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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Note 15 - Stock-Based Compensation Equity Incentive Plans On April 1, 2020, the Company approved the establishment of the Company’s 2020 Equity Incentive Plan, as amended (the “2020 Plan”). On November 20, 2022 and April 20, 2023, the Company amended the 2020 Plan to increase the maximum aggregate number of shares of common stock available for issuance under the 2020 Plan by 2,500,000 shares and 17,500,000 shares, respectively. On June 15, 2023, the Company's shareholders approved the amended 2020 Plan. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares to its employees, directors and consultants. As of December 31 2023, there are 7,399,380 shares available for future issuance under the 2020 Plan. The Company assumed the fuboTV Inc. 2015 Equity Incentive Plan (the "2015 Plan") on April 1, 2020. No shares are available for future issuance under the 2015 Plan. On August 3, 2022, the Company's board of directors (the "Board") approved the adoption of the 2022 Employment Inducement Equity Incentive Plan (the “2022 Inducement Plan”), which was adopted without shareholder approval pursuant to Rule 303A.08 of the New York Stock Exchange Listed Company Manual. The 2022 Inducement Plan provided for the grant of equity-based awards, including non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares, and its terms are substantially similar to the 2020 Plan, with the exception that awards can only be made to new employees in connection with their commencement of employment. No shares are available for future issuance under the 2022 Inducement Plan. On August 7, 2023, the Board approved the adoption of the 2023 Employment Inducement Equity Incentive Plan (the “2023 Inducement Plan”), which was adopted without shareholder approval pursuant to Rule 303A.08 of the New York Stock Exchange Listed Company Manual. The aggregate number of shares of common stock reserved for issuance under the 2023 Inducement Plan is 3,000,000. The 2023 Inducement Plan provides for the grant of equity-based awards, including non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares, and its terms are substantially similar to the 2020 Plan, with the exception that awards can only be made to new employees in connection with their commencement of employment. As of December 31 2023, there are 2,724,451 shares available for future issuance under the 2023 Inducement Plan. During the years ended December 31, 2023, 2022 and 2021 the Company recognized stock-based compensation expense as follows (in thousands):
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
Subscriber related | $ | 211 |  |  | $ | 144 |  |  | $ | 71 |
Sales and marketing | 22,886 |  |  | 22,198 |  |  | 7,818 |
Technology and development | 12,024 |  |  | 9,998 |  |  | 13,752 |
General and administrative | 16,094 |  |  | 20,114 |  |  | 31,509 |
| $ | 51,215 |  |  | $ | 52,454 |  |  | $ | 53,150 |
During the year ended December 31, 2023 and 2022, in connection with the MEP Framework Agreement (See Note 14), the Company recorded approximately $6.5 million and $2.9 million of stock-based compensation expense, respectively, to shares settled liability. As of December 31, 2023 and 2022, $5.1 million and $2.9 million, respectively, is included in accrued expenses and other current liabilities and other long-term liabilities on the consolidated balance sheet. Stock Options The Company provides option grants to employees, directors, and consultants under 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. A summary of stock option activity for the year ended December 31, 2023, 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, 2022 | 10,243,772 |  |  | $ | 6.43 |  |  | $ | 1,956 |  |  | 6.0
Granted | 636,298 |  |  | $ | 2.02 |  |  |  |  |
Exercised | (339,842) |  |  | $ | 1.10 |  |  |  |  |
Forfeited or expired | (64,621) |  |  | $ | 10.67 |  |  |  |  |
Outstanding as of December 31, 2023 | 10,475,607 |  |  | $ | 6.31 |  |  | $ | 6,534 |  |  | 5.3
Options vested and exercisable as of December 31, 2023 | 9,172,874 |  |  | $ | 6.48 |  |  | $ | 5,796 |  |  | 5.4
The following was used in determining the fair value of stock options granted during the year ended December 31, 2023:
Dividend yield |  | — | %
Expected price volatility |  | 49.8 | %
Risk free interest rate |  | 3.9 | %
Expected term (years) |  | 6.0
As of December 31, 2023, the estimated value of unrecognized stock-based compensation expense related to unvested options was $2.8 million to be recognized over a period of 1.1 years. Performance-Based Stock Options On October 8, 2020, the Company awarded the CEO an option to purchase 4,100,000 shares of common stock which was eligible to vest 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 terms of the option provided that the Company's Board would review and certify attainment of such goals annually from 2021 through 2026 on a given certification date subsequent to the Company’s calendar year end (the "Determination Date") to determine if any vesting was warranted. The Board had the discretion to determine vesting at, above, or below 20% of the shares subject to the performance option on a given Determination Date. All shares were eligible for vesting until the Determination Date following the 2025 calendar year. Any such vesting was 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 was subject to the discretion of the Board, the compensation expense was 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 year ended December 31, 2022, the Board determined that the option would vest with respect to 820,000 shares for the 2021 calendar year. On April 20, 2023, the Company entered into the first amendment to the performance-based stock options described above that were awarded to its CEO. The amendment did not adjust the total number of options granted (4,100,000 options), the exercise price of $10.00 per share or the expiration date of October 7, 2030. Under the terms of the amendment, the original vesting conditions were modified with respect to the 3,280,000 performance-based stock options that remained unvested. The modified vesting of the stock options is based upon the achievement of certain performance metrics (the "Performance Criteria") during the period from January 1, 2025 through December 31, 2025, including 50% vesting based on the Company's adjusted EBITDA, 25% vesting based on revenue criteria, and 25% vesting based on the number of subscribers achieved. The Company’s Board will certify the Company’s performance relative to the Performance Criteria on or prior to February 20, 2026 (the “Certification Date”). If a change in control event occurs on or prior to December 31, 2025, all of the unvested options (measured at target performance) will vest on February 20, 2026 (or the date of an earlier termination of employment without cause or for good reason (a "Qualifying Termination") following the change in control), provided the CEO continues to provide services through such date. In the event of the CEO’s Qualifying Termination prior to a change in control, if the termination occurs on or prior to December 31, 2025, then all unvested options (measured at target performance) will vest as of the date of termination, and if the termination occurs on or after January 1, 2026, a number of unvested options, determined based on actual performance during the performance period, will vest on date performance is certified. Compensation cost related to the modification of the 3,280,000 unvested options will be recognized over the requisite service period for the new award beginning on the amendment date and ending on the Certification Date based on the probability of achievement of the Performance Criteria. There is no accounting impact on the fully vested 820,000 shares as a result of the amendment. The fair value of the options as of the amendment date totaled $1.2 million, and during the year ended December 31, 2023, the Company recognized stock-based compensation expense of $0.3 million. Modification of Options and Restricted Stock Units During the years ended December 31, 2022 and 2021, the Board of Directors approved a modification to stock option and restricted stock award grants to employees who terminated from the 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 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 2021, respectively. The incremental stock-based compensation expense for modifications of stock option and restricted stock awards during the year ended December 31, 2023 was not material. Market and Service Condition Based Stock Options A summary of activity under the Plan for market and service-based stock options for the year ended December 31, 2023 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, 2022 | 4,453,297 |  |  | $ | 12.75 |  |  | $ | — |  |  | 4.7
Outstanding as of December 31, 2023 | 4,453,297 |  |  | $ | 12.75 |  |  | $ | — |  |  | 3.7
Options vested and exercisable as of December 31, 2023 | 3,994,964 |  |  | $ | 11.96 |  |  | $ | — |  |  | 3.6
Stock based compensation expense is based on the estimated value of the awards on the grant date, and is recognized over the period from the grant date through the expected vest dates of each vesting condition, both of which were estimated based on a Monte Carlo simulation model. There were no market and service-based options granted during the year ended December 31, 2023 and 2022. During the year ended December 31, 2021, 1,375,000 stock options with a fair value of $19.2 million were granted to an employee of the Company. The options vest on the earlier of each anniversary of 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, 2023, 2022, 2021, the Company recognized $3.3 million, $7.8 million, and $7.2 million respectively, of stock-based compensation related to its market and service-based stock options. As of December 31, 2023, there was $0.9 million of unrecognized stock-based compensation expense for market and service-based stock options. Service-based Restricted Stock Awards MEP Framework Agreement - MEP Project Restricted Stock Awards In connection with the MEP Framework Agreement, stock-based compensation cost for MEP Project restricted stock awards (the "MEP Project RSAs") totaling approximately $23.0 million measured as 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 related shares. In connection with the MEP Project RSAs, as of December 31, 2023 the unrecognized stock-based compensation totaled $12.3 million, and $3.7 million of shares liability in accrued expenses and other current liabilities and other long-term liabilities was recorded on the consolidated balance sheet. Performance-based Restricted Stock Awards MEP Framework Agreement - MEP Network Restricted Stock Awards The restricted stock awards allocated as consideration for the MEP Network (“MEP 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 MEP 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 at $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 were subject to forfeiture until launch of the Network which occurred in June 2023. The Company will recognize the total fair value of $5.7 million ratably over the two-year period. In connection with the MEP Network RSAs, as of December 31, 2023, the unrecognized stock-based compensation totaled $1.7 million, and $1.4 million of shares liability in accrued expenses and other current liabilities and other long-term liabilities was recorded on the consolidated balance sheet. Time-Based Restricted Stock Units A summary of the Company’s time-based restricted stock unit activity during the year ended December 31, 2023 is as follows:
| Number of Shares |  | Weighted Average Grant-Date Fair Value
Unvested at December 31, 2022 | 13,055,629 |  |  | $ | 5.25 |
Granted | 13,912,089 |  |  | $ | 2.99 |
Vested | (3,397,642) |  |  | $ | 5.82 |
Forfeited | (3,256,301) |  |  | $ | 3.72 |
Unvested at December 31, 2023 | 20,313,775 |  |  | $ | 3.85 |
During the year ended December 31, 2023, the Company granted 13,912,089 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 $44.0 million. During the year ended December 31, 2023, the Company issued 3,443,251 shares of common stock to its Board of Directors and employees in settlement of vested restricted stock units. During the year ended December 31, 2022, the Company granted 12,803,284 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 $47.2 million. During the year ended December 31, 2022, the Company issued 1,576,231 shares of common stock to its Board of Directors and employees in settlement of vested restricted stock units. As of December 31, 2023, the estimated value of unrecognized stock-based compensation related to restricted stock units totaled $72.6 million, had an aggregate intrinsic value of $64.6 million, and a weighted average remaining contractual term of 3.0 years. Performance-Based Restricted Stock Units ("PRSU") A summary of the Company’s performance-based restricted stock unit activity during the year ended December 31, 2023 is as follows:
| Number of Shares |  | Weighted Average Grant-Date Fair Value
Unvested at December 31, 2022 | 1,520,000 |  |  | $ | 33.87 |
Granted | 895,834 |  |  | $ | 2.87 |
Vested | (286,667) |  |  | $ | 33.87 |
Forfeited | (93,333) |  |  | $ | 33.87 |
Unvested at December 31, 2023 | 2,035,834 |  |  | $ | 20.23 |
On November 3, 2021, the Company granted 1.9 million performance-based restricted stock units (“PRSUs”) to the Chief Operating Officer ("COO") of the Company. The PRSUs were eligible to 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 would vest each year during the five-year performance period would be determined upon the achievement of the predetermined performance targets. Any such vesting would be subject to the COO’s continuation in service with the Company through the applicable vesting date. At each reporting period, the Company made a determination of the most likely outcome for achievement of each performance metric, which could have resulted in a cumulative catch-up as the Company assessments were evaluated. The fair value of the PRSUs was measured based on their grant date fair value which totaled $64.4 million. During the year ended December 31, 2022, the Company determined 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. During the 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. On November 20, 2023, the Company entered into the first amendment to the PRSUs described above that were awarded to its COO. The amendment did not adjust the total number of PRSUs granted (1.9 million PRSUs). Under the terms of the amendment, the original vesting conditions were modified with respect to the 1,140,000 PRSUs that remained unvested as of the amendment date. The modified vesting of the PRSUs is based upon the achievement of the Performance Criteria during the period from January 1, 2025 through December 31, 2025, including 50% vesting based on the Company's adjusted EBITDA, 25% vesting based on revenue criteria, and 25% vesting based on the number of subscribers achieved. The Company’s Board will certify the Company’s performance relative to the Performance Criteria on or prior to the February 20, 2026 (the “Certification Date”). If a change in control event occurs on or prior to December 31, 2025, all of the unvested PRSUs (measured at target performance) will vest on or prior to February 20, 2026 (or the date of an earlier "Qualifying Termination" following the change in control), provided the COO continues to provide services through such date. In the event of the COO’s Qualifying Termination prior to a change in control, if the termination occurs on or prior to December 31, 2025, then all unvested PRSUs (measured at target performance) will vest as of the date of termination, and if the termination occurs on or after January 1, 2026, a number of unvested PRSUs, determined based on actual performance during the performance period, will vest on date performance is certified. Compensation cost related to the modification of the 1,140,000 unvested PRSUs will be recognized over the requisite service period for the new award beginning on the amendment date and ending on the Certification Date based on the probability of achievement of the Performance Criteria. The fair value of the unvested PRSUs as of the amendment date totaled $7.2 million and will be expense pro-rata over the requisite service period. During the year ended December 31, 2023, the Company recognized stock-based compensation expense of $8.7 million related to the PRSUs. As of December 31, 2023, unrecognized stock-based compensation totaled $6.8 million. There is no accounting impact on the fully vested 666,667 shares that had fully vested as of the amendment. On May 9, 2023, the Company entered into a PRSU agreement with the Company's CEO. The PRSU agreement provides the right to earn shares of the Company's common stock upon achievement of certain performance criteria, with 730,338 shares being earned at target performance and up to 1,095,507 shares being earned at maximum performance. The number of PRSUs eligible to vest will be determined based upon the achievement of annual performance-based vesting conditions for the 2023, 2024, and 2025 calendar years. The Company accounts for the PRSUs as three separate awards each with a requisite service period beginning on January 1st of the applicable year. For year one, the Company has defined the performance targets including adjusted EBITDA, revenue, and the number of subscribers, and determined the grant date is June 15, 2023. The Company's Board will define the performance criteria for years two and three no later than March 15, 2024 and 2025, respectively (the grant date of those respective tranches). Any PRSUs that are eligible to vest based on performance relative to the pre-determined annual performance objectives will vest on the date on which the Company’s performance for the 2025 performance year is certified, which will occur on or before February 20, 2026. Any such vesting is subject to the employee’s continuation in service with the Company through the applicable vesting date. The Company's Board will review attainment of such performance conditions annually from 2024 through 2026 on a given certification date (subsequent to the Company’s calendar year end) to determine if any PRSUs should be eligible to vest. The PRSUs contain both service and performance vesting conditions. Compensation cost related to the target PRSUs will be recognized over the requisite service period based on the probability of achievement of certain performance thresholds. The fair value of the PRSUs is measured based on their grant date fair value which totaled $0.7 million for the year one tranche. On November 20, 2023, the Company entered into PRSU agreements with various executive employees (the "Executives") covering a total of 569,475 shares in the aggregate. Under the terms of the agreements, the PRSUs will be eligible to vest based upon the achievement of the Performance Criteria during the period January 1, 2025 through December 31, 2025, including 50% vesting based on the Company's adjusted EBITDA, 25% vesting based on revenue criteria, and 25% based on the number of subscribers achieved. The Company’s Board will certify the Company’s performance relative to the Performance Criteria on or prior to the February 20, 2026 Certification Date. If a change in control event occurs on or prior to December 31, 2025, all of the unvested PRSUs (measured at target performance) will vest on February 20, 2026 (or the date of a "Qualifying Termination" following the change in control), provided the Executives continues to provide services through such date. In the event of an Executive's Qualifying Termination prior to a change in control, if the termination occurs on or prior to December 31, 2025, then all unvested PRSUs (measured at target performance) will vest as of the date of termination, and if the termination occurs on or after January 1, 2026, a number of unvested PRSUs, determined based on actual performance during the performance period, will vest on date performance is certified. Compensation cost related to the unvested PRSUs will be recognized over the requisite service period for the new award beginning on the grant date and ending on the Certification Date based on the probability of achievement of the Performance Criteria. The fair value of the PRSUs totaled $1.9 million, and during the year ended December 31, 2023, the Company recognized stock-based compensation expense of $0.1 million. As of December 31, 2023, unrecognized stock-based compensation totaled $1.8 million.

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