fuboTV Inc. /FL [FUBO] Filings

10-Q 1 fubo-20220630.htm 10-Q fubo-20220630

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 June 30, 2022


o			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: 001-39590

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.)

1290 Avenue of the Americas, New York, NY						10104
(Address of Principal Executive Offices)						(Zip Code)

(212) 672-0055

(Registrant’s Telephone Number, Including Area Code)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

FUBO

New York Stock Exchange

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 o

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

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. o

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

As of July 31, 2022, there were 185,295,945 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

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fuboTV Inc.

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		Page

	PART I - FINANCIAL INFORMATION	1

Item 1.	Financial Statements	1

	Condensed Consolidated Balance Sheets as of June 30 , 2022 (unaudited) and December 31, 20 21	2

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2022 and 2021 (unaudited)	3

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30 , 2022 and 2021 (unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 202 2 and 20 21 (unaudited)	6

	Notes to Condensed Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45

Item 4.	Controls and Procedures	46

	PART II - OTHER INFORMATION	48

Item 1.	Legal Proceedings	48

Item 1A.	Risk Factors	49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	88

Item 3.	Defaults Upon Senior Securities	89

Item 4.	Mine Safety Disclosures	89

Item 5.	Other Information	89

Item 6.	Exhibits	89

Signatures		92

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BASIS OF PRESENTATION

As used in this Quarterly Report on Form 10-Q (“Quarterly Report”), unless expressly indicated or the context otherwise requires, references to “fuboTV Inc.,” “fuboTV,” “we,” “us,” “our,” “the Company,” and similar references refer to fuboTV Inc., a Florida corporation and its consolidated subsidiaries.

FORWARD-LOOKING STATEMENTS

This Quarterly Report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as 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 regarding our future results of operations and financial position, industry and business trends, stock-based compensation, revenue recognition, business strategy, plans and market growth, and our objectives for future operations, including related to investment in our technologies and data capabilities, and strategies with respect to subscriber acquisition, our gaming business and other adjacent markets, and our international operations.

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 Part II, Item 1A, “Risk Factors” of this Quarterly Report. 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, forward-looking 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. We undertake no obligation to update any forward-looking statements made in this Quarterly Report 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, 2021 included in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2022 (the “Annual Report”).

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RISK FACTORS SUMMARY

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report. Material risks that may affect our business, operating results and financial condition include, but are not limited to, the following:

•Our actual operating results may differ significantly from our guidance.

•We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.

•We may require additional capital to meet our financial obligations and support planned business growth, and this capital might not be available on acceptable terms or at all.

•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.

•Our operating results may fluctuate, which makes our results difficult to predict.

•If we fail to effectively manage our growth, our business, operating results, and financial condition may suffer.

•If our efforts to attract and retain subscribers are not successful, our business will be adversely affected.

•Our agreements with certain distribution partners may contain parity obligations which limit our ability to pursue unique partnerships.

•If content providers refuse to license streaming content or other rights upon terms acceptable to us, our business could be adversely affected.

•Our content providers impose a number of restrictions on how we distribute and market our products and services, which can adversely affect our business.

•We rely upon Google Cloud Platform and Amazon Web Services to operate certain aspects of our service, and any disruption of or interference with our use of Google Cloud Platform and/or Amazon Web Services would impact our operations and our business would be adversely impacted.

•If we fail to comply with the reporting obligations of the Exchange Act, our business, financial condition, and results of operations, and investors’ confidence in us, could be materially and adversely affected.

•Our key 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.

•TV streaming is highly competitive and many companies, including large technology and entertainment companies, TV brands, and service operators, are actively focusing on this industry. If we fail to differentiate ourselves and compete successfully with these companies, it will be difficult for us to attract or retain subscribers and our business will be harmed.

•The gaming industry is heavily regulated and our failure to obtain or maintain applicable licensure or approvals, or otherwise comply with applicable requirements, could be disruptive to our business and could adversely affect our operations.

•Our products and services related to sports wagering will cause our business to become subject to a variety of related U.S. and foreign laws, many of which are unsettled and still developing, and which could subject us to claims or otherwise harm our business. The violation of any such laws, any adverse change in any such laws or their interpretation, or the regulatory climate applicable to these contemplated products and services, or changes in tax rules and regulations or interpretation thereof related to these

iii

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contemplated products and services, could adversely impact our ability to operate our business as we seek to operate in the future, and could have a material adverse effect on our financial condition and results of operations.

•Our participation in the sports wagering industry may expose us to risks to which we have not previously been exposed, including risks related to trading, liability management, pricing risk, payment processing, palpable errors, and reliance on third-party sports data providers for real-time and accurate data for sporting events, among others. We may experience lower than expected profitability and potentially significant losses as a result of a failure to determine accurately the odds in relation to any particular event and/or any failure of its sports risk management processes.

•There can be no assurance that we will be able to compete effectively or generate sufficient returns on our recently expanded sports wagering operations and launch of Fubo Sportsbook.

•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.

•Our shareholders will be subject to extensive governmental oversight, and if a shareholder is found unsuitable by a gaming authority, that shareholder may not be able to beneficially own, directly or indirectly, certain of our securities.

•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 may be unable to successfully expand our international operations and our international expansion plans, if implemented, will subject us to a variety of economic, political, regulatory and other risks arising from our international operations.

•We are subject to a number of legal requirements and other obligations regarding privacy, security, and data protection, and any actual or perceived failure to comply with these requirements or obligations could have an adverse effect on our reputation, business, financial condition and operating results.

•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.

•We are subject to taxation-related risks in multiple jurisdictions.

•We could be subject to claims or have liability based on defects with respect to certain historical corporate transactions that were not properly authorized or documented.

•Legal proceedings could cause us to incur unforeseen expenses and could occupy a significant amount of our management’s time and attention.

•The impact of worldwide economic conditions may adversely affect our business, operating results, and financial condition.

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

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fuboTV Inc.

Condensed Consolidated Balance Sheets

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


	June 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	272,671	$	374,294
Cash reserved for users	724		579
Short-term investments	100,000		—
Accounts receivable, net	31,730		34,308
Prepaid and other current assets	41,460		19,324
Total current assets	446,585		428,505

Property and equipment, net	6,992		6,817
Restricted cash	6,138		5,112
Intangible assets, net	198,684		218,186
Goodwill	616,277		630,269
Right-of-use assets	39,880		37,755
Other non-current assets	47,399		43,134
Total assets	$	1,361,955	$	1,369,778

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	53,099	$	56,460
Accrued expenses and other current liabilities	210,980		219,579
Notes payable	5,393		5,113
Deferred revenue	42,297		44,296
Warrant liabilities	—		3,548
Long-term borrowings - current portion	2,139		3,668
Current portion of lease liabilities	5,993		4,633
Total current liabilities	319,901		337,297

Convertible notes, net of discount	392,837		316,354
Deferred income taxes	1,671		2,431
Lease liabilities	37,215		34,129
Other long-term liabilities	8,567		8,686
Total liabilities	760,191		698,897

COMMITMENTS AND CONTINGENCIES (Note 14)

Redeemable non-controlling interest	1,630		—

Stockholders’ equity:
Common stock par value $0.0001: 400,000,000 shares authorized; 185,293,067 and 153,950,895 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	19		16
Additional paid-in capital	1,867,924		1,691,206
Accumulated deficit	(1,253,459)		(1,009,293)
Non-controlling interest	(11,463)		(11,220)
Accumulated other comprehensive income (loss)	(2,887)		172
Total stockholders’ equity	$	600,134	$	670,881
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY AND TEMPORARY EQUITY	$	1,361,955	$	1,369,778

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

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fuboTV Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022		2021		2022			2021
Revenues
Subscription	$	199,943	$	114,368	$	419,111		$	221,482
Advertising	22,020		16,466		45,172			29,072
Wagering	(182)		—		(483)			—
Other	109		50		109		—	50
Total revenues	221,890		130,884		463,909			250,604
Operating expenses
Subscriber related expenses	218,900		120,500		464,561			233,807
Broadcasting and transmission	17,157		12,395		37,454			22,946
Sales and marketing	30,789		21,514		76,975			43,657
Technology and development	20,923		20,001		42,348			31,439
General and administrative	27,445		28,293		59,674			46,447
Depreciation and amortization	8,519		9,247		19,981			18,456
Impairment of goodwill	10,682		—		10,682			—
Total operating expenses	334,415		211,950		711,675			396,752
Operating loss	(112,525)		(81,066)		(247,766)			(146,148)

Other income (expense)
Interest expense and financing costs	(3,680)		(4,175)		(7,450)			(6,629)
Amortization of debt discount	(619)		(4,043)		(1,219)			(6,555)
Loss on extinguishment of debt	—		(380)		—			(380)
Change in fair value of warrant liabilities	—		(6,019)		(1,701)			(6,604)
Other income (expense)	195		—		287			(18)
Total other income (expense)	(4,104)		(14,617)		(10,083)			(20,186)
Loss before income taxes	(116,629)		(95,683)		(257,849)			(166,334)
Income tax benefit	355		753		758			1,218
Net loss	(116,274)		(94,930)		(257,091)			(165,116)
Less: Net loss attributable to non-controlling interest	150		15		243			91
Net loss attributable to common stockholders	$	(116,124)	$	(94,915)	$	(256,848)		$	(165,025)

Other comprehensive income (loss)
Foreign currency translation adjustment	(844)		—		(2,215)			—
Comprehensive loss	$	(116,968)	$	(94,915)	$	(259,063)		$	(165,025)

Net loss per share attributable to common stockholders
Basic and diluted	$	(0.63)	$	(0.68)	$	(1.50)		$	(1.27)
Weighted average shares outstanding:
Basic and diluted	185,103,005		140,596,001		171,316,513			129,591,310

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

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fuboTV Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three and Six Months Ended June 30, 2022 and 2021

(Unaudited)

(in thousands, except share and per share amounts)


	Common Stock		Additional Paid-In Capital					Accumulated Deficit	Non-controlling Interest	Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
		Shares			Amount
Balance at December 31, 2021		153,950,895	$	16		$	1,691,206			$	(1,009,293)	$	(11,220)	$	172	$	670,881
Issuance of common stock/At-the-market offering, net of offering costs		27,443,580	2			203,794				—		—		—		203,796
Reclassification of the equity components of the 2026 Convertible Notes to liability upon adoption of ASU 2020-06		—	—			(87,946)				12,682		—		—		(75,264)
Exercise of warrants		540,541	—			10,249				—		—		—		10,249
Exercise of stock options		349,847	—			443				—		—		—		443
Delivery of common stock underlying restricted stock units		392,326	—			—				—		—		—		—
Stock-based compensation		—	—			19,449				—		—		—		19,449

Foreign currency translation adjustment		—	—			—				—		—		(2,215)		(2,215)
Net loss attributable to non-controlling interest		—	—			—				—		(93)		—		(93)
Net loss		—	—			—				(140,724)		—		—		(140,724)
Balance at March 31, 2022 (Unaudited)		182,677,189	$	18		$	1,837,195			$	(1,137,335)	$	(11,313)	$	(2,043)	$	686,522
Issuance of common stock/At-the-market offering, net of offering costs		2,400,000	1			16,391				—		—		—		16,392
Exercise of stock options		80,275	—			129				—		—		—		129
Delivery of common stock underlying restricted stock units		135,603	—			—				—		—		—		—
Stock-based compensation		—	—			14,209				—		—		—		14,209
Foreign currency translation adjustment		—	—			—				—		—		(844)		(844)
Net loss attributable to non-controlling interest		—	—			—				—		(150)		—		(150)
Net loss		—	—			—				(116,124)		—		—		(116,124)
Balance at June 30, 2022 (Unaudited)		185,293,067	$	19		$	1,867,924			$	(1,253,459)	$	(11,463)	$	(2,887)	$	600,134

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fuboTV Inc.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

Three and Six Months Ended June 30, 2022 and 2021

(Unaudited)

(in thousands, except share and per share amounts)


	Preferred stock			Common Stock			Additional Paid-In Capital		Treasury Stock				Accumulated Deficit		Non-controlling Interest		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount				Shares		Amount
Balance at December 31, 2020	23,219,613	$	406,665	92,490,768	$	9	$	853,824	$	(800,000)	$	—	$	(626,456)	$	(11,094)	$	622,948
Conversion of Series AA Preferred Stock	(23,219,613)	(406,665)		46,439,226	5		406,660		—		—		—		—		—
Exercise of common stock warrants	—	—		536,825	—		15,803		—		—		—		—		15,803
Recognition of debt discount on 2026 Convertible Notes	—	—		—	—		88,059		—		—		—		—		88,059
Exercise of stock options	—	—		1,082,964	—		776		—		—		—		—		776
Issuance of treasury stock in connection with acquisition	—	—		—	—		8,538		623,068		—		—		—		8,538
Stock based compensation	—	—		—	—		9,374		—		—		—		—		9,374
Other	—	—		—	—		(5)		—		—		—		—		(5)
Net loss attributable to non-controlling interest	—	—		—	—		—		—		—		—		(76)		(76)
Net loss	—	—		—	—		—		—		—		(70,110)		—		(70,110)
Balance at March 31, 2021 (Unaudited)	—	$	—	140,549,783	$	14	$	1,383,029	(176,932)		$	—	$	(696,566)	$	(11,170)	$	675,307
Exercise of common stock warrants	—	—		71,428	—		500		—		—		—		—		500
Recognition of debt discount on 2026 Convertible Notes	—	—		—	—		(113)		—		—		—		—		(113)
Exercise of stock options	—	—		508,664	—		1,200		—		—		—		—		1,200
Stock based compensation	—	—		—	—		24,431		—		—		—		—		24,431
Other	—	—		(32,581)	—		2		—		—		—		—		2
Net loss attributable to non-controlling interest	—	—		—	—		—		—		—		—		(15)		(15)
Net loss	—	—		—	—		—		—		—		(94,915)		—		(94,915)
Balance at June 30, 2021 (Unaudited)	—	$	—	141,097,294	$	14	$	1,409,049	(176,932)		$	—	$	(791,481)	$	(11,185)	$	606,397

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

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fuboTV Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands, except share and per share amounts)


	For the Six Months Ended June 30,
	2022		2021
Cash flows from operating activities
Net loss	$	(257,091)	$	(165,116)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	19,981		18,456
Amortization of gaming licenses and market access fees	1,858		—
Stock-based compensation	33,658		33,805
Impairment expense on goodwill	10,682		—
Amortization of debt discount	1,219		6,555
Loss on extinguishment of debt	—		380
Deferred income tax benefit	(758)		(1,218)
Change in fair value of warrant liabilities	1,701		6,604
Amortization of right-of-use assets	2,112		624

Other adjustments	653		245
Changes in operating assets and liabilities of business, net of acquisitions:
Cash reserved for users	(145)		—
Accounts receivable, net	2,476		(3,413)
Prepaid expenses and other assets	(23,662)		(5,583)
Accounts payable	(2,294)		1,390
Accrued expenses and other liabilities	(6,469)		13,233
Deferred revenue	(1,962)		7,068
Lease liabilities	209		(454)
Net cash used in operating activities	(217,832)		(87,424)

Cash flows from investing activities
Cash portion paid for acquisition	—		(1,740)
Purchases of short-term investments	(100,000)		—
Purchases of property and equipment	(1,055)		(2,138)
Capitalization of internal use software	(1,949)		—
Purchase of intangible assets - gaming	(700)		—
Payments for market access and license fee deposits	(3,462)		(1,300)
Net cash used in investing activities	(107,166)		(5,178)

Cash flows from financing activities
Proceeds from the issuance of common stock / At-the-market offering, net of offering costs	220,188		—
Proceeds from convertible note, net of issuance costs	—		389,946
Proceeds from exercise of stock options	572		1,976
Proceeds from the exercise of warrants	5,000		1,312
Repayments of notes payable and long-term borrowings	(1,359)		(24,709)
Net cash provided by financing activities	224,401		368,525

Net increase (decrease) in cash, cash equivalents and restricted cash	(100,597)		275,923
Cash, cash equivalents and restricted cash at beginning of period	379,406		136,221
Cash, cash equivalents and restricted cash at end of period	$	278,809	$	412,144

Supplemental disclosure of cash flows information:
Interest paid	$	6,639	$	432


Non-cash financing and investing activities:
Conversion of Series AA preferred stock to common stock	$	—	$	406,665
Issuance of treasury stock in connection with acquisition	$	—	$	8,538
Reclassification of the equity components of the 2026 Convertible Notes to liability upon adoption of ASU 2020-06	$	75,264	$	—
Cashless exercise of warrants	$	5,249	$	14,991

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

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fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Note 1 - Organization and Nature of Business

Incorporation

fuboTV Inc. (“fuboTV” or the “Company”) was incorporated under the laws of the State of Florida in February 2009 under the name York Entertainment, Inc. The Company changed its name to FaceBank Group, Inc. on September 30, 2019. On August 10, 2020, the Company changed its name to fuboTV Inc. and as of May 1, 2020, the Company’s trading symbol was changed from “FBNK” to “FUBO.” The Company’s common stock was approved for listing on the New York Stock Exchange (“NYSE”) in connection with a public offering in October 2020 and commenced trading on the NYSE on October 8, 2020.

Unless the context otherwise requires, “fuboTV,” “we,” “us,” “our,” and the “Company” refers to fuboTV and its subsidiaries on a consolidated basis.

Nature of Business

The Company is focused on developing its technology-driven IP in sports, movies, and live performances. The Company is principally focused on offering consumers a leading live TV streaming platform for sports, news, and entertainment. The Company’s revenues are primarily derived from the sale of subscription services and the sale of advertisements in the United States.

The Company’s subscription-based streaming services are offered to consumers who can sign-up for accounts through which the Company provides plans with the flexibility for consumers to purchase incremental features that include additional content or enhanced functionality (“Attachments”) best suited for them. Besides the website, consumers can also sign-up via some TV-connected devices. The fuboTV platform provides a broad suite of unique features and personalization tools such as multi-channel viewing capabilities, favorites lists and a dynamic recommendation engine, as well as 4K streaming and Cloud DVR offerings.

During the year ended December 31, 2021, the Company launched a business-to-consumer online sports wagering business (“Online Sportsbook”) in the states of Iowa and Arizona. The Company is planning to launch in additional states during 2022, and is developing a broader strategic plan for the Online Sportsbook based on market conditions and other factors. During the six months ended June 30, 2022, the Company paid $3.5 million for gaming licenses pursuant to market access agreements with third parties in various states (See Note 7).

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 and restricted cash of $278.8 million, short-term investments in time deposits of $100.0 million that mature in December 2022, working capital of $126.7 million and an accumulated deficit of $1.3 billion as of June 30, 2022. The Company incurred a net loss of $116.3 million and $257.1 million for the three and six months ended June 30, 2022, respectively. Since inception, the Company’s operations have been financed primarily through the sale of equity and debt securities. The Company has incurred losses from operations and negative cash flows from operating activities since inception and expects to continue to incur substantial losses.

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fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

As discussed further in Note 13, during the six months ended June 30, 2022, the Company received net proceeds of approximately $220.2 million (after deducting $4.5 million in commissions and expenses) from sales of 29,843,580 shares of its common stock, at a weighted average gross sales price of $7.53 per share pursuant to an At-The-Market Sales Agreement with its sales agents, Evercore Group L.L.C., Needham & Company, LLC and Oppenheimer & Co. Inc., effective August 13, 2021 (the “Sales Agreement”).

The Company’s current cash and cash equivalents and short-term investments, consisting of time-based deposits of $100.0 million that will mature in December 2022, will provide us with the necessary liquidity to continue as a going concern for at least one year from the date of issuance of these financial statements.

In addition to the foregoing, the Company cannot predict the long-term impact on its development timelines, revenue levels and its liquidity due to the worldwide spread of COVID-19 and other macroeconomic factors, including inflationary cost pressures and potential recession indicators. Based upon the Company’s current assessment, it does not expect the impact of the COVID-19 pandemic and other macroeconomic factors to materially impact the Company’s operations. However, the Company is continuing to assess the impact that the spread of COVID-19 and other macroeconomic factors may have on its operations.

Note 3 - Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The Company’s consolidated financial statements include the accounts of the Company and the accounts of the Company’s wholly-owned subsidiaries and non-wholly owned subsidiaries where the Company has a controlling interest. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP” or “U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation of such interim results.

The results for the unaudited condensed consolidated statement of operations and comprehensive loss are not necessarily indicative of results to be expected for the year ending December 31, 2022 or for any future interim period. The condensed consolidated balance sheet as of December 31, 2021 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, 2021 and notes thereto included in the Company’s Annual Report.

Use of Estimates

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

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fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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 and time-based deposits. Restricted cash primarily represents cash on deposit with financial institutions in support of a letter of credit outstanding in favor of the Company’s landlord for office space. The restricted cash balance has been excluded from the cash balance and is classified as restricted cash on the consolidated balance sheets.

On June 27, 2022, the Company entered into a time-based deposit totaling $50.0 million which accrues interest monthly at a rate of 2.0% and matures on September 27, 2022. No interest is paid until the settlement date of September 27, 2022.

The following table provides a reconciliation of cash, cash equivalents and restricted cash within the consolidated balance sheets that sum to the total of the same on the consolidated statement of cash flows (in thousands):


	June 30, 2022		December 31, 2021
Cash and cash equivalents	$	272,671	$	374,294
Restricted cash	6,138		5,112
Total cash, cash equivalents and restricted cash	$	278,809	$	379,406

Cash Reserved for Users

The Company maintains separate bank accounts to segregate users’ funds from operational funds. As of June 30, 2022, the cash reserved for users totaled approximately $0.7 million.

Short-term investments

The Company classifies its time-based deposits as cash and cash equivalents or short-term investments if it had a term at inception of greater or less than 90 days in accordance with ASC 320, Investments - Debt and Equity Securities. The Company reassesses the appropriateness of the classification of its investments at the end of each reporting period.

On June 27, 2022, the Company entered into a time-based deposit totaling $100.0 million which accrues interest monthly at a rate of 2.54% and matures on December 27, 2022 and is included in short-term investments on the accompanying consolidated balance sheet as of June 30, 2022. No interest is paid until the settlement date of December 27, 2022.

At June 30, 2022, the Company had $100.0 million of short-term investments classified as held-to-maturity.

Certain Risks and Concentrations

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

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

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fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Segment and Reporting Unit Information

Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is determined to be the CODM. The CODM reviews financial information and makes resource allocation decisions at the consolidated group level. The Company has two operating segments as of June 30, 2022 and December 31, 2021, streaming and wagering.

Significant Accounting Policies

For a detailed discussion of the Company’s significant accounting policies, see Note 3 to the consolidated financial statements for the year ended December 31, 2021, included in the Company’s Annual Report. Except for the accounting for the 2026 Convertible Notes discussed in Note 10 and Licensed Content below, there were no significant changes to the Company’s accounting policies during the six months ended June 30, 2022.

Licensed Content

During the six months ended June 30, 2022, the Company entered into various license agreements to obtain rights to certain live sports events. Costs incurred in acquiring certain rights to live sporting events are accounted for in accordance with ASC 920, Entertainment—Broadcasters (“ASC 920”). These program rights are expensed in a manner consistent with how it expects to monetize the licensed content, which is primarily based on subscription revenue.

Cash flows for licensed content are presented within operating activities in the condensed consolidated statements of cash flows.

Foreign Currency

The Company’s reporting currency is the U.S. dollar while the functional currency of each non-U.S. subsidiary is determined based on the primary economic environment in which such subsidiary operates. The financial statements of non-U.S. subsidiaries are translated into United States dollars in accordance with ASC 830, Foreign Currency Matters, using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining other comprehensive income (loss).

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fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Basic loss per share:
Net loss	$	(116,274)	$	(94,930)	$	(257,091)	$	(165,116)
Less: net loss attributable to non-controlling interest	150		15		243		91
Net loss attributable to common stockholders	(116,124)		(94,915)		(256,848)		(165,025)

Shares used in computation:
Weighted-average common shares outstanding	185,103,005		140,596,001		171,316,513		129,591,310
Basic and diluted loss per share	$	(0.63)	$	(0.68)	$	(1.50)	$	(1.27)

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


	June 30,
	2022	2021
Warrants to purchase common stock	3	1,750,843
Stock options	15,854,229	16,630,240
Unvested restricted stock units	7,158,200	1,243,757
Convertible notes variable settlement feature	6,966,078	6,966,078
Total	29,978,510	26,590,918

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fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Recently Adopted Accounting Standards

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by eliminating the requirement to separately account for an embedded conversion feature as an equity component in certain circumstances. A convertible debt instrument will be reported as a single liability instrument with no separate accounting for an embedded conversion feature unless separate accounting is required for an embedded conversion feature as a derivative or under the substantial premium model. The ASU simplifies the diluted earnings per share calculation by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. Further, the ASU requires enhanced disclosures about convertible instruments. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception.

The Company adopted the ASU 2020-06 on January 1, 2022 using the modified retrospective method. Upon adoption at January 1, 2022, the Company made certain adjustments in its condensed consolidated balance sheets as related to the 2026 Convertible Notes (see Note 10) which consists of an increase of $75.3 million in Convertible notes, net of discount, a net decrease of $87.9 million in Additional paid-in capital and a net decrease of $12.7 million in Accumulated deficit. Additionally, from January 1, 2022, as related to the 2026 Convertible Notes (see Note 10) we will no longer incur non-cash interest expense for the amortization of debt discount related to the previously separated equity component.

After adoption, the Company accounts for the 2026 Convertible Notes as single liability measured at amortized cost. The Company did not elect the fair value option. The Company will apply the if converted methodology in computing diluted earnings per share if and when profitability is achieved.

The following table summarizes the adjustments made to the Company’s condensed consolidated balance sheet as of January 1, 2022 as a result of applying the modified retrospective method in adopting ASU 2020-06 (in thousands):


	As Reported December 31, 2021		ASU 2020-06 Adjustments		As Adjusted January 1, 2022
2026 Convertible Notes	$	316,354	$	75,264	$	391,618
Additional paid-in capital	$	1,691,206	$	(87,946)	$	1,603,260
Accumulated deficit	$	(1,009,293)	$	12,682	$	(996,611)

Under the modified retrospective method, the Company does not need to restate the comparative periods in transition and will continue to present financial information and disclosures for periods before January 1, 2022 in accordance with guidance under ASC 470-20, Debt: Debt with Conversion and Other Options (ASC 470-20). The adoption did not impact previously reported amounts in the Company’s condensed consolidated statements of operations and comprehensive loss, cash flows and the basic and diluted net loss per share amounts.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses.” The ASU sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. Recently, the FASB issued the final ASU to delay adoption for smaller reporting companies to calendar year 2023. The Company adopted this ASU in January 2022 and the adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

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fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

In March 2019, the FASB issued ASU 2019-02, Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters-Intangibles-Goodwill and Other (Subtopic 920-350): Improvements to Accounting for Costs of Films and License Agreements for Program Materials, to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. The amendments also require that an entity reassess estimates of the use of a film for a film in a film group and account for any changes prospectively. In addition, this guidance requires an entity to test for impairment a film or license agreement within the scope of ASC 920-350 at the film group level, when the film or license agreement is predominantly monetized with other films and/or licensed agreements. The Company adopted this ASU in January 2022, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Recently Issued Accounting Standards

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change.

Note 4 – Acquisitions

Molotov S.A.S

On December 6, 2021, the Company acquired approximately 98.5% of the equity interests in Molotov S.A.S (“Molotov”), a television streaming platform located in France, for €101.7 million or $115.0 million (“Molotov Acquisition”). The consideration paid in cash totaled €14.4 million or $16.3 million, and the issuance of 5.7 million shares of the Company’s common stock with a fair value of approximately $98.8 million. Molotov is included in the streaming segment.

The Molotov Acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, which requires recognition of assets acquired and liabilities assumed at their respective fair values on the date of acquisition.

During the three and six months ended June 30, 2022, the Company continued finalizing its purchase price allocation of the assets acquired and liabilities assumed in the December 6, 2021 acquisition of Molotov based on new information obtained about facts and circumstances that existed as of the acquisition date. During the six months ended June 30, 2022, the Company recorded measurement period adjustments to its acquisition date goodwill to record the non-controlling interest of $1.8 million for the remaining 1.5% of Molotov’s equity interest and adjustments to right of use assets, lease liabilities, accounts payable, and accrued expenses based on additional information obtained about conditions that existed as of the acquisition date.

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fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

The following table presents the allocation of the purchase price to the net assets acquired, inclusive of intangible assets, with the excess fair value recorded to goodwill (in thousands):


Assets acquired:
Cash	$	818
Accounts receivable, net	1,752
Prepaid and other current assets	6,273
Property and equipment, net	738
Other non-current assets	2,643
Intangible assets	18,429
Goodwill	127,971
Right-of-use assets	4,566
Total assets acquired	163,190
Liabilities assumed:
Accounts payable	15,724
Accrued expenses and other current liabilities	21,628
Deferred revenue	812
Long-term borrowings - current portion	3,662
Lease liabilities	4,566
Total liabilities assumed	46,392
Redeemable non-controlling interest	1,752
Net assets acquired	$	115,046

Goodwill, which is not deductible for tax purposes, primarily represents the benefits expected to result from the assembled workforce of Molotov. The Company allocated the goodwill to its streaming segment.

The estimated useful lives and fair value of the intangible assets acquired are as follows (in thousands):


	Estimated Useful Lives (Years)	Fair Value
Customer relationships	2	$	9,271
Trade names	2	$	679
Software and technology	6	$	8,479
Total		$	18,429

Note 5 - Revenue from Contracts with Customers

Disaggregated revenue

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Subscription	$	199,943	$	114,368	$	419,111	$	221,482
Advertising	22,020		16,466

fuboTV Inc. /FL [FUBO] Filings
10-Q	[2022-08-08]
10-Q	[2022-05-10]
10-K	[2022-03-01]
10-Q	[2021-11-10]
10-Q	[2021-08-11]
10-Q	[2021-05-13]
10-K	[2021-03-25]
10-Q	[2020-11-16]
S-1	[2020-10-30]
10-Q	[2020-08-13]
S-1	[2020-08-11]
10-Q	[2020-07-06]
10-K	[2020-05-29]
10-Q	[2019-11-19]
10-Q	[2019-08-14]
10-Q	[2019-06-27]
10-K	[2019-06-10]
10-Q	[2018-11-19]
10-Q	[2018-08-15]
10-Q	[2018-05-21]
10-K	[2018-04-17]
10-Q	[2017-11-21]
10-Q	[2017-08-21]
10-Q	[2017-05-22]
10-K	[2017-04-10]
10-Q	[2016-12-07]
10-Q	[2016-11-23]
10-Q	[2016-11-23]
10-K	[2016-11-22]
10-Q	[2015-11-16]
10-Q	[2015-08-14]
10-Q	[2015-05-15]
10-K	[2015-03-31]
10-Q	[2014-11-14]
10-Q	[2014-08-19]
10-Q	[2014-05-20]
10-K	[2014-04-16]
10-Q	[2013-11-19]
10-Q	[2013-08-19]
10-Q	[2013-05-15]
10-K	[2013-04-15]
10-Q	[2012-11-16]
10-Q	[2012-09-26]