Stockholders’ Equity

6 Months Ended

Jun. 30, 2022

Equity [Abstract]

Stockholders’ Equity

Stockholders’ Equity

At-the-Market Sales Agreement

On August 13, 2021, the Company entered into an At-the-Market Sales Agreement ( “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”).

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 six months ended June 30, 2022, the Company received net proceeds of approximately $220.2 million (after deducting $4.5 million in commissions and expenses) from sales of 29,843,580 shares of its common stock, at a weighted average gross sales price of $7.53 per share pursuant to the Sales Agreement.

Warrants

A summary of the Company’s outstanding warrants as of June 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
Exercised	(540,541)	$	9.25	$	—	-
Expired	(25,000)	$	9.25
Outstanding and exercisable as of June 30, 2022	3	$	24,000.00	$	—	0.0

Stock-based compensation

During the three and six months ended June 30, 2022 and 2021 the Company recognized stock-based compensation expense as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Subscriber related	$	36	$	16	$	76	$	30
Sales and marketing	4,253		790		13,133		1,503
Technology and development	2,905		8,551		5,589		10,621
General and administrative	7,015		15,074		14,860		21,651
	$	14,209	$	24,431	$	33,658	$	33,805

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 six months ended June 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	(430,122)	$	1.33
Forfeited or expired	(443,836)	$	10.30
Outstanding as of June 30, 2022	10,580,932	$	6.45	$	4,248	6.5
Options vested and exercisable as of June 30, 2022	7,524,928	$	4.83	$	4,124	5.4

There were no options granted during the three and six ended June 30, 2022.

During the six months ended June 30, 2021, the Company granted options to purchase 158,399 shares of common stock with an aggregate fair value of $2.5 million. The following was used in determining the fair value of stock options granted during the six months ended June 30, 2021:

	Six months ended June 30,
		2021
Dividend yield		$	—
Expected price volatility		45.04		%
Risk free interest rate		1.0		%
Expected term (years)		6.0

As of June 30, 2022, the estimated value of unrecognized stock-based compensation expense related to unvested options was approximately $14.2 million to be recognized over a period of 1.8 years. As of June 30, 2021, the estimated value of unrecognized stock-based compensation expense related to unvested options was approximately $34.0 million to be recognized over a period of 2.6 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 six months ended June 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 June 30, 2022	4,453,297	$	12.75	$	—	5.2
Options vested and exercisable as of June 30, 2022	3,536,630	$	10.98	$	—	5.0

There were no market and service-based options granted during the six months ended June 30, 2022. The Company granted 1,375,000 market and service-based options during the six months ended June 30, 2021.

As of June 30, 2022, there was $6.9 million of unrecognized stock-based compensation expense for market and service-based stock options. As of June 30, 2021, there was $17.9 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 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 six months ended June 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 six months ended June 30, 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 six months ended June 30, 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 six months ended June 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	3,281,021	$	5.79
Vested	(252,787)	$	26.05
Forfeited	(275,834)	$	19.60
Unvested at June 30, 2022	5,538,200	$	14.21

As of June 30, 2022, the unrecognized stock-based compensation related to restricted stock units totaled $66.4 million, had an aggregate intrinsic value of approximately $13.7 million, and a weighted average remaining contractual term of 3.3 years. As of June 30, 2021, the estimated value of unrecognized stock-based compensation related to restricted stock units totaled $34.8 million, and had an aggregate intrinsic value of $39.9 million and a weighted average remaining contractual term of 3.5 years.