| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
Or
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
________
Carolco Pictures,001-39590
| Florida | 26-4330545 | |||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(212) 672-0055
None
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||||||||||||
| Common Stock, par value $0.0001 per share | FUBO | New York Stock Exchange | ||||||||||||
Common Stock, par value $0.0001 per share
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
| Large accelerated filer | Accelerated filer | ||||||||||
| Non-accelerated filer | Smaller reporting company | ||||||||||
| Emerging growth company | o | ||||||||||
Trading
$421,150,566.
January 31, 2023 was 209,694,958 shares.
FORM 10-K
| Page | ||||||||
| Item 1B. | ||||||||
| 80 |
Information
As usedPart I, Item 1A in this annual report on Form 10-K “we”, “our”, “us”, “the Company” and “Carolco” refer to Carolco Pictures, Inc. and its subsidiary unless the context requires otherwise.
Overview
We are an award-winning feature film and television specials production company. We seek to finance, produce and distribute one or more television series and feature films to be licensed for exploitation in domestic and international theatrical, television, cable, home video and pay per view markets.
Through our subsidiary that we acquired in December 2013, High Five Entertainment, we specialize in the development and presentation of quality television programming including live events and award shows.
Through our subsidiary that we acquired in July 2016, Recall Studios, we focus on Virtual Reality content, filling the demand attendant to the increased production of virtual reality viewing devices absent a corresponding increase in content production.
Corporate History Summary
Information
Business Plan, Objectives and Recent Developments
Carolco Pictures creates feature films and television entertainment content, as well as virtual reality content. We are also developing non-linear consumer based editing software.
Through our recent acquisition of Recall Studios, Carolco Pictures creates virtual reality content and is developing non-linear consumer based editing software.
In September, 2014 we acquired intellectual property rights in relationor furnish it to the trademarked Carolco Pictures, a name synonymousSecurities and Exchange Commission (“SEC”). The information found on our website is not part of this or any other report we file with, high quality blockbuster films fromor furnish to, the Terminator series, Rambo series and Basic InstinctSEC.
On December 24, 2013, the Company entered into a Stock Purchase Agreement with Martin Fischer (the “SPA”), pursuant to which the Company acquired from Mr. Fischer seventy-five (75%) percent of the issued and outstanding stock (the “Shares”) of S&G Holdings, Inc., a Tennessee corporation doing business as High Five Entertainment (“High Five”), making High Five a majority owned subsidiary of the Company. Under the terms of the SPA, the Company paid Mr. Fischer Two Hundred Ten Thousand ($210,000) Dollars at closing, made a capital contribution to High Five in the amount of One Hundred Thousand ($100,000) Dollars at closing, and agreed to make additional capital contributions of Three Hundred Sixty-Five Thousand ($365,000) Dollars to High Five over the first nine (9) months of 2014, to fund business operations. In the event the Company fails to make the required capital contributions to High Five, the Company will be required to return certain of the Shares to Mr. Fischer.
On April 29, 2015, the Company entered into an agreement (the “Agreement”) with Mario Kassar, the Chairman of the Company’s Board of Directors, pursuant to which Mr. Kassar utilized $250,000 of the Company’s funds for costs relating to the production of the film “Audition.” Pursuant to the terms of the Agreement, the Company engaged Mr. Kassar to render producing and sales services for each film in the “Rambo” franchise, “SMITE” franchise or other feature length motion picture property introduced to the Company by Mr. Kassar (each, a “Picture”) on the same terms as apply to “Audition,” except that the producing fee shall not be less than 10% of the budget of each Picture. The Company also agreed to pay Mr. Kassar 5% of the purchase price of any Carolco-produced feature length films in the “Rambo” franchise and all completed films or film libraries acquired by the Company with Mr. Kassar’s assistance and based on Mr. Kassar’s introduction to the Company of such completed films or film libraries. The terms of the Agreement also provide that the Company will pay Mr. Kassar a discretionary bonus in relation to his efforts in bringing projects and opportunities to the Company.
On October 5, 2015, Alexander Bafer, Carolco Pictures, Inc.’s then controlling shareholder, Chief Executive Officer and director, entered into and closed separate and distinct Securities Purchase Agreements (each, an “Agreement”) with individual purchasers. The purchasers (individually) purchased in the aggregate from Mr. Bafer a total of 35,000,000 shares of the Company’s common stock.
On October 14, 2015, Frank Esposito and Martin Fisher resigned as members of the Board of Directors. On October 15, 2015, Sam Lupowitz and Richard Waserstein were appointed to serve as members of the Board of Directors, and Mr. Lupowitz was appointed CEO. On October 16, 2015, Mr. Bafer resigned his position as president and CEO of the Company
On January 1, 2016, Sam Lupowitz and other shareholders, collectively representing Carolco Pictures, Inc.’s controlling shareholders, (jointly, the “Seller”), entered into and closed separate and distinct Securities Purchase Agreements (the “Agreements”) with Tarek Kirschen whereby Tarek Kirschen (individually) purchased, in the aggregate, 5,000,000 shares of the Company’s Series A Preferred Shares and a total of 30,000,000 common shares of the Company’s common stock (the “Shares”). Each share of the Series A Preferred Stock has 1,000 votes on all matters presented to the holders of Common Stock, resulting in Tarek Kirschen holding a majority of the issued and outstanding voting capital shares of the Company.
On January 1, 2016, Sam Lupowitz resigned as a member of the Board of Directors of the Company and as an officer of the Company. There were no disagreements with Sam Lupowitz as to the Company’s operations, policies, or practices. On January 1, 2016, Tarek Kirschen was appointed as a member of the Board of Directors of the Company. On January 1, 2016, Tarek Kirschen was appointed as our Chief Executive Officer and Chief Financial (Accounting) Officer.
Effective January 11, 2016, the Company increased the number of authorized shares of common stock to 5,000,000,000, and the number of shares of its preferred stock to 50,000,000, the rights and preferences of which to be determined by the Board of Directors. This action was takenwebcasts in order to provide sufficient contractually required reserve shares (in material multiplesachieve broad, non-exclusionary distribution of the anticipated number of shares to be converted) of common stock for certain convertible promissory notes.
On January 28, 2016, Mario Kassar resigned as a member of the Board of Directors of the Company and as an officer of the Company. On February 1, 2016, Leonard Lauren was appointed as a member of the Board of Directors of the Company.
On June 22, 2016, the Company entered into a Stock Purchase Agreement (the “SPA”) by and between the Company, Tarek Kirschen, the Chief Executive Officer of the Company, and South Centre, Inc. (“South Centre”).
On June 22, 2016, in connection with and as required by the SPA, the Company entered into a Release and Issuance Agreement by and between Mr. Kirschen, the Company, Alexander Bafer, a former officer and shareholder of the Company, and South Centre (the “Release Agreement”). Pursuantinformation to the Release Agreement, effective as ofpublic and for complying with our disclosure obligations under Regulation FD. We encourage investors, the closing, (i) Mr. Kirschen released all claims that he may have againstmedia, and others to follow the Company, Mr. Baferchannels listed above and their respective related parties; and (ii) Mr. Bafer released all claims that he may have against Mr. Kirschen and his related parties. Into review the Release Agreement, the Company also agreed to issue to Mr. Kirschen 5,000,000 shares of Series A Stock, and 1,000,000 shares of newly designated Series B Preferred Stock of the Company, par value $0.0001 per share (the “Series B Stock”), and Mr. Kirschen agreed to forgive $439,000 that was owed by the Company to Mr. Kirschen. (the “Debt”).
On June 27, 2016, the transactions pursuantinformation disclosed through such channels. Any updates to the SPA and the Release Agreement closed, pursuant tolist of disclosure channels through which 5,000,000 shares of Series A Stock were issued to Mr. Kirschen, Chief Executive Officer and a director of the Company, and such shares of Series A Stock were subsequently sold to South Centre in exchange for the payment to Mr. Kirschen of $150,000. The sole shareholder of South Centre is David Cohen. Concurrently with this appointment, Leonard Lauren and Mr. Kirschen each resigned as a director of the Company, and Mr. Kirschen resigned all positions as an officer and employee of the Company. Effective concurrently with the closing, the Board appointed David Cohen as the Company’s Chief Executive Officer and Director.
On June 29, 2016, the Company, entered into a letter agreement with Esposito Partners, PLLC (“Esposito Partners”), pursuant to which the Company engaged Esposito Partners to provide legal services to the Company (the “Agreement”). The Agreement also provides that Frank Esposito, the Managing Member of Esposito Partners, shallwe will announce information will be named as a Director of the Company and shall also serve as the Company’s Chief Legal Officer and Secretary.
On July 20, 2016, the Company entered into that certain Amendment to Promissory Notes (“Notes Amendment”) with Alexander Bafer, whereby the maturity date of each of our five loans from Mr. Bafer was amended to be August 1, 2017 instead of October 1, 2015. The five loans are represented by Replacement Convertible Promissory Notes (“Notes”). Pursuant to the terms of the Notes Amendment, Mr. Bafer waived any default under each of the Notes through the date of the Notes Amendment as a result of any amounts payable under the Notes not being paid as of October 1, 2015 and waived the payment of any Default Interest (as defined in the Notes) through the date of the Notes Amendment as a result of such failure of payment. No other terms of the loans changed, and we did not pay any consideration for the extension. Our outstanding balanceposted on the loans under the Notes asinvestor relations page on our website.
On July 21, 2016, the Company entered into a Redemption and Issuance Agreement (the “Redemption Agreement”) by and between the Company and South Centre, Inc., an entity owned and controlled by David Cohen, the Company’s sole director (at the time) and Chief Executive Officer. Pursuant to the Redemption Agreement, on the same date, the Company redeemed 2,500,000 shares of the Company’s Series A Preferred Stock (the “Series A Stock”) in exchange for the payment to South Centre of $0.0001 per share, for a total consideration of $250. The Company undertook the redemption for the purposes of obtaining the shares of Series A Stock so that such shares could be paid to certain third parties in connection with the Contribution Agreement as disclosed below. Pursuant to the Redemption Agreement, on the same date, the Company issued to South Centre 12,750,000 shares of newly designated Series C Preferred Stock of the Company (the “Series C Stock”) in exchange for payment to the Company of $1,275.
On July 25, 2016, the Company entered into a Contribution Agreement (the “Contribution Agreement”) by and between the Company, Recall Studios, Inc., a Nevada corporation (“Recall”), South Centre and various other shareholders of Recall (the “Recall Shareholders”). The Contribution Agreement provided that the Recall Shareholders would contribute to the Company all of the shares of Recall held by the Recall Shareholders, which would result in Recall becoming a wholly owned subsidiary of the Company. In return for the contributions by the Recall Shareholders, the Company issued to the Recall Shareholders 25,256,250 shares of Series C Stock and 2,500,000 shares of the Series A Stock, that were redeemed by the Company from South Centre, as described above. The transactions under the Contribution Agreement closed on July 25, 2016.
The Contribution Agreement provided that upon the closing of the transactions in the Contribution Agreement, the Company would enter into employment agreements with (i) Bradley Albert as President and Chief Creative Officer of the Company, (ii) Justin Morris as Chief Operating Officer of the Company and (iii) Alexander Bafer as Chief Development Officer of the Company. The Company entered into a Chairman Agreement with Alexander Bafer (the “Chairman Agreement”) on July 25, 2016, pursuant to which Mr. Bafer was named to the Board and also named Chairman of the Board. Pursuant to the Chairman Agreement, on the effective date thereof the Company issued to Mr. Bafer 510,000 shares of Series A Stock of the Company, which shares were immediately vested.
On July 25, 2016, pursuant to the Contribution Agreement, the Company issued 1,990,000 shares of Series A Stock and 25,256,250 shares of Series C Stock to the Recall Shareholders in exchange for the contribution to the Company by the Recall Shareholders (collectively) of 25,256,250 shares of common stock of Recall, and 748,334 shares of Class A Preferred Stock of Recall, collectively constituting 100% of the issued and outstanding capital stock of Recall. Pursuant to the Redemption Agreement pursuant to which South Centre returned 2,500,000 shares of the Series A Stock to the Company, on July 25, 2016, the Company issued to South Centre 12,750,000 shares of Series C Stock in exchange for payment to the Company of $1,275. At the option of the holder thereof, each share of Series C Stock is convertible into two shares of common stock of the Company (the “Common Stock”) provided that this option is not exercisable until there are sufficient shares of Common Stock authorized for the conversion of all of the Series C Stock. There is no adjustment to the conversion ratio in the event of a reverse stock split of the common stock or for any other reason.
In addition to the above, on the closing of the transaction with Recall, the Company issued 1,000,000 shares of Series C Stock to Harrison Smith (a former shareholder of Recall) and 993,750 shares of Series C Stock to Frank Esposito, an officer and director of the Company in consideration of services rendered to the Company in connection with the Contribution Agreement. Pursuant to the Employment Agreement with Mr. Bafer, on the commencement of his employment term, the Company issued to Mr. Bafer 510,000 shares of Series A Stock of the Company, which shares were immediately vested.
On July 25, 2016, the transactions pursuant to the Contribution Agreement closed, pursuant to which 1,990,000 shares of Series A Stock and 25,256,250 shares of Series C Stock were issued to the Recall Shareholders, and 1,993,750 shares of Series C Stock were issued to Mr. Smith and Mr. Esposito. On July 21, 2016, the Company amended its Articles of Incorporation to designate a new series of preferred stock, the Series C Preferred Stock (the “Series C Stock”) to be utilized in the transactions described above. 40,000,000 shares were designated as Series C Stock.
In July 2016, the Company entered into an agreement with Recall Studios, Inc., a Nevada corporation (“Recall Studios”) and various other shareholders of Recall Studios. The agreement provided that Recall Shareholders would contribute to the Company all of the shares of Recall held by the Recall Shareholders, which would result in Recall becoming a wholly owned subsidiary of the Company. Recall Studios, focuses on Virtual Reality content. Founded by business, media and entertainment industry leaders to meet growing demand for Virtual Reality (VR), and Augmented Reality (AR) content, Recall Studios is the future of new media entertainment and technology. Operating within the convergence of immersive content and software, Recall is allowing consumers to create and share interactive experiences across all platforms through its production of content and software permitting consumer based editing of non-linear content.
The Company
Film Production
The Filmmaking Process. The filmmaking process starts with an idea, from freelance writers or from existing literary or other works. Successful ideas are generally written up as a treatment (or story description) and then proceed to a screenplay, followed by the storyboarding process and then finally into the production process. Excluding the script and early development phase, the production process, from storyboarding to filming out the final image, for a full-length feature film can take approximately two to four years. We outsource individuals that are responsible for preparing and offering story-lines and ideas for the initial stages of development. These individuals, through creative development controls, are responsible for ensuring that ideas follow the best creative path within a desired budget and schedule. The complexity of each project, the background locations, the characters and all of the elements in a project create a very intricate and time-consuming process that differs from project-to-project. The four general phases for development of a full-length feature film include (1) the development phase which consists of story and visual development, (2) the pre-production phase which involves final refinement of the script and story, (3) the production phase which involves the actual filming and (4) the post-production phase where elements such as sound effects and the music/score are added.
Television Production
Through our subsidiary High Five Entertainment, we specialize in the development and presentation of quality television programming including specials, pilots, live events and award shows. Founded in Los Angeles, California in 1983, High Five Entertainment’s unwavering commitment to excellence in entertainment production for more than 30 years continues to foster an impressive legacy of unsurpassed client satisfaction through collaborative creative development, meticulous planning and flawless delivery of world-class entertainment properties. High Five Entertainment generates revenue from advertising sales and distribution of content through media channels such as theatrical, home entertainment and television.
High Five Entertainment, produced television’s first ever live musical performances weaved throughout a previously recorded network television premiere. On September 24, 2014, in connection with ABC’sNashvillepremieres on both the East Coast and West Coast, High Five Entertainment mixed fantasy and reality as it brought together theNashville stars with actual country music legends, broadcasting two concerts directly from the Bluebird Café set. Receiving real life acclaim for the innovation and quality, High Five Entertainment continues its ground breaking work. The progressive mixture of live and taped footage comes immediately after High Five Entertainment produced the Americana Music Honors & Awards, another in a series of well received accomplishments.
High Five Entertainment again produced the Country Music Awards Red Carpet event for the CMT network, leading in to the 48th Annual CMA Awards. We believe High Five Entertainment will continue to produce its ground breaking and well received programming in the immediate future.
In September 2014, we acquired intellectual property rights in relation to the trademarked Carolco Pictures. The Company believes it will successfully leverage the name that brought the public noteworthy films such as the Terminator series, the Rambo Series, Basic Instinct, Total Recall and The Doors, and capitalize on this acquisition. We have been awarded intellectual property rights to the concomitant service mark for use in the United States.
High Five Entertainment
As briefly described above, High Five Entertainment is an internationally recognized, Emmy Award-winning entertainment production company based in Nashville, Tennessee specializing in the development and presentation of quality television programming including series, specials, pilots, live events and award shows.
Founded in Los Angeles, California in 1983, High Five’s unwavering commitment to excellence in entertainment production for more than 30 years continues to foster an impressive legacy of unsurpassed client satisfaction through collaborative creative development, meticulous planning and flawless delivery of world-class entertainment properties.
Relocating to Nashville in the early nineties, High Five Entertainment became synonymous with the presentation of groundbreaking music television events (“The Women of Country” CBS, “This Is Garth Brooks” NBC, “At the Ryman” CMT and “The Road” Tribune Entertainment). Today, High Five continues to be one of the premiere producers of quality music-television entertainment with ongoing episodes of Opry Live quality music-television entertainment with ongoing episodes of synonymous with the presentation of groundbreaking music television events.
High Five made an extremely successful foray into the fascinating world of motorsports entertainment, producing SPEED Channel’s (soon to be Fox Sports One) top-rated series tPass Time”, a riveting, fast-paced game show for gear heads. HFE produced more than 150 episodes of the show. Also for SPEED Channel, High Five produced two seasons the popular unscripted series “Drag Race High” pitting two area high school motor-shop classes in direct head to head competition building and racing their own dragsters. HFE followed this with the series “Burnout –The Ultimate Drag Race Challenge” in Phoenix, AZ which aired on MTV2. HFE also recently produced a record-breaking PBS pledge special with Dr. Daniel Amen, iChange Your Brain, Change Your Life”, and the follow-up special “A Magnificent Mind At Any Age”.
Recall Studios
On July 21, 2016, we acquired Recall studios. Founded by business, media and entertainment industry leaders to meet growing demand for Virtual Reality (VR) and Augmented Reality (AR) content, Recall Studios operates within the convergence of immersive content and software. Recall Studios will allow consumers to create and share interactive experiences across all platforms.Combining modern business strategy with industry experience by bringing together highly trained relative newcomers and entertainment industry stalwarts to create low risk, high profit and artistically acclaimed feature film virtual reality and television projects, the Company and its subsidiaries are analyzing profitability across myriad entertainment sectors. We believe that Recall Studios is the future of new media entertainment and technology.
New Media is a multi-billion-dollar industry even in its nascent form. Demand for VR and mixed media content is growing rapidly.
Experienced at developing immersive narratives and software, we believe that Recall’s team is positioned to capitalize on the absence of high quality consumer VR experiences and software. No company has emerged as the leader in either VR production or technologies that allow consumers to edit, create, and distribute interactive VR content. Recall’s competition is limited as we do not believe that there are any companies actively providing non-linear, interactive VR software/platform solutions for consumers.
Management
The business side of our management team is disciplined in financial risk mitigation techniques. Aside from the commercialization of our management team’s past successes, which cannot in themselves necessarily predict future success, we are experienced at balancing projects, budgets and growth to effectively manage risk in light of our business objectives.
We believe that we have unique access to Hollywood talent, scripts and third parties ripe for acquisition. We believe that the reputation of our management team in producing some of the most-well known, talked about and socially ingrained entertainment opens doors for us that are closed to others.
We believe we represent a new model in entertainment industry profitability. We intend to focus on growth and efficiency. Our development plan combines modern business strategy with old-fashioned industry experience. Our early acquisition, High Five Entertainment, has given us highly regarded, industry leading talent. We have matched that talent with new and existing property development. By targeting additional revenue positive entertainment projects and companies, we expect to achieve increased profitability and efficiency through scale.
Competition
We believe that our management team’s reputation, contacts and experience give us a competitive edge. However, the market for productions currently is, and is expected to continue to be, extremely competitive. Our competitors include many companies that have substantially greater financial, management, marketing resources and experience than us. There can be no assurance that our productions will be competitive with other motion pictures or television shows, or that we will be able to achieve or maintain profitability.
Employees
As of December 31, 2015, we had four full-time employees. As of October 31, 2016, we had four full-time employees.
stock. The other nominees. Results of Operations for the The accompanying consolidated financial statements have been prepared assuming that for at least the next twelve months. net increase in accounts payable, accrued expenses and other current and long-term liabilities of $63.3 million due to timing of payments and a net increase in deferred revenue of $21.1 million, partially offset by increases in accounts receivable of $9.8 million and prepaid expenses, prepaid sports rights and other assets of $35.3 million. approximately $389.4 million of net proceeds received from the issuance of senior convertible notes, $140.4 million of net proceeds received from the “at-the market” offering and $6.8 million of proceeds received from the exercise of stock options and warrants. These proceeds were offset by repayments of $24.7 million of outstanding debt. and Estimates they occur. at the reasonable assurance level. E.Changes in Internal Control over Financial Reporting Schedules : We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 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. Total Stockholder’s Equity (Deficit) Loss before non-controlling interest Loss attributable to non-controlling interest Common stock issued for cash Estimates in December 2021, the Company issued the remaining 176,932 shares of treasury stock in connection with the acquisition of Edisn Inc. See Note 5 for further discussion regarding the acquisitions. The carrying amounts of the Company’s financial assets and liabilities, such as cash, other assets, accounts payable and accrued payroll, approximate their fair values because of the short maturity of these instruments. The carrying rates for instruments of similar credit risk. December 31, 2022 and 2021. Net 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 $133.2 million, $111.9 million and $48.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. transition. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s consolidated financial statements. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in material changes to its financial position. Standards In 2021: Goodwill, which is not deductible for tax purposes, primarily represents the benefits expected to result from the assembled workforce of Molotov. The Company 2022, in connection with the MEP Framework Agreement (See Note Black-Scholes option pricing model. The Company price. The risk-free interest rate 2022. exercise their stock options. The modifications resulted in incremental stock-based compensation expense of $2.1 million and $10.6 million during the years ended December 31, 2022 and December 31, 2021, respectively. 2022. the Company’s stock price. During the year ended December 31, December 31, 2022, there was $4.2 million of unrecognized stock-based compensation expense for market and service-based stock options. the grant date or based on the achievement of pre-established parameters relating to the performance of the Company’s stock price. During the year ended December 31, Company’s time-based restricted stock unit activity during the year ended December 31, 2022 is as follows: grant date which totaled $47.2 million. During the year ended December 31, During the year ended December 31, 31, 2022 the Company recorded an impairment charge of approximately $2.3 million for the right of use asset balances recorded in connection with Fubo Gaming (See Note 4).Notsmallerthe placement of a cookie or similar technologies on a user’s device and for direct electronic marketing. The GDPR also imposes conditions on obtaining valid consent for cookies, such as a prohibition on pre-checked consents and a requirement to ensure separate consents are sought for each type of cookie or similar technology. The current national laws that implement the ePrivacy Directive are highly likely to be replaced across the EEA (but not directly in the UK) by the ePrivacy Regulation which will significantly increase fines for non-compliance. In addition, recent European court decisions and regulatory guidance are driving increased attention to cookies and tracking technologies. For example, in December 2020 the French data protection regulator (the CNIL) imposed fines of EUR 100 million and EUR 35 million respectively against certain entities for alleged breaches of cookies consent and transparency requirements; and in December 2021, the CNIL imposed fines of EUR 150 million and EUR 60 million against certain entities for alleged failures to allow users to easily reject cookies.We do not own any real property. We maintainat 5550 Glades Road, Suite 516, Boca Raton, Florida 33431 under a one year rental agreement, which commenced on April 1, 2014, providinglease that expires in 2033. In addition, we lease various office and shared workspaces throughout the United States and internationally. We believe that our facilities are suitable to meet our current needs, and that suitable additional or substitute space will be available as needed to accommodate any further physical expansion of operations and for rental payments of $700 per month. This lease is now on a month to month basis.any additional offices.The Company is not currently engagedany legal proceedings, however,Note 16 to the Company received a letter dated April 26, 2016 from Studiocanal S.A., which claims to be the assigneeconsolidated financial statements included in Part II, Item 8 of trademark rights in ce1tain marks previously registered by a company that has been defunct since 1996. The letter stated that use of the marks by the Company is likely to cause confusion, to cause mistake, or to deceive as to whether there is an affiliation or association between the Company and the defunct entity and/or Studiocanal, and requested that the Company cease and desist from use of such marks and relinquish trademark registrations obtained by the Company after judicial decision. The Company responded and discussions were held between representatives of the Company and Studiocanal. At this time, Company is not aware of any legal claim having been brought by Studiocanal.Annual Report.10StockholderShareholder Matters and Issuer Purchases of Equity Securities.is quotedtrades on the OTC Pink tier of the OTC Markets and has tradedNew York Stock Exchange under the symbol, “CRCO”. On November 11, 2016, the closing sale price for“FUBO.”stock was $0.0011. Our stock has been thinly traded and there can be no assurance that a liquid market for our common stock will ever develop.following table sets forth the rangeactual number of high and low bid prices for our common stock for the periods indicated. The information reflects inter-dealer prices, without retail mark-ups, mark-downs or commissions and may not necessarily represent actual transactions.Year Quarter Ending High Low 2016 December 31 (1) $ .0011 $ 0.0011 September 30 $ 0.0004 $ 0.0001 June 30 $ 0.001 $ 0.0003 March 31 $ 0.0087 $ 0.0004 2015 December 31 $ .001 $ 0.001 September 30 $ 0.28 $ 0.28 June 30 $ 0.31 $ 0.26 March 31 $ 0.45 $ 0.45 2014 December 31 $ 1.50 $ 0.20 September 30 $ 4.75 $ 0.25 June 30 $ 5.00 $ 0.05 March 31 $ 5.00 $ 5.00 (1)Reflects transactions through November 11, 2016.Asshareholders is greater than this number of November 11, 2016, there were approximately 116 record holders an unknown number of additional holdersand includes shareholders who are beneficial owners but whose stock isshares are held in “street name”street name by brokers and 337,397,856 shares of common stock issued and outstanding.Equity Compensation Plan InformationThe Company has adopted a 2014 Equity Incentive Stock Plan (the “Plan”). The Plan provides for the issuance of up to 5,000,000 incentive stock options and nonqualified stock options to the Company’s employees, officers, directors, and certain consultants. The Plan is administered by the Company’s Board, and has a term of 10 years.nevernot declared or paid any cash dividends on our capitalcommon stock. We currently intend to retain all available funds and any future earnings, for use inif any, to finance the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future.
Payment of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, the requirements and contractual restrictions of then-existing debt instruments, and other factors that our board of directors deems relevant.11IssuanceUnregistered SecuritiesDuring the year ended December 31, 2015, the Company sold 3,555,500 common shares for $195,000 at purchase prices ranging from $0.005 to $0.20 per share.During February 2015, the Company sold 15,000 units at $0.80 per unit, for a total of $12,000. Each unit consisted of one share of common stock, one Class A warrant and one Class B warrant. The warrants are exercisable for two years from issuance at $3.00 and $6.00 per common share, respectively.During March 2015, the Company sold an additional 12,500 units at $0.80 per unit and 250,000 units at $0.50 per unit for a combined total of $135,000. Each unit consisted of one share of common stock, one Class A warrant and one Class B warrant. The warrants are exercisable for two years from issuance at $3.00 and $6.00 per common share, respectively.During April 2015, the Company sold 3,125 units at $0.80 per unit for a total of $2,500. Each unit consisted of one share of common stock, one Class A warrant and on Class B warrant. The warrants are exercisable for two years from issuance at $3.00 and $6.00 per share, respectively.From March 2015 through July 2015, the Company entered into five investor relations related consulting agreements pursuant to which the Company issued an aggregate of 1,776,000 shares of common stock. Under the provisions of ASC 505 and the termsSection 18 of the agreements,Exchange Act, except to the measurement date was determined to be the contract date, with no vesting or forfeiture provisions or significant disincentives for non-performance. Accordingly, the fair value of the issuances totaling $195,000, was charged to expense on the effective date of the agreements.In April 2015, the Company enteredextent that we specifically incorporate it by reference into an agreement with Mr. Mario Kassar, the Chairman of our Board of Directors. The agreement addressed funding of the Company’s “Audition” film project and provided for the issuance of 100,000 common shares to Mr. Kassar under the terms of the agreement. Under the provisions of ASC 505 and the terms of the agreement, the measurement date was determined to be the contract date, with no vesting or forfeiture provisions or significant disincentives for non-performance. Accordingly, the fair value of the issuance of $0.37 per share based on market price, was charged to stock-based compensation on the effective date of the agreement.The foregoing securities were issued in reliance on Section 4(a) (2) and/or Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). The shares were issued in private transactions to United States residents. The shares of common stock have not been registereda document filed under the Securities Act or under any state securities lawsthe Exchange Act.may(iii) the S&P Media and Entertainment Index, assuming an initial investment of $100 on October 8, 2020 including reinvestment of dividends where applicable. The results presented below are not be offered or sold without registration or an applicable exemption from the registration requirements. The shareholders acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risknecessarily indicative of an investment in the securities, and that they had the opportunity to ask questionsfuture performance.
Selected Financial Data.Not required for smaller reporting companies.
Reserved.12were incorporatedare a sports-first, cable TV replacement product, offering subscribers access to tens of thousands of live sporting events annually, as well as leading news and entertainment content, both live and on February 20, 2009, indemand. Fubo allows customers to access content through streaming devices and on SmartTVs, mobile phones, tablets, and computers.Florida, under the name York Entertainment,Delaware to dissolve our wholly owned subsidiary, Fubo Gaming Inc. On October 5, 2010, we amended our articles of incorporation to change our name to Brick Top Productions, Inc. Effective December 31, 2014, we amended our articles of incorporation to change our name to Carolco Pictures, Inc.We are an award-winning feature film and television specials production company. We seek to finance, produce and distribute one or more television series and feature films to be licensed for exploitation in domestic and international theatrical, television, cable, home video and pay per view markets. Through our subsidiary High Five Entertainment, we specialize in the development and presentation of quality television programming including series, specials, pilots, live events and award shows. We seek to combine modern business strategy with old-fashioned industry experience by bringing together highly trained relative newcomers and entertainment industry stalwarts to create low risk, high profit and artistically acclaimed feature film and television projects.Recent DevelopmentsOn January 1, 2016, Sam Lupowitz and other shareholders, collectively representing Carolco Pictures, Inc.’s controlling shareholders, (jointly, the “Seller”), entered into and closed separate and distinct Securities Purchase Agreements (the “Agreements”) with Tarek Kirschen whereby Tarek Kirschen (individually) purchased, in the aggregate, 5,000,000 shares of the Company’s Series A Preferred Shares and a total of 30,000,000 common shares of the Company’s common stock (the “Shares”(“Fubo Gaming”). Each share of the Series A Preferred Stock has 1,000 votes on all matters presented to the holders of Common Stock, resulting in Tarek Kirschen holding a majority of the issued and outstanding voting capital shares of the Company.On January 1, 2016, Sam Lupowitz resigned as a member of the Board of Directors of the Company and as an officer of the Company. There were no disagreements with Sam Lupowitz as to the Company’s operations, policies, or practices. On January 1, 2016, Tarek Kirschen was appointed as a member of the Board of Directors of the Company. On January 1, 2016, Tarek Kirschen was appointed as our Chief Executive Officer and Chief Financial (Accounting) Officer.Effective January 11, 2016, the Company increased the number of authorized shares of common stock to 5,000,000,000 and the number of shares of its preferred stock to 50,000,000, the rights and preferences of which to be determined by the Board of Directors. This action was taken in order to provide sufficient contractually required reserve shares (in material multiples of the anticipated number of shares to be converted) of common stock for certain convertible promissory notes.On January 28, 2016, Mario Kassar resigned as a member of the Board of Directors of the Company and as an officer of the Company. On February 1, 2016, Leonard Lauren was appointed as a member of the Board of Directors of the Company.On June 22, 2016, the Company entered into a Stock Purchase Agreement (the “SPA”) by and between the Company, Tarek Kirschen, the Chief Executive Officer of the Company and South Centre, Inc. (“South Centre”).On June 22, 2016, inIn connection with the dissolution of Fubo Gaming, we concurrently ceased operation of Fubo Sportsbook (as defined below).as required by the SPA, the Company enteredour wholly-owned subsidiary (“Merger Sub”) merged with and into a Release and Issuance Agreement by and between Mr. Kirschen, the Company, Alexander Bafer, a former officer and shareholder of the Company, and South Centre (the “Release Agreement”). Pursuant to the Release Agreement, effective as of the closing, (i) Mr. Kirschen released all claims that he may have against the Company, Mr. Bafer and their respective related parties; and (ii) Mr. Bafer released all claims that he may have against Mr. Kirschen and his related parties. In the Release Agreement, the Company also agreed to issue to Mr. Kirschen 5,000,000 shares of Series A Stock, and 1,000,000 shares of newly designated Series B Preferred Stock of the Company, par value $0.0001 per share (the “Series B Stock”), and Mr. Kirschen agreed to forgive $439,000 that was owed by the Company to Mr. Kirschen (the “Debt”).13On June 27, 2016, the transactions pursuant to the SPA and the Release Agreement closed, pursuant to which 5,000,000 shares of Series A Stock were issued to Mr. Kirschen, Chief Executive Officer and a director of the Company, and such shares of Series A Stock were subsequently sold to South Centre in exchange for the payment to Mr. Kirschen of $150,000. The sole shareholder of South Centre is David Cohen. Concurrently with this appointment, Leonard Lauren and Mr. Kirschen each resigned as a director of the Company, and Mr. Kirschen resigned all positions as an officer and employee of the Company. Effective concurrently with the Closing, the Board appointedDavid CohenfuboTV Sub, whereby fuboTV Sub continued as the Company’sChief Executive Officersurviving corporation and Director.On June 29, 2016, the Company, entered into a letter agreement with Esposito Partners, PLLC (“Esposito Partners”),became our wholly-owned subsidiary pursuant to which the Company engaged Esposito Partners to provide legal services to the Company (the “Agreement”). The Agreement also provides that Frank Esposito, the Managing Member of Esposito Partners, shall be named as a Director of the Company and shall also serve as the Company’s Chief Legal Officer and Secretary.On July 20, 2016, the Company entered into that certain Amendment to Promissory Notes (“Notes Amendment”) with Alexander Bafer, whereby the maturity date of each of our five loans from Mr. Bafer was amended to be August 1, 2017 instead of October 1, 2015. The five loans are represented by Replacement Convertible Promissory Notes (“Notes”). Pursuant to the terms of the Notes Amendment, Mr. Bafer waived any defaultAgreement and Plan of Merger and Reorganization dated as of March 19, 2020, by and among us, Merger Sub and fuboTV Sub (the “Merger Agreement”). Following the Merger, we changed our name from “FaceBank Group, Inc.” to “fuboTV Inc.,” and we changed the name of fuboTV Sub to “fuboTV Media, Inc.” The combined company operates under the name “Fubo,” and our trading symbol is “FUBO.”Notes throughvalue of our platform because, for example, we introduce new or adjust existing features, adjust pricing or platform offerings, or change the datemix of content in a manner that is not favorably received by them, we may not be able to attract and retain subscribers. To the Notes Amendmentextent that our competition pursues aggressive promotional campaigns, our value proposition may also be adversely impacted.any amounts payable under the NotesCOVID-19 pandemic, we and other streaming services experienced rapid growth in adoption as consumers engage with streaming video and audio through a variety of devices, including connected TVs, mobile phones, and tablets. Although traditional pay TV currently accounts for the majority of TV viewing hours for U.S. households; the proportion has declined in recent years as customers cut the cord. While we believe consumers are increasingly favoring the streaming services based on, among other factors, customer experience and pricing considerations, these positive trends for our business may not being paidcontinue during future periods.October 1, 2015their advertising budgets to traditional media, and waived the payment of any Default Interest (as definedwe expect advertisers may do so in the Notes)future. Although traditional TV advertisers have shown a growing interest in over-the-top (“OTT”) advertising, we cannot be certain that their interest will increase in the future. If advertisers do not perceive meaningful benefits of OTT advertising, the market may develop more slowly than we expect, which could adversely impact our operating results and our ability to grow our business. In addition, advertising spend is affected by broader macroeconomic conditions, and therefore economic downturns and recessionary fears may also negatively impact our ability to capture advertising dollars.datefirst and second quarter of the Notes Amendment asfollowing year.such failurethe deconsolidation of payment. NoNexway AG, which was effective as of March 31, 2020, the Company no longer generates revenue from software licenses.termsdistribution costs related to content streaming.loans changed,cost to acquire a signal, transcode, store, and we did not pay any consideration forretransmit it to the extension. Oursubscribers.balanceborrowings and the loss recorded on the loans underdeconsolidation of a subsidiary.Notes aschange in deferred tax assets and liabilities and resulting change in valuation allowance.July 20, 2016 was approximately $469,000.On July 21, 2016, the Company entered into a Redemption and Issuance Agreement (the “Redemption Agreement”) by and between the Company and South Centre, Inc., an entity owned and controlled by David Cohen, the Company’s sole director (at the time) and Chief Executive Officer. Pursuantoperating expenses related to the Redemption Agreement, on the same date, the Company redeemed 2,500,000 shareslaunch of the Company’s Series A Preferred Stock (the “Series A Stock”) in exchange for the payment to South Centre of $0.0001 per share, for a total consideration of $250. The Company undertook the redemption for the purposes of obtaining the shares of Series A Stock so that such shares could be paid to certain third parties in connectionwagering business and impairment expense associated with the Contribution Agreement as disclosed below. Pursuant to the Redemption Agreement, on the same date, the Company issued to South Centre 12,750,000 shareswrite-off of newly designated Series C Preferred Stockgoodwill, intangible assets, and other assets.On July 25, 2016, pursuant to the Contribution Agreement, the Company issued 1,990,000 shares of Series A Stock and 25,256,250 shares of Series C Stock to the Recall Shareholders in exchange for the contribution to the Company by the Recall Shareholders (collectively) of 25,256,250 shares of common stock of Recall, and 748,334 shares of Class A Preferred Stock of Recall, collectively constituting 100% of the issued and outstanding capital stock of Recall. Pursuant to the Redemption Agreement pursuant to which South Centre returned 2,500,000 shares of the Series A Stock to the Company, on July 25, 2016, the Company issued to South Centre 12,750,000 shares of Series C Stock in exchange for payment to the Company of $1,275. At the option of the holder thereof, each share of Series C Stock is convertible into two shares of common stock of the Company (the “Common Stock”) provided that this option is not exercisable until there are sufficient shares of Common Stock authorized for the conversion of all of the Series C Stock. There is no adjustment to the conversion ratio in the event of a reverse stock split of the common stock or for any other reason.In addition to the above, on the closing of the transaction with Recall, the Company issued 1,000,000 shares of Series C Stock to Harrison Smith (a former shareholder of Recall) and 993,750 shares of Series C Stock to Frank Esposito, an officer and director of the Company in consideration of services rendered to the Company in connection with the Contribution Agreement. Pursuant to the Employment Agreement with Mr. Bafer, on the commencement of his employment term, the Company issued to Mr. Bafer 510,000 shares of Series A Stock of the Company, which shares were immediately vested.On July 25, 2016, the transactions pursuant to the Contribution Agreement closed, pursuant to which 1,990,000 shares of Series A Stock and 25,256,250 shares of Series C Stock were issued to the Recall Shareholders, and 1,993,750 shares of Series C Stock were issued to Mr. Smith and Mr. Esposito.On July 21, 2016, the Company amended its Articles of Incorporation to designate a new series of preferred stock, the Series C Preferred Stock (the “Series C Stock”) to be utilized in the transactions described above.40,000,000 shares were designated as Series C Stock.In July 2016, the Company entered into an agreement with Recall Studios, Inc., a Nevada corporation (“Recall Studios”) and various other shareholders of Recall Studios. The agreement provided that Recall Shareholders would contribute to the Company all of the shares of Recall held by the Recall Shareholders, which would result in Recall becoming a wholly owned subsidiary of the Company. Recall Studios, focuses on Virtual Reality content. Founded by business, media and entertainment industry leaders to meet growing demand for Virtual Reality (VR), and Augmented Reality (AR) content, that Recall Studios is the future of new media entertainment and technology. Operating within the convergence of immersive content and software, Recall Studios is allowing consumers to create and share interactive experiences across all platforms through its production of content and software permitting consumer based editing of non-linear content.Subsequent to December 31, 2015, the Company issued a total of 243,540,999 shares of common stock upon conversion of convertible notes and accrued interest of approximately $104,000.Private Unit OfferingOn March 2, 2015, we commenced an offering to sell to certain “accredited investors” up to 31,250,000 units (each, a “Unit”) at a price per Unit of $0.50, each Unit consisting of one share of our common stock, one Class A Common Stock Purchase Warrant (the “Class A Warrant”) and one Class B Common Stock Purchase Warrant (the “Class B Warrant”). Each Class A Warrant entitles the holder to purchase one share of our common stock at an exercise price of $3.00 per share for a period of two years after its issuance and each Class B Warrant entitles the holder to purchase one share of our common stock at an exercise price of $6.00 per share for a period of two years after its issuance. The minimum investment amount per investor is $100,000 for 125,000 Units subject to our right to accept subscriptions in a lesser amount. We expect to invest up to $4,000,000 of the proceeds from this offering to partially finance the production of a motion picture based on the screenplay titled “Audition” written by Richard Gray. In addition, we plan to continue use the balance of the offering proceeds in our feature film and television production business.YearYears Ended December 31, 2015 Compared to2022, and 2021 (in thousands):For the Years Ended December 31, 2022 2021 Revenues Subscription $ 905,886 $ 564,441 Advertising 101,739 73,749 Other 1,071 180 Total revenues 1,008,696 638,370 Operating expenses Subscriber related expenses 976,415 593,241 Broadcasting and transmission 73,377 55,563 Sales and marketing 183,615 135,720 Technology and development 69,264 55,418 General and administrative 81,151 89,039 Depreciation and amortization 36,731 37,666 Total operating expenses 1,420,553 966,647 Operating loss (411,857) (328,277) Other income (expense) Interest expense and financing costs (11,696) (13,451) Amortization of debt discount (2,476) (14,928) Loss on extinguishment of debt — (380) Change in fair value of warrant liabilities (1,701) 2,659 Other income (expense) 1,019 (90) Total other expense (14,854) (26,190) Loss from continuing operations before income taxes (426,711) (354,467) Income tax benefit 1,666 2,681 Net loss from continuing operations (425,045) (351,786) Discontinued operations Loss from discontinued operations before income taxes (136,874) — (31,177) Net loss from discontinued operations (136,874) (31,177) Net loss (561,919) (382,963) Year Endedyear ended December 31, 2014 Year Ended December 31, 2015 2014 Revenue $ 964,141 $ 790,467 Cost of goods sold $ 792,031 $ 631,326 Operating expenses $ (3,218,204 ) $ (2,899,574 ) Net Loss from Operations before non-controlling interest $ (7,609,153 ) $ (2,276,941 ) Net Loss attributable to non-controlling interest $ (32,008 ) $ (56,745 ) Net Loss attributable to Carolco Pictures’ stockholders $ (7,577,145 ) $ (2,620,196 )
2022, we recognized revenues of $1,008.7 million compared to $638.4 million during the year ended December 31, 2021. The increase of $370.3 million was primarily due to an increase in subscription revenue of $341.4 million, comprising $290.5 million from increases in our subscriber base, $29.1 million from increases in subscription package prices and attachments sold and $21.8 million from the acquisition of Molotov S.A.S. ("Molotov") in December 2021. Advertising revenue increased $28.0 million primarily due to an increase in the number of impressions sold.15Revenues2015 were $964,000 as2021. The decrease of $7.8 million was primarily due to a decrease in stock-based compensation of $16.2 million, $7.6 million in sales tax and $5.7 million in professional fees, partially offset by a $15.6 million increase from the acquisition of Molotov and $4.7 million increase in salaries due to an increase in employee headcount.$790,000$37.7 million during the year ended December 31, 2021. The decrease of $1.0 million is primarily related to a reduction of amortization expense of $6.7 million, partially offset by increased amortization expense of $5.8 million from the acquisitions of Molotov and Edisn in December 2021.2014. The increase2020 includes the results of operations of Facebank AG and Nexway, which were disposed of in revenue was due to an increase in demand for the Company’s production services, particularly in areaJuly 2020. Because of award presentation programming. The Company continues to focus muchthis, certain of its efforts in the areaour results of productions related to televised awards programming where it believes it has the expertise to grow in this sector. Revenue recognition is deferred until product is delivered and accepted by our customers. Our future revenue plan is, in part, dependent on our ability to effectively market The Doorman pilot and close new viable acquisitions of film rights.Cost of goods soldoperations for the year ended December 31, 2015 were $792,000 as compared2021 are not readily comparable to $631,000the results of operations for the year ended December 31, 2014. This2020.For the Years Ended 2021 2020 Revenues Subscription $ 564,441 $ 184,328 Advertising 73,749 24,904 Software licenses, net — 7,295 Other 180 1,219 Total revenues 638,370 217,746 Operating expenses Subscriber related expenses 593,241 204,240 Broadcasting and transmission 55,563 29,542 Sales and marketing 135,720 63,141 Technology and development 55,418 30,189 General and administrative 89,039 77,635 Depreciation and amortization 37,666 43,972 Impairment of goodwill and intangible assets — 248,926 Total operating expenses 966,647 697,645 Operating loss (328,277) (479,899) Other income (expense) Interest expense and financing costs (13,451) (18,637) Amortization of debt discount (14,928) — Gain on sale of assets — 7,631 Loss on extinguishment of debt (380) (24,521) Loss on deconsolidation of Nexway — (11,919) Change in fair value of warrant liabilities 2,659 (83,338) Change in fair value of shares settled liability — (1,665) Change in fair value of derivative liability — (426) Change in fair value of profit share liability — 1,971 Unrealized gain on equity method investment — 2,614 Foreign currency exchange loss — (1,010) Other income (expense) (90) 147 Total other expense (26,190) (129,153) Loss from continuing operations before income taxes (354,467) (609,052) Income tax benefit 2,681 9,660 Net loss from continuing operations (351,786) (599,392) Discontinued operations Loss from discontinued operations before income taxes (31,177) — Net loss from discontinued operations (31,177) — Net loss (382,963) (599,392) attributable in partprimarily due to a 25% increasefull year of revenue in revenues and primarily2021 of Fubo compared to nine months in the prior year period, $301.6 million of higher subscription revenue due to increases in production labor asour subscriber base, $78.5 million of higher subscription revenue due to increases in subscription package prices and a $48.8 million increase in advertising revenue resulting from an increase in the Companynumber of impressions sold.staffmarketing expenses incurred to acquire new customers to our streaming platform.anticipation2021 of future planned production projects.OperatingFubo compared to nine months in the prior year period including an increase of $16.9 million in salaries due to an increase in employee headcount and $8.6 million in stock-based compensation.2015 were relatively constant at $3,218,0002020. The increase of $11.4 million was primarily due to a full year of expenses in 2021 of Fubo compared to $2,500,000nine months in the prior year period including a $5.2 million increase in sales tax reserves, $1.3 million increase in stock-based compensation and $5.0 million increase in salaries due to an increase in employee headcount.2014. The change2020.attributabledriven by the number of subscribers to our platform and per-subscriber viewership such as the type of, and duration of, content watched on platform. We believe ARPU is an increaseimportant metric for both management and investors to evaluate the Company’s core operating performance and measure our subscriber monetization, as well as evaluate unit economics, payback on subscriber acquisition cost and lifetime value per subscriber. In addition, we believe that presenting a geographic breakdown for North America ARPU and ROW ARPU allows for a more meaningful assessment of the business because of the significant differences in professional fees of $190,000,both Subscription revenue and an increaseAdvertising revenue generated on a per subscriber basis in generalNorth America when compared to ROW due to our current subscription pricing models and administrative expenses of $73,000 and impairment of goodwill of $319,000. These increases were primarily offset by a decreaseadvertising monetization in compensation expenses of $263,000.The Company has realized a net loss of $7,609,000the two geographic regions. Comparable information for the year ended December 31, 2015 compared to2022 is not presented for ROW ARPU because until our acquisition of our French streaming service, Molotov, in December 2021, we primarily operated in North America and therefore we believe such a net loss of $2,276,000comparison would not provide useful information for investors in evaluating our business2014. 2022.increase in net losstables below provide a reconciliation of approximately $5,333,000 is primarily dueNA ARPU and ROW ARPU to the change in fair valueGAAP Subscription and Advertising Revenue (in thousands, except average subscribers and average per user amounts):derivativesNorth America ARPU:Years Ended December 31, 2022 2021 As-Reported As-Reported Subscription Revenue (GAAP) $ 905,886 $ 564,441 Advertising Revenue (GAAP) 101,739 73,749 (Subtract): ROW Subscription Revenue (23,207) (1,450) ROW Advertising Revenue (1,134) (211) Total 983,284 636,529 Divide: Average Subscribers (North America) 1,126,461 752,360 Months in Period 12 12 North America Monthly Average Revenue per User (NA ARPU) $ 72.74 $ 70.50 $2,263,000, loss on extinguishmentGAAP Subscription and Advertising Revenue to ROW ARPU:Years Ended December 31, 2022 As-Reported Subscription Revenue (GAAP) $ 905,886 Advertising Revenue (GAAP) 101,739 (Subtract): North America Subscription Revenue (882,679) North America Advertising Revenue (100,605) Total 24,341 Divide: Average Subscribers (ROW) 330,222 Months in Period 12 ROW Monthly Average Revenue per User (ROW ARPU) $ 6.14 Year Ended
December 31, 2015 Year Ended
December 31, 2014 Net Cash Used In Operating Activities $ (914,694 ) $ (412,868 ) Net Cash Used in Investing Activities $ (250,000 ) $ (51,203 ) Net Cash Provided by Financing Activities $ 1,052,582 $ 488,836 Net Change in Cash $ (112,112 ) $ 24,765 As of December 31, 2015, our total assets were $313,000 and our total liabilities were $5,685,000 and we had negative working capital of ($5,623,000). Our financial statements report a net loss of $7,609,000 for the year ended December 31, 2015 and a net loss of $2,677,000 for the year ended December 31, 2014.As part of the Company’s acquisition of S&G Holdings, Inc. (doing business as High Five Entertainment), the Company entered into an Executive Employment Agreement with Mr. Martin Fischer, pursuant to which Mr. Fischer will serve as High Five’s president for an initial term of five years with an initial base salary of $144,000. He will also be entitled to an annual bonus of up to $100,000 and a monthly car allowance of $500. In addition, the Company awarded Mr. Fischer an option to purchase 1,491,351 shares of common stock, these options vest throughout 2014.We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard, we have raised additional capital through equity offerings and loan transactions, and, in the short term, will seek to raise additional capital in such manners to fund our operations. We do not currently have any third-party financing available in the form of loans, advances, or commitments. Our officers and shareholders have not made any written or oral agreement to provide us additional financing. There can be no assurance that we will be able to continue to raise capital on terms and conditions that are deemed acceptable to us.16Off Balance Sheet ArrangementsAs of December 31, 2015, there were no off balance sheet arrangements.Going Concernthe Companywe 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.As reflected See Note 16 in the accompanying consolidated financial statements the Company hadfor a stockholders’ deficit atfurther discussion of our cash commitments and contractual obligations as of December 31, 2015, incurred a2022, including lease obligations and sponsorship agreements, in addition to our discussion below regarding the dissolution of Fubo Gaming in October 2022. Our primary sources of cash are receipts from subscribers and advertising revenue as well as proceeds from equity and debt financings. Our primary uses of cash are content and programming license fees and operating expenses, including payroll-related, marketing, technology and professional fees. In addition, prior to the dissolution of our subsidiary, Fubo Gaming, on October 17, 2022, and the concurrent termination of operations of Fubo Sportsbook, our primary uses of cash included expenses related to the launch and operations of our wagering business.lossof offering expenses, through the sale of 3.25% senior convertible notes in February 2021. We currently have an effective shelf registration statement on Form S-3 (No. 333-258428) initially filed with the SEC on August 4, 2021, as amended (the “2021 Form S-3”) pursuant to which we may offer, from time to time, in one or more offerings any combination of common stock, preferred stock, debt securities, warrants, purchase contracts and used cashunits of up to $750.0 million in operating activities forthe aggregate. We also have an additional effective shelf registration statement on Form S-3 (No 333-266557) filed with the SEC on August 5, 2022 under which we may offer, from time to time, in one or more offerings any combination of common stock, preferred stock, debt securities, warrants, purchase contracts and units of up to $750.0 million in the aggregate.then ended. Theseended December 31, 2022, we sold 50,620,577 shares of our common stock in at-the-market offerings pursuant to the 2021 Form S-3 and ATM Programs, resulting in net proceeds of approximately $292.1 million, after deducting agent commissions and issuance costs. As of December 31, 2022, we had cash, cash equivalents and restricted cash of $343.2 million.raise substantial doubt about itswe are considering various financing opportunities, which may include one or a combination of secured indebtedness, unsecured indebtedness and equity or equity-linked securities. 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 us. Issuing additional shares of our capital stock, other equity securities, or additional securities convertible into equity may dilute the economic and voting rights of our existing shareholders, reduce the market price of our common stock, or both. Debt securities convertible into equity could be subject to adjustments in the conversion ratio pursuant to which certain events may increase the number of equity securities issuable upon conversion. Preferred stock, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to continue aspay dividends to the holders of our common stock. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the amount, timing, or nature of our future offerings. As a going concern.The Company is attemptingresult, holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their percentage ownership. If we are unable to produce sufficient revenue; however, the Company’sraise additional capital due to unfavorable market conditions, including rising interest rates, or otherwise, or generate cash positionflows necessary to expand our operations and invest in continued innovation, we may not be sufficientable to support its daily operations. Whilecompete successfully, which would harm our business, operations, and financial condition.Company believes in the viabilityadequacy of its strategy to produce sufficient revenue and in itsour available funds will depend on many factors, including our ability to raise additional funds, theresuccessfully attract and retain subscribers, develop new technologies that can be no assurancescompete in a rapidly changing market with many competitors and the need to that effect. The ability ofenter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings. We believe our existing cash, cash equivalents and restricted cash will provide us with the Companynecessary liquidity to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenues and in its ability to raise additional funds.Company’s independent registered public accounting firm,foregoing, based on our current assessment, we do not expect any material impact on our long-term development timeline and our liquidity due to the worldwide COVID-19 pandemic and other macroeconomic factors, including inflationary cost pressures and potential recession indicators. However, we are continuing to assess the impact that COVID-19 and other macroeconomic factors may have on our operations. Although the number of people who have been vaccinated has been increasing, the future effects of COVID-19 are unknown and the potential future impact on our results of operations, financial condition or liquidity depends on factors beyond our knowledge and control. See Note 11 in its report on the Company’s December 31, 2015accompanying consolidated financial statements has raised substantial doubt aboutfor further discussion regarding our outstanding indebtedness.Year Ended December 31, 2022 2021 2020 Continuing operations: Net cash used in operating activities (289,786) (171,896) (149,018) Net cash used in investing activities (5,987) (30,377) (1,457) Net cash provided by financing activities 296,270 511,958 279,072 Discontinued operations Net cash used in operating activities (26,915) (24,031) — Net cash used in investing activities (6,436) (45,795) — Net increase in cash, cash equivalents and restricted cash (32,854) 239,859 128,597 Company’s abilityyear ended December 31, 2022, net cash used in operating activities was $289.8 million, which consisted of our net loss of $425.0, adjusted for non-cash movements of $95.9 million. The non-cash movements consist primarily of $36.7 million of depreciation and amortization expenses, $52.5 million of stock-based compensation, $2.5 million of amortization of debt discounts and $3.1 million amortization of right of use assets, partially offset by $1.7 million of change in fair value of warrant liability. Changes in operating assets and liabilities resulted in cash inflows of approximately $39.3 million, primarily due to continue as a going concern.consolidated financial statements do not include any adjustmentsnon-cash movements consist primarily of $37.7 million of depreciation and amortization expenses, $53.2 million of stock-based compensation, $14.9 million of amortization of debt discounts and $1.0 million amortization of right of use assets, partially offset by $2.7 million of change in fair value of warrant liability and $2.7 million of deferred income tax benefit. Changes in operating assets and liabilities resulted in cash inflows of approximately $77.6 million, primarily due to a net increase in accounts payable, accrued expenses and other current and long-term liabilities of $73.4 million due to timing of payments and a net increase in deferred revenue of $26.1 million, partially offset by increases in accounts receivable of $15.0 million and prepaid expenses, prepaid sports rights and other assets of $6.8 million.recoverabilitysale of Nexway and classification$0.2 million in capital expenditures, offset by net cash received of recorded asset amounts or$9.4 million from the amountsacquisition of fuboTV Pre-Merger.classification$5.8 million of liabilities that might be necessary shouldproceeds received from the Company be unableexercise of stock options and warrants. These proceeds were offset by repayments of $1.7 million of outstanding debt.continue as a going concern.judgments that affect the reported amounts of assets, liabilities, expenses, and related disclosure of contingent assets and liabilities. We evaluate, on an on-going basis, our estimates and judgments, including those related to the useful life of the assets. We base our estimates on historical experience and assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.The methods, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results that we report in our consolidated financial statements. The SEC considers an entity’s most critical accounting policies to be those policies that are both most important to the portrayal of a company’s financial condition and results of operations and those that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about matters that are inherently uncertain at the time of estimation. For a more detailed discussion of the accounting policies of the Company, see Note 2 of the Notes to the Consolidated Financial Statements, “Summary of Significant Accounting Policies”.We believe the following critical accounting policies, among others, require significant judgments and estimates used in the preparation of our consolidated financial statements.17Use of estimatesThe preparation of financial statements in conformity with generally accepted accounting principles 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. Actual results could differ from those estimates. ThoseWe have identified all significant accounting policies in Note 3 to our consolidated financial statements in Part II, Item 8 of this Annual Report.include depreciableto accurately assign fair value to the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of property and equipment, analysisthose acquired intangible assets. We estimate the useful lives of impairments of recorded goodwill, accruals for potential liabilities, assumptions made in valuing derivative liabilities and assumptions made in valuing stock instruments issued for services.Stock-Based CompensationThe Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employeesthe intangible assets based on the authoritative guidance providedexpected period over which we anticipate generating economic benefit from the asset. The determination of the fair value of acquired identifiable intangible assets requires us to make significant estimates and assumptions regarding projected revenue and growth rates, royalty rates, and discount rates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. We also review our intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of an asset is not recoverable.FASB whereFaceBank Pre-Merger would hold a majority of board seats in the combined company.awardreporting unit was less than its carrying value and we recognized an impairment charge of $148.1 million in third quarter of 2020. The impairment charge was primarily related to the departure of the former executive of the Facebank business and our shift in focus to the Fubo business.December 31, 2022 Control premium 35% Discount rate 31% Revenue multiples 0.34x - 0.52x expense on thea straight-line basis over the vestingrequisite service period. The Company accounts forFor stock-based awards that have a performance component, stock-based compensation is measured based on the fair value on the grant date and is recognized over the requisite service period as achievement of the performance objective becomes probablewarrant grants issued and vesting to non-employees in accordance withassumptions, including fair value of our common stock, the authoritative guidanceoption’s expected term, the expected price volatility of the FASB whereunderlying stock, risk free interest rates and the expected dividend yield.theour restricted stock compensationunits and restricted stock awards is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Options and warrants granted to non-employees are revalued each reporting period to determine the amount to be recorded as an expense in the respective period. As the options and warrants vest, they are valued on each vesting date and an adjustment is recorded for the difference between the value already recorded and the then current valueestimated on the date of vesting. In certain circumstances where theregrant based on the fair value of our common stock.no future performance requirements byfurther described below: non-employee, option and warrant grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.The fair value of the Company’s common stock.option and warrant grants are estimated usingvolatility based primarily on the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related tohistorical volatility of a publicly traded set of peer companies with consideration of the volatility of its own traded stock price.rates,rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term.volatility, expected lifedividend yield of thezero in its valuation models.or warrants,issued during the year ended December 31, 2022.future dividends. Compensation expense is recorded based upon2020:Years ended December 31 2021 2020 Dividend yield — % — % Expected price volatility 44.8% - 45.2% 44.4%-57.3% Risk free interest rate 0.6% - 1.1% 0.23%-0.58% Expected term (years) 5.8 - 6.1 years 5.3 - 7.5 years value derived from the Black-Scholes-Merton Option Pricing model, and based on actual experience. The assumptions used in the Black-Scholes-Merton Option PricingBlack-Scholes option-pricing model couldchange significantly, stock-based compensation for future awards may differ materially affect compensation expense recorded in future periods.Derivative Financial InstrumentsThe Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities,compared with the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes inpreviously granted awards.reportedof our market and service condition stock option awards on the grant date using a Monte Carlo simulation model. The Monte Carlo simulation incorporates into the valuation the possibility that the stock price goals may not be satisfied. One of the most judgmental assumptions in the statementsMonte Carlo simulation is the estimated fair value of operations. Forthe common stock underlying the award. If the stock price goals are met sooner than the derived service period, we will adjust our stock-based derivative financial instruments,compensation expense to reflect the Company uses a probability weighted average Black-Scholes-Merton models tocumulative expense associated with the vested award. We will recognize stock-based compensation expense over the requisite service period, regardless of whether the stock price goals are achieved.derivative instruments at inception and on subsequent valuation dates through theyears ended December 31, 2015, reporting date.The classification of derivative instruments, including whether such instruments should be recorded2021 and 2020 in the Monte Carlo simulation model:For the years ended December 31, 2021 2020 Dividend yield — — Expected volatility 71.5 % 76.0%-88.1% Risk free rate 1.3 % 0.24%-0.30% Derived service period 2.0 years 1.6- 1.9 years liabilities or as equity, is evaluated at the end of each reporting period.23 to our consolidated financial statements in the accompanying financial statementsPart II, Item 8 of this Annual Report for a discussion of recently issuedrecent accounting pronouncements
policies.18Jumpstart Our Business Startups Act of 2012The JOBS Act permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. Pursuant to Section 107(b) of the JOBS Act, we have elected to use the extended transition period for complying with new or revised accounting standards for an “emerging growth company.” This election will permit us to delay the adoption of new or revised accounting standards that will have different effective dates for public and private companies until such time as those standards apply to private companies. Consequently, our financial statements may not be comparable to companies that comply with public company effective dates.Not requiredsmallertrading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. As of December 31, 2022, a hypothetical 10% change in interest rates would not have resulted in a material impact on our consolidated financial statements.companies.our consolidated financial results. Our most significant currency exchange rate exposures are the euro and the Canadian dollar. As of December 31, 2022, a hypothetical 10% change in the relative value of the U.S. dollar to other foreign currencies would not have resulted in a material impact on our consolidated financial statements.included at the endappended to this Annual Report. An index of those financial statements is found in Item 15 of Part IV of this Report beginning on page F-1 as follows:
Annual Report.PAGE NO.AUDITED FINANCIAL STATEMENTS:Report of Independent Registered Public Accounting FirmF-1Consolidated Balance Sheets as of December 31, 2015 and 2014.F-2Consolidated Statements of Operations for the years ended December 31, 2015 and 2014.F-3Consolidated Statement of Changes in Stockholders Equity for the years ended December 31, 2015 and 2014.F-4Consolidated Statement of Cash Flows for the years ended December 31, 2015 and 2014F-5Notes to Consolidated Audited Financial StatementsF-6Disclosure.None.On March 28, 2016,Company dismissed its independent registered public accounting firm, Li & Company, P.C. (“LICO”). The decisiondesired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to changeapply judgment in evaluating the independent registered public accounting firm was recommendedbenefits of possible controls and approved by the Board of Directors of the Company. On March 28, 2016, the Company engaged Weinberg & Company, P.A., as its independent registered audit firmprocedures relative to audit the Registrant’s financial statements for the fiscal year ended December 31, 2015 and to perform procedures related to the financial statements included in the Company’s quarterly reports on Form 10-Q, beginning with the quarter ended March 31, 2016.Conclusion Regarding the Effectivenesstheir costs.We carried out an evaluation as required by paragraph (b) of Rule 13a-15 and 15d-15 of the Exchange Act, under the supervision andmanagement, including our Chief Executive Officerprincipal executive officer and Chief Financial Officer,principal financial officer, evaluated, as of the end of the period covered by this Annual Report, the effectiveness of our disclosure controls and procedures as(as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2015.Act). Based upon that evaluation, our Chief Executive Officerprincipal executive officer and Chief Financial Officerprincipal financial officer concluded that, as of December 31, 2022, our disclosure controls and procedures were not effective as of December 31, 2015.Management conductedAs of December 31, 2022, management completed an assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015, utilizingbased on the framework established in Internal Control – Integrated Framework (2013 framework) issued by the2013 Committee of Sponsoring Organizations of the Treadway Commission (COSO). framework. Based on thisthat assessment, management has determinedconcluded that the Company’sour internal control over financial reporting was effective as of December 31, 2015, was not effective, primarily as a result2022. KPMG, our independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting, which is included below.fact that the Company has few employees, only one of whom has a background in accounting, and lacks segregation of duties.
Registered Public Accounting Firm19A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Management necessarily applied its judgment in assessing the benefits of controls relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected.Reporting.controlscontrol over financial reporting that occurred(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal quarter of 2015ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Set forth below is the name, age, and positions held by our executive officers and directors:NameAgePosition(s) and Office(s) HeldDavid Cohen48Chief Executive Officer and DirectorAlexander Bafer45Chairman of the Board of Directors and Chief Development OfficerBradley Albert38President, Chief Creative Officer and DirectorJustin Morris38Chief Operating Officer and Director directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors has adopted a written Code of Business Conduct and hold office until removed by the board. AllEthics applicable to all officers, directors and directors listed above will remain in office until the next annual meetingemployees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. We have posted a current copy of our stockholders,Code of Business Conduct and until their successors have been duly elected and qualified.Set forth below is a brief description ofEthics on our investor relations website under the background and business experience of our current executive officers and directors.David Cohen. Mr. Cohen was appointed as Chief Executive Officer and a Director of the Company in June 2016. Prior to joining the Company, Mr. Cohen was a Director of Investment BankingGovernance tab at Newbridge Securities Corporation from January 2015 through January 2016, and was the Director of Investment at National Securities Corp from June 2013 through December 2014, where he led the underwriting efforts for myriad NASDAQ and NYSE listed public companies. Prior to working with these investment banks, Mr. Cohen founded a private equity firm, Beachwood Capital LLC since January 2011 based in North Palm Beach, Florida. That Firm’s successful philosophy focused on achieving high compounding risk-adjusted returns through investments in securities approaching an inflection point as informed by proprietary macro and microeconomic analyses. Those investments included public equity and debt securities, equity derivatives and select direct investments in private companies. The firm deployed capital through multi-year investments with innovative companies that were both under followed by research analysts and inefficiently priced by the investment community. Preceding his ownership in the aforementioned private equity firm, Mr. Cohen was the Founder, President, Chief Executive Officer and Director of a publicly traded company. During his leadership, Mr. Cohen executed a successful roll-up strategy within his industry, oversaw day-to-day management, led mergers, acquisitions and divestitures, employed junior management to oversee 40 employees and provided an informed voice to the Wall Street investment community. His 20 years of expertise in the securities markets includes all facets of public company management, corporate finance and corporate consulting for publicly-traded companies. As an advisor for various investment banking firms and brokerages, Mr. Cohen has specialized in the small and lower-middle market sectors, arranging financings in the public and private equity markets for emerging companies in a variety of industries. Mr. Cohen holds a Bachelor of Arts degree from Pace University in New York City.20Alexander BaferMr. Bafer is our Chief Development Officer, a Director and Chairman of the Board of Directors of the Company. Mr. Bafer is a seasoned executive and an established entrepreneur, having generated tens of millions of dollars in revenue for companies during his career. Mr. Bafer has successfully led the organization and development of numerous startup companies, and achieved many successful exits. The Company is the latest success story for Mr. Bafer. During the 5 years under his direction, the Company (formerly known as Brick Top Productions) went public, acquired an Emmy award-winning production company that was generating substantial revenue, and acquired the rights to the name and service mark of “Carolco Pictures”, which belonged to a now defunct but famous Academy Award winning studio behind blockbuster films Terminator 2 & 3, The Rambo Series, Total Recall, and Basic Instinct, just to name a few of the 36 films produced by the famous studio that earned it 16 Academy Award nominations and 6 Academy Award wins. Mr. Bafer’s vision was to rebrand the Company as the new “Carolco Pictures” and reunite the powerhouse name with the famous studio’s original founder and CEO, Mario Kassar. Mr. Bafer was successful, bringing Mr. Kassar on board as the Company’s Chief Development Executive and also as Chairman of the Board from February 2015 through January 2016. This ultimately resulted in the October 2015 sale of Mr. Bafer’s majority interest of the Company for a significant multiple. When new management of the Company asked him to come back to assist in leading the Company back to prominence, Mr. Bafer agreed. Prior to his work with the Company, Mr. Bafer was an equity partner with Guaranteed Mortgage Bankers, where he was responsible for managing and training 75 sales agents throughout 6 multi state offices. During his 4-year tenure at Guaranteed Mortgage, before selling his equity interest, his efforts resulted in a cumulative revenue increase for the company of more than 300%. Mr. Bafer’s business management and financial acumen were apparent even early on in his career and have permeated throughout it ever since. After graduating in the top 4% of his St. John’s University class, Mr. Bafer moved on to help manage a $500 million portfolio at Merrill Lynch in New York City. He then assumed a position as senior account executive with Preferred Securities Group in Boca Raton, Florida, where he was quickly promoted to President and Managing Director responsible for overseeing the firm’s three trading offices, 50 registered representatives and numerous support personnel. From there he accepted an equity position as a fund manager where he was involved in all aspects of building, organizing and managing a hedge fund. Throughout his career, Mr. Bafer has been involved with Investment Management of America, a venture capital firm and incubator, where he has been instrumental in raising capital for numerous prominent start-up ventures. Mr. Bafer has proven to be a successful asset to the management and support teams of several startups and continues to utilize his successes and proven experience in business development to assist others in organizing and developing their business’s from any stage, whether it be a startup or a developed company in need of capital, expansion, guidance or ultimately an exit.Bradley Albert. Mr. Albertwas appointed as President, Chief Creative Officer, and a Director of the Company in June 2016Prior to joining Recall Studios, Mr. Albert served as President of Synapps since 2010. He led his team to become the first VR company to film a US President in virtual reality and premiered a groundbreaking VR experience at 2016’s TriBeCA Film Festival. Mr. Albert was a marketing executive for over a decade and has developed strategies for some of the most successful companies in the world including Proctor & Gamble, Tyson Foods, Kia and Puma. From Lotus to Ludacris he helped shape the language of modern brand identity. In 2008, Brad founded SynApps Media at the inception of the Mobile App boom and created award winning UI/UX experiences across all mobile platforms. He also worked as an executive producer at Roadside Entertainment where he was a producer for the ESPY awards and a multitude of commercials and documentaries. Mr. Albert graduated with a degree in Organizational Behavior and Management from Brown University.21Justin Morris. Mr. Morris has served as our Chief Operating Officer and a Director of the Company since June 2016 Prior to joining Recall Studios, Mr. Morris served as Chief Executive Officer of Synapps since 2010. Mr. Morris is a technology and multi-media veteran with a unique insight into the obstacles facing Virtual Reality and media convergence today. Over the course of his career, Mr. Morris has directed and produced content for industry giants FOX, NBC, The Discovery Channel, SPIKE and E!. He has designed user experiences for a wide range of mediums including immersive content, mobile games, apps and websites. Prior to joining Recall Studios, Mr. Morris served as CEO of SynappsVR, a next generation content company that has pioneered the Virtual Reality landscape. Earlier in his career, Mr. Morris joined FTI Consulting where he helped facilitate deals and restructure over $40 billion of assets for various clients including GM, Lehman Brothers Creditors, the Government of Ireland, TD Bank and Citi. Seeking to broaden his horizons, he founded SynApps Media, a mobile app development firm that worked with clients ranging from AXA insurance to the WNBA’s Washington Mystics. Mr. Morris holds a degree in computer science from Brown University where he worked with the school’s Virtual Reality Lab called The Cave. Mr. Morris also holds a Masters degree in Real Estate Finance from NYU.Background and Qualifications of Directors.When considering whether directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of the Company’s business and structure, the Board of Directors focuses primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ individual biographies set forth above. We believe that our directors provide an appropriate mix of experience and skills relevant to the size and nature of our business. As more specifically described in the biographies set forth above, our directors possess relevant knowledge and experience in the finance, accounting and business fields generally, which we believe enhances the Board’s ability to oversee, evaluate and direct our overall corporate strategy.Committees of our Board of DirectorsOur securities are not quoted on an exchange that has requirements that a majority of our board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our board of directors include “independent” directors, nor are we required to establish or maintain an audit committee or other committee of our board of directors.As of December 31, 2015, the Company had the following Committees of our Board of Directors:1.Nomination CommitteeAlexander Bafer, ChairmanFrank Esposito2.Audit CommitteeAlexander Bafer, ChairmanFrank Esposito3.Compensation CommitteeAlexander Bafer, ChairmanFrank Esposito4.Corporate Governance CommitteeAlexander Bafer, ChairmanFrank EspositoOur board currently consists of Messrs. Bafer (Chair), Cohen, Albert and Morris. We do not currently have any board committees.Candidates for director nominees are reviewed in the context of the current composition of the board and the Company’s operating requirements and the long-term interests of its stockholders. In conducting this assessment, the Board of Directors considers skills, diversity, age, and such other factors as it deems appropriate given the current needs of the board and the Company, to maintain a balance of knowledge, experience and capability.The board’s process for identifying and evaluating nominees for director, including nominees recommended by stockholders, will involve compiling names of potentially eligible candidates, conducting background and reference checks, conducting interviews with the candidate and others (as schedules permit), meeting to consider and approve the final candidates and, as appropriate, preparing an analysis with regard to particular recommended candidates.Through their own business activities and experiences each of directors have come to understand that in today’s business environment, development of useful products and identification of undervalued real estate, along with other related efforts, are the keys to building our company. The directors will seek out individuals with relevant experience to operate and build our current and proposed business activities.22Director CompensationIn 2015, we granted each of our then-non-employee directors (Messrs. Goodman, Ortiz and Leitch) and Mr. Esposito 50,000 shares of our unregistered common stock and agreed to issue each of these directors an additional 50,000 shares on each anniversary of their appointment as compensation for their services as a director of our company. Certain directors who were employees during 2015 (Messrs. Bafer and Fischer) are not paid for board service in addition to their regular compensation.As compensation for serving as our Chairman of the Board of Directors in 2015, we granted Mr. Kassar 500,000 shares of our unregistered shares of common stock and the option to purchase all or any part of 400,000 shares of common stock at an exercise price of $1.00 per share, exercisable until 10 years after the effective date of his appointment. We also assumed an obligation to pay Mr. Kassar $300,000, as amended, to cover taxes with respect to compensation paid to him as Chairman. In addition, we agreedintend to reimburse Mr. Kassar forpost on our website all business expenses incurred or paid by him in the performance of his duties on behalf of the Company including, without limitation, all required travel and lodging expenses. We also agreed to indemnify Mr. Kassar against any and all losses, liabilities, damages, expenses (including outside attorneys’ fees), judgments, fines and amounts incurred by Mr. Kassar in connection with any claim, action, suit or proceeding (whether civil, criminal, administrative or investigative), including any action by or in the right of the Company, by reason of any act or omission to act in connection with the performance of his duties under the agreement to the fullest extentdisclosures that we are permitted to indemnify him under our Articles of Incorporation in effect as of the date of his appointment and applicable law. During the term of this agreement, we are required to obtain and maintain Directors and Officers Insurance in a form acceptable to Mr. Kassar naming him as an additional named insured. Further, provided that Mr. Kassar has neither voluntarily resigned nor been terminated under the terms of the agreement, the majority shareholders who are a party to the agreement agreed to vote all their shares in the Company over which they have voting control and agreed to promptly take all other necessary or desirable actions within their control (including in their capacity as shareholder, director, member of a board committee or officer of the Company or otherwise, and whether at a regular or special meeting or by written consent in lieu of a meeting) to reelect Mr. Kassar as Chairman of Board of the Company.In addition, we entered into an Executive Services Agreement with Mr. Kassar, subject to a condition precedent, to become our Chief Development Executive. As the Chief Development Executive, Mr. Kassar will render non-exclusive services to us in providing advice on any film projects that we acquire or are considering acquiring. The agreement will become effective when we obtain, no later than March 30, 2015, at least $4 million of equity investment (on terms approved by Mr. Kassar) for a project currently titled “Audition.”23Effective as of July 14, 2014, we agreed to pay Frank Esposito’s law firm a base retainer of $5,000 per month for legal services provided to us. Mr. Esposito ceased to be a member of our board of directors in October 2015.Compliance with Section 16(a) of the Securities Exchange Act of 1934Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC. Executive officers, directors and greater than 10% beneficial shareholders are required by SEC regulationslaw or the NYSE listing standards concerning any amendments to, furnish us with copies of all Section 16(a) forms they file.Based solely upon our review of copies of such forms received by us, we believe that, during the fiscal year ended December 31, 2015, the following persons did not timely file Forms 3, Forms 4 and Forms 5 reporting beneficial ownershipor waivers from, any provision of our securities and/or changes therein: eachCode of Messrs. Bafer, Esposito, Leitch, KassarBusiness Conduct and Goodman failed to file timely his Form 3,Ethics. The information contained on our website is not incorporated by reference into this Annual Report.Mr. Bafer failed to file timely one Form 4 with respect to one transaction and one Form 4 with respect to seven transactions.such required information is incorporated herein by reference.Summary Compensation Tabletable below summarizes all compensation awarded to, earnedinformation required by or paid to each named executive officerthis Item 11 will be included in our definitive proxy statement for our last two completed fiscal years for all services rendered to us.2015 SUMMARY COMPENSATION TABLE Name and
principal position Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity
Incentive Plan Compensation ($) Nonqualified Deferred Compensation Earnings ($) All Other
Compensation ($) Total ($) Alexander Bafer, 2015 0 0 0 0 0 0 0 0 CEO, CFO, & Director 2014 0 0 0 0 0 0 0 0 Employment AgreementsOn July 25, 2016, we entered into an employment agreement with Alexander Bafer under which he agreed to serve as our Chairman2023 Annual Meeting of the Board,Shareholders and Chief Development Officer. The agreement provides for a base salary of $0 per year and a will be eligible to receive a bonus, payable in Employer’s sole discretion. The amount of Executive’s compensation shall be reviewed periodically, and at minimum shall be reviewed annually. It may be increased at the sole discretion of the Board or its Compensation Committee, if any, provided, however, that, consistent with the renewal provisions contained in Article 1.1,supra, such compensation shall, after the initial Term, be placed before the Board or the Compensation Committee, if any, for a requested increase to cover cost of living expenses upon subsequent renewals of this Agreement. Employer shall provide Executive with standard benefits ordinarily granted to an executive in Executive’s position and ordinarily associated with the custom and practice of the industry, if any. Employer shall pay, or reimburse Executive, for all ordinary, reasonable and necessary expenses which Executive incurs in performing Executive’s duties under this Agreement including, but not limited to, travel, entertainment, professional dues and subscriptions, and all dues, fees and expenses associated with membership in various professional, business and civic associations and societies of which Executive’s participationinformation is in the best interest of Employer. While employedincorporated herein by Employer, Executive shall be allowed to participate, on the same basis generally as other Executives of Employer, in all general Executive benefit plans and programs, Executive’s employment with Employer shall be terminated (i) upon the death of Executive; (ii) for Cause, as defined in Section 3.3; or (iii) upon Executive’s permanent disability (permanent disability being defined as Executive’s physical or mental incapacity to perform his usual duties as an Executive with such condition likely to remain continuously for more than three months, provided, however, that in such event, Executive’s employment shall be continued hereunder for a period of not less than one year from the date of such disability, but not beyond the end of the Term, with Executive’s base salary during such period to be reduced by any Employer-financed disability benefits. If Executive’s employment is terminated by reason of the death of Executive or permanent disability of Executive (as defined in Section 3.1), all future compensation to which Executive is otherwise entitled and all future benefits for which Executive is eligible shall become due and payable as of the date of termination. Executive, or his estate in the case of Executive’s death, shall be entitled to Executive’s pro rata salary through the date of such termination and shall be entitled to any individual bonuses or individual incentive compensation not yet paid but due under Employer’s plans but shall not be entitled to any other payments by or on behalf of Employer except for those which may be payable pursuant to the terms of Employer’s Executive benefit plans or by virtue of Executive’s ownership of Employer’s stock which shall remain unaffected by the termination of Executive’s employment. The Company shall have the right to terminate Executive’s employment under this Agreement at any time for Cause, which termination shall be effective immediately. As part of the consideration for the compensation and benefits to be paid to Executive hereunder, and as an additional incentive for Employer to enter into this Agreement, Employer and Executive agree to the non-competition provisions of this Article 5. Executive agrees that during the period of Executive’s non-competition obligations hereunder (twelve months), Executive will not, directly or indirectly for Executive or for others, in any geographic area or market where Employer or any of their affiliated companies are conducting any business (other than de minimis business operations) as of the date of termination of the employment relationship or have during the previous twelve months conducted any business (other than de minimis business operations): (i) engage in any business directly competitive with any business (other than de minimis business operations) conducted by Employer or any of Employer’s affiliates; (ii) render advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business directly competitive with any business(other than de minimis business operations) conducted by Employer or any of Employer’s affiliates; or (iii) induce any Executive of Employer or any of its affiliates (other than Executive’s personal secretary or administrative assistant) to terminate his employment with Employer, or its affiliates, or hire or assist in the hiring of any such induced Executive by any person, association, or entity not affiliated with Employer. These non-competition obligations shall extend until two years after termination of the employment relationship between Employer and Executive.
reference.24On July 25, 2016, we entered into an employment agreement with Bradly Albert under which he agreed to serve as our President, Chief Creative Officer, and Director. The employment agreement provides for a one year term, which automatically renews unless the other party gives a termination notice. The agreement provides for a base salary of $65,000 per year. Executive’s employment with Employer shall be terminated (i) upon the death of Executive; (ii) for Cause, as defined in Section 3.3; or (iii) upon Executive’s permanent disability (permanent disability being defined as Executive’s physical or mental incapacity to perform his usual duties as an Executive with such condition likely to remain continuously for more than three months. As part of the consideration for the compensation and benefits to be paid to Executive hereunder, and as an additional incentive for Employer to enter into this Agreement, Employer and Executive agree to the non-competition provisions of this Article 5. Executive agrees that during the period of Executive’s non-competition obligations hereunder (twelve months), Executive will not, directly or indirectly for Executive or for others, in any geographic area or market where Employer or any of their affiliated companies are conducting any business (other than de minimis business operations) as of the date of termination of the employment relationship or have during the previous twelve months conducted any business (other than de minimis business operations): (i) engage in any business directly competitive with any business (other than de minimis business operations) conducted by Employer or any of Employer’s affiliates; (ii) render advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business directly competitive with any business(other than de minimis business operations) conducted by Employer or any of Employer’s affiliates; or (iii) induce any Executive of Employer or any of its affiliates (other than Executive’s personal secretary or administrative assistant) to terminate his employment with Employer, or its affiliates, or hire or assist in the hiring of any such induced Executive by any person, association, or entity not affiliated with Employer. These non-competition obligations shall extend until two years after termination of the employment relationship between Employer and Executive.On July 25, 2016, we entered into an employment agreement with Justin Morris under which he agreed to serve as our Chief Operating Officer, and Director. The employment agreement provides for a one year term, which automatically renews unless the other party gives a termination notice. The agreement provides for a base salary of $65,000 per year. Executive’s employment with Employer shall be terminated (i) upon the death of Executive; (ii) for Cause, as defined in Section 3.3; or (iii) upon Executive’s permanent disability (permanent disability being defined as Executive’s physical or mental incapacity to perform his usual duties as an Executive with such condition likely to remain continuously for more than three months. As part of the consideration for the compensation and benefits to be paid to Executive hereunder, and as an additional incentive for Employer to enter into this Agreement, Employer and Executive agree to the non-competition provisions of this Article 5. Executive agrees that during the period of Executive’s non-competition obligations hereunder (twelve months), Executive will not, directly or indirectly for Executive or for others, in any geographic area or market where Employer or any of their affiliated companies are conducting any business (other than de minimis business operations) as of the date of termination of the employment relationship or have during the previous twelve months conducted any business (other than de minimis business operations): (i) engage in any business directly competitive with any business (other than de minimis business operations) conducted by Employer or any of Employer’s affiliates; (ii) render advice or services to, or otherwise assist, any other person, association, or entity who is engaged, directly or indirectly, in any business directly competitive with any business(other than de minimis business operations) conducted by Employer or any of Employer’s affiliates; or (iii) induce any Executive of Employer or any of its affiliates (other than Executive’s personal secretary or administrative assistant) to terminate his employment with Employer, or its affiliates, or hire or assist in the hiring of any such induced Executive by any person, association, or entity not affiliated with Employer. These non-competition obligations shall extend until two years after termination of the employment relationship between Employer and Executive.25Outstanding Equity Awards At Fiscal Year-end TableAt the end of our last completed fiscal year, our named executive officers did not have any outstanding unexercised options, stock that has not vested, or equity incentive plan awards.StockholderShareholders Matters.At November 11, 2016 we had 339,397,856 sharesour common stock issuedShareholders and outstanding. The following table sets forthsuch information regarding the beneficial ownership of our common stock as of November 11, 2016 by:●each person known by us to be the beneficial owner of more than 5% of our common stock;●each of our directors;●each of our named executive officers; and●our named executive officers, directors and director nominees as a group.Unless otherwise indicated, the business address of each person listed is in care of 5550 Glades Road, Suite 500, Boca Raton, Florida 33431. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding rights or conversion privileges ownedincorporated herein by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse. Amount and Nature of Beneficial Ownership Name and Address of Beneficial Owner Number of Shares Beneficially Owned % of Class Alexander Bafer 4,374,442,800 (1) 92.9 % David Cohen 25,500,000 (2) * Bradley Albert 12,031,250 (3) * Justin Morris 12,031,250 (4) * All directors and executive officers as a group (4 persons) 4,424,005,300 (1)(2)(3)(4) 93.0 % * Less than 1%
reference.26(1)Mr. Bafer, our Chairman of the Board and Chief Development Officer holds 5,290,000 shares of common stock, 2,500,000 Series A Preferred shares (50% of this class) of which 1,990,000 are held in the name of Brick Top Holdings, Inc., a company owned and controlled by Mr. Bafer and 510,000 shares held in his name. The Series A Preferred shares are not convertible into common shares and carry voting rights of 100 votes per share held. Mr. Bafer also holds 12,750,000 shares (33.7% of this class) of Series C Preferred stock which are convertible into two (2) common shares for each Series C Preferred share held. Beneficial ownership also reflect shares obtainable through the conversion of a convertible note payable to Mr. Bafer with a principal balance of approximately $434,000 at $0.0001 per share totaling 4,343,652,800 potential common shares.(2)Mr. Cohen, our Chief Executive Officer, and a Director. He holds 2,500,000 Series A preferred shares (50% of this class) which are not convertible into common shares and carry voting rights of 100 votes per share held. Mr. Cohen also holds 12,750,000 shares (33.7% of this class) of Series C Preferred stock which are convertible into two (2) common shares for each Series C preferred share held.(3)Mr. Albert serves as our Chief Creative Officer and a Director. He holds 6,015,625 shares of Series C Preferred stock (15.9% of this class) convertible into common shares at a ratio of two (2) common shares for each Series C Preferred share held.(4)Mr. Morris serves as our Chief Operating Officer and a Director. He holds 6,015,625 shares of Series C Preferred stock (15.9% of this class) convertible into common shares at a ratio of two (2) common shares for each Series C Preferred share held.On April 1, 2014, the Company’s CEO loaned the Company $150,000,considerationour definitive proxy statement for which the Company issued to its CEO a Promissory Note in the principal amountour 2023 Annual Meeting of $150,000, with interest at 5.0% per annum maturing on October 1, 2015, at which time a balloon payment of all outstanding principalShareholders, and interest shall be due. During the year ended December 31, 2014, the Company repaid $50,000 and converted the remaining principal balance of $100,000 into 20,000,000 shares of common stock.On October 1, 2014, the Company’s CEO loaned the Company $150,000, in consideration for which the Company issued to its CEO a Promissory Note in the principal amount of $150,000, with interest at 5.0% per annum maturing on October 1, 2015, at which time a balloon payment of all outstanding principal and interest shall be due.Effective December 24, 2013, as part of the Company’s acquisition of S&G Holdings, Inc. (doing business as High Five Entertainment), the Company entered into an Executive Employment Agreement with Mr. Martin Fischer, pursuant to which Mr. Fischer will serve as High Five’s president for an initial term of five years with an initial base salary of $144,000. He will also be entitled to an annual bonus of up to $100,000 and a monthly car allowance of $500. In addition, the Company awarded Mr. Fischer an option to purchase 1,491,351 shares of common stock, these options vest throughout 2014.following table shows what Li & Company, PC billed for the audit and other services for the years ended December 31, 2015 and 2014. Year Ended
12/31/1 5 Year Ended
12/31/14 Audit Fees $ 51,510 $ 45,355 Audit-Related Fees — — Tax Fees — — All Other Fees — — Total $ 51,510 $ 45,355 Audit Fees—This category includes the audit of the Company’s annual financial statements, review of financial statementsinformation required by this item will be included in the Company’s Form 10-Q Quarterly Reportsour definitive proxy statement for our 2023 Annual Meeting of Shareholders, and services that are normally providedsuch information is incorporated herein by the independent auditors in connection with engagements for those years.Audit-Related Fees—N/A
reference.27Tax Fees—N/AOverview—The Company’s Board reviews, and in its sole discretion pre-approves, our independent auditors’ annual engagement letter including proposed fees and all audit and non-audit services provided by the independent auditors. Accordingly, all services described under “Audit Fees,” “Audit-Related Fees,” and “Tax Fees” were pre-approved by our Company’s Board. The Board may not engage the independent auditors to perform the non-audit services proscribed by law or regulation.ExhibitsExhibit and Financial Statement Schedules.Exhibit Number Incorporated by Reference Filed / Furnished Herewith Exhibit Description Form File No. Exhibit Filing Date 2.1 8-K 000-55353 2.1 3/23/2020 3.1(a) S-1 333-176093 3.1(i) 8/5/2011 3.1(b) S-1 333-176093 3.1(ii) 8/5/2011 3.1(c) 10-K 000-55353 3.1(iii) 3/31/2015 3.1(d) 8-K 000-55353 3.1 1/29/2016 3.1(e) 8-K 000-55353 4.1 6/28/2016 3.1(f) 8-K 000-55353 4.2 6/28/2016 3.1(g) 8-K 000-55353 4.1 7/26/2016 3.1(h) 8-K 000-55353 3.1 3/6/2017 3.1(i) 8-K 000-55353 3.1 12/5/2017 3.1(j) 8-K 000-55353 3.1 8/6/2018 3.1(k) 8-K 000-55353 3.1 9/11/2019 3.1(l) 8-K 000-55353 3.1 3/23/2020 3.1(m) 8-K 000-55353 3.2 3/23/2020 3.1(n) 10-Q 000-55353 3.1(n) 7/6/2020 3.1(o) 10-Q 000-55353 3.1(o) 7/6/2020 3.1(p) 10-Q 000-55353 3.1(p) 7/6/2020 3.1(q) 10-Q 000-55353 3.1(q) 7/6/2020 3.1(r) 10-Q 000-55353 3.1(r) 7/6/2020 3.1(s) 10-Q 000-55353 3.1(s) 7/6/2020 3.1(t) 8-K 000-55353 3.1 8/13/2020 3.1(u) S-1 333-249783 3.1(u) 10/30/2020 3.1(v) S-3 333-266557 3.1(v) 8/5/2022 3.2 8-K 001-39590 3.1 3/2/2022 4.1 10-K 001-39590 4.1 3/25/2021 4.2 10-Q 000-55353 4.5 7/6/2020 4.3 8-K 001-39590 4.1 2/2/2021 4.4 8-K 001-39590 4.2 2/2/2021 4.5 * 10.1† 10-Q 000-55353 10.2 7/6/2020 10.2† 10-Q 000-55353 10.3 7/6/2020 10.3† 8-K 001-39590 10.1 12/18/2020 10.4† 10-K 001-39590 10.4 3/1/2022 10.5† 10-K 001-39590 10.5 3/1/2022 10.6† 10-K 001-39590 10.6 3/1/2022 10.7† S-8 333-253951 4.1 3/5/2021 10.8† 10-Q 001-39590 10.1 8/8/2022 10.9† 10-Q 001-39590 10.2 8/8/2022 10.10† 10-Q 001-39590 10.3 8/8/2022 10.11† 10-Q 001-39590 10.4 8/8/2022 10.12† 8-K 000-55353 10.2 4/7/2020 10.13† 8-K 001-39590 10.1 10/14/2020 10.14 8-K 001-39590 10.1 3/3/2021 10.15 10-K 001-39590 10.21 3/25/2021 10.16 10-K 001-39590 10.23 3/25/2021 10.17† 10-K 001-39590 10.15 3/1/2022 10.18 10-Q 000-55353 10.31 7/6/2020 10.19 8-K 001-39590 10.10 8/5/2022 21.1 * 23.1 * 31.1 * 31.2 * 32.1 ** Report of Independent Registered Public Accounting FirmF-1Consolidated Balance Sheets as of December 31, 2015 and 2014101.INSF-2Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. * Consolidated Statements of Operations for the years ended December 31, 2015 and 2014101.SCHF-3Inline XBRL Taxonomy Extension Schema Document * Consolidated Statement of Changes in Stockholders Equity for the years ended December 31, 2015 and 2014101.CALF-4Inline XBRL Taxonomy Extension Calculation Linkbase Document * Consolidated Statement of Cash Flows for the years ended December 31, 2015 and 2014101.DEFF-5Inline XBRL Taxonomy Extension Definition Linkbase Document * Notes to Consolidated Audited Financial Statements101.LABF-6(b) ExhibitsExhibitNumberInline XBRL Taxonomy Extension Label Linkbase Document Description* 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document * 3.1(a)104Articles of Incorporation (Incorporated by reference toCover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 3.1(i) to the Company’s Registration Statement on Form S-1 (Commission File No. 333-176093) filed with the SEC on August 5, 2011).101)* 3.1(b)*Amendment to Articles of Incorporation (Incorporated by reference to Exhibit 3.1(ii) to the Company’s Registration Statement on Form S-1 (Commission File No. 333-176093) filed with the SEC on August 5, 2011).Filed herewith.** Furnished herewith. 3.1(c)†Amendment to Articles of Incorporation filed with the Secretary of State of Florida on December 31, 2014 (Incorporated by reference to Exhibit 3.1(III) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and filed with the SEC on March 31, 2015).Indicates management contract or compensatory plan. 3.1(d)Certificate of Designation of Series A Preferred Stock (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 27, 2015).3.1(e)Amended Articles of Incorporation of Carolco Pictures, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 29, 2016).3.1(f)Certificate of Designation of Series A Preferred Stock (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2016).3.1(g)Certificate of Designation of Series B Preferred Stock (Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2016).3.1(h)Certificate of Designation of Series C Preferred Stock of the Company, effective as of July 21, 2016 (Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2016).283.2(a)By-Laws (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (Commission File No. 333-176093) filed with the SEC on August 5, 2011).3.2(b)Bylaws, as amended on June 22, 2016 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2016).3.2(c)Bylaws of the Company, as amended on July 20, 2016 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2016).10.1+2014 Incentive Stock Plan (Incorporated by reference to the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2015).10.2+Employment Agreement with Alexander Bafer (Incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (Commission File No. 333-176093) filed with the SEC on August 5, 2011)10.3Production Services Agreement (Incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-1/A (Commission File No. 333-176093) filed with the SEC on December 29, 2011).10.4Operating Agreement to York Productions, LLC (Incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-1/A (Commission File No. 333-176093) filed with the SEC on December 29, 2011).10.5Stock Purchase Agreement between Brick Top Productions, Inc. and Martin Fischer dated December 24, 2013 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 27, 2013).10.6+Executive Employment Agreement between S&G Holdings, Inc. and Martin Fischer (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on December 27, 2013).10.7+Brick Top Chief Development Executive Services Agreement between Brick Top Productions, Inc. and Mario Kassar dated November 20, 2014 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 24, 2014).10.8+Brick Top Productions Executive Services Agreement between Brick Top Productions, Inc. and Harrison Smith and Felissa Rose dated December 15, 2014 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 17, 2014).10.9Debt Conversion Agreement dated as of December 29, 2014 between Brick Top Productions, Inc. and Alexander Bafer (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 31, 2014).10.10+Agreement for Chairman of Board of Directors among Carolco Pictures, Inc., certain shareholders of the Company and Mario Kassar dated as of February 13, 2015 (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on February 17, 2015).10.11+Agreement dated April 29, 2015, by and between Carolco Pictures, Inc. and Mario Kassar (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2015).10.12Form of Securities Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 9, 2015).2910.13Convertible promissory note in favor of Alexander Bafer for $45,527, dated July 9, 2015 (Incorporated by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 filed with the SEC on November 16, 2015).10.14Convertible promissory note in favor of Alexander Bafer for $51,076 dated July 9, 2015 (Incorporated by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 filed with the SEC on November 16, 2015).10.15Convertible promissory note in favor of Alexander Bafer for $102,042 dated July 9, 2015 (Incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 filed with the SEC on November 16, 2015).10.16Convertible promissory note in favor of Alexander Bafer for $155,875 dated July 9, 2015 (Incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 filed with the SEC on November 16, 2015).10.17Convertible promissory note in favor of Alexander Bafer for $188,597 dated July 9, 2015 (Incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 filed with the SEC on November 16, 2015).10.18Convertible promissory note in favor of Vis Vires Group, Inc. $52,500 dated July 10, 2015 (Incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2015 filed with the SEC on November 16, 2015).10.19Stock Purchase Agreement, dated as of June 22, 2016 by and between Tarek Kirschen, South Centre, Inc. and Carolco Pictures, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2016).10.20Amendment No. 1 to Stock Purchase Agreement, dated as of June 24, 2016, by and between Tarek Kirschen, South Centre, Inc. and Carolco Pictures, Inc. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2016).10.21Release and Issuance Agreement, dated as of June 22, 2016, by and between Tarek Kirschen, South Centre, Inc., Alexander Bafer and Carolco Pictures, Inc. (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on June 28, 2016).10.22Letter Agreement between Carolco Pictures, Inc. and Esposito Partners, PLLC (Incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2016).10.23Redemption Agreement, dated as of July 21, 2016, by and between South Centre, Inc. and the Company (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2016).10.24Contribution Agreement, dated as of July 25, 2016, by and between the Company and the other parties thereto (Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2016).10.25+Employment Agreement, dated as of July 25, 2016, by and between the Company and Bradley Albert (Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2016).10.26+Employment Agreement, dated as of July 25, 2016, by and between the Company and Justin Morris (Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2016).
Item 16. Form 10-K Summary3010.27+Employment Agreement, dated as of July 25, 2016, by and between the Company and Alexander Bafer (Incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2016).10.28+Chairman Agreement, dated as of July 25, 2016, by and between the Company and Alexander Bafer (Incorporated by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2016).21.1Subsidiaries of the Registrant (Previously filed as an exhibit to the Company’s S-1 Registration Statement filed with the SEC on August 5, 2011).31.1Section 302 Certificate of Chief Executive Officer and Chief Financial Officer*32.1Section 1350 Certification of Chief Executive Officer and Chief Financial Officer*101.INSXBRL INSTANCE DOCUMENT*101.SCHXBRL TAXONOMY EXTENSION SCHEMA*101.CALXBRL TAXONOMY EXTENSION CALCULATION LINKBASE*101.DEFXBRL TAXONOMY EXTENSION DEFINITION LINKBASE*101.LABXBRL TAXONOMY EXTENSION LABEL LINKBASE*101.PREXBRL TAXONOMY EXTENSION PRESENTATION LINKBASE** Filed herewith.+ Management contract or compensatory plan or arrangement.
None.31CAROLCO PICTURES, INC.FUBOTV INC. Dated: November 22, 2016February 27, 2023By: /s/ David CohenGandlerDavid CohenGandlerChief Executive Officer and Director(Principal Executive Officer)CohenGandler and John Janedis, and each of them, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution,resubstituting, for him or her and in his or her name, place and stead, in any and all capacities to sign any and all amendments to this annual reportAnnual Report on Form 10-K and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of said attorney-in-fact and agent or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.SignatureTitleDateSignature Title Date /s/ David CohenGandlerChief Executive Officer and Director (principalFebruary 27, 2023 David Gandler November 22, 2016David Cohen/s/ John Janedis Chief Financial Officer February 27, 2023 John Janedis officer)officer)/s/ Alexander BaferEdgar Bronfman, Jr.Executive Chairman of the Board and Chief Development OfficerDirectorNovember 22, 2016February 27, 2023Alexander BaferEdgar Bronfman/s/ Bradley AlbertIgnacio FiguerasPresident, Chief Creative Officer and DirectorNovember 22, 2016February 27, 2023Bradley AlbertIgnacio Figueras/s/ Justin MorrisJulie HaddonChief Operating Officer and DirectorNovember 22, 2016February 27, 2023Justin MorrisJulie Haddon32/s/ Daniel Leff Director February 27, 2023 Daniel Leff /s/ Laura Onopchenko Director February 27, 2023 Laura Onopchenko Pär-Jörgen Pärson Director February 27, 2023 Pär-Jörgen Pärson Carolco Pictures,December 31, 2015 and 2014 the Consolidated Financial StatementsContentsPage(s)Page ReportReports of Independent Registered Public Accounting FirmFirms Auditor Name: KPMG LLP (PCAOB ID: 185) Auditor Location: New York, NY.F-1F-2F-3F-4F-5F-6F-12 and Stockholders ofCarolco PicturesfuboTV Inc.Carolco PicturesfuboTV Inc. and subsidiaries (the “Company”)Company) as of December 31, 20152022 and 2014 and2021, the related consolidated statements of operations stockholders’and comprehensive loss, shareholders’ equity, (deficit) and cash flows for each of the years then ended. in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not requiredmisstatement, whether due to have, nor were we engaged to perform, an audit of its internal control over financial reporting.error or fraud. Our audits included considerationperforming procedures to assess the risks of internal control overmaterial misstatement of the consolidated financial reporting as a basis for designing auditstatements, whether due to error or fraud, and performing procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includesrespond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amountamounts and disclosures in the consolidated financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statement presentation.statements. We believe that our audits provide a reasonable basis for our opinion.In our opinion,referredthat was communicated or required to above present fairly,be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in all material respects,any way our opinion on the consolidated financial position ofstatements, taken as a whole, and we are not, by communicating the Companycritical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.20152022. Since October 1, 2022, the Company experienced sustained decreases in its stock price and 2014,market capitalization. As a result, the Company conducted an impairment test of its goodwill as of December 31, 2022, estimating the fair value of its streaming reporting unit by weighting results from a market approach and an income approach. The results of the impairment test showed that the fair value was in excess of the carrying value of the reporting unit. Therefore, it was determined that goodwill is not impaired.December 31,
2022December 31,
2021ASSETS Current assets Cash and cash equivalents $ 337,087 $ 370,968 Accounts receivable, net 43,996 34,297 Prepaid sports rights 37,668 3,284 Prepaid and other current assets 13,508 13,595 Assets of discontinued operations 4,643 6,361 Total current assets 436,902 428,505 Property and equipment, net 4,975 5,114 Restricted cash 6,139 5,112 Intangible assets, net 171,832 203,561 Goodwill 618,506 619,587 Right-of-use assets 35,888 34,654 Other non-current assets 3,532 3,017 Assets of discontinued operations — 70,228 Total assets $ 1,277,774 $ 1,369,778 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable $ 66,952 $ 55,767 Accrued expenses and other current liabilities 264,415 215,285 Notes payable 5,687 5,113 Deferred revenue 65,370 44,296 Warrant liabilities — 3,548 Long-term borrowings - current portion 1,986 3,668 Current portion of lease liabilities 1,763 3,825 Liabilities of discontinued operations 32,581 5,795 Total current liabilities 438,754 337,297 Convertible notes, net of discount 394,094 316,354 Deferred income taxes 765 2,431 Lease liabilities 39,266 31,682 Other long-term liabilities 1,565 — Liabilities of discontinued operations — 11,133 Total liabilities 874,444 698,897 COMMITMENTS AND CONTINGENCIES (Note 16) Redeemable non-controlling interest 1,648 — Shareholders’ equity: Common stock par value $0.0001: 400,000,000 shares authorized; 209,684,548 and 153,950,895 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively 21 16 Additional paid-in capital 1,972,006 1,691,206 Accumulated deficit (1,558,088) (1,009,293) Non-controlling interest (11,662) (11,220) Accumulated other comprehensive income (595) 172 Total shareholders’ equity 401,682 670,881 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,277,774 $ 1,369,778 statementsfinancial statements.their cash flowsComprehensive LossFor the Years Ended December 31, 2022 2021 2020 Revenues Subscription $ 905,886 $ 564,441 $ 184,328 Advertising 101,739 73,749 24,904 Software licenses, net — — 7,295 Other 1,071 180 1,219 Total revenues 1,008,696 638,370 217,746 Operating expenses Subscriber related expenses 976,415 593,241 204,240 Broadcasting and transmission 73,377 55,563 29,542 Sales and marketing 183,615 135,720 63,141 Technology and development 69,264 55,418 30,189 General and administrative 81,151 89,039 77,635 Depreciation and amortization 36,731 37,666 43,972 Impairment of goodwill and intangible assets — — 248,926 Total operating expenses 1,420,553 966,647 697,645 Operating loss (411,857) (328,277) (479,899) Other income (expense) Interest expense and financing costs (11,696) (13,451) (18,637) Amortization of debt discount (2,476) (14,928) — Gain on sale of assets — — 7,631 Loss on extinguishment of debt — (380) (24,521) Loss on deconsolidation of Nexway — — (11,919) Change in fair value of warrant liabilities (1,701) 2,659 (83,338) Change in fair value of shares settled liability — — (1,665) Change in fair value of derivative liability — — (426) Change in fair value of profit share liability — — 1,971 Unrealized gain on equity method investment — — 2,614 Foreign currency exchange loss — — (1,010) Other income (expense) 1,019 (90) 147 Total other expense (14,854) (26,190) (129,153) Loss from continuing operations before income taxes (426,711) (354,467) (609,052) Income tax benefit 1,666 2,681 9,660 Net loss from continuing operations (425,045) (351,786) (599,392) Discontinued operations Loss from discontinued operations before income taxes (136,874) (31,177) — Income tax benefit — — — Net loss from discontinued operations (136,874) (31,177) — Net loss (561,919) (382,963) (599,392) For the Years Ended December 31, 2022 2021 2020 Less: Net loss attributable to non-controlling interest 442 126 29,059 Net loss attributable to controlling interests (561,477) (382,837) (570,333) Less: Deemed dividend - beneficial conversion feature on preferred stock — — (171) Net loss attributable to common shareholders $ (561,477) $ (382,837) $ (570,504) Other comprehensive income (loss) Foreign currency translation adjustment (767) 172 — Comprehensive loss attributable to common shareholders $ (562,244) $ (382,665) $ (570,504) Net loss per share attributable to common shareholders Basic and diluted loss per share from continuing operations $ (2.33) $ (2.56) $ (12.82) Basic and diluted loss per share from discontinued operations $ (0.75) $ (0.23) $ — Basic and diluted loss per share $ (3.08) $ (2.78) $ (12.82) Weighted average shares outstanding: Basic and diluted 182,472,069 137,498,077 44,492,975 then ended December 31, 2022, 2021 and 2020conformitythousands except for share information)Preferred stock Common Stock Additional
Paid-In
CapitalTreasury Stock Accumulated
DeficitAccumulated
Other
Comprehensive
LossNon-controlling
Interest -Total
Shareholders’
EquityShares Amount Shares Amount Shares Amount Balance at December 31, 2019 (As restated) — $ — 28,912,500 $ 3 $ 257,002 — $ — $ (56,123) $ (770) $ 22,602 $ 222,714 Issuance of common stock for cash — — 22,664,464 2 203,262 — — — — — 203,264 Issuance of common stock and warrants for cash — — 9,119,066 2 43,097 — — — — — 43,099 Issuance of common stock - subsidiary share exchange — — 2,753,819 — 2,042 — — — — (2,042) — Common stock issued in connection with note payable — — 70,500 — 259 — — — — — 259 Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock — — — — (171) — — — — — (171) Accrued Series D Preferred Stock dividends — — — — (17) — — — — — (17) Deconsolidation of Nexway — — — — — — — — 770 (2,595) (1,825) Right to receive Series AA Preferred Stock in connection with acquisition of fuboTV Merger 32,324,362 566,124 — — — — — — — — 566,124 Conversion of Series AA Preferred Stock (9,104,749) (159,459) 18,209,498 2 159,457 — — — — — — Settlement of share settled liability — — 900,000 — 9,097 — — — — — 9,097 Redemption of redemption feature of convertible preferred stock — — — — 132 — — — — — 132 Issuance of common stock to original owners of Facebank AG — — 1,200,000 — 12,395 — — — — — 12,395 Exercise of common stock warrants — — 5,843,600 — 99,817 — — — — — 99,817 Exercise of stock options — — 1,418,532 — 2,178 — — — — — 2,178 Reclassification of warrant liabilities — — — — 13,535 — — — — — 13,535 Repurchase of common stock — — — — — (800,000) — — — — — Stock-based compensation — — 1,398,789 — 51,739 — — — — — 51,739 Net loss — — — — — — — (570,333) — (29,059) (599,392) Balance at December 31, 2020 23,219,613 $ 406,665 92,490,768 $ 9 $ 853,824 (800,000) $ — $ (626,456) — $ (11,094) $ 622,948 Preferred stock Common Stock Additional
Paid-In
CapitalTreasury Stock Accumulated
DeficitAccumulated
Other
Comprehensive
LossNon-controlling
Interest -Total
Shareholders’
EquityShares 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 — — — — — — Issuance of common stock in connection with Molotov acquisition — — 5,690,669 1 98,790 — — — — — 98,791 Issuance of common stock in connection with Edisn acquisition — — 287,768 — 8,262 — — — — — 8,262 Issuance of common stock/At-the-market offering, net of offering costs — — 5,338,607 1 140,394 — — — — — 140,395 Exercise of warrants — — 1,598,234 — 19,991 — — — — — 19,991 Issuance of treasury stock in connection with acquisitions — — — — 8,538 800,000 — — — — 8,538 Recognition of debt discount on 2026 Convertible Notes — — — — 87,946 — — — — — 87,946 Exercise of stock options — — 2,203,381 — 3,013 — — — — — 3,013 Delivery of common stock underlying restricted stock units — — 91,580 — — — — — — — — Shares repurchased in connection with separation agreement — — (166,599) — — — — — — — — Stock-based compensation — — — — 63,796 — — — — — 63,796 Foreign currency translation adjustment — — — — — — — — 172 — 172 Other — — (22,739) — (8) — — — 0 — (8) Net loss — — — — — — — (382,837) — (126) (382,963) Balance at December 31, 2021 — $ — 153,950,895 $ 16 $ 1,691,206 $ — $ — $ (1,009,293) $ 172 $ (11,220) $ 670,881 Issuance of common stock/At-the-market offering, net of offering costs — — 50,620,577 5 292,150 — — — — — 292,155 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 common stock warrants — — 540,541 — 10,249 — — — — — 10,249 Exercise of stock options — — 616,304 — 829 — — — — — 829 Delivery of common stock underlying restricted stock units — — 1,956,231 — — — — — — — — Issuance of restricted stock — — 2,000,000 — — — — — — — — Stock-based compensation — — — — 65,518 — — — — — 65,518 Foreign currency translation adjustment — — — — — — — — (767) — (767) Net loss attributable to non-controlling interest — — — — — — — — — (442) (442) Net loss — — — — — — — (561,477) — — (561,477) Balance at December 31, 2022 — $ — 209,684,548 $ 21 $ 1,972,006 $ — $ — $ (1,558,088) $ (595) $ (11,662) $ 401,682 For the Years Ended December 31, 2022 2021 2020 Cash flows from operating activities Net loss $ (561,919) $ (382,963) $ (599,392) Less: Loss from discontinued operations, net of tax (136,874) (31,177) — Net loss from continuing operations (425,045) (351,786) (599,392) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 36,731 37,666 43,972 Stock-based compensation 52,454 53,150 50,739 Impairment of intangible assets — — 100,304 Impairment expense goodwill — — 148,622 Non-cash expense relating to issuance of warrants and common stock — — 2,209 Loss on deconsolidation of Nexway, net of cash retained by Nexway — — 8,564 Loss on extinguishment of debt — 380 24,521 Common stock issued in connection with note payable — — 67 Gain on sale of assets — — (7,631) Amortization of debt discount 2,476 14,928 12,327 Deferred income tax benefit (1,666) (2,681) (9,660) Change in fair value of derivative liability — — 426 Change in fair value of warrant liabilities 1,701 (2,659) 83,338 Change in fair value of shares settled liability — — 1,665 Change in fair value of profit share liability — — (1,971) Unrealized gain on investment — — (2,614) Amortization of right-of-use assets 3,078 954 681 Accrued interest on notes payable — — 246 Foreign currency loss — — 1,010 Other adjustments 1,155 583 (620) Changes in operating assets and liabilities of business, net of acquisitions: Accounts receivable, net (9,778) (15,047) (12,591) Prepaid expenses and other assets (950) (3,554) (2,141) Prepaid sports rights (34,384) (3,284) — Accounts payable 12,014 8,727 (39,141) Accrued expenses and other liabilities 50,116 64,792 40,761 Due to related parties — — (665) Deferred revenue 21,102 26,055 8,619 Lease liabilities 1,210 (120) (663) Net cash used in operating activities - continuing operations (289,786) (171,896) (149,018) Net cash used in operating activities - discontinued operations (26,915) (24,031) — Net cash used in operating activities (316,701) (195,927) (149,018) For the Years Ended December 31, 2022 2021 2020 Cash flows from investing activities Advance to fuboTV Pre-Merger — — (10,000) Acquisition of fuboTV’s Pre-Merger cash and cash equivalents and restricted cash — — 9,373 Sale of Facebank AG — — (619) Cash paid for acquisitions, net of cash acquired — (22,894) — Purchases of short term investments (100,000) — — Proceeds from maturity of short term investments 100,000 — — Purchases of property and equipment (1,130) (3,409) (166) Capitalization of internal use software (4,857) (4,074) (45) Net cash used in investing activities - continuing operations (5,987) (30,377) (1,457) Net cash used in investing activities - discontinued operations (6,436) (45,795) — Net cash used in investing activities (12,423) (76,172) (1,457) Cash flows from financing activities Proceeds from sale of common stock and warrants, net of fees 292,123 140,446 278,883 Proceeds from convertible note, net of issuance costs — 389,446 3,003 Repayments of convertible notes — — (3,913) Proceeds from exercise of stock options 829 3,013 2,178 Proceeds from the exercise of warrants 5,000 3,762 1,685 Proceeds from notes payable and long-term borrowings — — 33,649 Repayments of notes payable and long-term borrowings (1,682) (24,709) (35,400) Proceeds from the issuance of Series D Preferred Stock — — 203 Redemption of Series D Preferred Stock — — (883) Repayments to related parties — — (333) Net cash provided by financing activities - continuing operations 296,270 511,958 279,072 Net cash provided by financing activities - discontinued operations — — — Net cash provided by financing activities 296,270 511,958 279,072 Net increase (decrease) in cash, cash equivalents and restricted cash (32,854) 239,859 128,597 Cash, cash equivalents and restricted cash at beginning of period 376,080 136,221 7,624 Cash, cash equivalents and restricted cash at end of period $ 343,226 $ 376,080 $ 136,221 Supplemental disclosure of cash flows information: Interest paid $ 13,786 $ 8,017 $ 5,372 For the Years Ended December 31, 2022 2021 2020 Non cash financing and investing activities: Conversion of Series AA preferred stock to common stock $ — $ 406,665 $ 159,459 Issuance of convertible preferred stock for Merger $ — $ — $ 566,124 Reclassification of warrant liabilities to equity $ — $ — $ 13,535 Issuance of common stock to original owners of Facebank AG $ — $ — $ 12,395 Issuance of common stock in connection with acquisitions $ — $ 107,053 $ — Reclassification of the equity components of the 2026 Convertible Notes to liability upon adoption of ASU 2020-06 $ 75,264 $ — $ — Reclass of shares settled liability to additional paid-in capital for issuance of common stock $ — $ — $ 9,097 Reclass of shares settled liability for intangible asset to stock-based compensation $ — $ — $ 1,000 Issuance of treasury stock in connection with acquisitions $ — $ 8,538 $ — Cashless exercise of warrants $ 5,249 $ 16,480 $ 98,132 Accrued expenses - At-the-market offering $ 18 $ 51 $ — Common stock issued in connection with note payable $ — $ — $ 259 Issuance of common stock - subsidiary share exchange $ — $ — $ 2,042 Deconsolidation of Nexway $ — $ — $ 1,825 Unpaid financing costs included in accounts payable $ — $ — $ 772 Accrued Series D Preferred Stock dividends $ — $ — $ 17 Deemed dividend related to immediate accretion of redemption feature of convertible preferred stock $ — $ — $ 171 accounting principles generally accepteda public offering in October 2020 and commenced trading on the NYSE on October 8, 2020.America.concern. As discussed in Note 1 to the consolidated financial statements, the Company has a stockholders’ deficit at December 31, 2015 and incurred a net loss and used cash in operating activities for the year then ended which raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty./s/ Weinberg & Company, P.A.Weinberg & Company, P.A.Los Angeles, CaliforniaNovember 22, 2016F-1Consolidated Balance Sheets December 31, 2015 December 31, 2014 ASSETS Current Assets Cash $ 48,265 $ 160,377 Accounts receivable - 11,248 Prepaid expenses and other current assets 13,415 55,380 Total current assets 61,680 227,005 Property and equipment, net of accumulated depreciation of $10,556 and $9,697, respectively 1,660 2,520 Deposits on project paid to related party 250,000 - Goodwill - 319,237 Total assets $ 313,340 $ 548,762 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities Accounts payable $ 22,673 $ 17,328 Accrued interest (including interest to related party of $41,767 and $0, respectively) 64,549 7,292 Accrued payroll 125,000 150,000 Deferred revenue - 63,699 Advances from related parties 30,567 110,847 Notes payable 43,687 20,340 Convertible notes payable, net of unamortized debt discount of $78,666 182,491 - Convertible notes payable-related party 543,115 150,300 Derivative liability 4,672,617 - Total current liabilities 5,684,699 519,806 Commitments and Contingencies Stockholders’ Equity (Deficit) Preferred stock: $0.0001 par value, 10,000,000 shares authorized; none issued or outstanding - - Common stock par value $0.0001: 100,000,000 shares authorized; 93,856,857 and 54,239,500 shares issued and outstanding, respectively 9,396 5,424 Additional paid-in capital 6,369,043 4,172,192 Common stock receivable - (8,015 ) Accumulated deficit (11,593,864 ) (4,016,719 ) Total Stockholders’ Equity (Deficit) (5,215,425 ) 152,882 Non-Controlling Interest in Subsidiaries (155,934 ) (123,926 ) (5,371,359 ) 28,956 Total Liabilities and Stockholders’ Equity (Deficit) $ 313,340 $ 548,762 See accompanying notes to the consolidated financial statements.F-2Consolidated Statements of Operations For the Year’s Ended December 31, 2015 December 31, 2014 Revenue $ 964,141 $ 790,467 Cost of goods sold 792,031 631,326 Gross Profit 172,110 159,141 Operating expenses Compensation 1,880,378 2,143,742 Professional fees 771,400 181,375 General and administrative 247,189 174,457 Impairment of goodwill 319,237 - Total operating expenses 3,218,204 2,499,574 Loss from operations (3,046,094 ) (2,340,433 ) Other (income) expense Interest expense (including interest to related party of $47,517 and $0, respectively) 340,717 13,849 Financing cost 529,724 - Change in fair value of derivative liability 2,262,774 - Gain on extinguishment of derivative liability (76,015 ) - Loss on extinguishment of debt 1,499,918 - Bad debt recovery - (75,000 ) Other (income) expense 5,941 (2,341 ) Other (income) expense, net 4,563,059 (63,492 ) Net loss (7,609,153 ) (2,276,941 ) (32,008 ) (56,745 ) Net loss attributable to Carolco Pictures, Inc. $ (7,577,145 ) $ (2,220,196 ) Net loss per common share - basic and diluted $ (0.13 ) $ (0.08 ) Weighted Average Common Shares Outstanding - basic and diluted 61,205,419 31,223,345 See accompanying notes to the consolidated financial statements.F-3Statements of Stockholders’ Equity (Deficit)For the years ended December 31, 2015 and 2014 Common Shares, $.0001 Par Value Per Share Additional Common Non Total Shares Paid-In Stock Accumulated Controlling Equity Issued Amount Capital Receivable Deficit Interest (Deficit) Balance, December 31, 2013, as reported 30,114,500 $ 3,021 $ 1,491,349 $ - $ (1,396,523 ) $ (67,181 ) $ 68,161 Adjustment to recognize the fair value of common stock issued for services 400,000 40 399,960 - (400,000 ) - - Balance, December 31, 2013, as adjusted 30,514,500 3,061 1,891,309 (1,796,523 ) (67,181 ) 68,161 3,325,000 323 205,178 (8,015 ) 197,496 Fair value of common stock issued for services 400,000 40 387,465 387,505 Amortization of common stock issued for employee services 37,505 37,505 Fair value of warrant issued for employee services 1,476,735 1,476,735 Common stock issued on conversion of note payable 20,000,000 2,000 98,000 100,000 Capital contribution by shareholder 76,000 76,000 Net loss (2,220,196 ) (56,745 ) (2,276,941 ) Balance December 31, 2014 54,239,500 5,424 4,172,192 (8,015 ) (4,016,719 ) (123,926 ) 28,956 Common stock issued for cash 3,836,125 384 190,866 191,250 Common stock issued for non-employee services 1,776,000 188 1,040,051 1,040,239 Fair value of warrant issued for employee services 900,000 900,000 Common stock issued in convertible notes payable 34,005,232 3,400 65,934 69,334 Reduction in subscription receivable 8,015 8,015 Net loss (7,577,145 ) (32,008 ) (7,609,153 ) Balance December 31, 2015 93,856,857 $ 9,396 $ 6,369,043 $ - $ (11,593,864 ) $ (155,934 ) $ (5,371,359 ) See accompanying notes to the consolidated financial statements.F-4Consolidated Statements of Cash Flows For the Year Ended December 31, 2015 December 31, 2014 Cash flows from operating activities: Net loss before non-controlling interest $ (7,609,153 ) $ (2,276,941 ) Adjustments to reconcile net loss to net cash used in operating activities Change in fair value of derivative liability 2,262,774 - Extinguishment of derivative liability (76,015 ) - Amortization of debt discount 256,830 - Financing cost 530,966 Loss on extinguishment of debt 1,499,918 - Impairment of goodwill 319,237 - Depreciation expense 859 3,140 Stock compensation 1,940,239 1,864,240 Changes in operating assets and liabilities: Accounts receivable 11,248 (11,248 ) Prepayments and other assets 41,965 (38,882 ) Accounts payable 5,345 (75,168 ) Accrued interest 70,072 7,292 Accrued payroll – related party (25,000 ) 1,000 Deferred revenues (63,699 ) - Advances from related party (80,280 ) 50,000 Accrued expenses and other current liabilities - 63,699 Net cash used in operating activities (914,694 ) (412,868 ) Cash flows from investing activities: Deposit on project paid to related party (250,000 ) (50,000 ) Purchase of computer equipment - (1,203 ) Acquisition payable - - Net cash used in investing activities (250,000 ) (51,203 ) Cash flows from financing activities: Proceeds from note payable 23,347 20,000 Proceeds from issuance of convertible notes payable 305,470 - Repayment of convertible notes payable (5,000 ) - Proceeds from issuance of common stock 340,750 197,496 Repayments of note payable - (54,960 ) Proceeds from note payable - related party 405,000 361,300 Repayment for note payable - related party (25,000 ) (111,000 ) Collection of common stock receivable 8,015 - Contribution to capital - 76,000 Net cash provided by financing activities 1,052,582 488,836 Net change in cash (112,112 ) 24,765 Cash at beginning of the period 160,377 135,612 Cash at end of the period $ 48,265 $ 160,377 Supplemental disclosure of cash flows information: Interest paid $ 5,569 $ 2,722 Income tax paid $ - $ - Non-cash financing and investing activities: Conversion of accrued interest – related party to convertible notes payable – related party $ 12,815 $ - Conversion of convertible notes payable to shares of common stock $ 69,335 $ - Derivative liability accounted as convertible debt discount $ 305,474 $ - Derivative liability accounted as reduction to paid in capital $ 149,500 $ - Finder fee settled in shares of common stock $ - $ 400,000 Issuance of common stock for conversion of notes payable $ - $ 100,000 Minority share of losses of subsidiary $ 32,008 $ 56,745 See accompanying notes to the consolidated financial statements.F-5Notes to the Consolidated Financial StatementsDecember 31, 2015 and 2014Note 1 - Organization and OperationsCarolco Pictures, Inc. (formerly “Brick Top Productions, Inc.” or the “Company”) was incorporated under the laws of the State of Florida on in February 2009 under the name “York Entertainment, Inc.” The Company changed its name to Brick Top Productions, Inc. in October 2010. In January 2015, the Company changed its name from Brick Top Productions, Inc. to Carolco Pictures, Inc. In addition, in January 2015, the Company changed its stock symbol from “BTOP” to “CRCO.”Going ConcernThe Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, and which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the consolidated financial statements, thea stockholders’cash, cash equivalents, and restricted cash of $343.2 million, working capital of $26.1 million (excluding discontinued operations) and an accumulated deficit of $5,371,359 at$1,558.1 million as of December 31, 2015, and2022. The Company incurred a net loss from continuing operations of $7,609,153, and utilized net cash used in operating activities $914,694$425.0 million for the year then ended. In addition, at December 31, 2015, $543,115 of convertible notes payable – related party matured and were in default and as a result, $261,157 of convertible notes were also deemed in default due to a cross-default provision of the note. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The 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.Management estimates that the current funds on hand and raising capital through proceeds from the sale of common stock subscriptions will be sufficient to continue operations through the year ended December 31, 2016. Subsequent2022. 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.2015,2022, the Company raisedreceived net proceeds of approximately $416,000 through the issuance$292.1 million (after deducting $6.6 million in commissions and expenses) from sales of 487,00050,620,577 shares of its common stock. The abilitystock, at a weighted average gross sales price of $5.90 per share, pursuant to at-the-market sales agreements with its sales agents.is dependentfor at least one year from the date of issuance of these financial statements.abilitycurrent assessment, it does not expect the impact of the COVID-19 pandemic and other macroeconomic factors to execute its strategy and in its ability to raise additional funds. Management is currently seeking additional funds, primarily throughmaterially impact 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 ifCompany’s operations. However, the Company is ablecontinuing to obtain additional financing, itassess the impact that the spread of COVID-19 and other macroeconomic factors may contain undue restrictionshave on our operations, in the case of debt financing or cause substantial dilution for our stock holders, in case or equity financing.its operations.23 - Summary of Significant Accounting Policiesestimatesgenerally accepted accounting principlesU.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 depreciableallocating the fair value of purchase consideration to assets acquired and liabilities assumed in business acquisitions, useful lives of property and equipment analysisand intangible assets, recoverability of impairments of recorded goodwill and intangible assets, accruals for potentialcontingent liabilities, assumptions made in valuing derivative liabilities and assumptions made in valuing stockequity instruments issued in share-based payment arrangements, and accounting for services.
income taxes, including the valuation allowance on deferred tax assets.F-6Principlessubsidiaries and/group level. The Company has one operating segment as of December 31, 2022, the streaming business.entities are as follows:Name of consolidatedsubsidiary or entityState or other jurisdictionof incorporation ororganizationDate of incorporationor formation(date of acquisition,if applicable)AttributableinterestYork Productions, LLCThe State of FloridaOctober 22, 2008(June 1, 2010)60%York Productions II, LLCThe State of FloridaJune 13, 201360%S&G Holdings, Inc.The State of TennesseeJanuary 4, 2005(December 24, 2013)75%The accompanyingless to be cash equivalents, including balances held in the Company’s money market account. Restricted cash primarily represents cash on deposit with financial statements are consolidated and include the accountsinstitutions in support of a letter of credit outstanding in favor of the CompanyCompany’s landlord for office space. The restricted cash balance has been excluded from the cash balance and its majority owned subsidiaries. is classified as restricted cash on the consolidated balance sheets.accounts include 100%balance sheets that sum to the total of the assetssame on the consolidated statement of cash flows (in thousands):December 31, 2022 December 31, 2021 Cash and cash equivalents $ 337,087 $ 370,968 Restricted cash 6,139 5,112 Total cash, cash equivalents and restricted cash $ 343,226 $ 376,080 liabilitiesConcentrationsourcredit 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.owned subsidiaries,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 ownership interests of minority investors are recordedCompany’s interference with Google Cloud Platform and Amazon Web Services could adversely impact the Company’s operations and business.minority interest. All inter-company balancesreduction in shareholders’ equity. During the year ended December 31, 2020, the Company repurchased 800,000 shares of its common stock at par value. In February 2021, the Company issued 623,068 shares of treasury stock in connection with the acquisition of Vigtory, Inc. and transactions have been eliminated.of Financial InstrumentsThe Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in generally accepted accounting principles (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described:Level 1Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.Level 2Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.Level 3Pricing inputs that are generally observable inputs and not corroborated by market data.Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.
EstimatesF-7valuesamounts of notes payable and convertible noteslong-term borrowings approximate their fair values due to the short-term maturity and the fact that the effective interest rates on these obligations are based on prevailingcomparable to market interest rates.carryingCompany 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:derivative liabilitycurrent and historical collection experience, management concluded that an allowance for credit losses was not necessary as of $4,672,617 was based on Level 2 measurements.are recordedis stated at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred.cost, net of accumulated depreciation. Depreciation of property and equipment is computed byusing the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives of five (5) years. Upon salethe assets. Leasehold improvements are depreciated over the shorter of the lease term or retirementthe estimated useful life of property and equipment, the relatedassets. 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.Management assessesoperations and comprehensive loss in the carrying valueperiod realized. Maintenance and repairs are expensed as incurred.property and equipmentcash flows.the carryingtheir net book value may not be recoverable. If there is indication of impairment, management prepares an estimate ofWhen such factors and circumstances exist, the Company compares the projected undiscounted future cash flows expected to result fromassociated with the userelated asset or group of the asset and its eventual disposition. If these cash flows are less than theassets over their estimated useful lives against their respective carrying amount of the asset, an impairment lossamount. Impairment, if any, is recognized to write down the asset to its estimated fair value. For the years ended December 31, 2015 and 2014, the Company did not recognize any impairment for its property and equipment.GoodwillGoodwill representsbased on the excess of the costcarrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made.acquired entity overexpectation that the assets would be sold or otherwise disposed of. The Company ceased operation of Fubo Sportsbook in connection with the dissolution of Fubo Gaming in October 2022. For the year ended December 31, 2022, the Company determined the carrying value of the asset groups, within Fubo Sportsbook, exceeded future undiscounted cash flows. The Company then calculated the fair value of the netasset groups as the present value of the estimated future cash flows and determined that the carrying value exceeded the fair value in certain instances. Based on this analysis, the Company recognized an aggregate non-cash impairment charge of $76.7 million which represented substantially all of the long-lived assets of Fubo Sportsbook (see Note 4) which is recorded in loss from discontinued operations in the consolidated statement of operations and comprehensive loss.date of acquisition. In accordance with the guidance of the FASB Accounting Standards Codification, goodwill acquired in a business combination with indefinite useful lives is not amortized; rather, goodwill is testedreporting unit level on an annual basis on October 1 for impairment annuallyeach fiscal year or more frequently if events or changes in circumstances indicate that the asset mightcarrying amount of goodwill may not be impaired.As part of our impairment test, we first assessrecoverable. The Company assesses qualitative factors to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If further testing is necessary, we compare the estimated fair value of our indefinite-lived intangible asset witha single reporting unit is less than its book value. If the carrying amount under Accounting Standards Update (“ASU”) No. 2017-04, Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment, issued by the FASB. If it is determined that the fair value is less than its carrying amount, the excess of the indefinite-lived intangible asset exceeds itsgoodwill carrying amount over the implied fair value is recognized as determined by its discounted cash flows, an impairment lossloss.Customer relationships 2 years Trade names 2-9 years Software and technology 3-9 years recognizeddeveloped or obtained for internal use, provided that management with the relevant authority authorizes and commits to the funding of the project, it is probable the project will be completed and the software will be used to perform the function intended. Capitalized costs, including costs incurred for enhancements that are expected to result in an amount equaladditional significant functionality are capitalized and amortized on a straight-line basis over the estimated useful life, which approximates three years. Costs related to that excess. Based upon our impairment testpreliminary project activities and post-implementation operation activities, including training and maintenance, are expensed as incurred.2015, the Company determined that its recorded goodwill of $319,237 was entirely impaired.ConcentrationsDuring the year ended December 31, 2015, the Company had four customers that accounted for 24%2022 and 2021 represents Pulse Evolution Corp. shareholders who retained an aggregate 23.4% and 23.4%, 18%, 16% and 15% of sales respectively.During the year ended December 31, 2014, the Company had three customers that accounted for 47%, 27%, and 19% of sales respectively.Non-Controlling InterestThe Company follows paragraph 810-10-65-1 of the FASB Accounting Standards Codification to report the non-controllingrespectively, interest in its majority owned subsidiaries inthat entity following the consolidated balance sheets within the equity section, separately from the Company’s stockholders’ equity. Non-controlling interest represents the non-controlling interest holders’ proportionate shareCompany's acquisition of the equity of the Company’s majority-owned subsidiaries.Evolution AI Corporation. Non-controlling interest is adjusted for the non-controlling interest holders’ proportionate share of the earnings or losses and other comprehensive income (loss) and the non-controlling interest continues to be attributed its share of losses even if that attribution resultsloss allocations result in a deficit non-controlling interest balance.F-8Revenue Recognitionspecializesaccounts for common stock warrants with cash settlement features as liability instruments at fair value. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the developmentCompany’s consolidated statements of operations and presentationcomprehensive loss. The fair value of quality television programming including series, specials, pilots, live eventswarrants classified as liabilities has been estimated using the Black-Scholes model. There were no warrant liabilities outstanding as of December 31, 2022.award shows. are recorded on the consolidated balance sheets as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right-of-use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term.its live events and award show productions when allcontracts 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 criteriafive steps are met: (i) persuasive evidenceapplied to achieve that core principle:an arrangement exists, (ii)streamed content and functionality depending on the show or liveplan selected. Subscription fees are fixed and paid in advance by credit card on primarily on a monthly 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 when it satisfies a performance obligation by transferring control of the promised services to the customers, which is ratably over the subscription period. 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 and comprehensive loss. Management concluded that the customers are the end user of the subscription services sold by these third-party app stores.completed and occurred and there are no future production obligations, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.Revenues from the saledisplayed.media will bedistribution costs related to content streaming. The cost of affiliate distribution rights is generally incurred on a per subscriber basis and is recognized when the following criteriarelated programming is distributed to subscribers. The Company has certain arrangements whereby affiliate distribution rights are met: (i) persuasive evidence of an arrangement exists; (ii) the show/episodepaid in advance or are subject to minimum guaranteed payments. An accrual is complete, and in accordance with the termsestablished when actual affiliate distribution costs are expected to fall short of the arrangement, has been delivered or is availableminimum 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 immediatesubscription revenue, customer service, certain employee compensation and unconditional delivery; (iii)benefits, cloud computing, streaming, and facility costs. The Company receives advertising spots from television networks for sale to advertisers as part of the priceaffiliate distribution agreements. Subscriber related expenses totaled $976.4 million, $593.2 million and $204.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.customer is fixedsubscriber.determinable;Marketing(iv) collectability is reasonably assured.The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. option and warrant grants issued and vesting to employees basedunits using the closing market price of its common stock on the authoritative guidance provided by FASB wheredate of the grant.award is measured onaward. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and recognized as compensation expenseexpire up to ten years from the date of grant. These options generally vest over a four- year period.straight-linesimplified method, which is the half-life from vesting to the end of itsoverfor an estimate of expected term.vesting period. historical volatility of a publicly traded set of peer companies with consideration of the volatility of its own traded stock price.stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the FASB where the value of the stock compensation is based upon the measurement dateforfeited awards as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Options and warrants granted to non-employees are revalued each reporting period to determine the amount to be recorded as an expense in the respective period. As the options and warrants vest, they are valued on each vesting date and an adjustment is recordedoccur.the difference between the value already recorded and the then current value on the date of vesting. In certain circumstances where there are no future performance requirements by the non-employee, option and warrant grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date.The fair value of the Company’s stock option and warrant grants are estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model, and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods.Deposit for Film Project to Related PartyDeposit for film project include capitalizable production costs, production overhead, interest, development costs and acquired production costs and are stated at the lower of cost, less accumulated amortization, or fair value. The amount by which the unamortized costs of film and television productions exceed their estimated fair values is written off. Film development costs for projects that have been abandoned or have not been set for production within three years are generally written off.Loss Per ShareBasic 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 loss per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding options and warrants are exercised and the proceeds are used to purchase common stock at the average market price during the period. Options and warrants may have a dilutive effectincome taxes under the treasury stockasset and liability method, only when the average market price of the common stock during the period exceeds the exercise price of the options and warrants.At December 31, 2015 and 2014 the Company had 2,952,600 and 1,491,350 warrants outstanding, respectively,in which were excluded from the loss per share calculation as they were anti-dilutive.F-9Derivative Financial InstrumentsThe Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a probability weighted average Black-Scholes-Merton models to value the derivative instruments at inception and on subsequent valuation dates through the December 31, 2015, reporting date.The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.Income Tax ProvisionThe Company follows the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based onrecognized for the future tax consequences attributable to differences between the financial statement and tax basescarrying amounts of existing assets and liabilities using enactedand their respective tax rates in effect for the year in which the differences are expected to reverse. Deferredbases and operating loss and tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Operationsoperations in the period that includes the enactment date.The Company A valuation allowance is required to the extent any deferred tax assets may recognizenot be realizable.tax benefit fromaccounting for uncertainty in income taxes recognized in an uncertainenterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position only if it is more likely than not that thetaken or expected to be taken in a tax return. For those benefits to be recognized, a tax position willmust be more-likely-than-not to be sustained onupon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25authorities. ASC 740 also provides guidance on de-recognition,derecognition, classification, interest and penalties, on income taxes, accounting in interim periodsperiod, disclosure and requires increased disclosures.Years Ended December 31, 2022 2021 2020 Basic loss per share: Loss from continuing operations $ (425,045) $ (351,786) $ (599,392) Less: net loss attributable to non-controlling interest 442 126 29,059 Less: deemed dividend on Series D Preferred Stock — — (171) Loss from continuing operations available to common shareholders (424,603) (351,660) (570,504) Loss from discontinued operations, net of tax (136,874) (31,177) — Net loss attributable to common shareholders $ (561,477) $ (382,837) $ (570,504) Shares used in computation: Weighted-average common shares outstanding 182,472,069 137,498,077 44,492,975 Basic and diluted loss per share from continuing operations $ (2.33) $ (2.56) $ (12.82) Basic and diluted loss per share from discontinued operations $ (0.75) $ (0.23) $ — Basic and diluted loss per share $ (3.08) $ (2.78) $ (12.82) December 31, 2022 2021 2020 Warrants to purchase common stock 166,670 565,544 2,535,528 Series AA convertible preferred shares — — 46,439,226 Stock options 15,517,069 15,908,187 16,808,862 Unvested restricted stock units 14,575,629 4,685,800 — Convertible notes variable settlement feature 6,966,078 6,966,078 — Total 37,225,446 28,125,609 65,783,616 IssuedAdopted Accounting PronouncementsMay 2014,August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09,Revenue from2020-06, 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 Customers.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 2014-09 is a comprehensive revenue recognition standardsimplifies the diluted earnings per share calculation by requiring that will supersede nearly all existing revenue recognition guidance under current U.S. GAAPan entity use the if-converted method and replace it with a principle based approach for determining revenue recognition.that the effect of potential share settlement be included in diluted earnings per share calculations. Further, the ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract.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.require additional disclosure aboutno longer incur non-cash interest expense for the nature, amount, timingamortization of debt discount related to the previously separated equity component.uncertaintywhen profitability is achieved.revenueJanuary 1, 2022 as a result of applying the modified retrospective method in adopting ASU 2020-06 (in thousands):As Reported ASU 2020-06 As Adjusted December 31, 2021 Adjustments 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) arising from customer contracts, including significant judgments and changes in judgmentsthe basic and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Company’s financial statements and disclosures.
diluted net loss per share amounts.F-10FebruaryJune 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Company’s financial statements and disclosures.In March 2016, the FASB issued the ASU 2016-09,Compensation2016-13, Financial Instruments - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments in this ASU require, among other things, that all income tax effects of awards be recognized in the income statement when the awards vest or are settled. Credit Losses. The ASU also allowssets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for an employerfinancial 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 repurchase morethe measurement of an employee’s shares than it can today for tax withholding purposes without triggering liability accountingcredit losses on financial assets measured at amortized cost and allows for a policy electionapplies to account for forfeitures as they occur. The amendments in thissome off-balance sheet credit exposures. This ASU arewas effective for fiscal years beginning after December 15, 2016,2019, including interim periods within those fiscal years. Earlyyears, with early adoption is permitted for any entity in any interim or annual period.permitted. The Company is currently evaluating the expected impact that the standard could have on its financial statements and related disclosures.Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants,adopted this ASU in January 2022 and the Securities and Exchange Commissionadoption did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation orstatements and related disclosures.Note 3 - AcquisitionS&G Holdings, Inc.S&G Holdings, Inc., doing business as High Five Entertainment (“S&G”), was organized underFilms and License Agreements for Program Materials, to align the lawsaccounting 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 State of Tennessee in January 2005. High Five Entertainment is an entertainment production company based in Nashville, Tennessee specializing in the development and presentation of television programming including series, specials, pilots, live events and award shows.On December 24, 2013, the Company acquired 75% of the issued and outstanding shares of common stock of S&G for $235,000. The acquisition was accounted for using the purchase method of accounting by allocating the purchase price to the fair value of the assets acquired, including intangible assets and liabilities assumed, based on their estimated fair values at the date of acquisition. The excess of the liabilities assumed and the purchase price over the net assets acquired was recorded as goodwill. The purchase price has been allocated to the assets and liabilities as follows:Total assets acquired $ 42,457 Goodwill 319,237 Total liabilities assumed (126,694 ) Acquisition price $ 235,000 At December 31, 2015, the Company completed its annual impairment test of goodwill, and determined that such goodwill was impaired, and recognized an impairment expense of $319,237. The Company determined there were no such impairment at December 31, 2014 due to the early stages of S&G operations subsequent to the Company’s acquisition.F-11Note 4 – Deposit for Film Project Paid to Related PartyIn April 2015, the Company entered into an agreement with Mr. Mario Kassar, who at the time was the Chairman of the Company. Pursuant to the agreement, the Company provided $250,000 in funding to a company managed by Mr. Kassar for the productionuse of a film initially titled “Audition”Pursuantfor 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 termsscope 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 consolidated financial statements and related disclosures.Agreement,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.engaged Mr. Kassar to render producing and sales services for each film indissolved its wholly owned subsidiary Fubo Gaming. In connection with the “Rambo” franchise, “SMITE” franchise or other feature length motion picture property introduced todissolution of Fubo Gaming, the Company by Mr. Kassar (each, a “Picture”) on the same terms as apply to “Audition,” except that the producing fee shall not be less than 10%concurrently ceased operation of Fubo Sportsbook.budget of each Picture. The Company also agreed to pay Mr. Kassar 5% offollowing for the purchase price of any Carolco-produced feature length films in the “Rambo” franchise and all completed films or film libraries acquired by the Company with Mr. Kassar’s assistance and based on Mr. Kassar’s introduction to the Company of such completed films or film libraries. The terms of the Agreement also provide that the Company will pay Mr. Kassar a discretionary bonus in relation to his efforts in bringing projects and opportunities to the Company.As ofyears ended December 31, 2015, the project was still in pre-production stage. The Company determined there were no such impairment of the deposit at December 31, 2015 due to the early stages of the film production.Note 5 –Note PayableIn 2014, the Company executed note payables with two financial institutions wherein the Company can make advances in the aggregate of up to $125,000. The note payables are secured by the Company’ assets, bear an average interest rate of 5% per annum2022 and will mature in May and April of each year or anniversary. As of December 31, 2014, total outstanding note payable amounted to $20,340.Years Ended December 31, 2022 2021 Revenues Wagering $ (759) $ (20) Total revenues (759) (20) Operating expenses Sales and marketing 9,976 6,667 Technology and development 9,220 5,095 General and administrative 28,481 19,146 Depreciation and amortization 433 215 Impairment of goodwill, intangible assets, and other long-lived assets, net 87,365 — Total operating expenses 135,475 31,123 Operating loss (136,234) (31,143) Other income (expense) Interest expense and financing costs (598) — Other income (expense) (42) (34) Total other expense (640) (34) Net loss (136,874) (31,177) 2015,2022 the Company was advanced a totalincurred non-cash impairment charges totaling $87.4 million primarily consisting of $106,325 under these notes,prepaid market access agreements, intangible assets and paid $82,978. goodwill.December 31,
2022December 31,
2021ASSETS Current assets Cash and cash equivalents $ 3,277 $ 3,326 Cash reserved for users — 579 Accounts receivable, net — 11 Prepaid and other current assets 1,366 2,445 Total current assets 4,643 6,361 Property and equipment, net — 1,703 Intangible assets, net — 14,625 Goodwill — 10,682 Right-of-use assets — 3,101 Other non-current assets — 40,117 Total assets - discontinued operations $ 4,643 $ 76,589 LIABILITIES Current liabilities Accounts payable $ 4,347 $ 693 Accrued expenses and other current liabilities 25,787 4,294 Lease liabilities 2,447 808 Total current liabilities 32,581 5,795 Lease liabilities — 2,447 Other long-term liabilities — 8,686 Total liabilities - discontinued operations $ 32,581 $ 16,928 2015, outstanding balance2022, the Company's accrued expenses and other current liabilities of the note amounted $43,687.Note 6- Convertible Notes Payableits discontinued operations included $24.7 million, primarily related to contract termination costs.DefaultConvertible notes payable consist of the following as of December 31, 2015 and 2014: December 31, 2015 2014 (a) St. George $ 55,501 $ - (b) Vis Vires 78,360 - (c) Auctus Find 85,966 - (d) Vis Vires 41,330 - Total Notes 261,157 - Less Debt Discount (78,666 ) - Net Balance $ 182,491 $ - (a) On May 6, 2015,FaceBank AG, the Company issuedhad an unsecured convertible promissory noteequity investment of 62.3% in the principal amount of $91,242 to St. George Investments, LLC (the “Lender”Nexway AG (“Nexway”)., which it acquired beginning on August 15, 2019 and on September 16, 2019. The note bearsequity investment in Nexway was a controlling financial interest at 10% per annum and matures eleven months from the effective date of the agreement. Under the terms of the note, there was an original issue discount (“OID”) of $8,000 withheld at funding and the Company agreedconsolidated its investment in Nexway under ASC 810, Consolidation.pay $3,00042.6% 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 had a controlling financial interest.Cash $ 5,776 Accounts receivable 9,831 Inventory 50 Prepaid expenses 164 Goodwill 51,168 Property and equipment, net 380 Right-of-use assets 3,594 Total assets $ 70,963 Less: Accounts payable 34,262 Accrued expenses 15,788 Lease liability 3,594 Deferred income taxes 1,161 Other liabilities 40 Total liabilities $ 54,845 Non-controlling interest 2,595 Foreign currency translation adjustment (770) 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 Lenderformer owners and recognized a gain on sale of its investment of $7.6 million, which is included as a gain on the sale of assets, a component of other income (expense) on the accompanying consolidated statement of operations and comprehensive loss.Investment in Nexway $ 4,989 Financial assets at fair value 1,965 Goodwill 28,541 Total assets 35,495 Loan payable 56,140 Net carrying amount (20,645) Issuance of common stock to original owners of Facebank AG 12,395 Cash paid to former owners of Facebank AG 619 Gain on sale of investment in Facebank AG $ (7,631) coverFubo Gaming Inc.Lender’s legal feesVigtory Acquisition was determined to be $10.3 million, including $1.7 million of Vigtory’s outstanding convertible notes and other transaction related costs. liabilities settled by the Company on the closing date. The Vigtory Acquisition consideration does not include $26.9 million fair value of common shares issued to former employee shareholders of Vigtory subject to vesting over future service periods.OIDVigtory Acquisition that were expensed as a note discount andincurred during the $3,000 fee as debt issuance costs. Both the note discount and issuanceyear ended December 31, 2021. These costs recognizedare included in loss from discontinued operations in the transaction are being accreted to interest expense over the lifeconsolidated statement of the note. In addition,operations and comprehensive loss.paidacquired 100% of Edisn Inc. (“Edisn”), an $8,000 finders’ feeAI-powered computer vision platform with patent-pending video recognition technologies based in the transaction which has been recorded in debt issuance costs and is being accreted to interest expense of the life of the note. During the year, the Company paid $5,000 of the principal due, and $30,741 of principal was converted into 6,527,297 shares of common stock, leaving a remaining balance due of $55,501 at December 31, 2015. The note is currently past due and in default.F-12The note is convertible by the Lender into common stock of the Company at the lesser of $0.45 per share or, in the event the Company’s market capitalization falls below $15.0Bangalore, India, for approximately $14.4 million at a defined Lender conversion price.(b) On May 12, 2015, the Company issued a convertible promissory note in the principal amount of $104,000 to the Vis Vires Group, Inc. (“VVG”Edisn Acquisition”). The note bears interest at 8% per annum, increased to 22% in the eventconsideration paid was cash of default,$6.1 million and matures February 14, 2016. VVG deducted $2,000 from the proceeds to cover their legal and other transaction related costs which was recorded as debt issuance costs and is being accreted to interest expense over the life of the note. During the year, principal of $25,640 was converted into 11,070,857464,700 shares of common stock, leaving a remaining balance due of $78,360 at December 31, 2015. The note is currently past due and in default.The note is convertible by VVG into common stock of the Company through the later of the note maturity date or the payment of the defined amount in the event of default. The note carries a variable conversion price defined as 61% of the market price (representing a 39% discount), with market price being defined as the average of the lowest three trading days for the Company’s common stock with a fair value of $8.3 million as of the date of closing. The Company accounted for the Edisn Acquisition as a business combination under the acquisition method of accounting. As such, the purchase price was allocated to the net assets acquired with any excess recorded to goodwill as follows (in thousands):Assets acquired: Cash $ 373 Prepaid and other current assets 5 Property and equipment, net 10 Intangible assets 1,500 Goodwill 12,501 Total assets acquired 14,389 Liabilities assumed: Deferred income taxes 12 Accrued expenses and other current liabilities 25 Total liabilities assumed 37 Net assets acquired $ 14,352 10 day period prior to the conversion date.(c) On June 22, 2015, the company issued a convertible promissory noteyear ended December 31, 2021. These costs were included in general and administrative expense in the amountconsolidated statement of $87,750 to the Auctus Fund, LLC (“Auctus”). operations and comprehensive loss.note bears interest at 8% per annum, increased to 24% in the event of default,estimated useful lives and matures on March 22, 2016. Auctus deducted $8,000 from the proceeds to cover their legal and other transaction related costs which were recorded as debt issuance costs and is being accreted to interest expense over the lifefair value of the note. In addition,intangible assets acquired are as follows (in thousands):Estimated
Useful Life
(in Years)Fair Value Software and technology 7 $ 1,500 Total $ 1,500 paid an $8,000 finders’ fee in this transaction which has been recorded in debt issuance costs and is being accreted to interest expense over the lifeacquired approximately 98.5% of the note. Duringequity interests in Molotov S.A.S (“Molotov”), a television streaming platform located in France, for €101.7 million or $115.0 million (“Molotov Acquisition”). In the year, principalfirst quarter of $1,784 was converted into 4,460,325 shares of common stock, leaving a2023, the Company acquired the remaining balance due of $85,966 at December 31, 2015. The note is currently past due and in default.The note is convertible by Auctus into common stock1.5% of the Company throughequity interests in Molotov. The consideration paid in cash totaled €14.4 million or $16.3 million, and the laterissuance of the note maturity date or the payment5.7 million shares of the defined default amount in the event of default. The note carries a variable conversion price defined as 50% of the market price (representing a 50% discount), with market price being defined as the lowest trading price of our common stock during the 25 trading day period prior to the conversion date.(d) On July 10, 2015, the Company issued a convertible promissory note in the principal amount of $52,500 to the Vis Vires Group, Inc. (“VVG”). The note bears interest at 8% per annum, increased to 22% in the event of default, and matures April 13, 2016. VVG deducted $1,000 from the proceeds to cover their legal related costs which were charged to financing costs.The note is convertible by VVG into common stock of the Company through the later of the note maturity date or the payment of the defined amount in the event of default. The note carries a variable conversion price defined as 61% of the market price (representing a 39% discount), with market price being defined as the average of the lowest three trading days for the Company’s common stock with a fair value of approximately $98.8 million. Molotov is included in the streaming segment and its contribution to revenue and operating loss during the 10 day period prior toyear ended December 31, 2021 was $1.4 million and $8.1 million, respectively.conversion date. 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.principal of $11,170 was converted into 11,946,753 shares of common stock, leaving a remaining balance due of $41,330 atended December 31, 2015.2022, the Company finalized 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 year ended December 31, 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.F-13Assets 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 consideredallocated the current FASB guidancegoodwill to its streaming segment.“Contractsacquisition-related costs for the Molotov Acquisition that were expensed as incurred during the year ended December 31, 2021. These costs were included in Entity’s Own Stock” which indicates that any adjustment togeneral and administrative expense in the fixed amount (either conversion price or numberconsolidated statement of shares) of the instrument regardless of the probability of whether or not within the issuers’ control means the instrument is not indexed to the issuer’s own stock. Accordingly, the Company determined that the conversion prices of the Notes were not a fixed amount because they were subject to an adjustment based on the occurrence of future offerings or events. As a result, the Company determined that the conversion features of the Notes were not considered indexed to the Company’s own stockoperations and characterized thecomprehensive loss.conversion featuresintangible assets acquired are as derivative liabilities upon issuance. follows:Estimated
Useful Life
(in Years)Fair Value Customer relationships 2 $ 9,271 Tradenames 2 679 Software and technology 6 8,479 Total $ 18,429 Company determined that upon issuancefollowing table presents the Company’s revenues disaggregated into categories based on the nature of the Notes in 2015, the initial fair value of the embedded conversion feature was $531,579. As such the Company recorded a $531,579 derivative liability, of which $304,861 was recorded as debt discount offsetting the fair value of the Notesrevenues (in thousands):Years Ended December 31, 2022 2021 2020 Subscription $ 905,886 $ 564,441 $ 184,328 Advertising 101,739 73,749 24,904 Software licenses, net — — 7,295 Other 1,071 180 1,219 Total revenues $ 1,008,696 $ 638,370 $ 217,746 the remainder of $226,105 was recorded as a financing cost in the Consolidated Statement of Operationsadvertising revenue by region for the year ended December 31, 2015. 2022, 2021 and 2020 (in thousands):Years Ended December 31, 2022 2021 2020 United States and Canada (North America) $ 882,679 $ 562,991 $ 184,137 Rest of world 23,207 1,450 191 Total subscription revenues $ 905,886 $ 564,441 $ 184,328 Years Ended December 31, 2022 2021 2020 United States and Canada (North America) $ 100,605 $ 73,538 $ 24,904 Rest of world 1,134 211 — Total advertising revenues $ 101,739 $ 73,749 $ 24,904 discountcontract liabilities primarily relate to upfront payments and consideration received from customers for subscription services. As of December 31, 2022 and 2021, the Company’s contract liabilities totaled $65.4 million and $44.3 million, respectively, and are recorded as deferred revenue on the accompanying consolidated balance sheets.Useful Lives
(Years)December 31, 2022 December 31, 2021 Furniture and fixtures 7 $ 441 $ 357 Computer equipment 3 - 5 2,922 2,764 Leasehold improvements Term of lease 5,136 4,405 8,499 7,526 Less: Accumulated depreciation (3,524) (2,412) Total property and equipment, net $ 4,975 $ 5,114 Useful
Lives
(Years)Weighted Average Remaining
Life (Years)December 31, 2022 Intangible Assets Accumulated Amortization Net Balance Customer relationships 2 1.2 $ 32,433 $ (28,421) $ 4,012 Trade names 2-9 6.2 38,837 (12,018) 26,819 Software and technology 3-9 5.8 200,222 (59,221) 141,001 Total $ 271,492 $ (99,660) $ 171,832 Useful
Lives
(Years)Weighted Average Remaining
Life (Years)December 31, 2021 Intangible Assets Accumulated Amortization Net Balance Customer relationships 2 2.2 $ 32,965 $ (21,105) $ 11,860 Tradenames 2-9 7.2 38,876 (7,455) 31,421 Software and technology 3-9 8.7 195,852 (35,572) 160,280 Total $ 267,693 $ (64,132) $ 203,561 Future Amortization 2023 35,775 2024 30,283 2025 25,729 2026 24,651 2027 24,651 Thereafter 30,743 Total $ 171,832 December 31, 2022 2021 Beginning balance $ 619,587 $ 478,406 Molotov acquisition (497) 128,468 Edisn acquisition — 12,501 Foreign currency translation (584) 212 Ending balance $ 618,506 $ 619,587 December 31, 2022 Control premium 35% Discount rate 31% Revenue multiples 0.34x - 0.52x December 31, 2022 December 31, 2021 Affiliate fees $ 218,367 $ 177,692 Broadcasting and transmission 15,732 15,179 Selling and marketing 26,907 17,248 Accrued compensation 9,838 11,080 Legal and professional fees 3,712 6,235 Sales tax 37,934 27,310 Accrued interest 4,773 5,057 Subscriber related 3,101 3,601 Shares settled liability 2,860 — Other 9,708 7,650 Total $ 332,932 $ 271,052 For the Years Ended December 31, 2022 2021 2020 United States $ 399,941 $ 346,244 $ 608,950 International 26,770 8,223 102 Loss before income taxes $ 426,711 $ 354,467 $ 609,052 December 31, 2022 2021 2020 U.S. Federal Current $ — $ — $ — Deferred 1,351 2,082 7,930 State and local Current — — — Deferred 315 599 1,730 Foreign Current — — — Deferred — — — Valuation allowance — — — Income tax benefit $ 1,666 $ 2,681 $ 9,660 December 31, 2022 2021 2020 Federal rate 21.00 % 21.00 % 21.00 % State income taxes, net of federal benefit 0.07 0.17 0.28 Nexway activity and deconsolidation — — (0.40) Incentive stock options (0.67) (2.25) (0.38) Change in fair value of derivative, warrant liability, and gain on extinguishment of convertible notes (0.08) 0.16 (3.42) Amortization of debt discount (0.67) — — Foreign rate differential 0.34 0.13 — Goodwill impairment — — (5.10) Change in valuation allowance (18.94) (18.99) (10.27) Other (0.66) 0.54 (0.12) Income tax benefit 0.39 % 0.76 % 1.59 % December 31, 2022 2021 Deferred tax assets: Net operating losses $ 324,256 $ 234,542 Accruals and deferrals 11,032 7,812 Stock based compensation 10,225 10,280 Interest expense limitation 13,959 11,945 Leasing assets 9,125 8,881 Other 49 27 Total deferred tax assets 368,646 273,487 Less: Valuation allowance (322,989) (219,609) Net deferred tax assets $ 45,657 $ 53,878 Deferred tax liabilities: Intangible assets $ 38,929 $ 47,503 Property and equipment 7,391 8,651 Other 102 155 Total deferred tax liabilities $ 46,422 $ 56,309 Net deferred tax liabilities $ 765 $ 2,431 Note Stated Interest Rate Principal Balance Capitalized Interest Debt Discount December 31, 2022 2026 Convertible Notes 3.25 % $ 402,500 $ — $ (8,406) $ 394,094 Note payable 10.0 % 2,700 2,950 — 5,650 BPi France 2.25 % 1,986 — — 1,986 Other 4.0 % 30 7 — 37 $ 407,216 $ 2,957 $ (8,406) $ — $ 401,767 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 method overof 8.67% to estimate the lifefair value of the debt instruments. 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.December 31, 2022 2021 Total long-lived assets - United States 197,673 224,672 Total long-lived assets - Rest of world 15,022 18,657 December 31, 2022 2021 2020 United States $ 972,220 $ 634,065 $ 217,555 Rest of world 36,476 4,305 191 Total Revenue $ 1,008,696 $ 638,370 $ 217,746 Fair valued measured at December 31, 2022 Quoted
prices in
active
markets
(Level 1)Significant
other
observable
inputs
(Level 2)Significant
unobservable
inputs
(Level 3)Total Financial assets at fair value: Cash and cash equivalents Money market securities $ 50,010 $ — $ — $ 50,010 Total financial assets at fair value $ 50,010 $ — $ — $ 50,010 Fair valued measured at December 31, 2021 Quoted
prices in
active
markets
(Level 1)Significant
other
observable
inputs
(Level 2)Significant
unobservable
inputs
(Level 3)Total Financial liabilities at fair value: Warrant liabilities $ — $ — $ 3,548 $ 3,548 Total financial liabilities at fair value $ — $ — $ 3,548 $ 3,548 Derivative - Convertible Notes Profits Interests Sold Embedded Put Option Warrant
liabilitiesFair value at December 31, 2019 $ 1,203 $ 1,971 $ 376 $ 24 Change in fair value (206) (1,971) (220) 83,338 Additions 3,583 — 172 50,743 Redemption (4,580) — (328) (97,884) Reclassification of warrant liabilities — — — (13,535) Fair value at December 31, 2020 — — — 22,686 Change in fair value — — — (2,659) Redemption — — — (16,479) Fair value at December 31, 2021 — — — 3,548 Change in fair value — — — 1,701 Redemption — — — (5,249) Fair value at December 31, 2022 $ — $ — $ — $ — December 31, 2021 Fair value of underlying common shares $ 15.52 Exercise price $ 9.25 Expected dividend yield — % Expected volatility 50.9% - 52.8% Weighted average expected volatility 52.7 % Risk free interest rate 0.06% - 0.06% Weighted average risk-free interest rate 0.06 % Expected term (years) 0.14 - 0.15 Weighted average expected term (years) 0.14 Number of Warrants Weighted Average
Exercise PriceTotal
Intrinsic
ValueWeighted
Average
Remaining
Contractual Life
(in years)Outstanding as of December 31, 2021 565,544 $ 9.96 $ 3,546 0.1 Granted 166,667 $ 15.00 $ — 9.8 Exercised (540,541) $ 9.25 $ — 0 Expired (25,000) $ 9.25 $ — 0 Outstanding and exercisable as of December 31, 2022 166,670 $ 17.40 $ — 9.6 December 31, 2022 Dividend yield — Expected price volatility 107.0% Risk free interest rate 2.8% Expected term (years) 10.0 amortization of debt discount was $256,830, respectively. The unamortized balance of the debt discount was $78,666 as of December 31, 2015.The convertible notes payable also contained certain a cross-default provision in case2022, 2021 and 2020 the Company will be in default of a similar outstanding debt instrument. In October 2015, the Company’s convertible note payable – related party amounting to $543,115 matured and was deemed in default. As a result, the convertible notes were now deemed in default,recognized stock-based compensation expense as such, the holders can accelerate the maturity of the Company’ indebtedness. In addition, the Company also started accruing interest at an average rate of 23% per annum pursuant to the terms of the note starting October 2015.Note 7 – Convertible Notes Payable to Related PartyAt December 31, 2014, the Company had outstanding a promissory note of $150,000 payable to Alex Bafer, the Company’s current Chairman and former CEO. follows:Years Ended December 31, 2022 2021 2020 Subscriber related $ 144 $ 71 $ 32 Sales and marketing 22,198 7,818 2,395 Technology and development 9,998 13,752 5,446 General and administrative 20,114 31,509 43,866 $ 52,454 $ 53,150 $ 51,739 2015, the Company issued an additional $405,000 of promissory notes to Mr. Bafer, of which a note of $25,000 was repaid. On July 9, 2015, the Company issued five convertible promissory notes in the aggregate amount of $543,115 to Mr. Bafer in exchange for his existing promissory notes and related accrued interest of $13,115. The convertible notes have a maturity of October 1, 2015 and an annual interest rate of 5% per annum. The noteholder has the right until the note(s) is fully paid, to convert any outstanding and unpaid principal portion of the note, and accrued interest, into fully paid and non-assessable shares of our common stock. The notes have a conversion price of 50% of the lowest closing bid stock price over the last twenty days prior to conversion. The notes are currently in default.The Company considered the current FASB guidance of “Contracts in Entity’s Own Stock” which indicates that any adjustment to the fixed amount (either conversion price or number of shares) of the instrument regardless of the probability of whether or not within the issuers’ control means the instrument is not indexed to the issuer’s own stock. Accordingly, the Company determined that the conversion prices of the Notes were not a fixed amount because they were subject to an adjustment based on the occurrence of future offerings or events. As a result, the Company determined that the conversion features of the Notes were not considered indexed to the Company’s own stock and characterized the fair value of the conversion features as derivative liabilities upon issuance. The Company determined that upon issuance of the convertible Notes in 2015, the initial fair value of the embedded conversion feature was $1,499,918. The Company determined that the cancellation of the 2014 and 2015 promissory notes in exchange for the convertible notes issued in 2015 was an extinguishment of debt, and the fair value of the derivative liability of $1,499,918 created upon the exchange of debt instruments was a debt extinguishment cost during the year ended December 31, 2015.8 - Derivative LiabilityThe FASB has issued authoritative guidance whereby instruments which do not have fixed settlement provisions are deemed to be derivative instruments. Certain warrants issued to investors and conversion features of notes payable do not have fixed settlement provisions because their exercise prices will be lowered if14), the Company issues securities at lower pricesrecorded approximately $2.9 million of stock-based compensation expense to shares settled liability which is included in accrued expenses and other current liabilities and other long-term liabilities on the future. In accordance withconsolidated balance sheet.FASB authoritative guidance, the conversion feature of the notes was separated from the host contract (i.e., the notes) and the2020 Plan. The fair value of each stock option grant is estimated on the warrants have been recognized as a derivative and will be re-measured atdate of grant using the end of every reporting period with the change in value reported in the statement of operations.F-14had four convertible notes payable, five convertible note payable tohistorically has lacked sufficient company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based primarily on the historical volatility of a related party and warrants to purchase a totalpublicly-traded set of 900,000 sharespeer companies with consideration of commonthe volatility of its own traded stock as of December 31, 2015 that were accounted for as derivative liability. The derivative liability was valued at the following dates using a probability based weighted-average Black-Scholes-Merton model with the following average assumptions: Issuance Date December 31, 2015 Stock Price $ 0.489 $ 0.001 Risk free interest rate 0.003 % 0.003 % Expected Volatility 443 % 404 % Expected life in years 1.17 0.614 Expected dividend yield 0 % 0 % Fair Value – Warrants $ 454,361 $ 3,657,895 Fair Value – Note Conversion Feature $ 2,031,497 $ 1,014,722 was based on rates establishedis determined by referencing the Federal Reserve Bank. The Company usesU.S. Treasury yield curve in effect at the historical volatilitytime of its common stock to estimate the future volatility for its common stock. The expected lifegrant of the warrant was determined byaward for time periods approximately equal to the remaining contractual lifeexpected term of the derivative instrument. For derivative instrument that already matured, the Company used the estimated life. The expectedaward. Expected dividend yield wasis based on the fact that the Company has notnever paid cash dividends to its common stockholders in the past and does not expect to pay any cash dividends to its common stockholders in the foreseeable future.In 2015, The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term. The simplified method was used because the Company recognized additional derivative liabilitiesdoes not have sufficient historical exercise data to provide a reasonable basis for an estimate of $454,361 related toexpected term. warrants issued in conjunction with the sale of the Company’s common stock (described in Note 9) and $2,031,497 related to the beneficial conversion feature of certain of our notes payable. For the fiscal year ended December 31, 2015,2022, is as follows (in thousands, except share and per share amounts):Number of Shares Weighted Average
Exercise PriceTotal Intrinsic Value Weighted Average Remaining Contractual Life
(in years)Outstanding as of December 31, 2021 11,454,890 $ 6.40 $ 70,231 7.4 Exercised (616,304) $ 1.34 Forfeited or expired (594,814) $ 11.16 Outstanding as of December 31, 2022 10,243,772 $ 6.43 $ 1,956 6.0 Options vested and exercisable as of December 31, 2022 8,118,408 $ 5.76 $ 1,956 5.7 Company recognized a change in fair value of the derivative liability of $2,262,774 and gain of $76,015 due to extinguishment of the derivative liability due to conversion of certain notes to equity. As ofyear ended December 31, 2015, the aggregate fair value of the derivative liabilities was $4,672,617.Note 9 - Stockholders’ Equity (Deficit)Sale of Common Stock2015,2021, the Company sold 3,555,500granted options to purchase 220,099 shares of common stock with an aggregate fair value of $3.2 million. The following was used in determining the fair value of stock options granted during the year ended December 31, 2021:Dividend yield — % Expected price volatility 44.8%-45.2% Risk free interest rate 0.6%-1.1% Expected term (years) 5.8 - 6.1 years cashportion of $191,250 at purchase prices rangingthe requisite service period rendered and based on the number of shares expected to be earned. As of December 31, 2022, 820,000 shares of the option had vested, and during the year ended December 31, 2022 the Company recognized $2.2 million of stock-based compensation benefit related to the options. Upon each subsequent Determination Date in 2023, 2024, 2025, and 2026, total stock-based compensation expense for each vested tranche will be remeasured and adjusted to reflect the grant date fair value.$0.005the Company. The modifications accelerated the vesting of unvested stock options and restricted stock awards as of the termination date and provided the option holders with an additional months post-termination to $0.20 per share.2015,2020, the Company sold 280,625 unitsgranted options to purchase 280,000 shares of the Company’s common stock at an averageexercise price of $0.53$7.20 per unit, for total proceeds of $149,500. Each unit consisted of one share of common stock, one Class A warrant and one Class B warrant. The warrants are fully vested, exercisable for two years from issuance at $3.00 and $6.00 per common share, respectively, and the exercise price and the number of common shares issuable upon exercise is subject to reset based on future equity transactions. As the warrants issued to do notshare. These options have fixed settlement provisions because their exercise prices will be lowered if the Company issues securities at lower prices in the future, thea fair value of $1.0 million, a five-year term and expires on December 21, 2024. These options were immediately vested as of the warrantsgrant date. During the year ended December 31, 2021, 280,000 options were exercised in exchange for 222,962 shares of $454,361the Company’s common stock.recordedimmaterial for the year ended December 31, 2020.a derivative liability upon issuance,described above, there were no options granted to non-employees during the years ended December 31, 2022 and 2021.Number of Shares Weighted Average
Exercise PriceTotal Intrinsic Value Weighted
Average
Remaining
Contractual Life
(in years)Outstanding as of December 31, 2021 4,453,297 $ 12.75 $ 17,933 5.7 Outstanding as of December 31, 2022 4,453,297 $ 12.75 $ — 4.7 Options vested and exercisable as of December 31, 2022 3,536,630 $ 10.98 $ — 4.5 $149,500 was recordedwere estimated based on a Monte Carlo simulation model applying the following key assumptions as a reduction to capital and the excess of the derivative liability over the aggregate cash proceeds received of $304,861 was recognized as a private placement costgrant date:December 31, 2021 Dividend yield — Expected volatility 71.5 % Risk free rate 1.3 % Derived service period 2.0 years 2015.2014,2021, 1,375,000 stock options with a fair value of $19.2 million were granted to an employee of the Company sold 3,325,000 common shares forCompany. The options vest on the cash amountearlier of $197,496 at purchase prices ranging from $0.005each anniversary of the grant date or based on the achievement of pre-established parameters relating to $0.20 per share.Common Shares Issued for Conversionthe performance of Notes Payable2015,2022 and 2021, the Company converted $69,334recognized $7.8 million and $7.2 million, respectively, of outstanding convertible debt into 34,005,232 sharesstock-based compensation related to its market and service-based stock options. As of common stock.2014,2020, 3,078,297 stock options with a fair value of $20.9 million were granted to an employee of the Company converted $100,000Company. The options vest on the earlier of outstanding debt into 20,000,000 shareseach anniversary of common stock.F-15Shares Issued for Services2015,2020, the pre-established parameters related to the Company’s stock performance were achieved, the 3,078,297 options were fully vested, and the Company issued 1,776,000 sharesrecognized $20.9 million of commonstock-based compensation related to these market and service-based stock valued at $1,040,239options.employee and non-employee services rendered. The shares were valued at the trading price on the date of agreement.EffectiveMEP Project restricted stock awards (the "MEP Project RSAs") totaling approximately $23.0 million measured as of February 13, 2015, the Company’s Board of Directors appointed Mario Kassar as the Chairman of the Board of Directors of the Company. In consideration for his services, the Company irrevocably issued 500,000 shares of the Company’s unregistered Common Stock, $0.0001 par value per share with a fair value of $500,000.Under the provisions of ASC 505 and the terms of the agreement with Mr. Kassar, the measurement date was determined to be the contract date, with no vesting or forfeiture provisions or significant disincentives for non-performance. Accordingly, the fair value of the 1,600,000 shares issued for the first tranche issued on August 12, 2022 at $7.0 million, plus the fixed monetary amount of $8.0 million settleable in shares on August 2, 2023, and the fixed monetary amount of $8.0 million settleable in shares on August 2, 2024. Compensation cost will be recognized on a straight-line basis over the term of the three-year service period as if the Company paid cash for the services. The second two tranches are liability classified because they are a fixed monetary amount, settleable in shares. As compensation cost is recognized for these tranches, a corresponding credit to share-based liabilities will be recorded and reclassified to equity upon issuance of the 500,000related shares.at $500,000liability in accrued expenses and other current liabilities and other long-term liabilities was based on market price and was charged to compensation expenserecorded on the effectiveconsolidated balance sheet.agreement. In addition,performance condition are recognized when probable over the Company granted Mr. Kassar warrants to purchase 500,00 common shares.In April 2015,requisite service period, that is the Company entered into an agreement with Mr. Mario Kassar,implicit service period over which the Chairmanperformance conditions are probable of our Board of Directors. The agreement addressed funding of the Company’s “Audition” film project and providedachievement.issuance of 100,000 common shares to Mr. Kassar under the terms of the agreement. Under the provisions of ASC 505 and the terms of the agreement, the measurement date was determined to be the contract date, with no vesting or forfeiture provisions or significant disincentives for non-performance. Accordingly,MEP Network RSAs totaling approximately $5.7 million is measured as the fair value of the issuance400,000 shares issued for the first tranche issued on August 12, 2022 at $1.7 million, plus the fixed monetary amount of $0.37 per share based$2.0 million, settleable in shares on market price, or $37,000, was chargedAugust 2, 2023, plus the fixed monetary amount of $2.0 million, settleable in shares on August 2, 2024 The MEP Network RSAs are subject to forfeiture until launch of the MEP Network. The Company determined the that it is probable that the Network will be launched by the end of the two-year service agreement. The Company will recognize the total fair value of $5.7 million ratably over the two-year period. Should the performance condition not be achieved, the Company will reverse any stock-based compensation cost recognized for the MEP Network RSAs.effective dateconsolidated balance sheet.agreement.Number of Shares Weighted Average Grant-Date
Fair ValueUnvested at December 31, 2021 2,785,800 $ 25.73 Granted 12,803,284 $ 3.68 Vested (1,611,348) $ 23.25 Forfeited (922,107) $ 13.82 Unvested at December 31, 2022 13,055,629 $ 5.25 2014, the Company issued a total of 400,000 shares of common stock to an employee, valued at $387,505, for services rendered. The shares were valued at the trading price on the date of agreement.Summary of the Company’s Stock Warrant ActivitiesThe following table summarizes information concerning outstanding and exercisable warrants as of December 31, 2015 and 2014: Warrants Weighted
Average Price January 1, 2014 - $ - Granted 1,491,350 0.01 Exercised - - Forfeited - - December 31, 2014 1,491,350 0.01 Granted 1,461,250 0.08 Exercised - - Forfeited - - December 31, 2015 2,952,600 $ 0.08 F-16Warrants Issued for Obtaining Employee ServicesIn February 2015,2022, the Company granted warrants to purchase 400,000 shares of common12,803,284 time-based restricted stock to Mr. Kassar, Chairman, upon his appointmentunits which generally vest annually over a four-year period, subject to the Board of Directors with arecipient’s continuation in service through each applicable vesting date. The fair value of $400,000. The warrants are fully vested, exercisable for ten years from issuance at $1.00 per common share.In March 2015, the Company granted warrants to purchase 500,000 shares of commonrestricted stock to Mr. Kassar, Chairman of the Board pursuant to a consulting agreement with aunits is measured based on their fair value of $500,000. The warrants are fully vested, exercisable for ten years from issuance at $0.001 per common share.2015,2022, the Company granted additional warrants to purchase a total of 561,250issued 1,576,231 shares of common stock as partto its Board of the saleDirectors and employees in settlement of 280,625 units of common shares for total proceeds of $149,500. The warrants are fully vested upon grant, have initial exercise price of $3.00 and $6.00 per share and will expire in 10 years.On January 10, 2014, the Company awarded an employee warrants to purchase 1,491,350 common shares with an exercise price at $0.01 per share expiring five years from the date of issuance. The Warrant vested as follows: (i) on March 31, 2014, the right to exercise the Warrant and to receive 50% of the Warrant Shares vested; (ii) on June 30, 2014, the right to exercise the Warrant and to receive an additional 25% of the Warrant Shares vested; and (iii) on September 30, 2014, the right to exercise the Warrant and to receive the remaining 25% of the Warrant Shares vested. The fair value of the warrants granted totaled $1,476,735. The warrants are fully vested on the grant date absent forfeiture or performance criteria. Accordingly, the entire fair value of the grant, based on a fair value of $1.00 per share was charged to compensation expense on the effective date of the agreement.The Company estimated the fair value of therestricted stock warrants on the date of grant using the Black-Scholes Option Pricing Model with the following weighted-average assumptions: December 31, 2015 December 31, 2014 Expected life 0.83 0.50 Expected volatility 439 % 68.32 % Expected annual rate of dividends 0 % 0 % Risk-free interest rate 0.19 % 0.77 % Note 10 - Related Party TransactionsAdvances from Related PartyFrom time to time, the former CEO of the Company and a shareholder advanced funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand.Advances from the former CEO and shareholder consisted of the following: December 31, 2015 December 31, 2014 Advances from former Chairman, Chief Executive Officer and Stockholder $ 30,567 $ 110,847 $ 30,567 $ 110,847
units.F-17Accrued PayrollPursuant to a September 2010 employment agreement with our former Chief Executive Officer, at December 31, 2015 and December 31, 2014, the Company had accrued payroll of $125,000 and $150,000, respectively, under this agreement.Compensation Costs2015,2021, the Company recordedgranted 2,883,240 time-based restricted stock units which generally vest annually over a four-year period, subject to the recipient’s continuation in service through each applicable vesting date. The fair value of restricted stock units is measured based on their fair value at grant date which totaled $75.3 million. During the year ended December 31, 2021, the Company issued 91,580 shares of common stock to its Board of Directors and employees in settlement of vested restricted stock units.expenserelated to restricted stock units totaled $63.6 million, had an aggregate intrinsic value of $22.7 million, and a weighted average remaining contractual term of 3.5 years.Number of Shares Weighted Average Grant-Date
Fair ValueUnvested at December 31, 2021 1,900,000 $ 33.87 Vested (380,000) $ 33.87 Unvested at December 31, 2022 1,520,000 $ 33.87 aggregate of $1,437,000 to account for theCompany assessments are evaluated. The fair value of the 600,000 sharesPRSUs is measured based on their grant date fair value which totaled $64.4 million.Board for services rendered. In addition,year ended December 31, 2022, the Company also paid Mr. Kassar $300,000determined the performance metrics were met for 286,667 PRSUs and 93,333 PRSUs were forfeited. The Company recognized stock-based compensation of $14.6 million during the year ended December 31, 2022, and as Chairman of December 31, 2022, unrecognized stock-based compensation totaled $41.0 million.Board.year ended December 31, 2021, the Company determined that the performance metrics for 380,000 PRSUs were met, and accordingly, recognized stock-based compensation of $5.6 million.1116 - Commitments and ContingenciesLease AgreementsYears Ended December 31, 2022 2021 2020 Operating leases Operating lease cost $ 5,711 $ 1,387 $ 935 Other lease cost 239 287 — Operating lease expense 5,950 1,674 935 Short-term lease rent expense 167 — — Total rent expense $ 6,117 $ 1,674 $ 935 Years Ended December 31, 2022 2021 2020 Operating cash flows from operating leases $1,421 $553 $915 Right of use assets exchanged for operating lease liabilities $4,312 $30,968 $5,373 Weighted average remaining lease term - operating leases 11.3 13.0 6.3 Weighted average remaining discount rate - operating leases 7.4% 7.6% 5.4% Year Ended December 31, 2023 $ 4,777 Year Ended December 31, 2024 5,921 Year Ended December 31, 2025 5,921 Year Ended December 31, 2026 5,921 Year Ended December 31, 2027 4,831 Thereafter 36,141 Total 63,512 Less present value discount (22,483) Operating lease liabilities $ 41,029 1, 2014,23, 2021, the Company entered into a lease agreement with St. Cloud Partners(the “Lease”) for approximately 55,042 rentable square feet located at 1290 Avenue of the office space being used byAmericas, New York, New York 10104. This location is the Company’s subsidiary, High Five Entertainment.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. lease is effective February 1, 2014 to February 28, 2017. The annual rent base payment is as follows:Term Amount 2/1/2014 – 2/28/2015 $ 34,164 3/1/2015 – 2/29/2016 $ 35,184 3/1/2016 – 2/28/2017 $ 36,240 Employment AgreementOn December 24, 2013, the Company entered into an employment agreement with Martin Fischer, the president of S&G. The agreement is for a five- year term, which may be renewedLease 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.requires ancommenced May 1, 2021. The annual base salary of $144,000fixed rent will be $932,747 for the first year; $953,741 for the second year, 1, $151,000$974,936 for the third year 2, $159,000and $996,130 for year 3, $167,000 for year 4 and $175,000 for year 5.The agreement also entitles the president to a cash bonus of up to $100,000 annually based on net income levels and a monthly $500 automobile allowance.fourth year. This lease is included in discontinued operations. During the year ended December 31,2015 and 2014, there were no cash bonus recorded.Litigationmay be involvedis 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):Year Ended December 31, 2023 $ 3,050 Year Ended December 31, 2024 3,225 Year Ended December 31, 2025 3,275 Year Ended December 31, 2026 3,325 Year Ended December 31, 2027 3,425 Thereafter 16,250 Total $ 32,550 Year Ended December 31, 2023 $ 41,235 Year Ended December 31, 2024 25,613 Year Ended December 31, 2025 13,748 Year Ended December 31, 2026 13,748 Year Ended December 31, 2027 13,748 Thereafter 4,583 Total $ 112,675 business. Except for income tax contingencies (commencing April 1, 2009),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 records accruals for contingenciesdetermines that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to the extent that management concludes thatfinancial statements taken as a whole. When a material loss contingency is only reasonably possible, the occurrence is probableCompany does not record a liability, but instead discloses the nature and that the related amountsamount of the claim, and an estimate of the loss or range of loss, if such an estimate can reasonably be reasonably estimated.made. Legal expenses associated with theany contingency are expensed as incurred.Studiocanal S.A.any legal proceedings, however,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, received a letter dated April 26, 2016 from Studiocanal S.A., which claims to be the assignee of trademark rights in ce1tain marks previously registered by a company that has been defunct since 1996. The letter stated that use of the markscorresponding expenditures by the Company is likely to cause confusion, to cause mistake, or to deceive as to whether there is an affiliation or association betweenpayable under the Companyagreement, and the defunct entity and/or Studiocanal,vendor’s compliance with its good faith express and requestedimplied 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 cease and desist from use of such marks and relinquish trademark registrations legally obtained by the Company and after judicial decision. The Company responded and discussions were held between representatives of the Company and Studiocanal. At this time, Company is not aware of any legal claim having been brought by Studiocanal.F-18Note 12 - Adjustment to Stockholders’ EquityIn September 2013, the Company engaged the services of a consultant or finder for the acquisition of S&G Holdings, Inc. (doing business as High Five Entertainment) (SG) (see Note 3). In December 2013, the acquisition of SG was completed, and as a result, the Company granted the consultant 400,000 shares of common stockmay pay for services rendered. The fair value of these shares was not recorded in 2013. The shares were issued in 2014.Asunder the acquisition was completed in December 2013, the Company determined that the appropriate treatment is to account for the 400,000 shares of common stock, with a fair value of $400,000 in December 2013. As such, the Company adjusted the previously reported balances in the Statement of Stockholders’ Equity (Deficit) as of December 31, 2013 to account for the fair value of the 400,000 shares of common stock.The impact of this error was an overstatement of expenses and net loss for the three-month period ended March 31, 2014 and twelve-month period ended December 31, 2014, and an understatement of expenses for the three and twelve month periods ended December 31, 2013.The Company assessed the materiality of this error on the three and twelve month ended periods ended December 31, 2013 in accordance with the SEC’s Staff Accounting Bulletin No. 99 (“SAB 99”) and concluded that the error was not material to either period. However, the Company did conclude that the error was material to the three-month period ended March 31, 2014 and twelve-month period ended December 31, 2014, as it affected the results for that period. Therefore, in accordance with the SEC’s Staff Accounting Bulletin No. 108 (“SAB 108”), the 2014 financial statements were revised in the 2015 Annual Report to correct for the immaterial error and to allow for the correct recording of this transaction in the 2013 consolidated financial statements.The correction has been reflected in these consolidated financial statements for the year ended December 31, 2014 and resulted in a $400,000 decrease in expenses resulting in a $7,609,153 net loss ($0.12 per basic and diluted share).Note 13 - Income Tax ProvisionThe Company did not record any income tax provision for the years ended December 31, 2015 and 2014. The Company files income tax returns in the United States (“Federal”) and Florida (“State”) jurisdictions. contract could be material.subject to Federal and State income tax examinations by tax authorities for all years since its inception.At December 31, 2016,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 had Federal and State net operating loss carry forwards available to offset future taxable income of approximately $2.5 million. These carry forwards will begin to expire in the year ending December 31, 2017, subject to IRS limitations, including change in ownership.The Company periodically evaluatesbelieves that the likelihood of the realization of deferred tax assets, and adjusts the carrying amount of the deferred tax assets by a valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carry-forward periods available to us for tax reporting purposes, and other relevant factors.F-19At December 31, 2015, based on the weight of available evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more likely than not that its deferred tax assets of approximately $2.5 million would not be realized. Accordingly, the Company has recorded a valuation allowance for 100% of its cumulative deferred tax assets. The components of our deferred tax assets are as follows. For the Year Ended
December 31, 2015 For the Year Ended
December 31, 2014 Net operating loss carryforwards $ 937,000 $ 287,000 Non-cash expenses 2,153,000 603,000 Total net deferred tax assets 3,090,000 890,000 Less valuation allowance (3,090,000 ) (890,000 ) Net deferred tax assets $ - $ - A reconciliation of income taxes with the amounts computed at the statutory federal rate are as follows: For the Year Ended
December 31, 2015 For the Year Ended
December 31, 2014 Computed tax provision (benefit) at statutory rate (34%) $ (597,000 ) $ (220,000 ) State income taxes (3%), net of federal benefit (53,000 ) (19,000 ) Valuation allowance 650,000 239,000 Income tax provision $ - $ - As a result of the implementation of certain provisions of ASC 740-10, the Company performed an analysis of its previous tax filings and determined that there were no positions taken that it considered uncertain. Therefore, there were no unrecognized tax benefits as of December 31, 2015.Future changes in the unrecognized tax benefit are not expected to have anany material adverse impact on the effective tax rate due to the existenceCompany’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.allowance.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.estimates thatbelieves the unrecognized tax benefit will not change within the next twelve months. The Company will continueclaims alleged in both lawsuits are without merit and intends to classify income tax penalties and interest, if any, as part of interest and other expenses in its consolidated statements of operations. There is no interest or penalties accrued as of December 31, 2015.Note 14 - Subsequent EventsOn January 1, 2016, Sam Lupowitz and other shareholders, collectively representing Carolco Pictures, Inc.’s controlling shareholders, entered into and closed separate and distinct Securities Purchase Agreements with Tarek Kirschen whereby Tarek Kirschen purchased, in the aggregate, 5,000,000 shares of the Company’s Series A Preferred Shares and a total of 30,000,000 common shares of the Company’s common stock (the “Shares”). Each share of the Series A Preferred Stock has one hundred votes on all matters presented to the holders of Common Stock, resulting in Tarek Kirschen holding a majority of the issued and outstanding voting capital shares of the Company. As a result ofvigorously defend these transaction, Mr. Kirschen gained control of the Company and became its Chief Executive Officer (CEO).On January 22, 2016, the Company increased the number of authorized shares of common stock to Five Billion (5,000,000,000), par value $.0001, and the number of shares of its preferred stock to Fifty Million (50,000,000), par value $.0001, the rights and preferences of which to be determined by the Board of Directors. This action was taken in order to provide sufficient contractually required reserve shares (in material multiples of the anticipated number of shares to be converted) of common stock for certain convertible promissory notes.On June 22, 2016, the “Company entered into a Stock Purchase Agreement (the “SPA”) by and between the Company, Tarek Kirschen, the Chief Executive Officer of the Company and South Centre, Inc. a firm owned by a non-related individual, David Cohen. As part of the agreement, the Company issued to Mr. Kirschen 5,000,000 shares of Series A Stock, and 1,000,000 shares of newly designated Series B Preferred Stock of the Company, par value $0.0001 per share (the “Series B Stock”) in as settlement for $439,000 that was owed by the Company to Mr. Kirschen. In addition, Mr. Kirshen sold the 5 million Series A Stock to Mr. David Cohen in exchange for $150,000. As a result, Mr. Cohen gained control of the Company and became its CEO.On July 20, 2016, the Company amended its Convertible Promissory Notes with Alexander Bafer, whereby the maturity date of each of our five loans from Mr. Bafer was amended to be August 1, 2017 instead of October 1, 2015. There were no other terms of the loans changed, and we did not pay any consideration for the extension. Our outstanding balance on the loans under the Notes as of July 20, 2016 was approximately $469,000.On July 21, 2016, the Company entered into a Redemption and Issuance Agreement (the “Redemption Agreement”) by and between the Company and South Centre, Inc., an entity owned and controlled by David Cohen, the Company’s sole director (at the time) and Chief Executive Officer. Pursuant to the Redemption Agreement, on the same date, the Company redeemed 2,500,000 shares of the Company’s Series A Preferred Stock (the “Series A Stock”) in exchange for the payment to South Centre of $0.0001 per share, for a total consideration of $250. The Company undertook the redemption for the purposes of obtaining the shares of Series A Stock so that such shares could be paid to certain third parties in connection with the Contribution Agreement as disclosed below. Pursuant to the Redemption Agreement, on the same date, the Company issued to South Centre 12,750,000 shares of newly designated Series C Preferred Stock of the Company (the “Series C Stock”) in exchange for payment to the Company of $1,275.In July 2016, the Company acquired Recall Studios, Inc. (“Recall”), a virtual reality and new media content production company. As part of the acquisition, the Company acquired all issued and outstanding shares of Recall in exchange for the Company’s 25,256,250 shares of Series C Stock and 2,500,000 shares of the Series. The Company engaged the services of a valuation specialist to assist in the determination of the valuation of the acquisition and allocation of the purchase price. As of the date of this report the Company is still finalizing the valuation.In July 2016, the Company raised approximately $416,000 through the issuance of 487,000 shares of Recall’s common stock. The Company and the purchasers of these common stock are currently in negotiations to convert the 487,000 shares of Recall common stock to the Company’s Series C Preferred Stock.Subsequent to December 31, 2015, the Company issued a total of 243,540,999 shares of common stock upon conversion of convertible notes and accrued interest of approximately $104,000.
litigations.F-20