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Stockholders’ Equity
 3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
Stockholders’ Equity

Note 13 - Stockholders’ Equity

 

At-the-Market Sales Agreement

 

On August 13, 2021, the Company entered into an At-the-Market Sales Agreement (the “Sales Agreement”) with Evercore Group L.L.C., Needham & Company, LLC and Oppenheimer & Co. Inc., as sales agents (each, a “manager” and together, the “managers”), under which the Company may, from time to time, sell shares of its common stock, par value $0.0001 per share, having an aggregate offering price of up to $500.0 million through the managers (the “Offering”).

 

 

fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

 

Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, the managers may sell the shares by methods deemed to be an “at-the-market” offering as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. Subject to the terms and conditions of the Sales Agreement, each manager will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the shares from time to time, based upon the Company’s instructions. The Company will pay the managers a commission for their services in acting as agents in the sale of common stock at a commission rate of up to 3% of the gross sales price of the shares of the Company’s common stock sold through them pursuant to the Sales Agreement. The Company is not obligated to, and cannot provide any assurances that it will, make any sales of the shares under the Sales Agreement. The Offering of shares of common stock pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the Sales Agreement or (ii) termination of the Sales Agreement in accordance with its terms.

 

During the three months ended March 31, 2022, the Company received net proceeds of approximately $203.8 million (after deducting $4.2 million in commissions and expenses) from sales of 27,443,580 shares of its common stock, at a weighted average gross sales price of $7.58 per share pursuant to the Sales Agreement.

 

Warrants

 

A summary of the Company’s outstanding warrants as of March 31, 2022, 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, 2021   565,544   $9.96   $3,546    0.1 
Exercised   (540,541)  $9.25           
Expired   (25,000)  $9.25           
Outstanding and exercisable as of March 31, 2022   3   $24,000.00   $-    - 

 

Stock-based compensation

 

During the three months ended March 31, 2022 and 2021, the Company recognized stock-based compensation expense as follows:

 

   2022   2021 
   For the Three Months Ended
March 31,		 
   2022   2021 
Subscriber related  $40   $14 
Sales and marketing   8,880    713 
Technology and development   2,684    2,070 
General and administrative   7,845    6,577 
Stock-based compensation expense  $19,449   $9,374 

 

Options

 

The Company provides option grants to employees, directors, and consultants under the fuboTV Inc. Equity 2020 Equity Incentive Plan, as amended (the “2020 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 sufficient 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.

 

 

fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

 

Stock Options

 

A summary of stock option activity for the three months ended March 31, 2022, 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, 2021   11,454,890   $6.40   $70,231    7.4 
Exercised   (349,847)  $1.27           
Forfeited or expired   (373,568)  $10.27           
Outstanding as of March 31, 2022   10,731,475   $6.44   $20,097    6.8 
                     
Options vested and exercisable as of March 31, 2022   7,066,665   $5.17   $18,857    6.1 

 

There were no options granted during the three months ended March 31, 2022.

 

During the three months ended March 31, 2021, the Company granted options to purchase 62,599 options shares of common stock with an aggregate fair value of $1.3 million. The following was used in determining the fair value of stock options granted during the three months ended March 31, 2021:

 

   March 31, 2021 
Dividend yield   0%
Expected price volatility   44.85%
Risk free interest rate   0.73%
Expected term (years)   6.1 

 

As of March 31, 2022, the estimated value of unrecognized stock-based compensation expense related to unvested options was $18.0 million to be recognized over a period of 2.0 years.

 

 

fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

 

Market and Service Condition Based Stock Options

 

A summary of activity under the Plan for market and service-based stock options for the three months ended March 31, 2022 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, 2021   4,453,297   $12.75   $17,933    5.7 
Outstanding as of March 31, 2022   4,453,297   $12.75   $-    5.4 
                     
Options vested and exercisable as of March 31, 2022   3,078,297   $9.69   $-    5.1 

 

There were no market and service-based options granted during the three months ended March 31, 2022 and 2021.

 

As of March 31, 2022, there was $9.1 million of unrecognized stock-based compensation expense for market and service-based stock options.

 

Performance-Based Stock Options

 

On October 8, 2020, the Company awarded the CEO an option which vests based upon the achievement of certain predetermined goals for each of the five years in the performance period related to stock price, revenue, gross margin, an increase in the number of subscribers, the launch of new markets and, commencing in 2023, creation of new revenue streams. The Board will review attainment of such goals annually from 2021 through 2025 warranted on a given “Determination Date” (subsequent to the Company’s calendar year end) to determine if any vesting is warranted. The Board may determine vesting at, above, or below 20% of the shares subject to the performance option on a given Determination Date. All shares may be eligible for vesting until the Determination Date following the 2025 calendar year. Any such vesting is subject to the CEO’s continuation in service with the Company through the applicable Determination Date. Because the number of shares to be earned on each Determination Date is subject to the discretion of the Board, the compensation expense is adjusted each reporting period for changes in fair value prorated for the portion of the requisite service period rendered and based on the number of shares expected to be earned. During the three months ended March 31, 2022, the Board determined that the option would vest with respect to 820,000 shares. Upon each subsequent Determination Date in 2023, 2024, 2025, and 2026 stock-based compensation expense will be remeasured and adjusted to reflect the grant date fair value.

 

 

fuboTV Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

 

Modification of Options

During the three months ended March 31, 2022, the Board approved the acceleration of vesting and extended the post-termination exercisability of certain employee stock options. The Company reported $2.1 million of expense during the first quarter of 2022 as a result of the accelerated vesting of stock options.

 

Time-Based Restricted Stock Units

 

A summary of the Company’s time-based restricted stock unit activity during the three months ended March 31, 2022 is as follows:

 

   Number of Shares  

Weighted Average

Grant-Date

Fair Value

 
Unvested at December 31, 2021   2,785,800   $25.74 
Granted   1,668,269   $7.40 
Vested   (112,326)  $27.72 
Forfeited   (84,152)  $22.15 
Unvested at March 31, 2022   4,257,591   $18.56 

 

As of March 31, 2022, the estimated value of unrecognized stock-based compensation related to restricted stock units totaled $69.7 million, had an aggregate intrinsic value of $28.0 million, and a weighted average remaining contractual term of 3.5 years. For the quarter ended March 31, 2021, the estimated value of unrecognized stock-based compensation related to restricted stock units totaled $34.7 million, and had an aggregate intrinsic value of $25.0 million and a weighted average remaining contractual term of 3.7 years.

 

Performance-Based Restricted Stock Units

 

A summary of the Company’s performance-based restricted stock unit activity during the three months ended March 31, 2022 is as follows:

   Number of Shares  

Weighted Average

Grant-Date

Fair Value

 
Unvested at December 31, 2021   1,900,000   $33.87 
Vested   (280,000)  $33.87 
Unvested at March 31, 2022   1,620,000   $33.87 

 

On November 3, 2021, the Company granted 1.9 million performance-based restricted stock units (“PRSUs”) to an employee of the Company. The PRSUs will vest over a period of 5-calendar years through 2025, subject to the achievement of certain established performance metrics including revenue targets, subscriber targets, and the launching of new markets (and, with respect to 2023, the creation of one or more new revenue streams). The determination of the actual number of PRSUs that will vest each year during the five-year performance period will be determined upon the achievement of the pre-determined performance targets. Any such vesting is subject to the employee’s continuation in service with the Company through the applicable vesting date. At each reporting period, the Company will make a determination of the most likely outcome for achievement of each performance metric. This may result in a cumulative catch-up as the Company assessments are evaluated. The fair value of the PRSUs is measured based on their grant date fair value which totaled $64.4 million.

 

During the three months ended March 31, 2022, the Company issued 280,000 shares of its common stock in connection with the vesting of PRSUs.