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Notes Payable, Long-Term Borrowing, and Convertible Notes | 12 Months Ended
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Dec. 31, 2021
Notes Payable Long-term Borrowing And Convertible Notes |
Notes Payable, Long-Term Borrowing, and Convertible Notes | Note 11 - Notes Payable, Long-Term Borrowing, and Convertible Notes Notes payable, long-term borrowing, and convertible notes as of December 31, 2021 consist of the following (in thousands): Schedule of Notes Payable and Long-Term Borrowings
Note |  | Stated Interest Rate |  |  | Principal Balance |  |  | Capitalized Interest |  |  | Debt Discount |  |  | December 31, 2021 |
2026 Convertible Notes |  |  | 3.25 | % |  | $ | 402,500 |  |  | $ | - |  |  | $ | (86,146 | ) |  | $ | 316,354 |
Note payable |  |  | 10.0 | % |  |  | 2,700 |  |  |  | 2,377 |  |  |  | - |  |  |  | 5,077 |
BPi France |  |  | 2.25 | % |  |  | 2,422 |  |  |  | - |  |  |  | - |  |  |  | 2,422 |
Societe Generale |  |  | 0.25 | % |  |  | 1,246 |  |  |  | - |  |  |  | - |  |  |  | 1,246 |
Other |  |  | 4.0 | % |  |  | 30 |  |  |  | 6 |  |  |  | - |  |  |  | 36 |
|  |  |  |  |  | $ | 408,898 |  |  | $ | 2,383 |  |  | $ | (86,146 | ) |  | $ | 325,135 |
Notes payable and long-term borrowing as of December 31, 2020 consist of the following (in thousands):
Note |  | Stated Interest Rate |  |  | Principal Balance |  |  | Capitalized Interest |  |  | Debt Discount |  |  | December 31, 2020 |
Senior secured loan |  |  | LIBOR plus 5.25% per annum |  |  | $ | 20,000 |  |  | $ | - |  |  | $ | (444 | ) |  | $ | 19,556 |
Note payable |  |  | 10.0 | % |  |  | 2,700 |  |  |  | 1,858 |  |  |  | - |  |  |  | 4,558 |
Paycheck Protection Program Loan |  |  | 1.0 | % |  |  | 4,699 |  |  |  | - |  |  |  | - |  |  |  | 4,699 |
Other |  |  | 4.0 | % |  |  | 30 |  |  |  | 5 |  |  |  | - |  |  |  | 35 |
|  |  |  |  |  | $ | 27,429 |  |  | $ | 1,863 |  |  | $ | (444 | ) |  | $ | 28,848 |
2026 Convertible Notes As disclosed in Note 2, the Company issued $402.5 million of convertible notes (“2026 Convertible Notes”) dated February 2, 2021. The initial equivalent conversion price of the 2026 Convertible Notes was $57.78 per share of the Company’s common stock. Holders may convert their 2026 Convertible Notes on or after November 15, 2025, until the close of business on the second business day preceding the maturity date or prior to November 15, 2025 under certain circumstances including:
| (i) | during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ended on March 31, 2021, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
| (ii) | during the five-business day period after any five consecutive trading day period in which the trading price for each trading day of such five consecutive trading day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;
| (iii) | if the Company calls any or all of the 2026 Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
| (iv) | upon the occurrence of specified corporate events.
The Company may also redeem all or any portion of the 2026 Convertible Notes after February 20, 2024 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Upon conversion, the Company can elect to deliver cash or shares or a combination of cash or shares. The Company accounted for the 2026 Convertible Notes using a cash conversion model. In accordance with ASC 470-20, the Company used an effective interest rate of 8.67% to estimate the fair value of the debt instrument, excluding the equity conversion feature, and recognized a debt discount of $90.9 million (representing the difference between the fair value and the net proceeds) with a corresponding increase to additional paid in capital. The underwriting discount and offering expenses totaling $13.1 million were allocated between the debt and equity issuance costs in proportion to the allocation of the liability and equity components of the 2026 Convertible Notes. Accordingly, equity issuance costs of $3.0 million were recorded as an offset to additional paid-in capital and total debt issuance costs of $10.1 million were recorded on the issuance date and are reflected in the consolidated balance sheet as a direct deduction from the carrying value of the associated debt liability. The debt discount and debt issuance costs are being amortized through February 15, 2026, as amortization of debt discount on the accompanying consolidated statement of operations and comprehensive loss. During the year ended December 31, 2021, the Company paid $7.0 million of interest expense in connection with the 2026 Convertible Notes and recorded amortization expense of $14.9 million included in amortization of debt discount in the consolidated statements of operations and comprehensive loss. As of December 31, 2021, the net carrying value of the 2026 Convertible Notes was $316.4 million, with unamortized debt discount and issuance costs of $86.1 million. The estimated fair value (Level 2) of the 2026 Convertible Notes was $326.0 million. Senior Secured Loan In April 2018, fuboTV Pre-Merger entered into a senior secured term loan with AMC Networks Ventures, LLC (the “Term Loan”) with a principal amount of $25.0 million, bearing interest equal to LIBOR (London Interbank Offered Rate) plus 5.25% per annum and with scheduled principal payments beginning in 2020. The Company made principal repayments of $20.0 million during the year ended December 31, 2021. The Term Loan was repaid in full on May 7, 2021. Note payable The Company has recognized, through the consolidation of its subsidiary Evolution AI Corporation (“EAI”), a $2.7 million note payable bearing interest at the rate of 10% per annum that was due on October 1, 2018 (“CAM Digital Note”). The cumulative accrued interest on the CAM Digital Note amounts to $2.4 million. The CAM Digital Note is currently in a default condition due to non-payment of principal and interest. The Company is in negotiation with such holders to resolve the matter. The outstanding balance as of December 31, 2021, including interest and penalties, is $5.1 million and is included in notes payable on the accompanying consolidated balance sheet. Paycheck Protection Program Loan On April 21, 2020, the Company entered into a Promissory Note (the “PPP Note”) with JPMorgan Chase Bank, N.A. as the lender (the “Lender”), pursuant to which the Lender agreed to make a loan to the Company under the Paycheck Protection Program (the “PPP Loan”) offered by the U.S. Small Business Administration in a principal amount of $4.7 million pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The PPP Loan proceeds were utilized for payroll costs, including salaries, commissions, and similar compensation, group health care benefits, paid leaves, rent, utilities, and interest on certain other outstanding debt. The Company repaid the outstanding balance of $4.7 million on February 26, 2021. Other The Company assumed, through the consolidation of its subsidiary EAI, a $30,000 note payable due to a relative of the former Chief Executive Officer, John Textor bearing interest at the rate of 4% per annum. As of December 31, 2021, the principal balance and accrued interest totaled approximately $36,000. The Company assumed through the acquisition of Molotov, $3.7 million in notes bearing interest rates between 0.25% - 2.25% per annum.

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