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Stockholders’ Equity | 9 Months Ended
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Sep. 30, 2022
Equity [Abstract] |
Stockholders’ Equity | Stockholders’ Equity At-the-Market Sales Agreements 2021 ATM Offering On August 13, 2021, the Company entered into an At-the-Market Sales Agreement (the "2021 Sales Agreement") with Evercore Group L.L.C., Needham & Company, LLC and Oppenheimer & Co. Inc., as sales agents (each, a “prior manager” and together, the “prior managers”), pursuant to which the Company, from time to time, sold shares of its common stock having an aggregate offering price of up to $500.0 million through the prior managers. The Company paid the prior managers a commission of up to 3.0% of the aggregate gross proceeds the Company received from all sales of the Company’s common stock under the 2021 ATM Offering. Effective August 4, 2022, the Company terminated the 2021 ATM Offering. 2022 ATM Offering On August 4, 2022, the Company entered into an At-the Market Sales Agreement (the "2022 Sales Agreement," and, together with the 2021 Sales Agreement, the "ATM Sales Agreements") with Evercore Group L.L.C., Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Needham & Company, LLC, as sales agents (each, a “manager” and together, the “managers”) pursuant to which the Company may, from time to time, sell shares of its common stock, having an aggregate offering price of up to $350.0 million through the managers (the “2022 ATM Offering”). Upon delivery of a placement notice and subject to the terms and conditions of the 2022 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 2022 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 2022 Sales Agreement. The Company is not obligated to, and cannot provide any assurances that it will, make any sales of the shares under the 2022 Sales Agreement. The offering of shares of common stock pursuant to the 2022 Sales Agreement will terminate upon the earlier of (i) the sale of all common stock subject to the 2022 Sales Agreement or (ii) termination of the 2022 Sales Agreement in accordance with its terms. During the nine months ended September 30, 2022, the Company received net proceeds of approximately $229.0 million (after deducting $4.9 million in commissions and expenses) from sales of 31,658,931 shares of its common stock, at a weighted average gross sales price of $7.39 per share pursuant to the ATM Sales Agreements. As of September 30, 2022, there was $340.8 million of common stock remaining available for sale under the 2022 Sales Agreement. Framework Agreement with MEP FTV On August 2, 2022 (the "Effective Date"), Fubo Studios Inc. (formerly known as Fubo Entertainment Inc.), a subsidiary of the Company, entered into a binding framework agreement (the “Framework Agreement”) with MEP FTV Holdings, LLC (“MEP FTV”) and Maximum Effort Productions, Inc. (“MEP” and, together with MEP FTV, “Maximum Effort”), memorializing the parties’ collaboration on a forthcoming Maximum Effort linear channel and original programming for launch on FuboTV. Maximum Effort is a premiere entertainment production company led by Ryan Reynolds and George Dewey. Pursuant to the Framework Agreement, the Company and Maximum Effort desire to work together to (1) develop scripted and unscripted television programs intended for initial distribution on Fubo’s platform (the “Projects”) and (2) create a new television channel with unique content, features and functionality (the “Network”). In connection with the Framework Agreement, as consideration for Maximum Effort’s participation in the collaboration, the Company entered into a Restricted Stock Award Agreement dated August 12, 2022 (the “RSA Agreement”) pursuant to which it has agreed to issue to MEP FTV(i) 2,000,000 shares of restricted common stock, par value $0.0001 (“Common Stock”), of the Company, within 10 business days after the Effective Date (“First Closing Date”) (“Tranche 1”); (ii) a number of shares of Common Stock determined by dividing $10.0 million by the 30-day volume weighted average closing price of Common Stock for the 30 trading days preceding the first anniversary of the Effective Date, within 10 business days after the first anniversary of the Effective Date (“Second Closing Date”) (“Tranche 2”); and (iii) a number of shares of Common Stock determined by dividing $10.0 million by the 30-day volume weighted average closing price of Common Stock for the 30 trading days preceding the second anniversary of the Effective Date, within 10 business days after the second anniversary of the Effective Date (“Third Closing Date”) (“Tranche 3”) (collectively, the “Shares”). The Shares will be subject to transfer restrictions until various time- and performance-based milestones are met, and, during this restricted period, will be subject to potential forfeiture if the Framework Agreement is terminated under certain conditions. The Parties agree that 80% of the equity grant shall be allocated as consideration for the Projects and 20% of the equity grant shall be allocated as consideration for the Network. Because shares of the Company’s common stock will be issued as consideration for the Framework Agreement, the Company accounted for the RSA Agreement pursuant to the non-employee guidance in ASC 718, Compensation – Stock Compensation. Warrants Pursuant to the Framework Agreement, on August 12, 2022, the Company issued MEP FTV a warrant to acquire 166,667 shares of the Company’s common stock with an exercise price of $15.00 per share. The warrant is exercisable on or prior to August 2, 2032, provided that the price per share of the Company’s common stock equals or exceeds a 30-trading day volume weighted average closing price of $30.00 at any time prior to third anniversary of the grant date. The fair value of the warrant was measured on August 12, 2022, using the Monte Carlo valuation model, and the fair value totaled approximately $0.4 million. The derived service period was determined to be 1.7 years. As of September 30, 2022, the unrecognized stock-based compensation totaled $0.4 million. A summary of the Company’s outstanding warrants as of September 30, 2022, are presented below (in thousands, except share and exercise price):
| Number of Shares |  | 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 |
Granted | 166,667 |  |  | $ | 15.00 |  |  |  |  |  |
Exercised | (540,541) |  |  | $ | 9.25 |  |  |  |  | - |
Expired | (25,000) |  |  | $ | 9.25 |  |  |  |  |  |
Outstanding and exercisable as of September 30, 2022 | 166,670 |  |  | $ | 17.40 |  |  | $ | — |  |  | 9.8 |
The Company estimated the fair value of the warrants granted during the three and nine months ended September 30, 2022 using the Monte Carlo valuation model as follows:
Dividend yield | —
Expected price volatility | 107.0%
Risk free interest rate | 2.8%
Expected term (years) | 10.0
Stock-based compensation During the three and nine months ended September 30, 2022 and 2021 the Company recognized stock-based compensation expense as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Subscriber related | $ | 15 |  |  | $ | 13 |  |  | $ | 91 |  |  | $ | 43 |
Sales and marketing | 5,432 |  |  | 821 |  |  | 18,565 |  |  | 2,324 |
Technology and development | 2,575 |  |  | 1,535 |  |  | 8,164 |  |  | 12,156 |
General and administrative | 5,614 |  |  | 10,298 |  |  | 20,474 |  |  | 31,949 |
| $ | 13,636 |  |  | $ | 12,667 |  |  | $ | 47,294 |  |  | $ | 46,472 |
Options The Company provides option grants to employees, directors, and consultants under the fuboTV Inc. 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. Stock Options A summary of stock option activity for the nine months ended September 30, 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 (Years)
Outstanding as of December 31, 2021 | 11,454,890 |  |  | $ | 6.40 |  |  | $ | 70,231 |  |  | 7.4
Exercised | (565,022) |  |  | $ | 1.33 |  |  |  |  |
Forfeited or expired | (507,492) |  |  | $ | 10.95 |  |  |  |  |
Outstanding as of September 30, 2022 | 10,382,376 |  |  | $ | 6.46 |  |  | $ | 7,975 |  |  | 6.2
Options vested and exercisable as of September 30, 2022 | 7,816,011 |  |  | $ | 5.63 |  |  | $ | 7,854 |  |  | 5.8
There were no options granted during the three and nine months ended September 30, 2022. During the nine months ended September 30, 2021, the Company granted options to purchase 220,099 shares of common stock with an aggregate fair value of $3.2 million. As of September 30, 2022, the estimated value of unrecognized stock-based compensation expense related to unvested options was approximately $11.7 million to be recognized over a period of 1.5 years. As of September 30, 2021, the estimated value of unrecognized stock-based compensation expense related to unvested options was approximately $31.1 million to be recognized over a period of 2.4 years. Market and Service Condition Based Stock Options A summary of activity under the 2020 Plan for market and service-based stock options for the nine months ended September 30, 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 (Years)
Outstanding as of December 31, 2021 | 4,453,297 |  |  | $ | 12.75 |  |  | $ | 17,933 |  |  | 5.7
Outstanding as of September 30, 2022 | 4,453,297 |  |  | $ | 12.75 |  |  | $ | — |  |  | 4.9
Options vested and exercisable as of September 30, 2022 | 3,536,630 |  |  | $ | 10.98 |  |  | $ | — |  |  | 4.7
There were no market and service-based options granted during the nine months ended September 30, 2022. The Company granted 1,375,000 market and service-based options during the nine months ended September 30, 2021. As of September 30, 2022, there was $5.6 million of unrecognized stock-based compensation expense for market and service-based stock options. As of September 30, 2021, there was $14.9 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 Company's board of directors (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 nine months ended September 30, 2022, the Board determined that the option would vest with respect to 820,000 shares for the 2021 calendar year. 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. Modification of Options During the nine months ended September 30, 2022, the Board approved the acceleration of vesting and extended the post-termination exercisability of certain employee stock options and restricted stock units. The Company reported $2.2 million of expense during the nine months ended September 30, 2022 as a result of the accelerated vesting of stock options and restricted stock units. Service-based Restricted Stock Awards Framework Agreement - Project Restricted Stock Awards In connection with the Framework Agreement, stock-based compensation cost for Project restricted stock awards (the "Project RSAs") totaling approximately $23.0 million is measured as the fair value of the 1,600,000 shares issued for the first tranche issued on August 12, 2022, $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 related shares. In connection with the Project RSAs, as of September 30, 2022, the unrecognized stock-based compensation totaled $21.9 million, and $0.7 million of shares liability in accrued expenses and other current liabilities and other long-term liabilities was recorded on the condensed consolidated balance sheet. Performance-based Restricted Stock Awards Framework Agreement - Network Restricted Stock Awards The restricted stock awards allocated as consideration for the Network (“Network RSAs”) are performance-based RSAs. The performance condition consists of creating a new television channel with unique content, features and functionality. Compensation cost is measured on the grant date for shares that vest based upon the achievement of the performance condition are recognized when probable over the requisite service period, that is the implicit service period over which the performance conditions are probable of achievement. Stock-based compensation cost for the Network RSAs totaling approximately $5.7 million is measured as the fair value of the 400,000 shares issued for the first tranche issued on August 12, 2022, $1.7 million, plus the fixed monetary amount of $2.0 million, settleable in shares on August 2, 2023, plus the fixed monetary amount of $2.0 million, settleable in shares on August 2, 2024. The Network RSAs are subject to forfeiture until launch of the 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 Network RSAs. In connection with the Network RSAs, as of September 30, 2022, the unrecognized stock-based compensation totaled $5.3 million, and $0.3 million of shares liability in accrued expenses and other current liabilities and other long-term liabilities was recorded on the condensed consolidated balance sheet. Time-Based Restricted Stock Units A summary of the Company’s time-based restricted stock unit activity during the nine months ended September 30, 2022 is as follows:
| Number of Shares |  | Weighted Average Grant-Date Fair Value
Unvested at December 31, 2021 | 2,785,800 |  |  | $ | 25.73 |
Granted | 3,512,728 |  |  | $ | 5.70 |
Vested | (350,635) |  |  | $ | 26.93 |
Forfeited | (708,810) |  |  | $ | 14.59 |
Unvested at September 30, 2022 | 5,239,083 |  |  | $ | 13.73 |
As of September 30, 2022, the unrecognized stock-based compensation related to restricted stock units totaled $56.6 million, had an aggregate intrinsic value of approximately $18.6 million, and a weighted average remaining contractual term of 3.1 years. As of September 30, 2021, the estimated value of unrecognized stock-based compensation related to restricted stock units totaled $35.0 million, and had an aggregate intrinsic value of $32.1 million and a weighted average remaining contractual term of 3.2 years. Performance-Based Restricted Stock Units A summary of the Company’s performance-based restricted stock unit activity during the nine months ended September 30, 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 September 30, 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 predetermined 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 nine months ended September 30, 2022, the Company issued 280,000 shares of its common stock in connection with the vesting of PRSUs. During the nine months ended September 30, 2022 the Company recognized $14.4 million of stock-based compensation. As of September 30, 2022, the unrecognized stock-based compensation related to PRSUs totaled $44.4 million.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 6 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008 + Details
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