XML 40 R22.htm IDEA: XBRL DOCUMENT v3.22.0.1
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 16 - Commitments and Contingencies

 

Leases

 

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

 

The components of lease expense were as follows:

 

   2021   2020   2019 
   Years Ended December 31, 
   2021   2020   2019 
Operating leases               
Operating lease cost  $2,016   $935   $259 
Other lease cost   287    -    56 
Operating lease expense   2,303    935    315 
Short-term lease rent expense   -    -    - 
Total rent expense  $2,303   $935   $315 

 

Supplemental cash flow information related to leases were as follows:

 

   2021   2020   2019 
   Years Ended December 31, 
   2021   2020   2019 
Operating cash flows from operating leases  $1,029   $915   $281 
Right of use assets exchanged for operating lease liabilities  $34,560   $5,373   $3,719 
Weighted average remaining lease term - operating leases   12.2    6.3    7.8 
Weighted average remaining discount rate - operating leases   7.4%   5.4%   8.0%

 

Maturities of the Company’s operating leases, are as follows (amounts in thousands):

 

      
Year Ended December 31, 2022  $1,761 
Year Ended December 31, 2023   4,792 
Year Ended December 31, 2024   5,922 
Year Ended December 31, 2025   5,604 
Year Ended December 31, 2026   4,933 
Thereafter   40,970 
Total   63,982 
Less present value discount   (25,220)
Operating lease liabilities  $38,762 

 

On February 23, 2021, the Company entered into a lease agreement (the “Lease”) for approximately 55,042 rentable square feet located at 1290 Avenue of the Americas, New York, New York 10104. This location is the Company’s new corporate headquarters. The Lease term is twelve years and commenced during the quarter ended December 31, 2021. The annual fixed rent under the Lease will be:

 

  ● $4,128,150 for the first four years;
  ● $4,403,360 for years five through eight;
  ● $4,678,570 for years nine through twelve.

 

 

The Company has an option to extend the term of the Lease for an additional five years, at a fixed annual rate that is the fair market rent as of the beginning of the extension term as agreed to by the parties or determined by a neutral arbitration process.

 

On March 19, 2021, the Company entered into a sublease agreement for approximately 28,300 square feet located at One North Dearborn Avenue, Chicago, Illinois. The sublease term is four years and commenced May 1, 2021. The annual fixed rent will be $932,747 for the first year; $953,741 for the second year, $974,936 for the third year and $996,130 for the fourth year. This lease is included in the tables above.

 

Other Contractual Obligations

 

The Company is a party to several non-cancelable contracts with vendors and licensors for marketing and other strategic partnership related agreements where the Company is obligated to make future minimum payments under the non-cancelable terms of these contracts as follows ( in thousands):

Market Access Agreements

 

      
Year Ended December 31, 2022  $2,500 
Year Ended December 31, 2023   2,500 
Year Ended December 31, 2024   2,500 
Year Ended December 31, 2025   2,500 
Year Ended December 31, 2026   2,375 
Sub-total   12,375 
Less present value discount   (1,865)
Total  $10,510 

 

Schedule of Future Minimum Payments for Operating Leases

Annual Sponsorship Agreements

 

      
Year Ended December 31, 2022  $5,363 
Year Ended December 31, 2023  $6,131 
Year Ended December 31, 2024  $5,830 
Year Ended December 31, 2025  $6,010 
Year Ended December 31, 2026  $3,325 
Thereafter   19,675 
Total  $46,334 

 

Contingencies

 

The Company is subject to certain legal proceedings and claims that arise from time to time in the ordinary course of its business, including relating to business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. When the Company determines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the financial statements taken as a whole. When a material loss contingency is only reasonably possible, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can reasonably be made. Legal expenses associated with any contingency are expensed as incurred.

 

The Company is engaged in discussions with certain third parties regarding patent licensing matters. The Company is not able to reasonably estimate whether it will be able to reach an agreement with these parties or the amount of potential licensing fees, if any, it may agree to pay in connection with these discussions, but it is possible that any such amount could be material.

 

From time to time, we enter into business arrangements with vendors for technology services in the ordinary course of business. We are currently engaged in discussions with a vendor surrounding the scope of the parties’ relationship and underlying obligations under the terms of their contract. This includes, among other things, the type and range of services to be provided by this vendor to the Company, the corresponding expenditures by the Company payable under the agreement, and the vendor’s compliance with its good faith express and implied obligations under the contract.  Accordingly, we are not able to reasonably estimate the amount of the Company’s potential expenditures, if any, under our arrangement with this vendor, but it is possible that the amounts that the Company may pay for services under the contract could be material.

 

Legal Proceedings

 

The Company is and may in the future be involved in various legal proceedings arising from the normal course of business activities. Although the results of litigation and claims cannot be predicted with certainty, currently, the Company believes that the likelihood of any material adverse impact on the Company’s consolidated results of operations, cash flows or our financial position for any such litigation or claims is remote. Regardless of the outcome, litigation can have an adverse impact on the Company because of the costs to defend lawsuits, diversion of management resources and other factors.

 

 

Said-Ibrahim v. fuboTV Inc., David Gandler, Edgar M. Bronfman Jr., & Simone Nardi, Case No. 21-cv-01412 (S.D.N.Y) & Lee v. fuboTV, Inc., David Gandler, Edgar M. Bronfman Jr., & Simone Nardi, Case No. 21-cv-01641 (S.D.N.Y.) (consolidated as In re fuboTV Inc. Securities Litigation, No. 21-cv-01412 (S.D.N.Y.))

 

On February 17, 2021, putative shareholders Wafa Said-Ibrahim and Adhid Ibrahim filed a class action lawsuit against the Company, co-founder and CEO David Gandler, Executive Chairman Edgar M. Bronfman Jr., and CFO Simone Nardi (collectively, the “Class Action Defendants”). Plaintiffs allege that Class Action Defendants violated federal securities laws by disseminating false and misleading statements regarding the Company’s financial health and operating condition, including the Company’s ability to grow subscription levels, prospects, future profitability, seasonality factors, cost escalations, ability to generate advertising revenue, valuation, and entering the online sports wagering market. The Plaintiffs allege that Class Action Defendants violated Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 thereunder, as well as Section 20(a) of the Exchange Act, and seek damages and other relief.

 

On February 24, 2021, putative shareholder Steven Lee filed a nearly identical class action lawsuit against the same Defendants.

 

On April 29, 2021, the court consolidated Said-Ibrahim v. fuboTV Inc., David Gandler, Edgar M. Bronfman Jr., & Simone Nardi, Case No. 21-cv-01412 (S.D.N.Y) and Lee v. fuboTV, Inc., David Gandler, Edgar M. Bronfman Jr., & Simone Nardi, Case No. 21-cv-01641 (S.D.N.Y.) under In re FuboTV Inc. Securities Litigation, No. 1:21-cv-01412 (S.D.N.Y.). The court also appointed putative shareholder Nordine Aamchoune as lead plaintiff.

 

On July 12, 2021, Lead Plaintiff filed an Amended Class Action Complaint. Lead Plaintiff seeks to pursue this claim on behalf of himself as well as all other persons who purchased or otherwise acquired Company securities publicly traded on the New York Stock Exchange (“NYSE”) between March 23, 2020 and January 4, 2021, inclusive, and who were allegedly damaged thereby.

 

The Class Action Defendants filed a motion to dismiss the Amended Class Action Complaint on September 10, 2021. Lead Plaintiff filed an opposition on November 9, 2021. Class Action Defendants’ filed their reply in support of the motion to dismiss on December 9, 2021. The Company believes the claims alleged in both lawsuits are without merit and intends to vigorously defend these litigations.

 

Rosenfeld v. Edgar Bronfman Jr., Henry Ahn, Ignacio Figueras, Daniel Leff, Laura Onopchenko, David Gandler, Par-Jorgen Parson, & Simone Nardi, Case No. 21-cv-01953 (S.D.N.Y.)

 

On March 5, 2021, putative shareholder Robert Rosenfeld filed a derivative lawsuit against the Company and certain Company directors and officers, including Edgar Bronfman Jr., Henry Ahn, Ignacio Figueras, Daniel Leff, Laura Onopchenko, David Gandler, Par-Jorgen Parson, and Simone Nardi (collectively, the “Derivative Defendants”). Plaintiff’s complaint closely tracks the allegations in the Securities Class Action and alleges that the Derivative Defendants violated Sections 10(b) and 21D of the Securities Exchange Act of 1934, breached their fiduciary duties, and committed corporate waste.

 

Plaintiff seeks to prosecute the action on behalf of the Company, and seeks, among other relief, an order directing Derivative Defendants to take all necessary actions to reform and improve the Company’s corporate governance, risk management, and internal operating procedures to comply with applicable laws, and an award of damages to the Company for the harm suffered as a result of the alleged wrongful conduct.

 

On April 21, 2021, Derivative Defendants filed a Motion to Dismiss the Original Complaint. In light of the arguments made in Derivative Defendants’ Motion, Plaintiff filed his Amended Verified Shareholder Derivative Complaint on May 12, 2021. Derivative Defendants filed a Motion to Dismiss the Amended Complaint on June 2, 2021. On June 23, 2021, after thoroughly considering Derivative Defendants’ arguments in their Motion, Plaintiff concluded that Derivative Defendants’ arguments were well founded and he jointly, with Derivative Defendants, asked the Court to voluntarily dismiss the derivative action with prejudice, following a proposed Notice of the dismissal to current shareholders. On June 25, 2021, the court entered an order approving the form of the proposed Notice of dismissal to current shareholders and ordering fuboTV to file the Notice with the SEC and post the Notice to the investor relations section of fuboTV’s corporate website. On June 28, 2021, fuboTV filed the Notice with the SEC and posted the Notice to the investor relations section of fuboTV’s corporate website. On July 28, 2021, the court entered an order dismissing with prejudice the derivative lawsuit filed by Robert Rosenfeld.

 

Andrew Kriss and Eric Lerner vs. FaceBank Group, Inc. et. al. (Index No. 605474/20 Supreme Court of the State of New York.

 

On June 8, 2020, Andrew Kriss and Eric Lerner filed a Summons with Notice in the Supreme Court of the State of New York, Nassau County naming as defendants the Company, PEC, John Textor and Frank Patterson, among others. On November 12, 2020, plaintiffs filed a Complaint, which asserts claims for breach of express contract and implied duties, fraud in the inducement, unjust enrichment, conversion, declaratory relief, fraud, and fraudulent conveyance. The claims arise from an alleged relationship between Plaintiffs and defendant PEC. Plaintiffs seek monetary damages in an amount to be proven at trial, but not less than six million dollars ($6,000,000). The Company believes the claims are without merit and intends to vigorously defend this litigation and on January 19, 2021, the Company filed a motion to dismiss all claims asserted against it. That motion has been fully submitted and is pending resolution by the court. A court conference was held on November 15, 2021, and the court confirmed that the motion to dismiss was fully submitted.