XML 28 R18.htm IDEA: XBRL DOCUMENT
v3.24.3

Shareholders’ Equity | 9 Months Ended
--- | ---
Sep. 30, 2024
Equity [Abstract] |
Shareholders’ Equity | Shareholders’ Equity At-the-Market Sales Agreement On August 4, 2022, the Company entered into an at-the-market sales agreement (the "Sales Agreement") with Evercore Group L.L.C., Citigroup Global Markets Inc., Morgan Stanley & Co. LLC and Needham & Company, LLC, as sales agents (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 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. 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 nine months ended September 30, 2024, the Company sold 33,218,851 shares of its common stock under the ATM Program at a weighted average gross sales price of $1.33 and received net proceeds of approximately $43.3 million (after deducting $1.0 million in commissions and expenses). As of September 30, 2024, there was $112.0 million remaining available for sale under the Sales Agreement. Stock-based compensation During the three and nine months ended September 30, 2024 and 2023, the Company recognized stock-based compensation expense as follows (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Subscriber related | $ | 80 |  |  | $ | 38 |  |  | $ | 238 |  |  | $ | 147 |
Sales and marketing | 4,047 |  |  | 5,915 |  |  | 13,424 |  |  | 18,578 |
Technology and development | 2,679 |  |  | 2,901 |  |  | 9,188 |  |  | 8,923 |
General and administrative | 2,518 |  |  | 3,853 |  |  | 9,759 |  |  | 11,803 |
| $ | 9,324 |  |  | $ | 12,707 |  |  | $ | 32,609 |  |  | $ | 39,451 |
Equity Incentive Plans On April 1, 2020, the Company approved the establishment of the Company’s 2020 Equity Incentive Plan, as subsequently amended (the “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. On June 17, 2024, the Company further amended the 2020 Plan to, among other things, increase the maximum aggregate number of shares of common stock available for issuance under the 2020 Plan by 20,000,000 shares. As of September 30, 2024, there are 25,166,209 shares available for future issuance under the 2020 Plan. On August 3, 2022, August 7, 2023, and August 5, 2024, the Company's board of directors (the "Board") adopted the 2022 Employment Inducement Equity Incentive Plan ("2022 Plan"), the 2023 Employment Inducement Equity Incentive Plan ("2023 Plan") and the 2024 Employment Inducement Equity Incentive Plan (the “2024 Plan” and, collectively, the "Inducement Plans"), respectively, in each case without shareholder approval pursuant to Rule 303A.08 of the New York Stock Exchange Listed Company Manual. The Inducement Plans provide 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 their 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 September 30, 2024, there are no shares available for future issuance under the 2022 Plan and 2023 Plan, and there are 2,924,488 shares available for future issuance under the 2024 Plan. Time-Based Stock Options A summary of time-based stock option activity for the nine months ended September 30, 2024 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, 2023 | 10,475,607 |  |  | $ | 6.31 |  |  | $ | 6,534 |  |  | 5.3
Exercised | (4,042) |  |  | $ | 0.87 |  |  |  |  |
Forfeited or expired | (178,585) |  |  | $ | 12.72 |  |  |  |  |
Outstanding as of September 30, 2024 | 10,292,980 |  |  | $ | 6.20 |  |  | $ | 1,254 |  |  | 4.6
Options vested and exercisable as of September 30, 2024 | 9,702,174 |  |  | $ | 6.46 |  |  | $ | 1,254 |  |  | 4.5
There were no options granted during the three and nine months ended September 30, 2024. The fair value of each stock option grant is determined on the date of grant using the Black-Scholes option pricing model. The following assumptions were used in determining the fair value of stock options granted during the nine months ended September 30, 2023:
Dividend yield |  | —
Expected price volatility |  | 49.8%
Risk free interest rate |  | 3.9%
Expected term (years) |  | 6.0 years
As of September 30, 2024, the estimated value of unrecognized stock-based compensation expense related to unvested options was approximately $0.5 million to be recognized over a weighted average period of 2.1 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, 2024 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, 2023 | 4,453,297 |  |  | $ | 12.75 |  |  | $ | — |  |  | 3.7
Outstanding as of September 30, 2024 | 4,453,297 |  |  | $ | 12.75 |  |  | $ | — |  |  | 2.9
Options vested and exercisable as of September 30, 2024 | 3,994,964 |  |  | $ | 11.96 |  |  | $ | — |  |  | 2.8
There were no market and service-based options granted during the nine months ended September 30, 2024 and 2023. As of September 30, 2024, there was no unrecognized stock-based compensation expense for market and service-based stock options. Performance-Based Stock Options On October 8, 2020, the Company granted the CEO a performance stock option to purchase 4,100,000 shares of common stock, with an exercise price of $10.00, which was originally eligible to vest over a period of five calendar years through 2025, subject to the achievement of certain predetermined performance goals. On April 20, 2023, the Company amended the award to modify the vesting conditions with respect to the 3,280,000 options that remained unvested as of the amendment date (the "Amended Options"). The Amended Options are eligible to vest on February 20, 2026 (the "Certification Date"), subject to the achievement of the predetermined revenue, adjusted EBITDA, and subscriber objectives (the "Performance Criteria") for the year ended December 31, 2025. Compensation cost related to the Amended 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 was no accounting impact on the 820,000 shares subject to the vested portion of the stock option as a result of the amendment. The fair value of the Amended Options as of the amendment date totaled $1.2 million. The Amended Options are subject to acceleration upon certain events and conditions, including a change of control and qualifying terminations, and upon death, disability, and certain “good leaver” circumstances. Time-Based Restricted Stock Units A summary of the Company’s time-based restricted stock unit activity during the nine months ended September 30, 2024 is as follows:
| Number of Shares |  | Weighted Average Grant-Date Fair Value
Unvested at December 31, 2023 | 20,313,775 |  |  | $ | 3.85 |
Granted | 2,977,651 |  |  | $ | 1.50 |
Vested | (1,654,577) |  |  | $ | 4.17 |
Forfeited or expired | (2,145,370) |  |  | $ | 4.75 |
Unvested at September 30, 2024 | 19,491,479 |  |  | $ | 3.36 |
During the nine months ended September 30, 2024, the Company granted 2,977,651 time-based restricted stock units which generally vest annually over one-year (in the case annual grants to directors) to four-year (in the case grants to employees) periods, 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 approximately $4.5 million. As of September 30, 2024, the unrecognized stock-based compensation related to time-based restricted stock units totaled $47.6 million, had an aggregate intrinsic value of approximately $27.7 million, and a weighted average remaining contractual term of 2.5 years. Performance-Based Restricted Stock Units ("PRSU") A summary of the Company’s performance-based restricted stock unit activity during the nine months ended September 30, 2024 is as follows:
| Number of Shares |  | Weighted Average Grant-Date Fair Value
Unvested at December 31, 2023 | 2,035,834 |  |  | $ | 20.23 |
Granted | 947,035 |  |  | $ | 1.55 |
Forfeited | (189,825) |  |  | $ | 3.26 |
Unvested at September 30, 2024 | 2,793,044 |  |  | $ | 15.05 |
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, which were eligible to vest over a period of five calendar years through 2025, subject to the achievement of certain established performance metrics. On November 20, 2023, the Company amended the PRSUs (the "Amended PRSUs") to modify the vesting conditions with respect to the 1,140,000 PRSUs that remained unvested as of the amendment date. The Amended PRSUs are eligible to vest on the Certification Date, subject to the achievement of predetermined revenue, adjusted EBITDA and subscribers objectives (the "Performance Criteria") for the year ended December 31, 2025. The Amended PRSUs are subject to acceleration upon certain events and conditions, including a change of control and qualifying termination, and upon death, disability, and certain “good leaver” circumstances. The fair value of the unvested PRSUs as of the amendment date totaled $7.2 million and will be expensed pro-rata over the requisite service period. During the three months ended September 30, 2024 and 2023, the Company recognized stock-based compensation expense of $0.8 million and $2.5 million, respectively, related to these PRSUs. During the nine months ended September 30, 2024 and 2023, the Company recognized stock-based compensation expense of $2.4 million and $8.1 million, respectively, related to these PRSUs. As of September 30, 2024, unrecognized stock-based compensation related to these PRSUs totaled $4.4 million. On May 9, 2023, the Company granted PRSUs to the Company's CEO (the "CEO PRSUs"), which are eligible to vest on the Certification Date, 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 the first and second performance period, the Company defined the performance targets as adjusted EBITDA, revenue, and the number of subscribers, and determined the grant date was June 15, 2023 and March 25, 2024, respectively. The Company's Board will define the performance criteria for the third performance period no later than March 15, 2025 (the grant date of the third tranche). Any PRSUs that are eligible to vest based on performance relative to the pre-determined annual performance objectives will vest on the Certification Date. The PRSUs are subject to acceleration upon certain events and conditions, including a change of control and qualifying termination, and upon death, disability, and certain “good leaver” circumstances. 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 and $0.4 million for the first and second performance period, respectively. On November 20, 2023, the Company granted an aggregate of 569,475 PRSUs to various executive employees, which are eligible to vest on the Certification Date, subject to the achievement of predetermined revenue, Adjusted EBITDA and subscribers objectives (the “Performance Criteria”) for the year ended December 31, 2025. 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. During the nine months ended September 30, 2024, 189,825 shares were forfeited. As of September 30, 2024, the unrecognized stock-based compensation totaled $0.8 million. On April 4, 2024, the Company granted PRSUs to the Company's CEO, which are eligible to vest on February 20, 2027 (the "2027 Certification Date"), with 1,851,852 shares being earned at target performance and up to 2,777,778 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 2024, 2025, and 2026 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 the first performance period, the Company has defined the performance targets as adjusted EBITDA, revenue, and the number of subscribers, and determined the grant date was April 4, 2024, respectively. The Company's Board will define the performance criteria for the second and third performance period no later than March 15, 2025 and 2026 (the grant date). Any PRSUs that are eligible to vest based on performance relative to the pre-determined annual performance objectives will vest on the 2027 Certification Date. The PRSUs are subject to acceleration upon certain events and conditions, including a change of control and qualifying termination, and upon death, disability, and certain “good leaver” circumstances. 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 $1.0 million for the first performance period. Framework Agreement with MEP FTV On August 2, 2022 (the "MEP Effective Date"), Fubo Studios Inc., a subsidiary of the Company, entered into a binding framework agreement (the “MEP Framework Agreement”) with MEP FTV Holdings, LLC (“MEP FTV”) and Maximum Effort Productions, LLC. (“MEP” and, together with MEP FTV, “Maximum Effort”), memorializing the parties’ collaboration on a Maximum Effort linear channel and original programming for launch on Fubo. Pursuant to the MEP Framework Agreement, the Company and Maximum Effort agreed to work together to (1) develop scripted and unscripted television programs intended for initial distribution on Fubo’s platform (the “MEP Projects”) and (2) create a new television channel with unique content, features and functionality (the “MEP Network”). In connection with the MEP 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 “MEP RSA Agreement”) pursuant to which it has agreed to grant restricted common stock, issuable in three tranches in each of August 2022, 2023 and 2024, to MEP FTV, subject to various time and performance-based milestones. Under the MEP RSA Agreement, 80% of the restricted stock is consideration for the MEP Projects and 20% for the MEP Network. 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 shares settled liabilities will be recorded and reclassified to equity upon issuance of the related shares. 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 MEP Network which occurred in June 2023. The Company will recognize the total fair value of $5.7 million ratably over the two-year period. Because shares of the Company’s common stock will be issued as consideration for the MEP Framework Agreement, the Company accounted for the MEP RSA Agreement pursuant to the non-employee guidance in ASC 718, Compensation – Stock Compensation. During the three months ended September 30, 2024 and 2023, in connection with the MEP Framework Agreement, the Company recorded approximately $0.8 million and $1.9 million, respectively, of stock-based compensation expense as a shares settled liability. During the nine months ended September 30, 2024 and 2023, in connection with the MEP Framework Agreement, the Company recorded approximately $2.6 million and $3.7 million, respectively, of stock-based compensation expense as a shares settled liability. As of September 30, 2024 and December 31, 2023, $7.7 million and $5.1 million, respectively, of such shares settled liability is included in accrued expenses and other current liabilities on the consolidated balance sheet. Warrants Pursuant to the MEP 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. The expense recognized during the three and nine months ended September 30, 2024 and 2023 was immaterial. There was no unrecognized expense outstanding as of September 30, 2024. A summary of the Company’s outstanding warrants as of September 30, 2024, are presented below (in thousands, except number of shares and exercise price):
| Number of Shares |  | Weighted Average Exercise Price |  | Total Intrinsic Value |  | Weighted Average Remaining Contractual Life (Years) |
Outstanding as of December 31, 2023 | 166,670 |  |  | $ | 17.40 |  |  | $ | — |  |  | 8.6 |
Outstanding as of September 30, 2024 | 166,670 |  |  | $ | 17.40 |  |  | $ | — |  |  | 7.8 |

X
- References No definition available. + Details
Name: | us-gaap_EquityAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for equity. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-14 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 235 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477968/946-235-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 235 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477968/946-235-50-2 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Publisher FASB -URI https://asc.fasb.org/1943274/2147478448/946-505-50-6 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-6 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480008/505-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 505 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/505/tableOfContent Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (i) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-13 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-14 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-14 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 16 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-16 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 Reference 18: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 Reference 19: http://www.xbrl.org/2003/role/disclosureRef -Topic 505 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 18 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481112/505-10-50-18 + Details
Name: | us-gaap_StockholdersEquityNoteDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration