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Stockholders’ Equity
 6 Months Ended
Jun. 30, 2021
Equity [Abstract]  
Stockholders’ Equity

Note 12 - Stockholders’ Equity

 

Conversion of Series AA Preferred Stock

 

In January and February 2021, 9,807,367 shares of Series AA Preferred Stock converted into 19,614,734 shares of common stock. On March 1, 2021, we consummated an offer to exchange the remaining outstanding shares of Series AA Preferred Stock for two shares of our common stock per share of Series AA Preferred Stock (the “Exchange Offer”). As a result of the Exchange Offer, 13,412,246 shares of Series AA Preferred Stock, representing 100% of the outstanding shares of Series AA Preferred Stock, were exchanged for 26,824,492 shares of our common stock.

 

Issuance of treasury stock

 

On February 26, 2021, the Company issued 623,068 shares of its common stock in connection with the Vigtory Acquisition.

 

Stock-based compensation

 

During the three and six months ended June 30, 2021 and 2020 the Company recognized stock-based compensation expense as follows:

 

   Three Months Ended June 30,   Six Months Ended June 30, 
   2021   2020   2021   2020 
Subscriber related expenses  $16   $7   $30   $7 
Sales and marketing   790    625    1,503    625 
Technology and development   8,551    1,195    10,621    1,195 
General and administrative   15,074    9,906    21,651    18,157 
   $24,431   $10,923   $33,805   $19,984 

 

 

fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

 

Options

 

The Company provides stock-based compensation to employees, directors, and consultants under the Company’s 2020 Equity Incentive Plan. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The Company historically has lacked company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based primarily on the historical volatility of a publicly-traded set of peer companies with consideration of the volatility of its own traded stock price. The risk-free interest rate is determined by referencing the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. 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 does not have sufficient historical exercise data to provide a reasonable basis for an estimate of expected term. 

 

The Board of Directors approved a modification to stock option grants to two employees who terminated from the Company. The modifications accelerated the vesting of unvested stock options as of the termination date and provided the option holders with an additional three month post-termination to exercise their stock options. The modifications resulted in incremental stock-based compensation expense of $7.9 million during the three and six month periods ended June 30, 2021.

 

A summary of stock option activity for the six months ended June 30, 2021, is as follows (in thousands, except share and per share amounts):

 

   Number of Shares   Weighted Average
Exercise Price		   Total Intrinsic Value   Weighted Average Remaining Contractual Life
(in years)		 
Outstanding as of December 31, 2020   13,450,565   $5.45   $303,036    8.1 
Granted   158,399   $19.77           
Exercised   (1,492,285)  $1.33           
Forfeited or expired   (139,736)  $7.05           
Outstanding as of June 30, 2021   11,976,943   $6.13   $311,161    7.7 
                     
Options vested and exercisable as of June 30, 2021   5,768,677   $3.83   $163,154    6.7 

 

The outstanding stock options as of December 31, 2020 were adjusted from the previously reported amount in the Annual Report to exclude certain option grants subject to discretionary performance conditions, for which a grant date had not occurred as of December 31, 2020.

 

As of June 30, 2021, the unrecognized stock-based compensation expense related to unvested options was approximately $36.3 million to be recognized over a period of 2.6 years.

 

Non-employees

 

During the six months ended June 30, 2020, the Company granted options to purchase 280,000 shares of the Company’s common stock at an exercise price of $7.20 per share. This option has a fair value of $1,031,000, a five-year term and expires on December 21, 2024. These options were immediately vested as of the grant date. During the six months ended June 30, 2021, 80,000 options were exercised in exchange for 71,010 shares of the Company’s common stock. These options are not included in the table above.

 

 

fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)

 

There were no options granted to non-employees during the six months ended June 30, 2021.

 

Market and Service Condition Based Stock Options

 

A summary of activity under the Plan for market and service-based stock options for the six months ended June 30, 2021 is as follows (in thousands, except share and per share amounts):

 

   Number of Shares   Weighted Average
Exercise Price		   Total Intrinsic Value   Weighted Average Remaining Contractual Life
(in years)		 
Outstanding as of December 31, 2020   3,078,297   $9.69   $56,351    6.3 
Granted   1,375,000   $19.59           
Outstanding as of June 30, 2021   4,453,297   $12.75   $86,106    6.2 
                     
Options vested and exercisable as of June 30, 2021   3,078,297   $9.69   $68,925    5.8 

 

Restricted Stock Units

 

A summary of the Company’s restricted stock unit activity during the six months ended June 30, 2021 is as follows:

 

   Number of Shares   Weighted Average
Grant-Date
Fair Value		 
Unvested at December 31, 2020   85,000   $25.26 
Granted   1,187,090   $31.46 
Vested   (28,333)  $25.26 
Unvested at June 30, 2021   1,243,757   $31.18 

  

As of June 30, 2021, the unrecognized stock-based compensation related to restricted stock units totaled $34.8 million, had an aggregate intrinsic value of approximately $39.9 million and weighted average remaining contractual term of 3.5 years.

 

Warrants

 

A summary of the Company’s outstanding warrants as of June 30, 2021, are presented below (in thousands, except share and per share amounts):

 

   Number of Warrants   Weighted Average
Exercise Price		   Total Intrinsic Value   Weighted Average Remaining Contractual Life
(in years)		 
Outstanding as of December 31, 2020   2,535,528   $8.22   $50,560    1.0 
Exercised   (784,685)  $8.66   $-    - 
Outstanding as of June 30, 2021   1,750,843   $8.02   $42,538    0.5 
                     
Warrants exercisable as of June 30, 2021   1,750,843   $8.02   $42,538    0.5 

 

 

fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements
(Unaudited)