Item 2.01 Completion of Acquisition or Disposition of Assets
On April 1, 2020, fuboTV Acquisition Corp., a Delaware corporation ("Merger
Sub") and a wholly-owned subsidiary of FaceBank Group, Inc. ("FaceBank" or the
"Company") merged with and into fuboTV Inc., a Delaware corporation ("fuboTV")
whereby fuboTV continued as the surviving corporation and became a wholly-owned
subsidiary of FaceBank pursuant to the terms of the Agreement and Plan of Merger
and Reorganization dated as of March 19, 2020 (the "Merger Agreement") by and
among FaceBank, Merger Sub and fuboTV.
In accordance with the terms of the Merger Agreement, at the effective time of
the Merger (the "Effective Time") all of the capital stock of fuboTV was
converted into the right to receive shares of a newly created class of Series AA
Convertible Preferred Stock of FaceBank, par value $0.0001 per share (the
"Series AA Preferred Stock") . The aggregate number of FaceBank common stock
equivalent shares to be issued to fuboTV shareholders as a result of the Merger
is 32,324,362 shares of Series AA Preferred Stock, each of which is convertible
into two (2) shares of FaceBank common stock, par value $0.0001 per share
("FaceBank Common Stock"), for a total of 72,699,824 shares of FaceBank Common
Stock on an as-converted basis. In addition, at the Effective Time, each
outstanding option to purchase shares of common stock of fuboTV was assumed by
FaceBank and converted into an option to acquire FaceBank Common Stock. The
aggregate number of options to acquire FaceBank Common Stock as a result of the
foregoing is 8,051,098, which are exercisable at a weighted average price of
$1.32 per share. Each share of Series AA Preferred Stock is entitled to 0.8
votes per preferred share, and is convertible into two (2) shares of FaceBank
Common Stock, only in connection with a bona fide transfer to a third party. The
Series AA Preferred stock will benefit from certain protective provisions which,
among others, require FaceBank to obtain the approval of a majority of the
shares of outstanding Series AA Preferred Stock, voting as a separate class
before undertaking certain actions. The effect of the Merger and the terms of
the Series AA Preferred Stock is to initially establish an approximate
two-thirds majority ownership of FaceBank on a common equivalent basis for the
pre-Merger fuboTV shareholders while preserving a majority voting interest for
the pre-Merger FaceBank shareholders.
In connection with the closing of the Merger, the Board of Directors of FaceBank
approved the establishment of the FaceBank 2020 Equity Incentive Plan (the
"Plan"). Pursuant to the Merger Agreement, FaceBank created an incentive option
pool of 12,116,646 shares of FaceBank Common Stock under the Plan
fuboTV was incorporated in Delaware in 2015. Since its founding in 2015 as a
soccer streaming service, fuboTV has evolved into a live TV streaming service
for cord-cutters, with top Nielsen-ranked sports, news and entertainment
channels.
The foregoing descriptions of the Merger Agreement and the transactions
contemplated thereby and the Series AA Preferred Stock do not purport to be
complete and are subject to, and qualified in their entirety by, the full text
of the Merger Agreement and Certificate of Designations with respect to the
Series AA Preferred Stock, which were filed as Exhibits 2.1 and 3.2,
respectively to the Company's Current Report on Form 8-K filed on March 23,
2020, and which are incorporated by reference into this Current Report on Form
8-K.
The Company will file with the Securities and Exchange Commission (the "SEC")
the financial statements and pro forma financial information required to be
filed pursuant to Rule 8-04 of Regulation S-X and Article 11 of Regulation S-X
within the time prescribed by the rules of the SEC.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 2.01 of this Current Report on Form 8-K is
incorporated into this Item 3.02 by reference.
Pursuant to the terms of the Merger Agreement, FaceBank agreed to issue to the
former shareholders of fuboTV who complete a duly executed letter of
transmittal, an aggregate of 32,324,362 shares of Series AA Preferred Stock as
merger consideration in the Merger.
The issuance of the shares of Series AA Preferred Stock to be issued as merger
consideration in the Merger has not been registered under the Securities Act of
1933, as amended (the "Securities Act"). The issuance of the shares of Series AA
Preferred Stock to be issued as merger consideration in the Merger is exempt
from the registration requirements of the Securities Act in reliance on an
exemption from registration pursuant to Section 4(a)(2) of the Securities Act
and Rule 506 of Regulation D promulgated thereunder.
Item 4.01 Change in Registrant's Certifying Accountant
(a) Dismissal of Previous Independent Public Accounting Firm
On March 31, 2020, the Board of Directors of FaceBank approved the dismissal of
Marcum LLP ("Marcum") as FaceBank's independent public accounting firm. On April
7, 2020, FaceBank notified Marcum of its dismissal effective immediately.
The report of Marcum on the Company's consolidated financial statements for the
fiscal year ended December 31, 2018 did not contain an adverse opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles. In connection with the audit of the
Company's consolidated financial statements for the fiscal year ended December
31, 2018, and in the subsequent interim period through April 7, 2020, there were
no disagreements with Marcum on any matters of accounting principles or
practices, financial statement disclosure or auditing scope and procedures
which, if not resolved to the satisfaction of Marcum, would have caused Marcum
to make reference to the matter in their report. There were no reportable events
(as that term is described in Item 304(a)(1)(v) of Regulation S-K) during the
fiscal year ended December 31, 2018, or in the subsequent period through April
7, 2020.
The Company provided Marcum with a copy of this Form 8-K prior to the time of
its filing with the Securities and Exchange Commission and has requested that
Marcum furnish it with a letter addressed to the Securities and Exchange
Commission stating whether Marcum agrees with the statements made by the Company
in this Item 4.01(a) and, if not, the respects in which it does not agree. The
Company will amend this Form 8-K and attach a copy of Marcum's letter as Exhibit
16.1 promptly after receipt of such letter.
During the two most recent fiscal years and in the subsequent interim period
through April 7, 2020, the Company has not consulted with Marcum with respect to
the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that would have been
rendered on the Company's consolidated financial statements, or any other
matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-K.
(b) Engagement of New Registered Public Accounting Firm
On March 31, 2020, the Board of Directors of FaceBank approved the appointment
of Salberg & Company P.A. ("Salberg") as the Company's new independent
registered public accounting firm. On April 6, 2020, the Company entered into an
engagement agreement with Salberg effective immediately. During the Company's
two most recent fiscal years ended December 31, 2018 and 2017, and the
subsequent interim period through April 6, 2020, neither the Company nor anyone
acting on its behalf consulted with Salberg regarding any of the matters
described in Items 304(a)(2)(i) and (ii) of Regulation S-K.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In accordance with the terms of the Merger Agreement, the Board of Directors of
FaceBank approved the appointment of David Gandler as Chief Executive Officer of
FaceBank and the appointment of John Textor, FaceBank's prior Chief Executive
Officer, as Executive Chairman of FaceBank, each effective as of the Effective
Time. In addition, the Board of Directors of FaceBank approved the appointment
of David Gandler to FaceBank's Board of Directors, effective as of the Effective
Time.
David Gandler has served as President and Chief Executive Officer of fuboTV and
as a member of the fuboTV board of directors since March 2014. Prior to joining
fuboTV, Mr. Gandler served as Vice President, Ad Sales at DramaFever, a video
streaming service acquired in 2016 by Warner Bros. Entertainment Inc., from 2013
to 2014. Prior to 2013, Mr. Gandler held positions at Scripps Networks
Interactive, Inc., Time Warner Cable and Telemundo, a division of NBCUniversial
Media, LLC. Mr. Gandler received a B.A. degree in economics from Boston
University.
There is no arrangement or understanding between Mr. Gandler and any other
person pursuant to which Mr. Gandler was elected as a director of the Company.
There are no family relationships between Mr. Gandler and any director or
executive officer of the Company, and, other than as described above, no
transactions involving Ms. Gandler that would require disclosure under Item
404(a) of Regulation S-K.
FaceBank and Mr. Gandler entered into an Employment Agreement dated as of April
1, 2020 pursuant to which Mr. Gandler agreed to serve as the Company's Chief
Executive Officer (the "Gandler Employment Agreement"). The Gandler Employment
Agreement will continue until the earlier of (i) Mr. Gandler's termination of
employment or (ii) immediately prior to a listing of the FaceBank Common Stock
on either the Nasdaq Stock Market or the New York Stock Exchange (an "Uplist"),
at which time the Company and Mr. Gandler have agreed to revisit and modify the
terms of the Gandler Employment Agreement by reference to other peer group
companies. Pursuant to the Gandler Employment Agreement, Mr. Gandler shall
receive a base salary of $500,000 per year, subject to increase, but not
decrease, at the discretion of the compensation committee of the Board. In
addition, the Company and Mr. Gandler have agreed that Mr. Gandler shall be
eligible to receive an annual bonus in a minimum amount of $100,000 based on his
meeting certain performance-based targets. Pursuant to the Gandler Employment
Agreement, Mr. Gandler will receive a bonus upon the successful Uplist of the
FaceBank Common Stock. Mr. Gandler is also eligible to receive equity based
awards under the Company's compensation plans. On April 1, 2020, the Company
granted to Mr. Gandler, a stock option to purchase 4,846,658 shares of FaceBank
Common Stock at a price of $8.124 per share pursuant to the Company's newly
adopted 2020 Equity Incentive Plan. Mr. Gandler's option shall vest over a four
year period at a rate of 1/48 per month of the total grant per month. Mr.
Gandler's stock options are subject to 100% accelerated vesting in the event of
his termination without Cause or for Good Reason (each as defined in the Gandler
Employment Agreement) following a change in control of the Company. Further, if
Mr. Gandler's employment is terminated without Cause or for Good Reason, he
receives as severance an amount equal to his then annual base salary and
accelerated vesting of any unvested equity awards. Mr. Gandler is also eligible
to participate in the Company's employee benefit plans as in effect from time to
time on the same terms as generally made available to other senior executives of
the Company and have other benefits provided to executives of the Company. The
Gandler Employment Agreement contains standard non-compete and confidentiality
provisions.
FaceBank and Mr. Gandler also entered into FaceBank's standard form of
Indemnification Agreement (the "Indemnification Agreement").
Copies of the Gandler Employment Agreement and the form of Indemnification
Agreement are attached hereto as Exhibits 10.1 and 10.2 respectively. The
foregoing descriptions of the Gandler Employment Agreement and the form of
Indemnification Agreement do not purport to be complete and are subject to, and
qualified in their entirety by, the full text of the Gandler Employment
Agreement and the form of Indemnification Agreement which are attached hereto as
Exhibits 10.1 and 10.2, respectively, and which are incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit
No. Description
10.1 Employment Agreement dated as of April 1, 2020 by and between FaceBank
Group, Inc. and David Gandler
10.2 Form of Indemnification Agreement by and between FaceBank Group, Inc.
and its directors and officers
99.1 Press Release issued by FaceBank Group, Inc. dated April 2, 2020
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