequent to the Merger, the Company changed its peer group for estimating expected volatility.
During the three months ended March 31, 2020, 280,000 options were granted outside of the Plan, and there were no options granted during the three months ended March 31, 2019. There were no options granted outside of the Plan in the three and six months ended June 30, 2020.

2339

~~FaceBank Group,~~fuboTV Inc.
Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements

Employees
The following reflects ~~the~~ stock option activity for the six months ended June 30, 2020 (in thousands, except share and per share amounts):
Number of Shares Weighted Average
Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life
(in years)
Outstanding as of December 31, 2019 16,667 $ 28.20 $ — 8.1
Options assumed from Merger 8,051,098 $ 1.31
Granted 5,747,039 $ 8.51
Forfeited or expired (359,331 ) $ 0.75
Outstanding as of June 30, 2020 13,445,473 $ 4.44 $ 81,360 8.3
Options vested and exercisable as of June 30, 2020 5,442,709 $ 4.43 $ 81,378 6.9
There were no employee options granted, forfeited or expired in the three months ended March 31, ~~2020:~~2020.

Number of Shares Weighted Average
Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life
(in years)
Outstanding as of December 31, 2019 16,667 $ 28.20 $ - 8.1
Granted 280,000 $ 7.20 $ 322,000 4.7
Outstanding as of March 31, 2020 296,667 $ 8.38 $ 322,000 4.9

Options vested and exercisable as of March 31, 2020 296,667 $ 8.38 $ 322,000 4.9
Total compensation cost related to unvested options not yet recognized was approximately $38.0 million and $0 as of June 30, 2020 and December 31, 2019, respectively. The weighted average period over which this compensation cost related to unvested employee options will be recognized is 2.7 and 0 years as of June 30, 2020 and December 31, 2019, respectively.
The weighted average grant-date fair value of options granted during the three and six months ended June 30, 2020 was $4.20. No options were exercised during the three and six months ended June 30, 2020. The aggregate fair value of options vested during the three months and six months ended June 30, 2020 was $1.3 million. There was no stock-based compensation recognized during the six months ended June 30, 2019.
Market and Service Condition Based Options
In the three and six months ended June 30, 2020, 3,078,297 options were granted that vest on the earlier of each anniversary of the grant date or based on the achievement of pre-established parameters relating to the performance of the Company’s stock price (not included in table above).
Compensation expense is based on the estimated value of the awards on the grant date, and is recognized over the period from the grant date through the expected vest dates of each vesting condition, both of which were estimated based on a Monte Carlo simulation model applying the following key assumptions as of the grant date:
Dividend yield — %
Expected volatility 76.0 – 88.1 %
Risk free rate 0.24 – 0.30 %
Derived service period 1.59 – 1.91
Non-employees

During the three months ended March 31, 2020, in connection with the Mayweather Agreement, the Company granted options to purchase 280,000 shares of the Company’s common stock at an exercise price of $7.20 per share. This option has a fair value of $1,031,000, a five-year term and expires on December 21, 2024. These options were immediately vested as of the grant date.

As part of ~~March 31, 2020, there was~~the Merger, the Company also assumed 343,047 options granted to non-employees with a weighted average exercise price of $0.23 (included in table above). Total compensation cost related to unvested non-employee options is immaterial as of June 30, 2020.
40
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
There were no ~~unrecognized stock-based compensation expense.~~options granted to non-employees in the three months ended June 30, 2020.

Warrants

A summary of the Company’s outstanding warrants as of ~~March 31,~~June 30, 2020 are presented ~~below:~~below (in thousands, except share and per share amounts):

Number of Warrants Weighted Average
Exercise Price Total Intrinsic Value Number of Warrants Weighted Average
Exercise Price Total Intrinsic Value
Outstanding as of December 31, 2019 200,007 $ 12.15 $ - 200,007 $ 12.15 $ —
Issued 3,411,349 $ 5.11 $ 11,038,616 7,477,443 $ 6.08 $ 32,670
Expired (200,000 ) $ - $ - (200,000 ) $ — $ —
Outstanding as of March 31, 2020 3,411,356 $ 5.16 $ 11,038,616
Warrants exercisable as of March 31, 2020 3,411,356 $ 5.16 $ 11,038,616
Outstanding as of June 30, 2020 7,477,450 $ 6.10 $ 32,670
Warrants exercisable as of June 30, 2020 7,477,450 $ 6.10 $ 32,670

On March 19, 2020, in connection with its Note Purchase Agreement (see Note 8)13), the Company issued the FB Loan Warrant, a warrant to purchase 3,269,231 shares of its common stock with a fair value of $15.6 million.

On ~~March 30,~~April 1, 2020, the Company issued 142,118 warrants in connection with a $1.1 million convertible note. The exercise price is $7.74 with a 5-year term.
On April 23, 2020, the Company issued 55,172 warrants in connection with a $0.4 million convertible note. The ~~Company received the proceeds from the convertible note on April 1,~~exercise price is $9.00 with a 3-year term.
Between May 11, 2020 and ~~will therefore record~~June 8, 2020, the ~~balance sheet impact~~Company issued 3,735,922 warrants in connection with Purchase Agreements with Investors with an exercise price of ~~this~~$7.00 with a 1.5-year term.
On May 25, 2020, the Company issued to ARETE Wealth Management a warrant ~~and convertible note on April 1, 2020.~~to purchase 275,000 shares of the Company’s common stock with an initial exercise price of $5.00 per share.
~~Note 13 – Leases~~
18. Leases

On February 14, 2019, the Company entered into a lease for offices in Jupiter, Florida. The lease has an initial term of 18 months commencing March 1, 2019 until August 31, 2020 with a base annual rent of ~~$89,437.~~$89,000. The Company has an option to extend the lease for another year until August 31, 2021 for an annual rent of ~~$94,884~~$95,000 and a second option for ~~a further annual~~an extension until August 31, 2022 for an annual rent of ~~$97,730.~~$98,000. The Company recorded the lease obligations in accordance with ASC 842.

As part of the acquisition of Nexway on September 19, 2019, the Company recognized right of use assets of $3.6 million and lease liabilities of $3.6 million associated with an operating lease obtained in the acquisition. At December 31, 2019, the Company had operating lease liabilities of $3.5 million and right of use assets of $3.5 million recorded in the consolidated balance sheet. At March 31, 2020, the Company deconsolidated its investment in Nexway and accordingly, reduced its operating lease liabilities and right of use assets to ~~zero.~~$0.
As part of the acquisition of fuboTV Pre-Merger on April 1, 2020, the Company recognized right of use assets and lease liabilities of $5.2 million for three operating leases. fuboTV Pre-Merger had entered into a lease agreement in April 2017 for approximately 10,000 square feet of office space in New York, NY. The lease commenced in April 2017 and the initial term of the lease is for a period of ten years with an option to renew for an additional five years. The renewal option is not considered in the remaining lease term as the Company is not reasonably certain that it will exercise such option. On January 30, 2018, the Company amended their lease agreement to add approximately 6,600 square feet of office space. The lease term commenced in February 2018 and is effective through March 2021.

2441

~~FaceBank Group,~~fuboTV Inc.
Notes to ~~the Unaudited~~ Condensed Consolidated Financial Statements
In February 2020, fuboTV Pre-Merger entered into a sublease with Welltower, Inc. to lease approximately 6,300 square feet of office space in New York, NY. The lease commenced in March 2020 and is effective through July 30, 2021. The annual rent for the space is $455,000.

The following summarizes quantitative information about the Company’s ~~Florida~~ operating ~~lease~~leases (amounts in thousands, except lease term and discount rate):

For the Three Months Ended March 31, 2020
For the Three Months
Ended
June 30, 2020

For the Six Months
Ended
June 30, 2020

Operating leases
Operating lease cost $ 98 $ 312 $ 410
Variable lease cost 73 3 76

Operating lease expense 171 $ 315 $ 486
Short-term lease rent expense - 166 166

Total rent expense $ 171 $ 481 $ 652

Weighted-average remaining lease term – operating leases 6.6 6.6
Weighted-average discount rate – operating leases 5.3 % 5.3 %

Operating cash flows from operating leases $ 75
Right-of-use assets exchanged for operating lease liabilities $ 125
Weighted-average remaining lease term – operating leases 0.4
Weighted-average monthly discount rate – operating leases 0.8 %
~~The Company’s operating lease expires on August 31, 2020 and the remaining liability totals $37,000. The Company has decided not to extend the lease.~~

For the Three Months
Ended
June 30, 2019

For the Six Months
Ended
June 30, 2019

Operating leases
Operating lease cost $ 23 $ 30
Variable lease cost 15 20

Operating lease expense $ 38 $ 50
Short-term lease rent expense — —

Total rent expense $ 38 $ 50

Weighted-average remaining lease term – operating leases 1.2 1.2
Weighted-average discount rate – operating leases 10.0 % 10.0 %

~~Note 14 – Commitments and Contingencies~~
~~Litigation~~
19. Commitments and Contingencies

The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business. When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the financial statements taken as a whole. When a material loss contingency is only reasonably possible, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can reasonably be made. Legal expenses associated with any contingency are expensed as incurred.

In connection with closed litigation on two separate matters that resulted in judgments against PEC, a majority interest of which was subsequently purchased by the Company, we have accrued ~~$524,000~~$0.5 million which remains on the balance sheet as a liability at ~~March 31,~~June 30, 2020 and December 31, 2019. The Company, on behalf of its subsidiary, is in settlement discussions with the parties.

42
fuboTV Inc.
Notes to Condensed Consolidated Financial Statements
On August 27, 2018, plaintiff Scott Meide filed a ~~pro se (unrepresented by counsel)~~ complaint in the United States District Court for the Middle District of Florida, Jacksonville Division against PEC, now ~~a subsidiary~~one of ~~the Company,~~our majority-owned subsidiaries, naming its former officers, among others, as defendants. The ~~Company’s position~~plaintiff’s claims are based on three investments: (i) the purchase of 750,000 restricted shares from PEC for the amount of $300,000 on July 18, 2014; (ii) the purchase of 800,000 shares of PEC from defendant Gregory Centineo in July 2015; and (iii) an investment in Evolution AI Corporation in 2018 in the amount of $75,000. Until recently, Mr. Meide was proceeding pro se. Although he has pled multiple claims, the crux of Mr. Meide’s claim, at least as pled in the Second Amended Complaint, which is the operative complaint, is that he was fraudulently induced into making all three investments. The complaint contains a claim for federal securities fraud which forms the ~~pro se~~only basis for federal jurisdiction. All of the defendants have moved to dismiss the Second Amended Complaint ~~is defamatory, without merit~~on various grounds, including, but not limited to, the ground that the plaintiff Mr. Meide lacks standing to bring the claims since the purchases of securities were made by Jacksonville Injury Center, LLC, rather than Mr. Meide in ~~fact or law~~his individual capacity.
On June 29, 2020, an attorney entered an appearance for Mr. Meide and ~~represents an extortive attempt to coerce payment under threat of reputational harm. The Company’s subsidiaries and affiliates~~ filed (i) a motion to ~~dismiss on September 25, 2018. On July 24, 2019, all counts of~~substitute Jacksonville Injury Center, LLC as the ~~complaint were dismissed in favor of the Company’s subsidiaries~~plaintiff and ~~affiliates. Mr. Meide was afforded the opportunity~~(ii) a motion for leave to file an amended complaint. All of the defendants have filed oppositions to the motion to substitute and motion for leave to amend. The proposed new complaint continues to allege fraud, but also purports to plead a shareholder derivative lawsuit in connection with a claim of an improper transfer of assets to the Company. The new proposed complaint also names the Company as a new defendant. Discovery in the matter has been stayed since July of 2019. The matter is set for ~~a portion~~trial in September of ~~his claims,~~2020, but we do not expect the trial to go forward given the pending motions to dismiss and such amendment was filed on September 24, 2019. On October 6, 2019, Judge Marcia Morales Howard ordered Mr. Meide’s amended complaint stricken, describing the filing as insufficient and having failed to identify facts necessary to support its allegations, and offering Mr. Meide “one final opportunity to properly state his claims” with an amended complaint. Mr. Meide’s third attempt to submit a sufficient complaint was filed on November 1, 2019. stay of discovery.
The Company’s subsidiaries and affiliates plan to reaffirm their motions to dismiss and the Company believes Mr. Meide’s final amended complaint will also be dismissed. The Company plans to the ask the court for an award of sanctions and attorney fees in connection with Mr. Meide’s filing of a frivolous lawsuit.

~~Note 15 – Acquisition of fuboTV~~
~~As described~~On June 8, 2020, Andrew Kriss and Eric Lerner (the “Plaintiffs”) filed a Summons with Notice in ~~Note 1, on~~ ~~April 1, 2020, we consummated~~ the ~~acquisition of Pre-Merger fuboTV by the merger of Merger Sub into fuboTV, whereby fuboTV continued as the surviving corporation and became a wholly-owned subsidiary of FaceBank pursuant to the terms~~Supreme Court of the ~~Merger Agreement.~~
~~In accordance with the terms~~State of the Merger Agreement, all of the capital stock of fuboTV was converted into the right to receive 34,324,362 shares Series AA Preferred Stock, a newly-created class of stock. Pursuant to the Series AA Certificate of Designation, each share of Series AA Preferred Stock is convertible into two (2) shares of FaceBank’s common stock. In addition, each outstanding option to purchase shares of common stock of fuboTV was assumed by FaceBank and converted into an option to acquire FaceBank’s common stock. In addition, in accordance with the terms of the Merger Agreement, at the Effective Time the Company assumed 8,051,098 stock options issued and outstanding under the fuboTV Inc. 2015 Equity Incentive Plan (the “2015 Plan”) with a weighted-average exercise price of $1.32 per share. From and after the Effective Time, such options may be exercised for shares of FaceBank’s common stock under the terms of the 2015 Plan.
25
New York, Nassau County naming as defendants FaceBank Group, Inc.
~~Notes~~, John Textor and Frank Patterson, among others (Index No. 605474/20). The Notice lists claims for breach of express contract and implied duties, fraud, aiding and abetting fraud, fraud in the inducement, fraudulent misrepresentation, fraudulent concealment, fraudulent conveyance, unjust enrichment and declaratory relief, and states that the Plaintiffs seek monetary damages in an amount to be proven at trial, but not less than six million dollars ($6,000,000) on the ~~Unaudited Condensed Consolidated Financial Statements~~
~~The preliminary purchase price amounted to $596.1 million which represents the $529.7 market value ($8.20 per share as~~breach of ~~April 1, 2020) of 64.6 million common shares plus the $66.4 million value of 8.1 million stock options on an as-converted basis. This preliminary purchase price excludes transaction costs.~~
The Company will account for the Merger as a business combination under the acquisition method of accounting. As such, the purchase price will be allocated to the net assets acquired, inclusive of intangible assets,contract claim with any excess fair value recorded to goodwill. Since the closing date of the acquisition occurred subsequent to the end of the reporting period, the allocation of purchase price to the underlying net assets has not yet been completed. The Company will reflect the preliminary purchase price allocation in its consolidated financial statements for the year ending December 31, 2020.
~~Note 16 – Subsequent Events~~
~~Refer to Note 8 to the Unaudited Condensed Consolidated Financial Statements for a description of the amendments to the Note Purchase Agreement since March 31, 2020.~~
~~Redemption of Series D Preferred Stock~~
On June 16, 2020, the Company redeemed 253,000 shares of its Series D Preferred Stock in exchange for $339,174. As of July 2, 2020, the total number of shares of Series D Preferred Stock outstanding was 203,000.
~~Issuance of Securities in Private Placements~~
~~Certain of the common stock issuances noted below remain issuable as of~~interest from the date of the ~~filing~~alleged breach on September 9, 2014. As of ~~this Quarterly Report.~~August 13, 2020, the Company had not been served.

20. Supplemental Cash Flow Information
Six Months Ended June 30
(in thousands) 2020 2019

Supplemental disclosure of cash flow information
Interest paid $ 4,110 $ —
Income tax paid $ — $ —

Non cash financing and investing activities
Issuance of convertible preferred stock for Merger $ 566,124 $ —
Reclass of shares settled liability for intangible asset to stock-based compensation $ 1,000 $ —
Issuance of common stock – subsidiary share exchange $ 2,042 $ —
Reclass of shares settled liability to additional paid-in capital for issuance of common stock $
9,054

Lender advanced loan proceeds direct to fuboTV $ 7,579 $ —
Accrued Series D Preferred Stock dividends $ 17 $ —
Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock settlement of liability $ 171 $ —
Common stock issued for lease settlement $ — $ 130
Right-of-use assets exchanged for operating lease liabilities $
5,395
$
—

21. Subsequent Events
Issuance of Common Stock and Warrants for Cash
Between May 11, 2020 and June 8, 2020, the Company entered into Purchase Agreements with certain investors (the “Investors”), pursuant to which the Company sold an aggregate of 3,735,922 shares (the “Purchased Shares”) of the Company’s common stock at a purchase price of $7.00 per share and issued warrants to the Investors covering a total of 3,735,922 shares of the Company’s common stock (the “Warrants”) for an aggregate purchase price of $26,151,454.

On July 2, 2020, the Company entered into a Purchase Agreement with Credit Suisse Capital LLC, pursuant to which the Company sold 2,162,163 shares ~~(the “CS Shares” and together with the Purchased Shares, the “Total Shares”)~~ of the Company’s common stock at a purchase price of $9.25 per share for an aggregate purchase price of ~~$20,000,007.75.~~$20.0 million.

~~Since March 31, 2020, the Company raised an additional $403,895.00 through issuances of an aggregate of 111,459 shares of its common stock in private placement transactions to several other investors.~~
~~Issuance of Common Stock Related to PEC Acquisition~~
~~Since March 31, 2020, the Company has issued 1,201,749 shares of its common stock in exchange for 14,222,975 shares of its subsidiary PEC.~~
~~Issuance of Convertible Notes and Related Warrants for Cash~~
~~Since March 31,~~On July 29, 2020, the Company issued ~~convertible notes with a principal balance of approximately $2.1 million. In connection with such notes, the Company issued (i) 55,000~~6,630,012 shares of ~~its common~~the Company’s Series AA Convertible Preferred stock ~~and (ii) warrants~~ to ~~purchase~~ an ~~aggregate of 55,172 shares of its common stock at an initial exercise price of $9.00 per share.~~affiliate distributor.

~~Issuance~~Termination of ~~Warrant for Services Rendered~~Credit Agreement

On ~~May 25,~~July 8, 2020, the Company ~~issued~~entered into a Termination and Release Agreement with HLEE Finance to ~~ARETE Wealth Management~~terminate the Credit Agreement. The Company did not draw down on the Credit Agreement during its term.
Share Purchase Agreement
On July 10, 2020, we entered into a ~~warrant~~Share Purchase Agreement (the “SPA”) with C2A2 Corp. AG Ltd. and Aston Fallen (the “Purchaser”). Pursuant to ~~purchase 275,000~~the terms of the SPA, the Purchaser agreed to acquire all of the 1,000 shares of Facebank AG common stock, held by the Company. The transaction closed on July 10, 2020 and the Company redeemed an aggregate of 3,633,114 shares of the Company’s common stock ~~with an initial exercise~~at a redemption price of ~~$5.00~~$0.0001 per ~~share.~~
~~Stock Option Grants to Executive Officers~~
~~On June 8, 2020, the Company granted an options to purchase 850,000~~share in exchange for 4,833,114 new shares of ~~its~~Company common stock at ~~an exercise~~a sale price of ~~$10.435~~$0.0001 per share, resulting in ~~connection with an employment agreement for~~a net issuance of 1,200,000 new shares of the Company’s ~~Chief Financial Officer.~~common stock. The Company expects to recognize a gain of approximately $8.3 million on this transaction during the third quarter.
Credit Agreement

On ~~June 28,~~July 16, 2020, we entered into a Credit Agreement (the “Access Road Credit Agreement”) with Access Road Capital LLC (the “Lender”). Pursuant to the ~~Company granted an option~~terms of the Access Road Credit Agreement, the Lender extended a term loan (the “Loan”) to ~~purchase 1,203,297 shares of common stock at an exercise price of $11.15 per share in connection~~us with a ~~Letter Agreement by~~principal amount of $10.0 million. The Loan bears interest at a fixed rate of 13.0% per annum and ~~between the Company and its Executive Chairman.~~matures on July 16, 2023.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis by our management of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the accompanying related notes included in this Quarterly Report on Form 10-Q and our audited financial statements and related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form ~~10-K~~10-K/A for the year ended December 31, 2019, as filed with the Securities and Exchange Commission (the “SEC”) on August 10, 2020 (the “Annual Report”).
The results of our operations for the three and six months ended ~~March 31,~~June 30, 2020 are not readily comparable against the results of our operations in the comparable prior year three and six month period ended ~~March 31,~~June 30, 2019 as a result of our ~~acquisition~~acquisitions of fuboTV Pre-Merger and Facebank AG, and our acquisition of and then deconsolidation of Nexway AG and its subsidiaries.

In addition, because of the acquisition of fuboTV on April 1, 2020, the results of our operations going forward will be markedly different. We encourage our investors to review the Pro Forma Unaudited Condensed Combined financial statement presentation as of and for the year ended December 31, 2019 that was included as Exhibit 99.2 to the Company’s Current Report on Form 8-K/A that was filed with the Commission on June 17, 2020, as well as the Company’s forthcoming Current Report on Form 8-K/A that will include additional Pro Forma Unaudited Condensed Combined financial statements as of and for the period ended March 31, 2020.
Incorporation

~~FaceBank Group,~~ fuboTV Inc. ~~(the~~(“fuboTV” or the “Company” ~~or “FaceBank”~~) was incorporated under the laws of the State of Florida in February 2009 under the name York Entertainment, Inc. OnThe Company changed its name to FaceBank Group, Inc. on September 30, ~~2019,~~2019. On August 10, 2020, the Company changed its name to fuboTV Inc. (the “Name Change”) and as of May 1, 2020, the Company’s ~~name~~trading symbol was changed to “FUBO.” The Company has filed a Notice of Corporate Action (the “Action”) with FINRA regarding the Name Change. The Action is pending FINRA approval at this time.
Unless the context otherwise requires, “fuboTV,” “we,” “us,” “our,” and the “Company” refers to fuboTV and its subsidiaries on a consolidated basis, and “fuboTV Pre-Merger” refers to fuboTV Inc., a Delaware corporation, prior to the Merger, and “fuboTV Sub” refers to fuboTV Inc., a Delaware corporation, and the Company’s wholly-owned subsidiary following the Merger. “FaceBank Pre-Merger” refers to FaceBank Group, Inc. prior to the Merger and its subsidiaries prior to the closing of the Merger.

Merger with fuboTV ~~Inc.~~Inc Pre-Merger

On April 1, 2020, fuboTV Acquisition Corp., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub”) merged with and into fuboTV ~~Inc., a Delaware corporation (“fuboTV”),~~Pre-Merger, whereby fuboTV Pre-Merger continued as the surviving corporation and became our wholly-owned subsidiary pursuant to the terms of the Agreement and Plan of Merger and Reorganization dated as of March 19, 2020, by and among us, Merger Sub and fuboTV Pre-Merger (the “Merger Agreement” and such transaction, the “Merger”) ~~(See Note 15)~~.

In accordance with the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), all of the capital stock of fuboTV Pre-Merger was converted into the right to receive shares of our newly-created class of Series AA Convertible Preferred Stock, par value $0.0001 per share (the “Series AA Preferred Stock”) ~~(See Note 12)~~. Each share of Series AA Preferred Stock is entitled to 0.8 votes per share and isshall only be convertible ~~into two (2)~~immediately following the sale of such shares ~~of our common stock, only in connection with a bona fide transfer to a third party~~on an arms’-length basis either pursuant to an exemption from registration under Rule ~~144.~~144 promulgated under the Securities Act or pursuant to an effective registration statement under the Securities Act. Until the time we are able to uplist to a national securities exchange, the Series AA Preferred Stock benefits from certain protective provisions that ~~for example,~~would require us to obtain the approval of a majority of the shares of outstanding Series AA Preferred Stock, voting as a separate class, before undertaking certain matters.

~~As a result of~~Prior to the Merger, the Company was, and after the Merger ~~fuboTV, a leading live TV streaming platform for sports, news, and entertainment, became a wholly-owned subsidiary of the Company. Before the Merger, Facebank Group was and~~ continues to be, a character-based virtual entertainment company, and a leading developer of digital human likeness for celebrities and consumers, focused on applications in traditional entertainment, sports entertainment, live events, social networking, mixed reality (AR/VR) and artificial intelligence. ~~Following~~As a result of the Merger, we operate our business under the name “fuboTV” and we are in the process of changing the name of FaceBank Group, Inc. to fuboTV, Inc. On May 1, 2020, the Company’s trading symbol was changed to “FUBO”. Unless the context otherwise requires, “we,” “us,” “our,” and the “Company” refers to FaceBank and its subsidiaries on a consolidated basis, and fuboTV Pre-Merger, ~~refers to fuboTV Inc. prior to~~a leading live TV streaming platform for sports, news, and entertainment, became a wholly-owned subsidiary of the ~~Merger.~~Company.

In connection with the Merger, on March 11, 2020, ~~FaceBank~~the Company and HLEE Finance S.a r.l. (“HLEE”) entered into a Credit Agreement, dated as of March 11, 2020, pursuant to which HLEE provided ~~FaceBank~~the Company with a ~~$100,000,000~~$100.0 million revolving line of credit (the “Credit Facility”). The Credit Facility is secured by substantially all the assets of ~~FaceBank. As of~~the Company. On July 6,8, 2020, ~~there are no amounts outstanding under~~the Company entered into a Termination and Release Agreement with HLEE Finance to terminate the Credit ~~Facility, and the~~Agreement. The Company ~~does~~did not ~~intend to~~ draw down on ~~this~~the Credit ~~Facility.~~Agreement during its term. See ~~Note 8 of the~~ Notes ~~to the Unaudited Condensed Consolidated Financial Statements~~Payable footnote for more information about the Credit Facility.

44
On March 19, 2020, FaceBank Pre-Merger, Merger Sub, Evolution AI Corporation (“EAI”) and Pulse Evolution Corporation (“PEC” and collectively with EAI, Merger Sub and FaceBank Pre-Merger, the “Initial Borrower”) and FB Loan Series I, LLC (“FB Loan”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”), pursuant to which the Initial Borrower sold to FB Loan senior secured promissory notes in an aggregate principal amount of ~~$10,050,000~~$10.1 million (the “Senior Notes”). The Company received proceeds of $7.4 million, net of an original issue discount of ~~$2.65~~$2.7 million. In connection with the FB Loan, FaceBank Pre-Merger, fuboTV Pre-Merger and certain of their respective subsidiaries granted a lien on substantially of their assets to secure the obligations under the Senior Notes. ~~See Note 8 of the Notes to the Unaudited Condensed Consolidated Financial Statements for more information about~~The Company made a $7.5 million payment on the Note Purchase ~~Agreement.~~Agreement on May 28, 2020 and paid the remaining balance of $2.6 million on July 3, 2020.

Prior to the Merger, fuboTV Pre-Merger and its subsidiaries were party to a Credit and Guaranty Agreement, dated as of April 6, 2018 (the “AMC Agreement”), with AMC Networks Ventures LLC as lender, administrative agent and collateral agent (“AMC Networks Ventures”). fuboTV Pre-Merger previously granted AMC Networks Ventures a lien on substantially all of its assets to secure its obligations thereunder. The AMC Agreement survived the Merger and, as of the Effective Time, there was ~~$24.9~~$23.8 million outstanding under the AMC ~~Agreement, net of debt issuance costs.~~Agreement. In connection with the Merger, ~~FaceBank~~the Company guaranteed the obligations of fuboTV Pre-Merger under the AMC Agreement on an unsecured basis. The liens of AMC Networks Ventures on the assets of fuboTV Pre-Merger are senior to the liens in favor of FB Loan and ~~FaceBank~~the Company securing the Senior Notes.

Nature of Business

The Company is a leading digital entertainment company, combining fuboTV Pre-Merger’s direct-to-consumer live TV streaming, or vMVPD, platform with FaceBank Pre-Merger’s technology-driven IP in sports, movies and live performances. We expect that this business combination will create a content delivery platform for traditional and future-form IP. We plan to leverage ~~FaceBank’~~FaceBank Pre-Merger’s IP sharing relationships with leading celebrities and other digital technologies to enhance its already robust sports and entertainment offerings.

Since the Merger, while we continue our previous business operations, we are principally focused on offering consumers a leading live TV streaming platform for sports, news and entertainment through fuboTV. ~~fuboTV~~The Company’s revenues are almost entirely derived from the sale of subscription services and ~~advertising~~the sale of advertisements in the United States, though ~~fuboTV~~the Company has started to assess expansion opportunities into international markets, with operations in Canada and the launch in late 2018 of its first ex-North America offering of streaming entertainment, to consumers in Spain.

Our subscription-based services are offered to consumers who can sign-up for accounts at https://fubo.tv, through which we provide basic plans with the flexibility for consumers to purchase the add-ons and features best suited for them. Besides the website, consumers can also sign-up via some TV-connected devices. The fuboTV platform provides, what we believe to be, a superior viewer experience, with a broad suite of unique features and personalization tools such as multi-channel viewing capabilities, favorites lists and a dynamic recommendation engine as well as 4K streaming and Cloud DVR offerings.

Corporate Information
Our headquarters are located at 1330 Avenue of the Americas, New York, NY 10019, and our telephone number is (212) 672-0055. You can access our websites, including historical financial information pertaining to fuboTV Pre-Merger, at https://fubo.tv, https://ir.fubo.tv, https://facebankgroup.com and https://ir.facebankgroup.com. Information contained on our websites is not part of this Quarterly Report on Form 10-Q and is not incorporated by reference in this Quarterly Report on Form 10-Q.

Components of Results of Operations
Revenues, net
Subscription
Subscription revenues consist primarily of subscription plans sold through the Company’s website and third-party app stores.
2745
Advertisements
Advertisement revenue consist primarily of fees charged to advertisers who want to display ads (‘impressions”) within the streamed content.
Software licenses, net
Software license revenue consists of revenue generated from the sale of software licenses at one of our subsidiaries, Nexway eCommerce Solutions.
Other
Other revenue consists of a contract to sub-license rights to broadcast certain international sporting events to a third party.
Subscriber Related Expenses
Subscriber related expenses consist primarily of affiliate distribution rights and other distribution costs related to content streaming.
Broadcasting and Transmission
Broadcasting and transmission expenses consist primarily of the cost to acquire a signal, transcode, store, and retransmit it to the subscribers.
Sales and Marketing
Sales and marketing expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, agency costs, advertising campaigns and branding initiatives.
Technology and Development
Technology and development expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, technical services, software expenses, and hosting expenses.
General and Administrative
General and administrative expenses consist primarily of payroll and related costs, benefits, rent and utilities, stock-based compensation, corporate insurance, office expenses, professional fees, as well as travel, meals, and entertainment costs.
Depreciation and amortization
Depreciation and amortization expense includes depreciation of fixed assets and amortization of finite-lived intangible assets.
Other income/(expense)
Other income/(expense) primarily consists of issuance gains/losses and the change in fair value of financial instruments, interest expense and financing costs on our outstanding borrowings, unrealized gains/losses on equity method investments, and the loss recorded on the deconsolidation of a subsidiary.
46
Income tax benefit
The Company’s deferred tax liability and income tax benefit relates to our amortizable of finite-lived intangible assets.

Results of Operations for the three and six months ended ~~March 31,~~June 30, 2020 and 2019 (in thousands):

Three Months Ended March 31,
2020 2019

Revenues
Revenues $ 7,295 $ -
Total Revenues

Operating Expenses
General and administrative 20,203
1,037

Amortization of intangible assets 5,217 5,153
Depreciation 3 5
Total Operating Expenses 25,423 6,195
Change in fair value of subsidiary warrant liability (15 ) 2,477
Change in fair value of warrant liability (366 ) -
Change in fair value of shares settled liability (180 ) -
Change in fair value of derivative liability 297 128
Interest expense (2,581 ) (446 )
Gain on deconsolidation of Nexway 39,249 -
Loss on issuance of convertible notes, bonds and warrants (24,053 ) -
Other expense (436 ) -
Total Other Income 11,915 2,159
Loss before income taxes (6,213 ) (4,036 )
Income tax benefit (1,038 ) (1,169 )
Net loss $ (5,175 ) $ (2,867 )

Three Months Ended
June 30,

Six Months Ended
June 30,

2020

2019

2020

2019

Revenues, net
Subscriptions $ 39,511 $ — $ 39,511 $ —
Advertisements 4,323 — 4,323 $ —
Software licenses, net — — 7,295 $ —
Other 338 — 338 —

Total Revenues $ 44,172 $ — $ 51,467 $ —

Operating expenses:
Subscriber related expenses 53,087 — 53,087 —
Broadcasting and transmission 9,492 — 9,492 —
Sales and marketing 7,577
111
11,256 324
Technology and development 9,551 — 9,551 —
General and administrative 17,338
693
33,862 1,517
Depreciation and amortization 14,417 5,158 19,637 10,316

Total operating expenses 111,462 5,962 136,885 12,157

Operating loss
(67,290
) (5,962 ) (85,418 ) (12,157 )

Other income (expense):
Interest expense and financing costs
(13,325
) (454 ) (15,906 ) (900 )
Loss on deconsolidation of Nexway — — (11,919 ) —
Loss on issuance of notes, bonds and warrants (26,753 ) — (50,806 ) —
Change in fair value of warrant liability 4,966 — 4,600 —
Change in fair value of subsidiary warranty liability 18 1,124
3
3,601
Change in fair value of shares settled liability
(1,485
) —
(1,665
) —
Change in fair value of derivative liability (823 ) 890 (526 ) 1,018
Change in fair value of Panda interests (148 ) — (148 ) —
Unrealized gain on equity method investment 2,614 — 2,614 —
Other expense (1,010 ) — (1,446 ) —

Total other income (expense) (35,946 ) 1,560 (75,199 ) 3,719

Loss before income taxes (103,236 ) (4,402 )
(160,617
) (8,438 )
Income tax benefit 3,481 1,037 4,519 2,206

Net loss $ (99,755 ) $ (3,365 ) $ (156,098 ) $ (6,232 )
Subsequent to June 30, 2019, the Company acquired Facebank AG, Nexway and fuboTV Pre-Merger. The results of our operations for the three and six months ended June 30, 2020 include the results of operations of those entities and also include the effects of the deconsolidation of Nexway as of March 31, 2020. Because of this, the results of operations for the three and six months ended June 30, 2020 are not comparable to the results of operations for the three and six months ended June 30, 2019.
Revenue, net

~~Revenue~~Three Months Ended June 30, 2020 and 2019

During the three months ended ~~March 31,~~June 30, 2020, we recognized revenues of $44.2 million, primarily related to $39.5 million of subscription revenue, $4.3 million of advertising revenue and $0.3 million in other revenue. These revenues were generated entirely by fuboTV post-Merger which occurred on April 1, 2020 and there are no comparable results in the prior year.
47
Six Months Ended June 30, 2020 and 2019
During the six months ended June 30, 2020, we recognized revenues of $51.5 million, primarily related to $39.5 million of subscription revenue and $4.3 million of advertising revenue in connection with the second quarter acquisition of fuboTV Pre-Merger. These revenues were generated entirely by fuboTV post-Merger which occurred on April 1, 2020 and there are no comparable results in the prior year. In addition, we generated $7.3 ~~million. The revenues recognized are~~million related to the sale of software licenses from our ~~software licenses.~~ acquisition of Facebank AG.
Subscriber related expenses
Three and Six Months Ended June 30, 2020 and 2019
During the three and six months ended June 30, 2020, we recognized subscriber related expenses of $53.1 million due to affiliate distribution rights and other distribution costs in connection with the streaming revenue generated from the Merger on April 1, 2020.
There were no ~~revenues~~subscriber related expenses recognized during the three and six months ended ~~March 31,~~June 30, 2019.

~~General~~Broadcasting and ~~Administrative~~transmission
Three and Six Months Ended June 30, 2020 and 2019
During the three and six months ended June 30, 2020, we recognized broadcasting and transmission expenses of $9.5 million primarily related to transmissions of our services in connection with the streaming revenue generated from the Merger on April 1, 2020.
There were no broadcasting and transmission expenses recognized during the three and six months ended June 30, 2019.
Sales and marketing
Three Months Ended June 30, 2020 and 2019

During the three months ended ~~March 31,~~June 30, 2020, we recognized sales and marketing expenses of $7.6 million as compared to $0.1 million during the three months ended June 30, 2019. The increase in sales and marketing expenses were incurred to acquire new customers to our streaming platform after the Merger on April 1, 2020.
Six Months Ended June 30, 2020 and 2019
During the six months ended June 30, 2020, we recognized sales and marketing expenses of $11.3 million as compared to $0.3 million during the six months ended June 30, 2019. The increase of $11.0 million is primarily related to the $7.5 million of sales and marketing expenses incurred to acquire new customers to our streaming platform after the Merger on April 1, 2020. The remaining increase in sales and marketing expenses were related to the costs incurred to acquire new customers of Nexway resulting from our 2019 acquisitions of Facebank AG and Nexway.
Technology and development
Three and Six Months Ended June 30, 2020 and 2019
During the three and six months ended June 30, 2020, we recognized technology and development expenses of $9.6 million in connection with the development of our streaming platform after the Merger on April 1, 2020.
There were no technology and development expenses recognized during the three and six months ended June 30, 2019.
General and Administrative
Three Months Ended June 30, 2020 and 2019
During the three months ended June 30, 2020, general and administrative expenses totaled ~~$20.2~~$17.3 million, compared to ~~$1.0~~$0.7 million for the three months ended ~~March 31,~~June 30, 2019. The increase of ~~$19.2~~$16.6 million iswas primarily related to $8.4 million of incremental general and administrative expenses as a result of the acquisition of fuboTV Pre-Merger and $6.8 million of professional services due to additional financing and acquisition activities.
48
Six Months Ended June 30, 2020 and 2019
During the six months ended June 30, 2020, general and administrative expenses totaled $33.9 million, compared to $1.5 million for the six months ended June 30, 2019. The increase of $32.4 million was primarily related to $9.2 million compensation expenses ~~$3.6 million marketing and advertising~~ and $6.2 million other general and administrative expenses resulting from our 2019 acquisitions of Facebank AG and Nexway. In addition, we incurred an additional $8.4 million of incremental general and administrative expenses as a result of the acquisition of fuboTV Pre-Merger and $6.8 million of professional services due to additional financing and acquisition activities.
Depreciation and amortization

~~Depreciation~~Three Months Ended June 30, 2020 and ~~Amortization~~2019
During the three months ended ~~March 31,~~June 30, 2020, we recognized depreciation and amortization expenses ~~totaled $5.2~~of $14.4 million compared to $5.2 million during the three months ended ~~March 31,~~June 30, 2019. The increase of $9.2 million is primarily related to the amortization expenses recognized on the intangible assets acquired as part of the Merger on April 1, 2020 of $9.1 million.
Six Months Ended June 30, 2020 and 2019
During the six months ended June 30, 2020, we recognized depreciation and amortization expenses of $19.6 million compared to $10.3 million during the six months ended June 30, 2019. The increase of $9.3 million is primarily related to $9.1 of amortization expense recorded for the intangible assets acquired in connection with the Merger on April 1, 2020.
Other Income (Expense)

~~Other Income (Expense)~~Three Months Ended June 30, 2020 and 2019

During the three months ended ~~March 31,~~June 30, 2020, we recognized ~~$11.9~~$35.9 million of other expense (net), compared to $1.6 million of other income ~~compared to $2.2 million of other income~~(net) during the three months ended ~~March 31,~~June 30, 2019. The ~~$9.8~~$35.9 million ~~increase to~~of other ~~income is~~expense (net) recognized during the three months ended June 30, 2020 was primarily related to ~~$39.2~~a $26.8 million loss on the issuance of warrants and $13.3 million of interest expense on our outstanding borrowings. These expenses were partially offset by a $5.0 million gain in the fair value of warrant liabilities and $2.6 million unrealized gain on ~~deconsolidation~~our equity method investment in Nexway. For the three months ended June 30, 2019, we recognized $1.6 million of ~~Nexway, $0.3~~other income (net) primarily related to $2.0 million ~~for~~of gains from the change in fair value of ~~our derivative liability related to our convertible notes and preferred stock,~~financial instruments, offset by ~~debt discount of $2.6 million related to our convertible notes,~~ $0.4 million ~~for~~of interest expense on our outstanding borrowings. The increase in other expenses are primarily due to the ~~loss~~new financings which resulted in ~~fair value of warrant liability, $0.2 million for the loss in fair value of shares settled liability and $24.1 million of~~ loss on ~~issuance~~issuances of ~~convertible notes, bonds~~financial instruments, and ~~warrants.~~additional interest expenses incurred on outstanding borrowings.
28
~~Income Taxes~~Six Months Ended June 30, 2020 and 2019

During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we recognized an$75.2 million of other expense (net), compared to $3.7 million of other income ~~tax benefit of $1.0 million. The Company’s deferred tax liability and income tax benefit relates to our amortizable intangible assets. The amortization of intangible assets of $1.0 million caused~~(net) during the ~~deferred tax liability to decrease by $1.0 million, which resulted in the recognition of an income tax benefit.~~
~~Net Loss~~
~~During the three~~six months ended ~~March 31,~~June 30, 2019. The $75.2 million of other expense (net) recognized during the six months ended June 30, 2020 ~~we recorded a net loss of $5.2 million, compared~~was primarily related to a net loss of $2.9 million for the three months ended March 31, 2019. The increase in net loss of $2.3 million is primarily due to higher stock-based compensation expense of $9.1 million and a gain of $39.2 million on deconsolidation of Nexway, $24.1$50.8 million loss on issuance of convertible notes, bonds and warrants, ~~debt discount~~a $15.9 million of interest expense on our outstanding borrowings, and an $11.9 million loss on the deconsolidation of Nexway. These expenses were partially offset by a $4.6 million gain in the fair value of warrant liabilities and $2.6 million unrealized gain on our equity method investment in Nexway. For the six months ended June 30, 2019, we recognized $3.7 million of other income (net) related to ~~our convertible notes~~a $3.6 million gain in fair value of subsidiary warrant liability and ~~net revenue~~$1.0 million gain in the fair value of ~~$7.3~~derivative liabilities, partially offset by $0.9 million of interest expense. The increase in other expenses are primarily due new financings which resulted in loss on issuances of financial instruments, additional interest expenses incurred on outstanding borrowings and the loss on the deconsolidation of Nexway.
Income tax benefit
Three Months Ended June 30, 2020 and 2019
During the three months ended June 30, 2020, we recognized ~~from~~an income tax benefit of $3.5 million, compared to $1.0 million during the ~~sale~~three months ended June 30, 2019. The increase in income tax benefits for the three months ended June 30, 2020 was related to the amortization of ~~our software licenses.~~the deferred tax liability established in connection with the Merger with fuboTV Pre-Merger on April 1, 2020.
49
Six Months Ended June 30, 2020 and 2019
During the six months ended June 30, 2020, we recognized an income tax benefit of $4.5 million, compared to $2.2 million during the six months ended June 30, 2019. The increase for the six months ended June 30, 2020 was related to the amortization of the deferred tax liability established in connection with the Merger with fuboTV Pre-Merger on April 1, 2020.

Liquidity and Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

The Company had cash and cash equivalents of ~~$0.1~~$7.4 million, a working capital deficiency of ~~$31.4~~$258.3 million and an accumulated deficit of ~~$140.1~~$210.5 million as at ~~March 31,~~June 30, 2020. The Company incurred a ~~$5.2~~$156.1 million net loss for the ~~three~~six months ended ~~March 31,~~June 30, 2020. The Company expects to continue incurring losses in the foreseeable future and will need to raise additional capital to fund its operations, meet its obligations in the ordinary course of business and execute its longer-term business plan. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date that those financial statements are issued. The condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company’s future capital requirements and the adequacy of its available funds will depend on many factors, including its ability to successfully attract and retain subscribers, develop new technologies that can compete in a rapidly changing market with many competitors and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings.

Management believes that the Company has access to capital resources through potential issuances of debt and equity securities. The ability of the Company to continue as a going concern is dependent on the Company’s ability to execute its strategy and raise additional funds. Management is currently seeking additional funds, primarily through the issuance of equity securities for cash, to operate its business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in the case of an equity financing. In addition to the foregoing, based on the Company’s current assessment, the Company does not expect any material impact on its long-term development timeline and its liquidity due to the worldwide spread of a novel strain of coronavirus (“COVID 19”). However, the Company is continuing to assess the effect on its operations by monitoring the spread of COVID-19 and the actions implemented to combat the virus throughout the world.Given the daily evolution of the COVID-19 outbreak and the global response to curb its spread, COVID-19 may affect the Company’s results of operations, financial condition or liquidity.
29
Cash Flows (in thousands)

Three Months Ended March 31,
2020 2019
Net Cash Used in Operating Activities $ (7,478 ) $ (582 )
Net Cash Used in Investing Activities (2,421 ) (801 )
Net Cash Provided by Financing Activities 2,356 1,658
Net Change in Cash $ (7,543 ) $ 275
Six Months Ended June 30,
2020 2019
Net cash used in operating activities (42,314 ) (1,548 )
Net cash used in investing activities
(697
) (374 )
Net cash provided by financing activities
44,073
2,042
Net increase in cash and cash equivalents
1,062
120

50
Operating Activities

For the ~~three~~six months ended ~~March 31,~~June 30, 2020, net cash used in operating activities was ~~$9.9~~$42.3 million, which consisted of our net loss of ~~$5.2~~$156.1 million, adjusted for non-cash ~~expenses~~movements of ~~$5.7 million, including $5.2~~$102.0 million. The non-cash movements included $50.8 million of ~~amortization expenses related to our intangible assets, loss~~losses on issuance of convertible notes, bonds and warrants, $19.6 million of ~~$24.1~~depreciation and amortization expenses primarily related to intangible assets, $17.8 million ~~$9.1~~ stock-based compensation, ~~$1.7~~$11.0 million of amortization of ~~the~~ debt ~~discount, $0.4~~discounts, $8.6 million loss on deconsolidation of Nexway partially offset by $4.6 million of change in fair value of warrant liability ~~$0.2~~and $4.5 million of ~~change~~deferred income tax benefits. Changes in ~~fair value~~operating assets and liabilities resulted in cash inflows of ~~shares settled liability~~approximately $11.8 million, primarily due to a net increase in accounts payable, accrued expenses and ~~$0.1~~other current liabilities of $11.7 million due to timing of payments.
For the six months ended June 30, 2019, net cash used in operating activities was $1.5 million, which consisted of our net loss of $6.2 million, adjusted for non-cash movements of $4.3 million. The non-cash movements included $10.3 million of depreciation and amortization expenses primarily related to intangible assets, $0.5 million of amortization of debt discounts and $0.3 million of accrued interest expense related to our ~~convertible~~ notes payable, partially offset by ~~$0.3~~$4.6 million related to the change in fair value of our ~~subsidiary warrant liability~~financial instruments and ~~our derivative liability, $42.6 million on deconsolidation of Nexway and $1.0~~$2.2 million of deferred income tax ~~benefit.~~benefits. Changes in operating assets and liabilities resulted in cash inflows of approximately $0.4 million, primarily consisted of increases in accounts payable and accrued expenses of ~~$1.0~~$0.5 million ~~offset by a decrease in accounts receivable~~due to timing of ~~$0.9 million.~~payments.

For the three months ended March 31, 2019, net cash used in operating activities was $0.6 million, which consisted of our net loss of $2.9 million, adjusted for non-cash expenses of $1.8 million including, $5.2 million of depreciation and amortization expenses, $0.2 million of amortization of the debt discount and $0.1 million of interest expense related to our notes payable, offset by $2.5 million related to the change in fair value of our warrant liability, $1.2 million of income tax benefit, and the increase in accounts payable and accrued expenses of $0.5 million.
Investing Activities

~~In March~~For the six months ended June 30, 2020, ~~we advanced $2.4~~net cash used in investing activities was $0.7 million, which consisted of a $10.0 million advance to fuboTV ~~in accordance with~~Pre-Merger, offset by net cash paid of $9.4 million for the ~~Merger Agreement.~~acquisition of fuboTV Pre-Merger and $0.1 million of capital expenditures.

For the ~~three~~six months ended ~~March 31,~~June 30, 2019, net cash used in investing activities was ~~$0.8~~$0.4 million, which primarily consisted of our $1.0 million payment for our investment in Panda Productions (HK) Limited (“Panda”), offset by ~~$0.2~~$0.7 million received from accredited investors for an interest in Panda.
Financing Activities
For the ~~three~~six months ended ~~March 31,~~June 30, 2020, net cash provided by financing activities was ~~$2.4~~$44.1 million. The net cash provided is primarily related to ~~$2.3~~$28.9 million of proceeds received from the sale of our common stock, ~~$0.2~~$23.6 million of proceeds received in connection with short-term and long-term borrowings and $3.0 million of proceeds received from the issuance of ~~our Series D Preferred Stock, $78,000 received as an advance from a related party, $0.9 million of~~convertible notes. These proceeds ~~received from the issuance of a convertible note,~~were partially offset by repayments of ~~$0.6~~$7.5 million in connection with the Note Purchase Agreement, $1.3 million in connection with our loan with AMC Networks Ventures, LLC, $1.1 million in connection with convertible notes ~~repayments of $0.3~~and $0.9 million ~~to related parties and redemption of $0.3 million of Series D Preferred Stock.~~in connection with our Revenue Participation Agreement.

For the ~~three~~six months ended ~~March 31,~~June 30, 2019, net cash provided by financing activities was ~~$1.7~~$2.0 million. The net cash provided is primarily related to ~~$1.8~~$2.2 million of proceeds received from the sale of our common stock ~~$65,000~~and warrants and 0.4 million of proceeds ~~received~~ from ~~the issuance of our subsidiary’s common stock,~~related parties. These proceeds were partially offset by repayments of ~~$0.2~~$0.5 million of our convertible notes.

Off-Balance Sheet Arrangements

As of ~~March 31,~~June 30, 2020, there were no off-balance sheet arrangements.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include revenue recognition, allocating the fair value of purchase consideration issued in business acquisitions, investments, depreciable lives of property and equipment, analysis of impairments of recorded goodwill and other long-term assets, accruals for potential liabilities, assumptions made in valuing derivative liabilities, assumptions made when estimating the fair value of equity instruments issued in share-based payment arrangements and deferred income taxes and related valuation allowance.

3051
There have been no material changes to our critical accounting policies from those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Annual Report.
Revenue from Customers
We recognize revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers (the
“revenue standard”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service.
The following five steps are applied to achieve that core principle:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when the company satisfies a performance obligation
Subscription revenue is recognized at a point in time when we satisfy a performance obligation by transferring control of the promised services to the customers. Advertising revenue is recognized at a point in time when we satisfy a performance obligation by transferring control of the promised services to the advertiser, which generally is when the advertisement has been displayed.

Recently Issued Accounting Pronouncements

See Note 3 in the accompanying condensed consolidated financial statements for a discussion of recent accounting policies.
52

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not required for smaller reporting companies.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, which are designed to ensure that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision of and with the participation of our management, including the Company’s Chief Executive Officer and Chief Financial Officer, , we evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~March 31,~~June 30, 2020. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, because of the material weaknesses in our internal control over financial reporting described in our ~~December 31, 2019~~ Annual Report on Form ~~10-K,~~10-K/A for the year ended December 31, 2019, as filed with the SEC on August 10, 2020, our disclosure controls and procedures were not effective.

Changes in Internal Control over Financial Reporting

~~There~~For the fiscal year ended December 31, 2019, we have ~~been no changes~~identified material weaknesses in our internal control over financial ~~reporting that occurred during~~reporting.
Subsequent to the ~~three months ended March 31, 2020 that have materially affected, or are reasonably likely~~Merger, the Company has taken steps to ~~materially affect, our~~address the internal control ~~over financial reporting.~~deficiencies that contributed to the material weaknesses, including:

● transitioning responsibility over the accounting function to the finance personnel of fuboTV Pre-Merger, including individuals with prior experience working for finance departments of public companies;
● hiring additional experienced finance and accounting personnel with technical accounting experience, supplemented by third-party resources;
● documenting and formally assessing our accounting and financial reporting policies and procedures, and implementing segregation of duties in key functions;
● assessing significant accounting transactions and other technical accounting and financial reporting issues, preparing accounting memoranda addressing these issues and maintaining these memoranda in our corporate records timely;
● improving the compilation processes, documentation and monitoring of our critical accounting estimates; and
● implementing processes for creating an effective and timely close process.
The implementation of these measures is ongoing and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles. In addition, The COVID-19 pandemic could negatively affect our internal controls over financial reporting, including our ongoing process of remediating the material weakness in our disclosure control and procedures, as a portion of our workforce is required to work from home and standard processes are disrupted. New processes, procedures, and controls which may increase the overall inherent risk in the business, may be required to ensure an effective control environment.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are and may be involved in various legal proceedings arising from the normal course of business activities. Although the results of litigation and claims cannot be predicted with certainty, currently, in our opinion, the likelihood of any material adverse impact on our consolidated results of operations, cash flows or our financial position for any such litigation or claims is deemed to be remote. Regardless of the outcome, litigation can have an adverse impact on us because of defense costs, diversion of management resources and other factors.

Except for income tax contingencies (commencing April 1, 2009), the Company records accruals for contingencies to the extent that management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred.Scott Meide vs. Pulse Evolution Corporation et. al.

On August 27, 2018, plaintiff Scott Meide filed a ~~pro se (unrepresented by counsel)~~ complaint in the United States District Court for the Middle District of Florida, Jacksonville Division against PEC, now ~~a subsidiary~~one of ~~the Company,~~our majority-owned subsidiaries, naming its former officers, among others, as defendants. The ~~Company’s position~~plaintiff’s claims are based on three investments: (i) the purchase of 750,000 restricted shares from PEC for the amount of $300,000 on July 18, 2014; (ii) the purchase of 800,000 shares of PEC from defendant Gregory Centineo in July 2015; and (iii) an investment in Evolution AI Corporation in 2018 in the amount of $75,000. Until recently, Mr. Meide was proceeding pro se. Although he has pled multiple claims, the crux of Mr. Meide’s claim, at least as pled in the Second Amended Complaint, which is the operative complaint, is that he was fraudulently induced into making all three investments. The complaint contains a claim for federal securities fraud which forms the ~~pro se~~only basis for federal jurisdiction. All of the defendants have moved to dismiss the Second Amended Complaint ~~is defamatory, without merit~~on various grounds, including, but not limited to, the ground that the plaintiff Mr. Meide lacks standing to bring the claims since the purchases of securities were made by Jacksonville Injury Center, LLC, rather than Mr. Meide in ~~fact or law~~his individual capacity.
On June 29, 2020, an attorney entered an appearance for Mr. Meide and ~~represents an extortive attempt to coerce payment under threat of reputational harm. The Company’s subsidiaries and affiliates~~ filed (i) a motion to ~~dismiss on September 25, 2018. On July 24, 2019, all counts of~~substitute Jacksonville Injury Center, LLC as the ~~complaint were dismissed in favor of the Company’s subsidiaries~~plaintiff and ~~affiliates. Mr. Meide was afforded the opportunity~~(ii) a motion for leave to file an amended complaint. All of the defendants have filed oppositions to the motion to substitute and motion for leave to amend. The proposed new complaint ~~for~~continues to allege fraud, but also purports to plead a ~~portion~~shareholder derivative lawsuit in connection with a claim of ~~his claims, and such amendment was filed on September 24, 2019. On October 6, 2019, Judge Marcia Morales Howard ordered Mr. Meide’s amended~~an improper transfer of assets to the Company. The new proposed complaint ~~stricken, describing~~also names the ~~filing~~Company as insufficient and having failed to identify facts necessary to support its allegations, and offering Mr. Meide “one final opportunity to properly state his claims” with an amended complaint. Mr. Meide’s third attempt to submit a ~~sufficient complaint was filed on November 1,~~new defendant. Discovery in the matter has been stayed since July of 2019. The ~~Company’s subsidiaries and affiliates plan~~matter is set for trial in September of 2020, but we do not expect the trial to ~~reaffirm their~~go forward given the pending motions to dismiss and stay of discovery. We believe the lawsuit has no merit, and we intend to vigorously defend our position.
53
Andrew Kriss and Eric Lerner vs. FaceBank Group, Inc. et. al.
On June 8, 2020, Andrew Kriss and Eric Lerner (the “Plaintiffs”) filed a Summons with Notice in the Supreme Court of the State of New York, Nassau County naming as defendants FaceBank Group, Inc., John Textor and Frank Patterson, among others (Index No. 605474/20). The Notice lists claims for breach of express contract and implied duties, fraud, aiding and abetting fraud, fraud in the inducement, fraudulent misrepresentation, fraudulent concealment, fraudulent conveyance, unjust enrichment and declaratory relief, and states that the Plaintiffs seek monetary damages in an amount to be proven at trial, but not less than six million dollars ($6,000,000) on the breach of contract claim with interest from the date of the alleged breach on September 9, 2014. As of August 13, 2020, the Company believes Mr. Meide’s final amended complaint will also be dismissed. The Company plans to the ask the court for an award of sanctions and attorney fees in connection with Mr. Meide’s filing of a frivolous lawsuit.had not been served.

Item 1A. Risk Factors

~~Not~~On April 1, 2020, we consummated the acquisition of fuboTV Inc., a Delaware corporation by the merger of fuboTV Acquisition Corp., our wholly-owned subsidiary, with and into fuboTV Inc., a Delaware corporation which we refer to as the “Merger.” In this Item 1A, unless the context otherwise requires, “we,” “us,” “our,” and the “Company” refers to the combined company post-Merger – fuboTV Inc., or fuboTV, and its subsidiaries, including fuboTV Sub. “FaceBank Pre-Merger” refers to FaceBank Group, Inc. prior to the Merger and its subsidiaries prior to the closing of the Merger, and “fuboTV Pre-Merger” refers to fuboTV Inc., a Delaware corporation and its subsidiaries prior to the Merger.
We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.
We have incurred losses since inception. If our revenue and gross profit do not grow at a greater rate than our operating expenses, we will not be able to achieve and maintain profitability. A number of our operating expenses, including expenses related to streaming content obligations, are fixed. 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. Additionally, we may encounter unforeseen operating or legal expenses, difficulties, complications, delays and other factors 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.
Our auditors have indicated that there is a substantial doubt about our ability to continue as a going concern.
To date, we have not been profitable and have incurred significant losses and cash flow deficits, and we anticipate that we will continue to report losses and negative cash flow. As a result of these net losses and cash flow deficits and other factors, our management has determined that there is a substantial doubt about our ability to continue as a going concern over the next twelve months.
Additionally, both FaceBank Pre-Merger’s current and former independent registered public accountants issued audit opinions – FaceBank Pre-Merger’s current accountants with respect to FaceBank Pre-Merger’s consolidated financial statements for the year ended December 31, 2019, and FaceBank Pre-Merger’s former firm with respect to FaceBank Pre-Merger’s consolidated financial statements for the year ended December 31, 2018 – indicating that there is substantial doubt about FaceBank Pre-Merger’s ability to continue as a going concern. FaceBank Pre-Merger’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Additionally, fuboTV Pre-Merger’s accountants with respect to fuboTV Pre-Merger’s consolidated financial statements for the year ended December 31, 2019 indicated there was substantial doubt about fuboTV Pre-Merger’s ability to continue as a going concern.
The reaction of investors to the inclusion of a going concern statement by FaceBank Pre-Merger’s independent registered public accountants and our management’s determination that we may be unable to continue as a going concern could materially adversely affect the price of our common stock. Our ability to continue as a going concern is dependent upon generating sufficient cash flow from operations and obtaining additional capital and financing. If our ability to generate cash flow from operations is delayed or reduced, including as a result of the effects of the COVID-19 pandemic, and if we are unable to raise additional funding from other sources, we may be unable to continue in business.
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We will 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.
We intend to continue to make significant investments to support planned business growth and may require additional funds to respond to business challenges, including the need to enhance our platform, improve our operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, we will need to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, 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. 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. If we were to violate the restrictive covenants, we could incur penalties, increased expenses and an acceleration of the payment terms of our outstanding debt, which could in turn harm our business.
We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.
The restatement of our previously issued financial statements could expose us to risks that could materially adversely affect our financial position, results of operations and cash flows.
We have restated our previously-issued financial statements for the year ended December 31, 2019 and quarter ended March 31, 2020. These restatements, and the remediation efforts we intend to undertake could expose us to a number of risks that could materially adversely affect our financial position, results of operations and cash flows.
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TV streaming is highly competitive and many companies, including large technology companies, TV brands, and service operators, are actively focusing on this industry. If we fail to differentiate ourselves and compete successfully with these companies, it will be difficult for us to attract subscribers and our business will be harmed.
TV streaming is increasingly competitive and global. Our success depends in part on attracting and retaining subscribers on, and effective monetization of, our platform. To attract and retain subscribers, we need to be able to respond efficiently to changes in consumer tastes and preferences and continue to increase the type and number of content offerings. Effective monetization requires us to continue to update the features and functionality of our streaming platform for subscribers and advertisers.
Companies such as Netflix, Amazon.com, Dish Network, Apple Inc. and Google Inc. 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 devices in order to promote their other products and services making it harder for us to acquire new subscribers and increase hours streamed. 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.
In addition, many TV brands, such as LG, Samsung Electronics Co., Ltd. and VIZIO, Inc., offer their own TV streaming solutions within their TVs. Other devices, such as Microsoft’s Xbox and Sony’s PlayStation game consoles and many DVD and Blu-ray players, also incorporate TV streaming functionality. Similarly, some service operators, such as Comcast and Cablevision, offer TV streaming applications as part of their cable service plans and can leverage their existing consumer bases, installation networks, broadband delivery networks and name recognition to gain traction in the TV streaming market.
We expect competition in TV streaming from the large technology companies and service operators described above, as well as new and growing companies, to increase in the future. This increased competition could result in pricing pressure, lower revenue and gross profit or the failure of our platform to gain or maintain broad market acceptance. To remain competitive, we need to continuously invest in product development and marketing. We may not have sufficient resources to continue to make the investments needed to maintain our competitive position. 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. 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. 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. New entrants may enter the TV streaming market with unique service offerings or approaches to providing video. In addition, our competitors may enter into business combinations or alliances that strengthen their competitive positions. Increased competition could reduce our market share, revenue and operating margins, increase our operating costs, harm our competitive position and otherwise harm our business.
The long-term and fixed cost nature of certain of our content commitments may limit our operating flexibility and could adversely affect our liquidity and results of operations.
In connection with licensing streaming content, we typically enter into multi-year agreements with content providers. These agreements have sometimes required us to pay minimum license fees for content that are not tied to subscriber usage or the size of our subscriber base. Given the multiple-year duration and sometimes fixed cost nature of content commitments, if subscriber acquisition and retention do not meet our expectations, our margins may be adversely impacted, and we may not be in a position to make the minimum guarantee payments required under certain content licenses. We have already failed to make minimum guarantee payments to certain key programmers and may not be in a position to make similar payments in the future. If we do not make these payments, then we may lose access to such content, which in turn may further depress subscriber acquisition or retention, cause other programmers to exercise termination rights due to the content mix available through our service, or impact our ability to obtain content from other programmers. 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. Additionally, we are currently in breach under certain of our content provider agreements as a result of our unwillingness to make certain fixed fee payments required pursuant to such agreements. We are currently negotiating the terms of these agreements, and in particular, fixed fee payments required thereunder, but if we are unsuccessful in renegotiating these agreements or the payments required thereunder, our partners could terminate these agreements and require us to make these fixed fee payments in their entirety, which could adversely affect our business, results of operations and financial condition.
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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 accelerated payment requirements of certain agreements. In addition, the long-term and fixed cost nature of certain of our content commitments may limit our flexibility in planning for, or reacting to changes in our business and the market segments in which we operate. If we license and/or produce content that is not favorably received by consumers in a territory, or is unable to be shown in a territory, acquisition and retention may be adversely impacted and given the long-term and fixed cost nature of certain of our content commitments, we may not be able to adjust our content offering quickly and our results of operation may be adversely impacted.
Our revenue and gross profit are subject to seasonality, and if subscriber behavior during certain seasons falls below our expectations, our business may be harmed.
Seasonal variations in subscriber and marketing behavior significantly affect our business. We have previously experienced, and expect to continue to experience, effects of seasonal trends in subscriber behavior due to the seasonal nature of sports. Additionally, increased Internet usage and sales of streaming service subscriptions during the fourth quarter of each calendar year affect our business. We also may experience higher advertising sales during the fourth quarter of each calendar year due to greater advertiser demand during the holiday season, but also incur greater marketing expenses as we attempt to attract new subscribers to our platform. In addition, expenditures by advertisers tend to be cyclical and are often discretionary in nature, reflecting overall economic conditions, the economic prospects of specific advertisers or industries, budgeting constraints and buying patterns, and a variety of other factors, many of which are outside our control.
Given the seasonal nature of our subscriptions, accurate forecasting is critical to our operations. We anticipate that this seasonal impact on revenue and gross profit 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. A substantial portion of our expenses are personnel-related and include salaries, stock-based compensation and benefits that are not seasonal in nature. Accordingly, in the event of a revenue shortfall, we would be unable to mitigate the negative impact on margins, at least in the short term, and our business would be harmed.
The recent COVID-19 pandemic and the global attempt to contain it may harm our industry, business, results of operations and ability to raise additional capital.
The global spread of COVID-19 and the various attempts to contain it have created significant volatility, uncertainty and economic disruption. In response to government mandates, health care advisories and employee concerns, we have altered certain aspects of our operations. Our workforce has had to spend a significant amount of time working from home, which may impact their productivity. Travel has been severely curtailed, and virtually all professional and college sports leagues have cancelled or altered seasons and events. Such limitations caused by the pandemic have also resulted in us seeking previous extensions for our current and periodic filings with the SEC. As a result, our broadcasting partners had and are having to substitute other content in the place of previously scheduled live sporting events. While professional sports are returning in the United States, there is no guarantee that those seasons continue uninterrupted or at all. The potential further delay or cancellation of professional and college sports may cause us to temporarily have less popular content available on our platform, which could negatively impact consumer demand for and subscription retention to our platform and our number of paid subscribers.
The full extent to which the COVID-19 pandemic and the various responses to it impacts our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic; the actions of professional and college sports leagues; the availability and cost to access the capital markets; the effect on our subscribers and subscriber demand for and ability to pay for our platform; disruptions or restrictions on our employees’ ability to work and travel; and interruptions or restrictions related to the provision of streaming services over the internet, including impacts on content delivery networks and streaming quality. During the COVID-19 pandemic, we may not be able to provide the same level of customer service that our subscribers are used to, which could negatively impact their perception of our platform resulting in an increase in cancellations. If we need to access the capital markets, there can be no assurance that financing may be available on attractive terms, if at all. We will continue to actively monitor the issues raised by the COVID-19 pandemic and may take further actions that alter our business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests of our employees, subscribers and shareholders. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our subscribers, or on our financial results.
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If we fail to obtain or maintain popular content, we may fail to retain existing subscribers and attract new subscribers.
We have invested a significant amount of time to cultivate relationships with our content providers; however, such relationships may not continue to grow or yield further financial results. We currently have over 240 streaming channels on our platform in the United States, and we must continuously maintain existing relationships and identify and establish new relationships with content providers to provide popular content. In order to remain competitive, we must consistently meet user demand for popular streaming channels and content. If we are not successful in maintaining channels on our platform that attract and retain a significant number of subscribers, or if we are not able to do so in a cost-effective manner, our business will be harmed.
If our efforts to attract and retain subscribers are not successful, our business will be adversely affected.
We have experienced significant subscriber growth over the past several years. Our ability to continue to attract subscribers will depend in part on our ability to consistently provide our subscribers with compelling content choices and effectively market our platform. Furthermore, the relative service levels, content offerings, pricing and related features of our competitors may adversely impact our ability to attract and retain subscribers. In addition, many of our subscribers rejoin our platform or originate from word-of-mouth advertising from existing subscribers. 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. 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. 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, availability of content is unsatisfactory, competitive services provide a better value or experience and customer service issues are not satisfactorily resolved. We must continually add new subscriptions both to replace canceled subscriptions and to grow our business beyond our current subscription base. While we permit multiple subscribers within the same household to share a single account for non-commercial purposes, if account sharing is abused, our ability to add new subscribers may be hindered and our results of operations may be adversely impacted. If we do not grow as expected, given, in particular, that our content costs are largely fixed in nature and contracted over several years, we may not be able to adjust our expenditures or increase our (per subscriber) revenues commensurate with the lowered growth rate such that our margins, liquidity and results of operation may be adversely impacted. If we are unable to successfully compete with current and new competitors in both retaining our existing subscribers and attracting new subscribers, our business will 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.
Our agreements with distribution partners contain parity obligations which limit our ability to pursue unique partnerships.
Our agreements with distribution partners contain obligations which require us to offer them the same technical features, content, pricing and packages that we make available to our other distribution partners and also require us to provide parity in the marketing of the availability of our application across our distribution partners. These parity obligations may limit our ability to pursue technological innovation or partnerships with individual distribution partners and may limit our capacity to negotiate favourable transactions with different partners or otherwise provide improved products and services. As our technical feature developments progress at varying speeds and at different times with different distribution partners, we currently offer some enhanced technical features on distribution platforms that we do not make available on other distribution platforms, which limits the quality and uniformity of our offering to all consumers across our distribution platforms. 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.
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If we are unable to maintain an adequate supply of ad inventory on our platform, our business may be harmed.
We may fail to attract content providers that generate sufficient 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. The amount, quality and cost of inventory available to us can change at any time. 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.
We operate in a highly competitive industry and we compete for advertising revenue with other Internet streaming platforms and services, as well as traditional media, such as radio, broadcast, cable and satellite TV and satellite and Internet radio. We may not be successful in maintaining or improving our fill-rates or cost per mille (“CPMs”).
Our competitors offer content and other advertising mediums that may be more attractive to advertisers than our TV streaming platform. These competitors are often very large and have more advertising experience and financial resources than we do, which may adversely affect our ability to compete for advertisers and may result in lower revenue and gross profit from advertising. If we are unable to increase our advertising revenue by, among other things, continuing to improve our platform’s data capabilities to further optimize and measure advertisers’ campaigns, increase our advertising inventory and expand our advertising sales team and programmatic capabilities, our business and our growth prospects may be harmed. We may not be able to compete effectively or adapt to any such changes or trends, which would harm our ability to grow our advertising revenue and harm our business.
If the advertisements on our platform are not relevant or not engaging to our subscribers, our growth in active accounts and hours streamed may be adversely impacted.
We have made, and are continuing to make, investments to enable advertisers to deliver relevant advertising content to subscribers on our platform. Existing and prospective advertisers may not be successful in serving ads that lead to and maintain user engagement. Those ads may seem irrelevant, repetitive or overly targeted and intrusive. We are continuously seeking to balance the objectives of our subscribers and advertisers with our desire to provide an optimal user experience, but we may not be successful in achieving a balance that continues to attract and retain subscribers and advertisers. If we do not introduce relevant advertisements or such advertisements are overly intrusive and impede the use of our TV streaming platform, our subscribers may stop using our platform which will harm our business.
We may not be successful at expanding our content to areas outside our current content offering and even if we are able to expand into other content areas and sustain such expansion, we may not be successful in overcoming our reputation as primarily a live sports streaming service.
We currently have a reputation as primarily a live sports streaming service. We are making efforts to expand our content offerings outside live sports streaming, and currently offer a wide selection of news and entertainment content. However, we may not be successful at expanding our content to areas outside our current content offering, or maintaining content from our current content offering, and even if we are able to expand into other content areas and sustain such expansion, we may not be successful in overcoming our reputation as primarily a live sports streaming service.
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Integrating the business of fuboTV Pre-Merger and FaceBank Pre-Merger may be more difficult, costly, or time-consuming than anticipated.
We are still in the process of integrating fuboTV Pre-Merger and FaceBank Pre-Merger. A successful integration of these businesses will depend substantially on our ability to consolidate operations, corporate cultures, systems and procedures and to eliminate redundancies and costs. We may not be able to combine our businesses without encountering difficulties, such as:
● the loss of key employees;
● disruption of operations and business;
● inability to maintain and increase competitive presence;
● possible inconsistencies in standards, control procedures and policies;
● unexpected problems with costs, operations, personnel and technology; and/or
● problems with the assimilation of new operations, sites or personnel, which could divert resources from regular operations.
Additionally, general market and economic conditions may inhibit our successful integration. Achieving the anticipated benefits of the Merger is subject to a number of uncertainties, including whether we integrate our businesses, including our organizational culture, operations, technologies, services and products, in an efficient and effective manner, and general competitive factors in the marketplace. Failure to achieve these anticipated benefits on the anticipated timeframe, or at all, could result in a reduction in the price of our shares as well as in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materially and adversely affect our business, results of operations and financial condition. Additionally, we made fair value estimates of certain assets and liabilities in the Merger. Actual values of these assets and liabilities could differ from our estimates, which could result in our not achieving the anticipated benefits of the acquisition. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.
We may be subject to fines or other penalties imposed by the Internal Revenue Service and other tax authorities.
We are currently delinquent in filing annual tax returns with the Internal Revenue Service and several states. FaceBank Pre-Merger has not filed its federal and state income tax returns for several years. We are in the process of working to remedy this issue by filing these delinquent tax returns. We may be subject to penalties and interest with the tax authorities because of the late tax returns. There can be no assurance that we remedy our delinquent filings sufficiently, and we may face penalties and fees which would adversely affect our operating results and investors’ confidence in our internal operations.
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.
Sales and use, value-added, goods and services, and similar tax laws and rates are complicated and vary greatly by jurisdiction. There is significant uncertainty as to what constitutes sufficient nexus for a state or local jurisdiction to levy taxes, fees, and surcharges for sales made over the internet, as well as whether our subscriptions are subject to tax in various jurisdictions. The vast majority of states have considered or adopted laws that impose tax collection obligations on out-of-state companies. Additionally, the Supreme Court of the United States recently ruled in South Dakota v. Wayfair, Inc. et. al. (Wayfair) that online sellers can be required to collect sales and use tax despite not having a physical presence in the buyer’s state. In response to Wayfair, or otherwise, states or local governments may enforce laws requiring us to calculate, collect, and remit taxes on sales in their jurisdictions. We have not always collected sales and other similar taxes in all jurisdictions in which we are required to, and we are working with our tax advisors to determine our collection obligations in each jurisdiction. We may be obligated to collect and remit sales tax in jurisdictions in which we have not collected and remitted sales tax. A successful assertion by one or more states requiring us to collect taxes where we historically have not or presently do not do so could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest. The imposition by state governments or local governments of sales tax collection obligations on out-of-state sellers could also create additional administrative burdens for us and decrease our future sales, which could adversely affect our business and operating results.
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We are subject to taxation-related risks in multiple jurisdictions.
We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Significant judgment is required in determining our global provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis. While we believe our tax positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be challenged by jurisdictional tax authorities, which may have a significant impact on our global provision for income taxes.
Tax laws are being re-examined and evaluated globally. New laws and interpretations of the law are taken into account for financial statement purposes in the quarter or year that they become applicable. Tax authorities are increasingly scrutinizing the tax positions of companies. If U.S. or other foreign tax authorities change applicable tax laws, our overall liability could increase, and our business, financial condition or results of operations may be adversely impacted.
We might not be able to utilize a significant portion of our net operating loss carryforwards.
As of December 31, 2019, we had available to us federal net operating loss carryforwards, a portion of which will, if not used, expire at various dates. Under legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, as modified by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating losses in tax years beginning after December 31, 2020 is limited. Other limitations may apply for ~~smaller~~state tax purposes.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards to offset its post-change income may be limited. We have not determined whether we have experienced Section 382 ownership changes in the past, and therefore a portion of our net operating loss carryforwards may be subject to an annual limitation under Section 382 of the Code. In addition, we may experience ownership changes in the future as a result of subsequent changes in our stock ownership, including this offering, 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.
If we fail to comply with the reporting ~~companies.~~obligations of the Exchange Act, our business, financial condition, and results of operations, and investors’ confidence in us, could be materially and adversely affected.
As a public company, we are required to comply with the periodic reporting obligations of the Exchange Act, including preparing annual reports, quarterly reports, and current reports. Our failure to prepare and disclose this information in a timely manner and meet our reporting obligations in their entirety could subject us to penalties under federal securities laws and regulations of the exchange we are listed on, expose us to lawsuits, and restrict our ability to access financing on favorable terms, or at all.
Prior to the Merger, fuboTV Pre-Merger was not a public company and FaceBank Pre-Merger had limited resources. Our management has faced significant challenges in consolidating the functions of fuboTV Pre-Merger and FaceBank Pre-Merger and their subsidiaries, including integrating their technologies, organizations, procedures, policies and operations. In connection with the Merger, we have been working to integrate certain operations of fuboTV Pre-Merger and FaceBank Pre-Merger, including, among other things, back-office operations, information technology and regulatory compliance.
We have been and expect to continue to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of sales and marketing and finance and accounting. Prior to such expansion, as a result of previously maintaining a limited legal, finance and accounting staff, we may later determine that certain related party transactions were not properly identified, reviewed and approved prior to us entering into them with such related parties.
As we seek to increase staffing levels to manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and our limited experience in managing such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our operations may lead to significant costs and may divert or stretch our management and business development resources in a way that we may not anticipate. Any inability to manage growth could delay the execution of our business plans or disrupt our operations.
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Additionally, for our recent Exchange Act filings, we have relied on an order (the “Order”) issued by the SEC pursuant to Section 36 of the Exchange Act (Release No. 34-88465), permitting filing extensions to certain public companies based on the COVID-19 pandemic. We relied upon this permissible extension in good faith after analyzing, among other things, the fact that our books and records were not easily accessible, which resulted in delays in preparation and completion of our financial statements, and that the various governmental mandatory closures of businesses have precluded our personnel, particularly our senior accounting staff, from obtaining access to our subsidiaries’ books and records necessary to prepare our financial statements. Following this analysis, we believe that we satisfied all eligibility criteria to take advantage of these extensions. If it is later determined that we were ineligible to rely upon the Order for such extensions, our filings could be deemed to be late, which could have a material adverse effect on our ability to raise capital, which could have a material adverse effect on our business, results of operations, and financial condition.
We will need to improve our operational and financial systems to support our expected growth, increasingly complex business arrangements, and rules governing revenue and expense recognition, and any inability to do so could adversely affect our billing services and financial reporting.
We have increasingly complex business arrangements with our content publishers and licensees, and the rules that govern revenue and expense recognition in our business are increasingly complex. To manage the expected growth of our operations and increasing complexity, we will need to improve our operational and financial systems, procedures and controls and continue to increase systems automation to reduce reliance on manual operations. Any inability to do so will negatively affect our billing services and financial reporting. Our current and planned systems, procedures and controls may not be adequate to support our complex arrangements and the rules governing revenue and expense recognition for our future operations and expected growth. Delays or problems associated with any improvement or expansion of our operational and financial systems and controls could adversely affect our relationships with our subscribers, content publishers or licensees; cause harm to our reputation and brand; and could also result in errors in our financial and other reporting.
Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may seriously harm and negatively affect our reputation and our business.
We regularly review key metrics related to the operation of our business to evaluate growth trends, measure our performance, and make strategic decisions. These metrics are calculated using internal company data and have not been validated by an independent third party. While these numbers are based on what we believe to be reasonable estimates of our subscriber base for the applicable period of measurement, there are inherent challenges in measuring how our platform is used across large populations.
Errors or inaccuracies in our metrics or data could result in incorrect business decisions and inefficiencies. In addition, advertisers generally rely on third-party measurement services to calculate our metrics, and these third-party measurement services may not reflect our true audience. If advertisers, partners, or investors do not perceive our subscriber, geographic, or other demographic metrics to be accurate representations of our subscriber base, or if we discover material inaccuracies in our subscriber, geographic, or other demographic metrics, our reputation may be seriously harmed.
Non-compliance with the objective and subjective criteria for the Paycheck Protection Program loan could have a material adverse effect on our business.
On April 21, 2020, we availed ourselves of a PPP Loan from JPMorgan Chase Bank, N.A., in the aggregate amount of $4,699,240.00, pursuant to the Paycheck Protection Program under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan, which was in the form of a note dated April 21, 2020 issued by the Company, matures on April 21, 2022, and bears interest at a rate of 0.98% per annum, payable monthly commencing on November 21, 2020. The PPP Loan may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020 The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.
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On April 23, 2020, the Secretary of the U.S. Department of the Treasury stated that the SBA will perform a full review of any PPP Loan over $2.0 million before forgiving the loan. In order to apply for the PPP Loan, we were required to certify, among other things, that the current economic uncertainty made the PPP Loan request necessary to support our ongoing operations. We made this certification in good faith after analyzing, among other things, the maintenance of our entire workforce, notwithstanding certain “work-from-home” limitations. We also took into account our need for additional funding to continue operations, and our ability to currently access alternative forms of capital in the current market environment. Following this analysis, we believe that we satisfied all eligibility criteria for the PPP Loan, and that our receipt of the PPP Loan is consistent with the objectives of the PPP Loan of the CARES Act. If it is later determined that we were ineligible to receive the PPP Loan or determined that we did not comply with requirements after receiving the PPP Loan, we may be required to repay the PPP Loan in its entirety and/or be subject to additional penalties and adverse publicity, which could have a material adverse effect on our business, results of operations, and financial condition.
Our financial condition and results of operations could be adversely affected if we do not effectively manage our current or future debt.
In connection with the Merger, we incurred approximately $33.80 million of additional indebtedness from (i) the sale of senior secured promissory notes in an aggregate principal amount of $10.05 million to FB Loan Series I, LLC, or the Senior Notes, and (ii) our guarantee of approximately $23.75 million of existing indebtedness of fuboTV Pre-Merger under its existing senior secured credit facility with AMC Networks Ventures LLC, or the AMC Facility, which is secured by a lien on substantially all of the assets of the Company. Following the Merger, we have repaid the Senior Notes in full as of July 3, 2020. In addition, we have outstanding convertible promissory notes with an aggregate principal amount of $2,773,000. To the extent not converted, we may be required to pay principal, interest, and any late fees to the holders of these notes. Furthermore, on July 16, 2020, Access Road Capital LLC made a term loan to us in the principal amount equal to $10,000,000, which is currently outstanding. We are currently conducting a review of our credit agreements to determine our ongoing compliance obligations under such agreements.
As a result of such transactions, we have a substantially greater amount of debt than we had maintained in the past, which could adversely affect our ability to take advantage of corporate opportunities and could adversely affect our business, financial condition and results of operations. For example:
● our ability to obtain any necessary financing in the future for working capital, capital expenditures, debt service requirements, or other purposes may be limited or financing may be unavailable;
● a substantial portion of our cash flows must be dedicated to the payment of principal and interest on our indebtedness and other obligations and will not be available for use in our business;
● lack of liquidity could limit our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate;
● our debt obligations will make us more vulnerable to changes in general economic conditions and/or a downturn in our business, thereby making it more difficult for us to satisfy our obligations; and
● 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.
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If we incur any additional debt, the related risks that we and our subsidiaries face could intensify.
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.
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. Our business may not continue to 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. 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. We may need or desire to refinance our existing indebtedness, and there can be no assurance that we will be able to refinance any of our indebtedness on commercially reasonable terms, if at all. Our ability to refinance the term loans or existing or future indebtedness will depend on the capital markets and our financial condition at such time. 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.
If TV streaming develops more slowly than we expect, our operating results and growth prospects could be harmed. In addition, our future growth depends in part on the growth of TV streaming advertising.
TV streaming is a relatively new and rapidly evolving industry, making our business and prospects difficult to evaluate. The growth and profitability of this industry and the level of demand and market acceptance for our platform are subject to a high degree of uncertainty.
We believe that the continued growth of streaming as an entertainment alternative will depend on the availability and growth of cost-effective broadband Internet access, the quality of broadband content delivery, the quality and reliability of new devices and technology, the cost for subscribers relative to other sources of content, as well as the quality and breadth of content that is delivered across streaming platforms. These technologies, products and content offerings continue to emerge and evolve. Subscribers, content publishers or advertisers may find TV streaming platforms to be less attractive than traditional TV, which would harm our business. In addition, many advertisers continue to devote a substantial portion of their advertising budgets to traditional advertising, such as TV, radio and print. The future growth of our business depends in part on the growth of TV streaming advertising, and on advertisers increasing spend on such advertising. We cannot be certain that they will do so. 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.
Legal proceedings could cause us to incur unforeseen expenses and could occupy a significant amount of our management’s time and attention.
From time to time, we may be subject to litigation or claims that could negatively affect our business operations and financial position. We may face allegations or litigation related to our acquisitions, securities issuances or business practices. Litigation disputes 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. While the ultimate outcome of investigations, inquiries, information requests and related legal proceedings is difficult to predict, such matters can be expensive, time-consuming and distracting, and adverse resolutions or settlements of those matters may result in, among other things, modification of our business practices, reputational harm or costs and significant payments, any of which could negatively affect our business operations and financial position.
We could become subject to litigation regarding intellectual property rights that could be costly and harm our business.
Third parties have previously asserted, and may in the future assert, that we have infringed, misappropriated or otherwise violated their intellectual property rights. Plaintiffs that have no relevant product revenue may not be deterred by our own issued patents and pending patent applications in bringing intellectual property rights claims against us. The cost of patent litigation or other proceedings, even if resolved in our favor, could be substantial. Some of our competitors may be better able to sustain the costs of such litigation or proceedings because of their substantially greater financial resources. Patent litigation and other proceedings may also require significant management time and divert management from our business. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace. The occurrence of any of the foregoing risks could harm our business.
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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. These licenses may not be available on commercially reasonable terms, or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be nonexclusive, with the potential for our competitors to gain access to the same intellectual property. In addition, the rights that we secure under intellectual property licenses may not include rights to all of the intellectual property owned or controlled by the licensor, and the scope of the licenses granted to us may not include rights covering all of the products and services provided by us and our licensees. 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; cease making, licensing or using technologies that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to redesign our solutions; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies, content or materials; and to indemnify our partners and other third parties. In addition, any lawsuits regarding intellectual property rights, regardless of their success, could be expensive to resolve and would divert the time and attention of our management and technical personnel.
If our trademarks and other proprietary rights are not adequately protected to prevent use or appropriation by our competitors, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected.
We rely and expect to continue to rely on a combination of confidentiality and license agreements with our employees, consultants and third parties with whom we have relationships, as well as trademark, copyright, patent and trade secret protection laws, to protect our proprietary rights. We may also seek to enforce our proprietary rights through court proceedings or other legal actions. We have filed and we expect to file from time to time for trademark and patent applications. Nevertheless, these applications may not be approved, third parties may challenge any copyrights, patents or trademarks issued to or held by us, third parties may knowingly or unknowingly infringe our intellectual property rights, and we may not be able to prevent infringement or misappropriation without substantial expense to us. If the protection of our intellectual property rights is inadequate to prevent use or misappropriation by third parties, the value of our brand, content, and other intangible assets may be diminished.
Failure to protect our domain names could also adversely affect our reputation and brand and make it more difficult for subscribers to find our website and our service. We may be unable, without significant cost or at all, to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.
Our use of open source software could impose limitations on our ability to commercialize our platform.
We incorporate open source software in our platform. From time to time, companies that incorporate open source software into their products have faced claims challenging the ownership of open source software and/or compliance with open source license terms. Therefore, we could be subject to suits by parties claiming ownership of what we believe to be open source software or noncompliance with open source licensing terms. Although we monitor our use of open source software, the terms of many open source software licenses have not been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that could impose unanticipated conditions or restrictions on our ability to sell subscriptions to our platform. In such event, we could be required to make our proprietary software generally available to third parties, including competitors, at no cost, to seek licenses from third parties in order to continue offering our platform, to re-engineer our platform or to discontinue our platform in the event re-engineering cannot be accomplished on a timely basis or at all, any of which could harm our business.
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If we are unable to obtain necessary or desirable third-party technology licenses, our ability to develop platform enhancements may be impaired.
We utilize commercially available off-the-shelf technology in the development of our platform. As we continue to introduce new features or improvements to our platform, we may be required to license additional technologies from third parties. These third-party licenses may be unavailable to us on commercially reasonable terms, if at all. 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.
We are subject to a number of legal requirements and other obligations regarding privacy, security, and data protection, and any failure to comply with these requirements or obligations could have an adverse effect on our reputation, business, financial condition and operating results.
Various federal and state laws and regulations govern the collection, use, retention, sharing and security of the data we receive from and about our subscribers and other individuals. The regulatory environment for the collection and use 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. Privacy groups and government bodies, including the Federal Trade Commission, 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. The U.S. federal and various state and foreign government bodies and agencies have adopted or are considering adopting laws and regulations limiting, or laws and regulations regarding the collection, distribution, use, disclosure, storage, and security of certain types of information. 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 to facilitate compliance with such standards by content publishers, advertisers, or others.
For example, the California Consumer Privacy Act, or CCPA, became operative on January 1, 2020. The CCPA requires covered companies to provide new disclosures to California consumers, and to afford such consumers new abilities to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability. Further, a new privacy law, the California Privacy Rights Act, or the CPRA, recently was certified by the California Secretary of State to appear on the ballot for the November 3, 2020 election. If this initiative is approved by California voters, the CPRA would significantly modify the CCPA, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.
Our use of data to deliver relevant advertising on our platform places us and our content publishers at risk for claims under a number of unsettled laws, including the Video Privacy Protection Act, or VPPA. 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 Federal Trade Commission has also revised its rules implementing the Children’s Online Privacy Protection Act, or COPPA Rules, broadening the applicability of the COPPA Rules, including the types of information that are subject to these regulations, and could effectively apply to limit the information that we or our content publishers and advertisers collect and use through certain content publishers, the content of advertisements and in relation to certain channel partner content. We and our content publishers and advertisers could be at risk for violation or alleged violation of these and other laws, regulations, and other standards relating to privacy, data protection, and information security.
Internationally, virtually every jurisdiction in which we operate has established its own data security and privacy or data protection legal framework with which we must comply. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of data that identifies or may be used to identify or locate an individual. These laws and regulations often are more restrictive than those in the United States and are rapidly evolving. For example, the European Union, or EU, and its member states have laws and regulations requiring informed consent for the placement of cookies or other tracking technologies and the delivery of relevant advertisements. More generally, the EU General Data Protection Regulation, or the GDPR, which has been in effect since May 25, 2018, imposes stringent obligations relating to data protection and security and authorizes fines up to 4% of global annual revenue or €20 million, whichever is greater, for some violations. Some countries also are considering or have passed legislation requiring local storage and processing of data, or similar requirements, which could increase the cost and complexity of operating our platform.
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Complying with the GDPR, CCPA, and other laws, regulations, and other obligations relating to privacy, data protection, data localization or security may cause us to incur substantial operational costs or require us to modify our data handling practices. We also expect that there will continue to be new proposed laws and regulations concerning privacy, data protection and information security, and we cannot yet determine the impact such future laws, regulations and standards, or amendments to or re-interpretations of, existing laws and regulations, industry standards, or other obligations may have on our business. New laws and regulations, amendments to or re-interpretations of existing laws and regulations, industry standards, and contractual and other obligations may require us to incur additional costs and restrict our business operations.
Furthermore, the interpretation and application of laws, regulations, standards, contractual obligations and other obligations relating to privacy, data protection, and information security are uncertain, and these laws, standards, and contractual and other obligations may be interpreted and applied in a manner that is, or is alleged to be, inconsistent with our data management and processing practices, our policies or procedures, or the features of our platform. We may face claims or allegations that we are in violation of these laws, regulations, standards, or contractual or other obligations. We could be required to fundamentally change our business activities and practices or modify our platform or practices to address laws, regulations, or other obligations relating to privacy, data protection, or information security, or claims or allegations that we have failed to comply with any of the foregoing, which could have an adverse effect on our business. 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.
Increased regulation of data collection, use and distribution practices, including self-regulation and industry standards, changes in existing laws and regulations, enactment of new laws and regulations, increased enforcement activity, and changes in interpretation of laws and regulations, all could increase our cost of compliance and operation, limit our ability to grow our business or otherwise harm our business. Additionally, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to the businesses of content publishers and advertisers may limit their use and adoption of, and reduce the overall demand for, our platform and advertising on our platform, and content publishers and advertisers may be at risk for violation or alleged violation of laws, regulations, and other standards relating to privacy, data protection, and information security relating to their activities on our platform. More generally, privacy, data protection, and information security concerns, whether or not valid, may inhibit market adoption of our platform, particularly in certain foreign countries.
Any inability to adequately address privacy, data protection or security-related concerns, even if unfounded, or to successfully negotiate privacy, data protection or security-related contractual terms with content publishers, 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, regulatory investigations and proceedings, and claims, litigation, and other liability involving governmental entities and private parties, damage to our reputation, and inhibit use of our platform by advertisers and sales of subscriptions to our platform, all of which could harm our business, financial condition, and results of operations.
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.
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. 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. For example, laws relating to the liability of providers of online services for activities of their subscribers and other third parties have been tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, the advertisements posted or the content provided by subscribers. Moreover, as Internet commerce and advertising continues to evolve, increasing regulation by federal, state and foreign regulatory authorities becomes more likely.
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As we improve our TV streaming platform, we may also be subject to new laws and regulations specific to such technologies.
We are subject to payment processing risk.
Acceptance and processing of payments are subject to certain rules and regulations, including additional authentication requirements for certain payment methods, and require payment of interchange and other fees. To the extent there are increases in payment processing fees, material changes in the payment ecosystem, such as large re-issuances of payment cards, delays in receiving payments from payment processors, changes to rules or regulations concerning payments, loss of payment partners and/or disruptions or failures in our payment processing systems, partner systems or payment products, including products we use to update payment information, our revenue, operating expenses and results of operation could be adversely impacted.
Changes in competitive offerings for entertainment video, including the potential rapid adoption of piracy-based video offerings, could adversely impact our business.
The market for entertainment video is intensely competitive and subject to rapid change. Through new and existing distribution channels, consumers have increasing options to access entertainment video. The various economic models underlying these channels include subscription, transactional, ad-supported and piracy-based models. All of these have the potential to capture meaningful segments of the entertainment video market. Piracy, in particular, threatens to damage our business, as its fundamental proposition to consumers is so compelling and difficult to compete against: virtually all content for free. Furthermore, in light of the compelling consumer proposition, piracy services are subject to rapid global growth. Traditional providers of entertainment video, including broadcasters and cable network operators, as well as Internet based e-commerce or entertainment video providers are increasing their streaming video offerings.
Several of these competitors have long operating histories, large customer bases, strong brand recognition, exclusive rights to certain content and significant financial, marketing and other resources. They may secure better terms from suppliers, adopt more aggressive pricing and devote more resources to product development, technology, infrastructure, content acquisitions and marketing. New entrants may enter the market or existing providers may adjust their services with unique offerings or approaches to providing entertainment video. Companies also may enter into business combinations or alliances that strengthen their competitive positions. 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.
If content providers refuse to license streaming content or other rights upon terms acceptable to us, our business could be adversely affected.
Our ability to provide our subscribers with content they can watch depends on content providers and other rights holders licensing rights, including distribution rights, to such content and certain related elements thereof, such as the public performance of music contained within the content we distribute. The license periods and the terms and conditions of such licenses vary. 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. 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. Because of these provisions as well as other actions we may take, content available through our service can be withdrawn on short notice. As competition increases, we see the cost of certain programming increase.
Further, if we do not maintain a compelling mix of content, our subscriber acquisition and retention may be adversely affected.
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Our content providers impose a number of restrictions on how we distribute and market our products and services, which can adversely affect our business.
A number of our major content partners impose significant restrictions on how we can distribute and market our products and services. For example, our content partners may prevent us from partnering with third party distributors and manufacturers to exploit new market opportunities or prevent us from bundling or reselling our products with third party products and services, or otherwise restrict how we might brand or market our products and services. Our content partners also impose restrictions on the content and composition of the packages we can make available to our customers and restrictions on how we might make some or all of our content available to customers (such as on a standalone basis, length of free trials or access modified or shorter form content). These restrictions may prevent us from responding dynamically to changing customer expectations or market demands or exploiting lucrative partnership opportunities. Content providers may also restrict the advertising that may be made available in connection with their content, including restrictions on the content and timing of such advertising, and restrictions on how advertising may be sold (such as a limit to sale on an aggregated, non-content specific basis only), which limits our opportunity to exploit potentially lucrative revenue streams.
Content providers may also only provide their content on a service that includes a minimum number of channels from other providers, or require that we only provide their content in specific service tiers that include a specific mix of programming. Certain provisions in these agreements could become a challenge to comply with if we were to lose rights under agreements with key programmers.
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. This may materially restrict the functionality and performance of our technology, particularly our proprietary recommendation engine. This may also prevent us from offering commercial benefits to certain content providers, limiting our capacity to negotiate favorable transactions and overall limiting our ability to provide improved products and services.
Our agreements with content providers are complex, with various rights restrictions and favorability obligations which impose onerous compliance obligations.
The content rights granted to us are complex and multi-layered and differ substantially across different content and content providers. We may be able to make certain content available on a video-on-demand basis or on certain devices but may be restricted from doing the same with other content, sometimes even with the same content provider. We are often not able to make certain content available at certain times or in certain geographical regions. In addition, our obligations to provide equality in the treatment between certain content providers require us to continuously monitor and assess treatment of content providers and content across our products and services.
These complex restrictions and requirements impose a significant compliance burden which is costly and challenging to maintain. A failure to maintain these obligations places us at risk of breaching our agreements with content providers, which could lead to loss of content and damages claims, which would negatively impact on our products and service and our financial position.
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.
Building and maintaining a strong brand is important to our ability to attract and retain subscribers, as potential subscribers have a number of TV streaming choices. Successfully building a brand is a time-consuming and comprehensive endeavor and can be positively and negatively impacted by any number of factors. Some of these factors, such as the quality or pricing of our platform or our customer service, are within our control. Other factors, such as the quality of the content that our content publishers provide, may be out of our control, yet subscribers may nonetheless attribute those factors to us. Our competitors may be able to achieve and maintain brand awareness and market share more quickly and effectively than we can. Many of our competitors are larger companies and promote their brands through traditional forms of advertising, such as print media and TV commercials, and have substantial resources to devote to such efforts. Our competitors may also have greater resources to utilize Internet advertising or website product placement more effectively than we can. If we are unable to execute on building a strong brand, it may be difficult to differentiate our business and platform from our competitors in the marketplace; therefore, our ability to attract and retain subscribers may be adversely affected and our business may be harmed.
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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.
We utilize a combination of proprietary and third-party technology to operate our business. This includes the technology that we have developed to recommend and merchandise content to our consumers as well as enable fast and efficient delivery of content to our subscribers and their various consumer electronic devices. For example, as part of the content delivery systems, we use third-party content delivery networks (“CDNs”). To the extent Internet Service Providers (“ISPs”) do not interconnect with our CDN or charge us to access their networks, or if we experience difficulties in our CDN’s operation, our ability to efficiently and effectively deliver our streaming content to our subscribers could be adversely impacted and our business and results of operation could be adversely affected.
Likewise, our system for predicting subscriber content preferences is based on advanced data analytics systems and our proprietary algorithms. We have invested, and will continue to invest, significant resources in refining these technologies; however, we cannot assure you that such investments will yield an attractive return or that such refinements will be effective. The effectiveness of our ability to predict subscriber content preferences depends in part on our ability to gather and effectively analyze large amounts of subscriber data. Our ability to predict content that our subscribers enjoy is critical to the perceived value of our platform among subscribers and failure to make accurate predictions could materially adversely affect our ability to adequately attract and retain subscribers and sell advertising to meet investor expectations for growth or to operate the business profitably. We also utilize third-party technology to help market our service, process payments, and otherwise manage the daily operations of our business. If our technology or that of third-parties we utilize in our operations fails or otherwise operates improperly, including as a result of “bugs” in our development and deployment of software, our ability to operate our service, retain existing subscribers and add new subscribers may be impaired. Any harm to our subscribers’ personal computers or other devices caused by software used in our operations could have an adverse effect on our business, results of operations and financial condition.
The quality of our customer support is important to our subscribers, and if we fail to provide adequate levels of customer support we could lose subscribers, which would harm our business.
Our subscribers depend on our customer support organization to resolve any issues relating to our platform. A high level of support is critical for the successful marketing of our platform. Providing high-level support is further challenging during the COVID-19 pandemic and resulting remote work environment. If we do not effectively train, update and manage our customer support organization that assists our subscribers in using our platform, and if that support organization does not succeed in helping them quickly resolve any issues or provide effective ongoing support, it could adversely affect our ability to sell subscriptions to our platform and harm our reputation with potential new subscribers.
We could be subject to economic, political, regulatory and other risks arising from our international operations.
Operating in international markets requires significant resources and management attention and subjects us to economic, political, regulatory and other risks that may be different from or incremental to those in the U.S. In addition to the risks that we face in the U.S., our international operations involve risks that could adversely affect our business, including:
● the need to adapt our content and user interfaces for specific cultural and language differences;
● difficulties and costs associated with staffing and managing foreign operations;
● political or social unrest and economic instability;
● 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;
● 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;
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● 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;
● 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;
● fluctuations in currency exchange rates;
● profit repatriation and other restrictions on the transfer of funds;
● differing payment processing systems;
● new and different sources of competition; and
● different and more stringent user protection, data protection, privacy and other laws, including data localization and/or restrictions on data export, and local ownership requirements.
Our failure to manage any of these risks successfully could harm our international operations and our overall business and results of our operations.
Any significant interruptions, delays or discontinuations in service or disruptions in or unauthorized access to our computer 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.
Our reputation and ability to attract, retain and serve our subscribers is dependent upon the reliable performance and security of our computer systems and those of third parties that we utilize in our operations. These systems may be subject to damage or interruption from, among other things, earthquakes, adverse weather conditions, other natural disasters, terrorist attacks, rogue employees, power loss, telecommunications failures, and cybersecurity risks. 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 computer systems used in our operations could diminish the overall attractiveness of our subscription to existing and potential subscribers.
Our computer systems and those of third parties we use in our operations are subject to cybersecurity threats, including cyber-attacks such as computer viruses, denial of service attacks, physical or electronic break-ins and similar disruptions. 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 or intellectual property. Additionally, outside parties may attempt to induce employees or subscribers to disclose sensitive or confidential information 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, if successful, could harm our business, be expensive to remedy and damage our reputation.
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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. 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 to prevent disruptions to our service and unauthorized access to our systems are expensive to develop, implement and maintain. These efforts require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated and may limit the functionality of or otherwise negatively impact our service offering and systems. Additionally, disruption to our service and data security breaches and other incidents may occur as a result of employee or contractor error. 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 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, litigation and reputation risk, which could have a negative effect on our business, financial condition and results of operations. With the increase in remote work during the current COVID-19 pandemic, 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. We also may face increased costs relating to maintaining and securing our infrastructure and data that we maintain and otherwise process.
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. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation.
We depend on highly skilled key personnel to operate our business, and if we are unable to attract, retain, and motivate qualified personnel, our ability to develop and successfully grow our business could be harmed.
We believe that our future success is highly dependent on the talents and contributions of our senior management and co-founders, including David Gandler, our Co-Founder and Chief Executive Officer, Simone Nardi, our Chief Financial Officer, Alberto Horihuela, our Co-Founder and Chief Marketing Officer, Sung Ho Choi, our Co-Founder and Head of Product, Geir Magnusson Jr., our Chief Technology Officer, members of our executive team, and other key employees, such as key engineering, finance, legal, research and development, marketing, and sales personnel. Our future success depends on our continuing ability to attract, develop, motivate, and retain highly qualified and skilled employees. All of our employees, including our senior management, are free to terminate their employment relationship with us at any time, and their knowledge of our business and industry may be difficult to replace. Qualified individuals are in high demand, particularly in the digital media industry, and we may incur significant costs to attract them. We use equity awards to attract talented employees, but if the value of our common stock declines significantly and remains depressed, that may prevent us from recruiting and retaining qualified employees. If we are unable to attract and retain our senior management and key employees, we may not be able to achieve our strategic objectives, and our business could be harmed. In addition, we believe that our key executives have developed highly successful and effective working relationships. We cannot ensure that we will be able to retain the services of any members of our senior management or other key employees. 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.
We rely upon a number of partners to make our service available on their devices.
We currently offer subscribers the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes and mobile devices. Some of our agreements with key distribution partners give distribution partners the ability to terminate their carriage of our service at any time. If we are not successful in maintaining existing and creating new relationships, or if we encounter technological, content licensing, regulatory, business or other impediments to delivering our streaming content to our subscribers via these devices, our ability to retain subscribers and grow our business could be adversely impacted.
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Our business could be adversely affected if a number of our partners do not continue to provide access to our service or are unwilling to do so on terms acceptable to us, which terms may include the degree of accessibility and prominence of our service. Furthermore, devices are manufactured and sold by entities other than the Company, and while these entities should be responsible for the devices’ performance, the connection between these devices and fuboTV may nonetheless result in consumer dissatisfaction toward the Company and such dissatisfaction could result in claims against us or otherwise adversely impact our business. In addition, technology changes to our streaming functionality may require that partners update their devices, or may lead to us to stop supporting the delivery of our service on certain legacy devices. If partners do not update or otherwise modify their devices, or if we discontinue support for certain devices, our service and our subscribers’ use and enjoyment could be negatively impacted.
The impact of worldwide economic conditions may adversely affect our business, operating results, and financial condition.
Our financial performance is subject to worldwide economic conditions 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. Historically, economic downturns have resulted in overall reductions in advertising spending. Economic conditions may adversely impact levels of consumer spending, which could adversely impact our number of subscribers.
Consumer purchases of discretionary items generally decline during recessionary periods and other periods in which disposable income is adversely affected. To the extent that overall economic conditions reduce spending on discretionary activities, our ability to retain current and obtain new subscribers could be hindered, which could reduce our subscription revenue and negatively impact our business.
We rely upon Amazon Web Services to operate certain aspects of our service and any disruption of or interference with our use of the Amazon Web Services operation would impact our operations and our business would be adversely impacted.
Amazon Web Services, or AWS, provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a “cloud” computing service. We have architected our software and computer systems so as to utilize data processing, storage capabilities and other services provided by AWS. Currently, we run the vast majority of our computing on AWS. Given this, along with the fact that we cannot easily switch our AWS operations to another cloud provider, any disruption of or interference with our use of AWS would impact our operations and our business would be adversely impacted. While the retail side of Amazon competes with us, we do not believe that Amazon will use the AWS operation in such a manner as to gain competitive advantage against our service, although if it was to do so it could harm our business.
Changes in how we market our service could adversely affect our marketing expenses and subscription levels may be adversely affected.
We utilize a broad mix of marketing and public relations programs, including social media sites, to promote our service and content to existing and potential new subscribers. We may limit or discontinue use or support of certain marketing sources or activities if advertising rates increase or if we become concerned that subscribers or potential subscribers deem certain marketing platforms or practices intrusive or damaging to our brand. If the available marketing channels are curtailed, our ability to engage subscribers and attract new subscribers may be adversely affected.
Companies that promote our service may decide that we negatively impact their business or may make business decisions that in turn negatively impact us. For example, if they decide that they want to compete more directly with us, enter a similar business or exclusively support our competitors, we may no longer have access to their marketing channels. We also acquire a number of subscribers who rejoin our service having previously canceled their subscription. If we are unable to maintain or replace our sources of subscribers with similarly effective sources, or if the cost of our existing sources increases, our subscription levels and marketing expenses may be adversely affected.
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We utilize marketing to promote our content, drive conversation about our content and service, and drive viewing by our subscribers. 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.
We may pursue future acquisitions, which involve a number of risks, and if we are unable to address and resolve these risks successfully, such acquisitions could harm our business.
We may in the future acquire businesses, products or technologies to expand our offerings and capabilities, subscriber base and business. We may pursue acquisitions of entities that are not profitable and have significant liabilities. We have evaluated, and expect to continue to evaluate, a wide array of potential strategic transactions. Any acquisition could be material to our financial condition and results of operations and any anticipated benefits from an acquisition may never materialize. In addition, the process of integrating acquired businesses, products or technologies may create unforeseen operating difficulties and expenditures. Acquisitions in international markets would 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. We may not be able to address these risks successfully, or at all, without incurring significant costs, delays or other operational problems and if we were unable to address such risks successfully our business could be harmed.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~During~~The following is a summary of all of the ~~three months ended~~unregistered securities that the Company has sold from March 31, 2020 ~~the Company issued shares~~to June 30, 2020.
Issuance of its common stock consisting of 777,500 shares issued to advisors in connection with the Merger, 262,500 shares in connection with celebrity rights agreements, 795,593 shares in private placement transactions,Stock, Convertible Notes and ~~1,552,070 shares in connection with its subsidiary share exchange agreement with PEC.~~Warrants for Financing Purposes
● May-June 2020 Common Stock Financing. Between May 11, 2020 and June 8, 2020, the Company entered into securities purchase agreements (the “Purchase Agreements”) with several investors (the “Investors”), one of which was an entity affiliated with a director of the Company. Pursuant to the Purchase Agreements, the Company issued (i) an aggregate of 3,735,922 shares of common stock at a purchase price of $7.00 per share and (ii) warrants to purchase up to 100% of the number of shares of common stock sold to such investors, up to an aggregate of 3,735,922 shares of common stock, at an exercise price of $7.00 per share, for aggregate gross proceeds of $26,151,454.00.diluted
● Other Private Placements.
○ Between March 31, 2020 and August 10, 2020, the Company issued convertible notes with a principal balance of approximately $2.1 million. In connection with such notes, the Company issued (i) 55,000 shares of its common stock and (ii) warrants to purchase an aggregate of 55,172 shares of its common stock at an initial exercise price of $9.00 per share.
○ On March 30, 2020, the Company issued 142,118 warrants in connection with a $1.1 million convertible note. The exercise price is $7.74 with a 5-year term. The Company received the proceeds from the convertible note on April 1, 2020 and will therefore record the balance sheet impact of this warrant and convertible note on April 1, 2020.
○
Between March 31, 2020 and July 8, 2020, the Company raised an additional $477,694 through issuances of an aggregate of 170,391 shares of its common stock in private placement transactions to several investors.
● Series D Financing and Redemption.
○ On June 16, 2020, the Company redeemed 253,000 shares of Series D Convertible Preferred Stock for an aggregate price of $339,174.

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Issuance of Stock for Business Acquisitions
● Issuance of Unregistered Common Stock for Acquisition of PEC.
○ Between March 31, 2020 and July 8, 2020, the Company has issued 1,201,749 shares of its common stock in exchange for 14,222,975 shares of its subsidiary PEC.

Issuance of Common Stock and Options for Services Provided
● Issuance to Service Providers.
○ On May 25, 2020, the Company issued to ARETE Wealth Management a warrant to purchase 275,000 shares of the Company’s common stock with an initial exercise price of $5.00 per share.
● Issuance of Stock Options. From January 1, 2017 through June 30, 2020, the Company granted (i) options to purchase 16,667 shares of common stock under the Company’s 2014 Plan at an exercise price of $28.20 per share and (ii) options to purchase 8,825,336 shares of common stock under the Company’s 2020 Plan with a weighted-average exercise price of $8.92 per share.
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. The Company believes the offers, sales, and issuances of the above securities ~~referenced above~~ were ~~issued solely to “accredited investors” in reliance on the exemption~~exempt from registration ~~afforded~~under the Securities Act by virtue of Section 4(a)(2) of the Securities Act because the issuance of securities to the recipients did not involve a public offering or in reliance on Rule 701 because the transactions were pursuant to compensatory benefit plans or contracts relating to compensation as ~~amended.~~provided under such rule.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Pursuant to the Series AA Certificate of Designation and in accordance with the Merger Agreement, until the earlier of the time that (i) no shares of Series AA Preferred Stock remain issued and outstanding and (ii) the Company’s common stock is listed on Nasdaq or The New York Stock Exchange, the holders of Series AA Preferred Stock, voting as a separate class (the “Series AA Holders”), and with each share of Series AA Preferred Stock having one vote on such matter, has the right to elect any replacement of any of the three directors (of the total of seven directors) designated by fuboTV Inc. and added to the Board of Directors of FaceBank pursuant to the closing of the transactions as contemplated in the Merger Agreement. If the Series AA Holders fail to elect a sufficient number of directors to fill all directorships for which they are entitled to elect directors, then any directorship not so filled shall remain vacant until such time as the Series AA Holders elect a person to fill such directorship, and no such directorship may be filled other than by the Series AA Holders.None.
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Item 6. Exhibits
Exhibit Incorporated by Reference
Number

Description

Form

Filing Date

Exhibit No.
2.1 Agreement and Plan of Merger and Reorganization dated as of March 19, 2020 by and among FaceBank Group, Inc., fuboTV Acquisition Corp. and fuboTV, Inc. 8-K March 23, 2020 2.1
3.1(a) Articles of Incorporation dated February 20, 2009. S-1 August 5, 2011 3.1(i)
3.1(b) Articles of Amendment to Articles of Incorporation dated October 5, 2010. S-1 August 5, 2011 3.1(ii)
3.1(c) Articles of Amendment to Articles of Incorporation dated December 31, 2014. 10-K March 31, 2015 3.1(iii)
3.1(d) Articles of Amendment to Articles of Incorporation dated January 11, 2016. 8-K January 29, 2016 3.1
3.1(e) Certificate of Designation of Series A Preferred Stock dated June 23, 2016. 8-K June 28, 2016 4.1
3.1(f) Certificate of Designation of Series B Preferred Stock dated June 23, 2016. 8-K June 28, 2016 4.2
3.1(g) Certificate of Designation of Series C Preferred Stock dated July 21, 2016. 8-K July 26, 2016 4.1
3.1(h) Second Amended Certificate of Designation of Series C Preferred Stock dated March 3, 2017. 8-K March 6, 2017 3.1
3.1(i) Articles of Amendment to Articles of Incorporation dated October 17, 2017. 8-K December 5, 2017 3.1
3.1(j) Certificate of Designation of Preferences and Rights of Series X Convertible Preferred Stock dated August 3, 2018. 8-K August 6, 2018 3.1
3.1(k) Articles of Amendment to Articles of Incorporation dated September 9, 2019. 8-K September 11, 2019 3.1
3.1(l) Articles of Amendment to Articles of Incorporation dated March 16, 2020. 8-K March 23, 2020 3.2
3.1(m) Certificate of Designation of Series AA Convertible Preferred Stock dated March 20, 2020. 8-K March 23, 2020 3.2
3.1(n)* Articles of Amendment to Articles of Incorporation dated September 29, 2016
Exhibit Incorporated by Reference
Number Description Form Filing Date Exhibit No.
2.1 Agreement and Plan of Merger and Reorganization dated as of March 19, 2020 by and among FaceBank Group, Inc., fuboTV Acquisition Corp. and fuboTV, Inc. 8-K March 23, 2020 2.1
3.1(a) Articles of Incorporation dated February 20, 2009. S-1 August 5, 2011 3.1(i)
3.1(b) Articles of Amendment to Articles of Incorporation dated October 5, 2010. S-1 August 5, 2011 3.1(ii)
3.1(c) Articles of Amendment to Articles of Incorporation dated December 31, 2014. 10-K March 31, 2015 3.1(iii)
3.1(d) Articles of Amendment to Articles of Incorporation dated January 11, 2016. 8-K January 29, 2016 3.1
3.1(e) Certificate of Designation of Series A Preferred Stock dated June 23, 2016. 8-K June 28, 2016 4.1
3.1(f) Certificate of Designation of Series B Preferred Stock dated June 23, 2016. 8-K June 28, 2016 4.2
3.1(g) Certificate of Designation of Series C Preferred Stock dated July 21, 2016. 8-K July 26, 2016 4.1
3.1(h) Second Amended Certificate of Designation of Series C Preferred Stock dated March 3, 2017. 8-K March 6, 2017 3.1
3.1(i) Articles of Amendment to Articles of Incorporation dated October 17, 2017. 8-K December 5, 2017 3.1
3.1(j) Certificate of Designation of Preferences and Rights of Series X Convertible Preferred Stock dated August 3, 2018. 8-K August 6, 2018 3.1
3.1(k) Articles of Amendment to Articles of Incorporation dated September 9, 2019. 8-K September 11, 2019 3.1
3.1(l) Articles of Amendment to Articles of Incorporation dated March 16, 2020. 8-K March 23, 2020 3.2
3.1(m) Certificate of Designation of Series AA Convertible Preferred Stock dated March 20, 2020. 8-K March 23, 2020 3.2
3.1(n) Articles of Amendment to Articles of Incorporation dated September 29, 2016 10-Q July 6, 2020 3.1(n)

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3.1(o)* Articles of Amendment to Articles of Incorporation dated January 9, 2017
3.1(p)* Articles of Amendment to Articles of Incorporation dated May 11, 2017
3.1(q)* Articles of Amendment to Articles of Incorporation dated February 12, 2018
3.1(r)* Articles of Amendment to Articles of Incorporation dated January 29, 2019
3.1(s)* Articles of Amendment to Articles of Incorporation dated July 12, 2019
3.2(a) By-Laws of the Company. S-1 August 5, 2011 3.2
3.2(b) Amendment to the Bylaws of the Company, dated June 22, 2016. 8-K June 28, 2016 3.1
3.2(c) Amendment to the bylaws of the Company, dated July 20, 2016. 8-K July 26, 2016 3.1
4.1 Warrant dated March 19, 2020 issued by FaceBank Group, Inc. to FB Loan Series I, LLC. 8-K March 23, 2020 4.1
4.2* Common Stock Warrant dated May 25, 2020 issued by FaceBank Group, Inc. to ARETE Wealth Management.
4.3* Common Stock Warrant dated March 30, 2020 issued by FaceBank Group, Inc. to Auctus Fund, LLC.
4.4* Common Stock Warrant dated April 20, 2020 issued by FaceBank Group, Inc. to Platinum Point Capital LLC.
4.5*
Form of Common Stock Purchase Warrant in connection with the private placement between May 11, 2020 and June 8, 2020.

4.6* Description of Registrant’s Securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
4.7* Convertible promissory note in favor of GS Capital Partners, LLC for $150,000 dated January 17, 2020.
4.8* Convertible promissory note in favor of Auctus Fund, LLC for $275,000 dated January 29, 2020.
4.9* Convertible promissory note in favor of EMA Financial, LLC for $125,000 dated February 6, 2020.
4.10* Convertible promissory note in favor of Adar Alef, LLC for $150,000 dated February 10, 2020.
4.11* Convertible promissory note in favor of Jefferson Street Capital LLC for $100,000 dated March 24, 2020.
4.12* Convertible promissory note in favor of BHP Capital NY Inc. for $100,000 dated March 24, 2020.
4.13* Convertible promissory note in favor of Auctus Fund, LLC for $1,100,000 dated March 30, 2020.
4.14* Convertible promissory note in favor of Eagle Equities LLC for $275,000 dated March 31, 2020.
4.15* Convertible promissory note in favor of Platinum Point Capital LLC for $103,000 dated March 31, 2020.
10.1† 2014 Incentive Stock Plan 10-K April 16, 2014 4.1
10.2*† fuboTV Inc. 2015 Equity Incentive Plan.
10.3*† Form of Stock Option Agreement under fuboTV Inc. 2015 Equity Incentive Plan.
10.4*† FaceBank Group, Inc. 2020 Equity Incentive Plan.
10.5*† Form of Stock Option Agreement under FaceBank Group, Inc. 2020 Equity Incentive Plan.
10.6 Loan and Security Agreement dated as of March 19, 2020 by and between fuboTV, Inc., as borrower and FaceBank Group, Inc., as lender. 8-K March 23, 2020 10.1
10.7 Credit Agreement entered into as of March 11, 2020 between FaceBank Group, Inc. and HLEE Finance S.a.r.l. 8-K March 23, 2020 10.2
10.8 Security Agreement dated March 11, 2020 by and between FaceBank Group, Inc., as Grantor in favor of HLEE Finance S.a.r.l. 8-K March 23, 2020 10.3
10.9 Note Purchase Agreement dated as of March 19, 2020 by and among FaceBank Group, Inc., fuboTV Acquisition Corp., Evolution AI Corporation and Pulse Evolution Corporation, as Borrower and FB Loan Series I, LLC, as Purchaser. 8-K March 23, 2020 10.4
10.10 Amendment to the Note Purchase Agreement dated as of March 19, 2020 by and among FaceBank Group, Inc., fuboTV Acquisition Corp., Evolution AI Corporation and Pulse Evolution Corporation. 8-K April 27, 2020 10.1
10.11 Senior Secured Note dated March 19, 2020 payable to FB Loan Series I, LLC. 8-K March 23, 2020 10.5
3.1(o) Articles of Amendment to Articles of Incorporation dated January 9, 2017 10-Q July 6, 2020 3.1(o)
3.1(p) Articles of Amendment to Articles of Incorporation dated May 11, 2017 10-Q July 6, 2020 3.1(p)
3.1(q) Articles of Amendment to Articles of Incorporation dated February 12, 2018 10-Q July 6, 2020 3.1(q)
3.1(r) Articles of Amendment to Articles of Incorporation dated January 29, 2019 10-Q July 6, 2020 3.1(r)
3.1(s) Articles of Amendment to Articles of Incorporation dated July 12, 2019 10-Q July 6, 2020 3.1(s)
3.1(t)

Articles of Amendment to Articles of Incorporation dated July 2, 2020.

8-K

August 13, 2020

3.1
3.2(a) By-Laws of the Company. S-1 August 5, 2011 3.2
3.2(b) Amendment to the Bylaws of the Company, dated June 22, 2016. 8-K June 28, 2016 3.1
3.2(c) Amendment to the bylaws of the Company, dated July 20, 2016. 8-K July 26, 2016 3.1
4.1 Common Stock Warrant dated May 25, 2020 issued by FaceBank Group, Inc. to ARETE Wealth Management. 10-Q July 6, 2020 4.2
4.2 Common Stock Warrant dated April 20, 2020 issued by FaceBank Group, Inc. to Platinum Point Capital LLC. 10-Q July 6, 2020 4.4
4.3 Form of Common Stock Purchase Warrant in connection with the private placement between May 11, 2020 and June 8, 2020. 10-Q July 6, 2020 4.5
4.4* Convertible promissory note in favor of Platinum Point Capital for $420,000 dated April 20, 2020.
4.5* Convertible promissory note in favor of EMA Financial for $250,000 dated May 5, 2020.
10.1† 2014 Incentive Stock Plan 10-K April 16, 2014 4.1
10.2† fuboTV Inc. 2015 Equity Incentive Plan. 10-Q July 6, 2020 10.2
10.3† Form of Stock Option Agreement under fuboTV Inc. 2015 Equity Incentive Plan. 10-Q July 6, 2020 10.3
10.4† FaceBank Group, Inc. 2020 Equity Incentive Plan. 10-Q July 6, 2020 10.4
10.5† Form of Stock Option Agreement under FaceBank Group, Inc. 2020 Equity Incentive Plan. 10-Q July 6, 2020 10.5
10.6 Consent and Second Amendment to Note Purchase Agreement dated as of May 28, 2020 by and among FaceBank Group, Inc., Evolution AI Corporation, Pulse Evolution Corporation, fuboTV Inc. and Sports Rights Management, LLC and FB Loan Series I, LLC. 10-K May 29, 2020 10.64
10.7 Guaranty Agreement, dated as of April 30, 2020, issued by Sports Rights Management, LLC to FB Loan Series I, LLC. 8-K May 6, 2020 10.3
10.8 Joinder Agreement dated as of April 30, 2020 and effective April 2, 2020, by and among fuboTV Inc., Sports Rights Management, LLC, and FB Loan Series I, LLC. 8-K May 6, 2020 10.2
10.9 Counterpart Agreement, dated as of April 30, 2020, by and between FaceBank Group, Inc. and AMC Networks Ventures LLC. 8-K May 6, 2020 10.1

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10.12 Consent and Second Amendment to Note Purchase Agreement dated as of May 28, 2020 by and among FaceBank Group, Inc., Evolution AI Corporation, Pulse Evolution Corporation, fuboTV Inc. and Sports Rights Management, LLC and FB Loan Series I, LLC. 10-K May 29, 2020 10.64
10.13 Security Agreement dated as of March 19, 2020 by and among FaceBank Group, Inc., fuboTV Acquisition Corp., Evolution AI Corporation and Pulse Evolution Corporation, as Grantors and Borrower in favor of FB Loan Series I, LLC, as Purchaser. 8-K March 23, 2020 10.6
10.14 Collateral Assignment of Loan Agreement dated as of March 19, 2020 by and between FaceBank Group, Inc. and FB Loan Series I, LLC. 8-K March 23, 2020 10.7
10.15 Collateral Assignment of Merger Agreement dated as of March 19, 2020 by and among FaceBank Group, Inc., fuboTV Acquisition Corp and FB Loan Series I, LLC. 8-K March 23, 2020 10.8
10.16 Trademark Security Agreement dated as of March 19, 2020 by and among FaceBank Group, Inc., fuboTV Acquisition Corp., Evolution AI Corporation and Pulse Evolution Corporation in favor of FB Loan Series I, LLC. 8-K March 23, 2020 10.9
10.17 Guaranty Agreement, dated as of April 30, 2020, issued by Sports Rights Management, LLC to FB Loan Series I, LLC. 8-K May 6, 2020 10.3
10.18 Joinder Agreement dated as of April 30, 2020 and effective April 2, 2020, by and among fuboTV Inc., Sports Rights Management, LLC, and FB Loan Series I, LLC. 8-K May 6, 2020 10.2
10.19 Counterpart Agreement, dated as of April 30, 2020, by and between FaceBank Group, Inc. and AMC Networks Ventures LLC. 8-K May 6, 2020 10.1
10.20 Securities Purchase Agreement dated as of March 19, 2020 by and between FaceBank Group, Inc. and FB Loan Series I, LLC. 8-K March 23, 2020 10.10
10.21 Form of Indemnification Agreement by and between FaceBank Group, Inc. and its directors and officers. 8-K April 7, 2020 10.2
10.22† Employment Agreement dated as of April 1, 2020 by and between FaceBank Group, Inc. and David Gandler. 8-K April 7, 2020 10.1
10.23† Letter Agreement by and between FaceBank Group, Inc. and Edgar Bronfman Jr., dated as of April 29, 2020. 8-K May 5, 2020. 10.1
10.24† Employment Agreement dated as of May 30, 2020 by and between FaceBank Group, Inc. and Simone Nardi. 8-K June 12, 2020 10.1
10.25* Third Amendment to Note Purchase Agreement dated as of July 1, 2020 by and among Facebank Group, Inc., Evolution AI Corporation, Pulse Evolution Corporation, fuboTV Inc. and Sports Rights Management, LLC, as Borrower, and FB Loan Series I, LLC, as Purchaser.
10.26*° Lease, dated August 24, 2016, by and between fuboTV Inc. and RXR 1330 Owner LLC.
10.27* First Amendment to Lease, dated January 22, 2018, by and between fuboTV Inc. and RXR 1330 Owner LLC.
10.28*° Sublease, dated February 20, 2020, by and between fuboTV Inc. and Welltower, Inc.
10.29*° Lease and Service Agreement, dated September 1, 2018, by and between Recall, Inc. and Town Center, Inc.
10.30* Lease Agreement, dated February 14, 2019, by and between Recall Studies, Inc. and JYC Investors, LLC.
10.31* Form of Purchase Agreement, by and between the Company and the Purchaser
10.32 Amended Digital Likeness Development Agreement. 10-K May 29, 2020 10.63
31.1* Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
34
32.1* ~~Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~
101.INS* ~~XBRL INSTANCE DOCUMENT~~
101.SCH* ~~XBRL TAXONOMY EXTENSION SCHEMA~~
101.CAL* ~~XBRL TAXONOMY EXTENSION CALCULATION LINKBASE~~
101.DEF* ~~XBRL TAXONOMY EXTENSION DEFINITION LINKBASE~~
101.LAB* ~~XBRL TAXONOMY EXTENSION LABEL LINKBASE~~
101.PRE* ~~XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE~~
10.10† Employment Agreement dated as of April 1, 2020 by and between FaceBank Group, Inc. and David Gandler. 8-K April 7, 2020 10.1
10.11† Letter Agreement by and between FaceBank Group, Inc. and Edgar Bronfman Jr., dated as of April 29, 2020. 8-K May 5, 2020. 10.1
10.12† Employment Agreement dated as of May 30, 2020 by and between FaceBank Group, Inc. and Simone Nardi. 8-K June 12, 2020 10.1
10.13 Third Amendment to Note Purchase Agreement dated as of July 1, 2020 by and among Facebank Group, Inc., Evolution AI Corporation, Pulse Evolution Corporation, fuboTV Inc. and Sports Rights Management, LLC, as Borrower, and FB Loan Series I, LLC, as Purchaser. 10-Q July 6, 2020 10.25
10.14°

Lease, dated August 24, 2016, by and between fuboTV Inc. and RXR 1330 Owner LLC. 10-Q July 6, 2020 10.26
10.15 First Amendment to Lease, dated January 22, 2018, by and between fuboTV Inc. and RXR 1330 Owner LLC. 10-Q July 6, 2020 10.27
10.16°

Sublease, dated February 20, 2020, by and between fuboTV Inc. and Welltower, Inc. 10-Q July 6, 2020 10.28
10.17°

Lease and Service Agreement, dated September 1, 2018, by and between Recall, Inc. and Town Center, Inc. 10-Q July 6, 2020 10.29
10.18 Lease Agreement, dated February 14, 2019, by and between Recall Studies, Inc. and JYC Investors, LLC. 10-Q July 6, 2020 10.30
10.19 Form of Purchase Agreement, by and between the Company and the Purchaser. 10-Q July 6, 2020 10.31
10.20† FaceBank Group, Inc. Outside Director Compensation Policy. 10-Q July 6, 2020 10.40
31.1* Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS* XBRL INSTANCE DOCUMENT
101.SCH* XBRL TAXONOMY EXTENSION SCHEMA
101.CAL* XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF* XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB* XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE* XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

* Filed herewith.
† Management contract or compensatory plan or arrangement.
° Redacted.

3578

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~FACEBANK GROUP,~~ FUBOTV INC.

Date: ~~July 6,~~August 13, 2020 By: /s/ David Gandler
David Gandler
Chief Executive Officer (Principal Executive Officer)

~~FACEBANK GROUP,~~ FUBOTV INC.

Date: ~~July 6,~~August 13, 2020 By: /s/ Simone Nardi
Simone Nardi
Chief Financial Officer (Principal Financial Officer))

3679

	March 31			December 31,
	2020			2019
	(Unaudited)			*
ASSETS
Current assets
Cash	$	81		$	7,624
Accounts receivable, net		-			8,904
Notes Receivable - FuboTV		10,000			-
Inventory		-			49
Prepaid expenses		130			1,396
Total current assets		10,211			17,973

Property and equipment, net		-			335
Deposits		24			24
Investment in Nexway at fair value		2,374			-
Financial assets at fair value		1,965			1,965
Intangible assets		111,459			116,646
Goodwill		148,054			148,054
Right-of-use assets		37			3,519
Total assets	$	274,124		$	288,516

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		3,406		$	36,373
Accrued expenses		4,337			20,402
Due to related parties		305			665
Notes payable, net of discount		5,207			4,090
Notes payable - related parties		446			368
Convertible notes, net of $945 and $456 discount as of March 31, 2020 and December 31, 2019, respectively		1,962			1,358
Shares settled liability for intangible asset		-			1,000
Shares settled liability for note payable		7,515			-
Profit share liability		1,971			1,971
Warrant liability - subsidiary		39			24
Warrant liability		15,987			-
Derivative liability		389			376
Current portion of lease liability		37			815
Total current liabilities		41,601			67,442

Deferred income taxes		28,679			30,879
Other long-term liabilities		1			41
Lease liability		-			2,705
Long term borrowings		55,130			43,982
Total liabilities		125,411			145,049

COMMITMENTS AND CONTINGENCIES (Note 14)

Series D Convertible Preferred stock, par value $0.0001, 2,000,000 shares authorized, 456,000 and 456,000 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $463 and $462 as of March 31, 2020 and December 31, 2019, respectively		463			462

Stockholders’ equity:
Series AA Preferred stock, par value $0.00001, 35,800,000 shares authorized, 0 shares issued and outstanding as of December 31, 2019		-			-
Series A Preferred stock, par value $0.0001, 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2019		-			-
Series B Convertible Preferred stock, par value $0.0001, 1,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2019		-			-
Series C Convertible Preferred stock, par value $0.0001, 41,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2019		-			-
Series X Convertible Preferred stock, par value $0.0001, 1,000,000 shares authorized, 0 and 1,000,000 shares issued and outstanding as of December 31, 2019		-			-
Common stock par value $0.0001: 400,000,000 shares authorized; 32,307,663 and 28,912,500 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively		3			3
Additional paid-in capital		270,397			257,002
Accumulated deficit		(140,134	)		(135,832	)
Non-controlling interest		17,984			22,602
Accumulated other comprehensive loss		-			(770	)
Total stockholders’ equity		148,250			143,005
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY	$	274,124		$	288,516

	For the Three Months Ended March 31,
	2020			2019
Revenues
Revenues, net	$	7,295		$	-
Total revenues		7,295			-
Operating expenses
General and administrative		20,203			1,037
Amortization of intangible assets		5,217			5,153
Depreciation		3			5
Total operating expenses		25,423			6,195
Operating loss		(18,128	)		(6,195	)

Other income (expense)
Interest expense and financing costs		(2,581	)		(446	)
Gain on deconsolidation of Nexway		39,249			-
Loss on issuance of notes, bonds and warrants		(24,053	)		-
Other expense		(436	)		-
Change in fair value of warrant liability		(366	)		-
Change in fair value of subsidiary warrant liability		(15	)		2,477
Change in fair value of shares settled liability		(180	)		-
Change in fair value of derivative liability		297			128
Total other income		11,915			2,159
Loss before income taxes		(6,213	)		(4,036	)
Income tax benefit		(1,038	)		(1,169	)
Net loss		(5,175	)		(2,867	)
Less: net loss attributable to non-controlling interest		873			599
Net loss attributable to controlling interest	$	(4,302	)	$	(3,466	)
Less: Deemed dividend - beneficial conversion feature on preferred stock		(171	)		-
Net loss attributable to common stockholders	$	(4,473	)	$	(3,466	)

Net loss per share attributable to common stockholders
Basic	$	(0.15	)	$	(0.27	)
Diluted	$	(0.15	)	$	(0.27	)
Weighted average shares outstanding:
Basic		30,338,073			12,883,381
Diluted		30,338,073			12,883,381

	For the Three Months Ended March 31,
	2020			2019
Cash flows from operating activities
Net loss	$	(5,175	)	$	(2,867	)

Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of intangible assets		5,217			5,153
Depreciation		3			5
Stock-based compensation		9,061			-
Gain on deconsolidation of Nexway, net of cash retained by Nexway		(42,604	)		-
Common stock issued in connection with note payable		67			-
Loss on issuance of notes, bonds and warrants		24,053			-
Amortization of debt discount		1,664			234
Deferred income tax benefit		(1,038	)		(1,169	)
Change in fair value of derivative liability		(297	)		(128	)
Change in fair value of warrant liability		366			-
Change in fair value of subsidiary warrant liability		15			(2,477	)
Change in fair value of shares settled liability		180			-
Amortization of right-of-use assets		13			6
Accrued interest on note payable		112			144
Other adjustments		(55	)		-
Changes in operating assets and liabilities of business, net of acquisitions:
Accounts receivable		(927	)		-
Notes Receivable		(179	)		-
Prepaid expenses		1,102			(23	)
Accounts payable		1,295			172
Accrued expenses		(277	)		374
Due from related parties		(60	)		-
Lease liability		(14	)		(6	)
Net cash used in operating activities		(7,478	)		(582	)

Cash flows from investing activities
Investment in Panda Productions (HK) Limited		-			(1,000	)
Sale of profits interest in investment in Panda Productions (HK) Limited		-			212
Advance to fuboTV	$	(2,421	)
Lease security deposit		-			(13	)
Net cash used in investing activities		(2,421	)		(801	)

Cash flows from financing activities
Proceeds from issuance of convertible notes		900			-
Repayments of convertible notes		(550	)		(203	)
Proceeds from the issuance of Series D Preferred Stock		203			-
Proceeds from sale of common stock and warrants		2,297			1,778
Proceeds from sale of subsidiary’s common stock		-			65
Redemption of Series D Preferred Stock		(272	)		-
Proceeds from related parties notes		78			-
(Repayments) proceeds from (to) related parities		(300	)		18
Net cash provided by financing activities		2,356			1,658

Net (decrease) increase in cash		(7,543	)		275
Cash at beginning of period		7,624			31
Cash at end of period		81		$	306

Supplemental disclosure of cash flows information:
Interest paid	$	170		$	68
Income tax paid	$	-		$	-

Non cash financing and investing activities:
Reclass of shares settled liability for intangible asset to stock-based compensation	$	1,000		$	-
Issuance of common stock - subsidiary share exchange	$	1,150		$	-
Lender advanced loan proceeds direct to fuboTV	$	7,579		$	-
Accrued Series D Preferred Stock dividends	$	9		$	-
Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock	$	171		$	-
Common stock issued for lease settlement	$	-		$	130
Measurement period adjustment on the Evolution AI Corporation acquisition	$	-		$	1,920

	March 31,		March 31,
	2020		2019
Common stock purchase warrants		200,007		200,007
Series D Preferred Stock shares		456,000		-
Stock options		16,667		16,667
Convertible notes variable settlement feature		311,111		577,503
Total		983,785		794,177

	March 31, 2020
Beginning balance	$	30,879
Income tax benefit (associated with the amortization of intangible assets)		(1,038	)
Deconsolidation of Nexway		(1,162	)
Ending balance	$	28,679

Price per share Euros	€	5.28
Exchange rate		1.1032
Price per share USD	$	5.82
Nexway shares held by the Company		407,550
Fair value - investment in Nexway	$	2,374

Balance – December 31, 2019	$	227,763
Deconsolidation of Nexway		(51,168	)
Balance – March 31, 2020	$	176,595
Acquisition of fuboTV Pre-Merger		562,908
Less: transfer to asset held for sale		(28,541	)
Balance – June 30, 2020	$	710,962

	June 30, 2020		December 31, 2019

Suppliers		—	$	37,508
Affiliate fees		61,883		—
Broadcasting and transmission		17,960		—
Selling and marketing		5,735		—
Payroll taxes (in arrears)		1,308		1,308
Accrued compensation		1,553		3,649
Legal and professional fees		3,379		3,936
Accrued litigation loss		524		524
Taxes (including value added)		8,118		5,953
Subscriber related		2,694		—
Other		6,250		3,897
Total		109,404	$	56,775

	March 31, 2020			June 30, 2020
Principal value of Senior Note	$	10,050		$	10,050
Original issue discount		(2,650	)		(2,650	)
Discount resulting from allocation of proceeds to warrant liability		(7,400	)		(7,400	)
Amortization of discount		1,005			9,183
Principal repayment					(7,500	)
Net carrying value of Senior Note	$	1,005		$	1,683

	(i)	FB Loan consented to the May 11, 2020 sale by the Company of capital stock for aggregate consideration in the amount of ~~$7,409,045;~~$7.5 million; and
	(ii)	the provision requiring that following receipt by any loan party or any subsidiary of proceeds of any financing, the Borrower must prepay the Senior Note in an amount equal to 100% of the cash proceeds of such financing, was removed.

	Fair valued measured at March 31, 2020
	Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Financial Assets at Fair Value:
Investment in Equity/Debt Funds	$	-	$	1,965	$	-
Investment in Nexway at fair value		2,374		-		-
Total Financial Assets at Fair Value	$	2,374	$	1,965	$	-

Financial Liabilities at Fair Value:
Derivative liability - convertible notes	$	-	$	-	$	1,692
Profits interest sold		-		-		1,971
Embedded put option		-		-		389
Warrant liability - Subsidiary		-		-		39
Warrant liability		-		-		15,987
Total Financial Liabilities at Fair Value	$	-	$	-	$	20,078

	Fair Value measured at December 31, 2019
	Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Derivative liability – convertible notes	$	-	$	-	$	1,203
Profits interest		-		-		1,971
Embedded put option		-		-		376
Warrant Liability - Subsidiary		-		-		24
Total Financial Liabilities at Fair Value	$	-	$	-	$	3,574

	June 30, 2020
	Total		Level 1		Level 2		Level 3

Financial Liabilities at Fair Value:
Convertible notes	$	3,661	$	—	$	—	$	3,661
Profit share liability		2,119	$	—		—		2,119
Derivative liability		163		—		—		163
Warrant liability – subsidiary		21		—		—		21
Warrant liabilities		40,617		—		—		40,617
Total	$	46,581	$	—	$	—	$	46,581

	Convertible Notes			Warrant Liability - Subsidiary			Profits Share Liability		Warrant Liabilities			Derivative Liability
Fair value at December 31, 2019	$	1,203		$	24		$	1,971	$	—		$	376
Change in fair value		(200	)		15			—		366			(97	)
Additions		689			—			—		15,621			172
Redemption		—			—			—		—			(62	)
Fair value at March 31, 2020	$	1,692		$	39		$	1,971	$	15,987		$	389
Change in fair value		(925	)		(18	)		148		(4,966	)		(23	)
Additions		2,894			—			—		29,596			—
Redemption		—			—			—		—			(203	)
Fair value at June 30, 2020	$	3,661		$	21		$	2,119	$	40,617		$	163

	Derivative - Convertible Notes			Warrants (assumed from subsidiary)		Profits Interests Sold		Warrant Liability		Embedded Put Option
Fair value at December 31, 2019	$	1,203		$	24	$	1,971	$	-	$	376
Change in fair value		(200	)		15		-		366		(97	)
Additions		689			-		-		15,621		172
Redemption		-			-		-		-		(62	)
Fair value at March 31, 2020	$	1,692		$	39	$	1,971	$	15,987	$	389

	March 31, 2020			December 31, 2019			June 30, 2020			December 31, 2019
Exercise price	$	0.75		$	0.75		$	0.75		$	0.75
Stock price – subsidiary	$	0.03		$	0.02		$	0.05		$	0.02
Discount applied		0	%		0	%
Fair value of stock price	$	0.00		$	0.00		$	—		$	—
Risk free rate		0.28	%		1.62	%		0.17	%		1.62	%
Contractual term (years)		2.83			3.08			2.58			3.08
Expected dividend yield		0	%		0	%		—	%		—	%
Expected volatility		83.7	%		83.7	%		69.2	%		83.7	%
Number of subsidiary warrants outstanding		48,904,037			48,904,037			48,904,037			48,904,037

	June 30, 2020
Fair value of underlying common shares	$	10.45
Exercise price	$	5.00
Expected dividend yield		—	%
Expected volatility		50.5	%
Risk free rate		0.17	%
Expected term (years)		4.72

	March 31, 2020
Fair value of underlying common shares	$ 4.78 - 4.97
Exercise price	$	5.00
Dividend yield		-	%
Historical volatility		52.6% - 52.8	%
Risk free interest rate		0.14% – 0.66	%

	Issuance Date	Stated Interest Rate			Maturity Date	Principal		Unamortized Discount			Variable Share Settlement Feature at Fair Value		Carrying amount		Issuance Date	Stated Interest Rate			Maturity Date	Principal		Unamortized Discount			Variable Share Settlement Feature at Fair Value		Carrying amount
Convertible notes
JSJ Investments (2)	12/6/2019		10	%	12/6/2020	$	255	$	(174	)	$	443	$	524
Eagle Equities (3)	12/12/2019		12	%	12/12/2020		210		(147	)		297		360
BHP Capital (4)	12/20/2019		10	%	12/20/2020		125		(85	)		120		160
GS Capital Partners (5)	1/17/2020		10	%	1/17/2021		150		(120	)		210		240	1/17/2020		10	%	1/17/2021		150		(82	)		196		264
EMA Financial, LLC (6)	2/6/2020		10	%	11/6/2020		125		(100	)		204		229	2/6/2020		10	%	11/6/2020		125		(59	)		187		253
Adar Alef, LLC (7)	2/10/2020		12	%	2/10/2021		150		(129	)		220		241	2/10/2020		12	%	2/10/2021		150		(92	)		196		254
BHP Capital (8)	3/24/2020		10	%	3/24/2020		100		(95	)		99		104	3/24/2020		10	%	3/24/2020		100		(71	)		90		119
Jefferson Street Capital, LLC (9)	3/24/2020		10	%	3/24/2020		100		(95	)		99		104	3/24/2020		10	%	3/24/2020		100		(71	)		90		119
Balance at March 31, 2020						$	1,215	$	(945	)	$	1,692	$	1,962
Auctus Fund (10)															4/1/2020		10	%	3/30/2021		1,100		(825	)		1,663		1,938
Eagle Equities (11)															4/2/2020		10	%	3/31/2021		275		(207	)		351		419
Platinum Point (12)															4/2/2020		10	%	3/31/2021		103		(69	)		92		126
Platinum Point (13)															4/2/2020		10	%	4/20/2021		420		(340	)		381		461
EMA Financial, LLC (14)															5/5/2020		10	%	5/5/2020		250		(211	)		415		454
Balance at June 30, 2020																				$	2,773	$	(2,027	)	$	3,661	$	4,407

	Issuance Date	Stated Interest Rate			Maturity Date	Principal		Unamortized Discount			Variable Share Settlement Feature at Fair Value		Carrying amount
Convertible notes
Adar Bays – Alef (1)	7/30/2019		10	%	7/30/2020		275		(159	)		379		495
JSJ Investments (2)	12/06/2019		10	%	12/6/2020		255		(238	)		422		439
Eagle Equities (3)	12/12/2019		12	%	12/12/2020		210		(199	)		285		296
BHP Capital (4)	12/20/2019		10	%	12/20/2020		125		(114	)		117		128

Balance at December 31, 2019						$	865	$	(710	)	$	1,203	$	1,358

(1)	On July 30, 2019, the Company issued a convertible promissory note to Adar Alef, LLC in the amount of $275,000. The note accrues interest at a rate of 12% per annum and matures on July 30, 2020. The note is not convertible until the six month anniversary of the note, at which time if the note has not already been repaid by the Company, the note holder shall be entitled to convert all or part of the note into shares of the Company’s common stock, at a price per share equal to 53% of the lowest trading price of the common stock for the twenty prior trading days upon which the conversion notice is received by the Company.

	On January 20, 2020, the Company repaid the principal balance of $275,000 and accrued interest of approximately $16,000.

(2)	On December 6, 2019, the Company issued a convertible promissory note to JSJ Investments with a principal balance of $255,000. The Company received net proceeds of $250,000. The note matures on December 6, 2020 and bears interest at 10% per annum. The Company may prepay this note and unpaid interest on or prior to July 3, 2020. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 47% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date. On June 2, 2020, the Company repaid the principal balance of $255,000 and accrued interest of approximately $12,000.

(3)	On December 12, 2019, the Company issued a convertible promissory note to Eagle Equities, LLC with a principal balance of $210,000. The Company received net proceeds of $200,000. The note matures on December 12, 2020 and bears interest at 12% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock, at any time after the six month anniversary of the note, at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date. On June 10, 2020, the Company repaid the principal balance of $210,000 and accrued interest of approximately $13,000.

(4)	On December 20, 2019, the Company issued a convertible promissory note to BHP Capital NY Inc. with a principal balance of $125,000. The Company received net proceeds of $122,500. The note matures on December 20, 2020 and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date. In connection with the promissory note, the Company issued 5,000 shares of its restricted common stock with a fair value of approximately $47,000. The Company ~~will have~~had the option to buy back the shares 180 days from the issue date, for a one-time payment of $8.00 per share. This option was not exercised and has expired as of June 30, 2020. On June 17, 2020, the Company repaid the principal balance of $125,000 and accrued interest of approximately $6,000.

(5)	On January 17, 2020, the Company issued a convertible promissory note to GS Capital Partners, LLC. with a principal balance of $150,000. The note matures on January 17, 2021 and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.

	On July 15, 2020, the Company repaid the principal balance of $150,000 and accrued interest of approximately $7,000.

(6)	On February 6, 2020, the Company issued a convertible promissory note to EMA Financial, LLC. with a principal balance of $125,000. The note matures on November 6, 2020 and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock equal to the lower of (i) the lowest closing price of the common stock during the preceding twenty (20) day trading period ending on the latest trading day prior to the note issuance date or (ii) at a rate of 50% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.

(7)	On February 10, 2020, the Company issued a convertible promissory note to Adar Alef, LLC. with a principal balance of $150,000. The note matures on February 10, 2021 and bears interest at 12% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.

(8)	On March 24, 2020, the Company issued a convertible promissory note to BHP Capital NY Inc. with a principal balance of $100,000. The note matures on demand and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date.

(9)	On March 24, 2020, the Company issued a convertible promissory note to Jefferson Street Capital, LLC. with a principal balance of $100,000. The note matures on demand and bears interest at 10% per annum. The loan and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date.

(10)	On ~~January 29,~~April 1, 2020, the Company issued a convertible promissory note to Auctus Fund, LLC. with a principal balance of ~~$275,000.~~$1.1 million. The note matures on ~~November 29, 2020~~March 30, 2021 and bears interest at 10% per annum. The ~~loan~~note and any accrued interest may be converted into shares of the Company’s common stock at a rate of 50% multiplied by the lowest trading price during the previous ~~twenty five (25)~~thirty (30) day trading period ending on the latest complete trading day prior to the conversion date. In connection with this convertible promissory note, the Company issued 142,118 warrants and 30,000 shares of common stock. See Note 17.

(11)	On ~~March 19,~~April 2, 2020, the Company issued a convertible promissory note to Eagle Equities, LLC. with a principal balance of $275,000. The note matures on March 31, 2021 and bears interest at 10% per annum. The note and any accrued interest may be converted into shares of the Company’s common stock at a rate of 53% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.

(12)	On April 2, 2020, the Company issued a convertible promissory note to Platinum Point Capital, LLC. with a principal balance of $103,000. The note matures on March 31, 2021 and bears interest at 10% per annum. The note and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date.

(13)	On April 23, 2020, the Company issued a convertible promissory note to Platinum Point Capital, LLC. with a principal balance of $420,000. The note matures on April 20, 2021 and bears interest at 10% per annum. The note and any accrued interest may be converted into shares of the Company’s common stock at a rate of 61% multiplied by the lowest trading price during the previous fifteen (15) day trading period ending on the latest complete trading day prior to the conversion date. In connection with this convertible promissory note, the Company issued 55,172 warrants and 25,000 shares of common stock. See Note 17.

(14)	On May 11, 2020, the Company issued a convertible promissory note to EMA Financial, LLC. with a principal balance of $250,000. The note matures on May 5, 2021 and bears interest at 10% per annum. The note and any accrued interest may be converted into shares of the Company’s common stock equal to the lower of (i) the lowest closing price of the common stock during the preceding twenty (20) day trading period ending on the latest trading day prior to the note issuance date or (ii) at a rate of 50% multiplied by the lowest trading price during the previous twenty (20) day trading period ending on the latest complete trading day prior to the conversion date.

	Series D Preferred Stock
	Shares			Amount
Total temporary equity as of December 31, 2019		461,839		$	462
Issuance of Series D convertible preferred stock for cash		203,000			203
Offering cost related to issuance of Series D convertible preferred stock		-			(3	)
Deemed dividends related to immediate accretion of offering cost		-			3
Accrued Series D preferred stock dividends		8,868			9
Bifurcated redemption feature of Series D convertible preferred stock		-			(171	)
Deemed dividends related to immediate accretion of bifurcated redemption feature of Series D convertible preferred stock		-			171
Redemption of Series D preferred stock (including accrued dividends)		(210,831	)		(211	)
Total temporary equity as of March 31, 2020		462,876		$	463

Series D preferred stock issued		203,000
Per share value	$	1.00
Series D preferred stock value	$	203
Accrued dividends	$	8
Total Series D preferred stock	$	211
Redemption percentage	$	1.29
Total redemption	$	272

Series D preferred stock issued		253,000
Per share value	$	1.00
Series D preferred stock value	$	253
Accrued dividends	$	10
Total Series D preferred stock value	$	263
Redemption percentage		1.29	%
Total redemption	$	339

	Number of Shares			Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2019		16,667		$	28.20	$	—		8.1
Options assumed from Merger		8,051,098		$	1.31
Granted		5,747,039		$	8.51
Forfeited or expired		(359,331	)	$	0.75
Outstanding as of June 30, 2020		13,445,473		$	4.44	$	81,360		8.3
Options vested and exercisable as of June 30, 2020		5,442,709		$	4.43	$	81,378		6.9

Dividend yield	—	%
Expected volatility	76.0 – 88.1	%
Risk free rate	0.24 – 0.30	%
Derived service period	1.59 – 1.91

	Number of Warrants			Weighted Average Exercise Price		Total Intrinsic Value		Number of Warrants			Weighted Average Exercise Price		Total Intrinsic Value
Outstanding as of December 31, 2019		200,007		$	12.15	$	-		200,007		$	12.15	$	—
Issued		3,411,349		$	5.11	$	11,038,616		7,477,443		$	6.08	$	32,670
Expired		(200,000	)	$	-	$	-		(200,000	)	$	—	$	—
Outstanding as of March 31, 2020		3,411,356		$	5.16	$	11,038,616
Warrants exercisable as of March 31, 2020		3,411,356		$	5.16	$	11,038,616
Outstanding as of June 30, 2020									7,477,450		$	6.10	$	32,670
Warrants exercisable as of June 30, 2020									7,477,450		$	6.10	$	32,670

	For the Three Months Ended March 31, 2020		For the Three Months Ended June 30, 2020			For the Six Months Ended June 30, 2020
Operating leases
Operating lease cost	$	98	$	312		$	410
Variable lease cost		73		3			76

Operating lease expense		171	$	315		$	486
Short-term lease rent expense		-		166			166

Total rent expense	$	171	$	481		$	652

Weighted-average remaining lease term – operating leases				6.6			6.6
Weighted-average discount rate – operating leases				5.3	%		5.3	%