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Share-Based Compensation Expense
9 Months Ended
Sep. 30, 2024
Share-Based Compensation Expense [Abstract]  
Share-Based Compensation Expense
11.Share-Based Compensation Expense

 

The Company’s stock award plans consist of:

 

Rumble Inc. Amended and Restated Stock Option Plan

 

The Company maintains a long-term incentive plan, the Rumble Inc. Amended and Restated Stock Option Plan (the “Stock Option Plan”). The Stock Option Plan governs the terms and conditions of the outstanding awards previously granted under the Stock Option Plan, as well as all options to purchase Legacy Rumble Class A common shares or Legacy Rumble Class B common shares which were converted into options to purchase shares of Class A Common Stock in connection with the Business Combination.

 

As of September 30, 2024, there were 58,165,382 shares of Class A Common Stock reserved for future issuance under the Stock Option Plan.

 

Rumble Inc. 2022 Stock Incentive Plan

 

The Rumble Inc. 2022 Stock Incentive Plan (the “Stock Incentive Plan”) was approved by the board of directors and the stockholders of the Company, and became effective, on September 16, 2022. The Company initially reserved 27,121,733 shares of Common Stock for issuance under the Stock Incentive Plan, subject to a ten-year an evergreen feature.

 

As of September 30, 2024, there were 36,361,367 shares of Class A Common Stock reserved for future issuance under the Stock Incentive Plan.

 

Rumble Inc. 2024 Employee Stock Purchase Plan

 

The Rumble Inc. 2024 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”) was approved by the board of directors and the stockholders of the Company, and became effective, on March 26, 2024. The Company initially reserved 1,500,000 shares of Common Stock for issuance under the Employee Stock Purchase Plan.

 

As of September 30, 2024, there were no shares of Class A Common Stock reserved for future issuance under the Employee Stock Purchase plan.

 

Restricted Stock Units

 

The following table reflects the continuity of unvested restricted stock units (“RSUs”) transactions:

 

   Number  

Weighted Average Grant Date

Fair Value

 
Outstanding, December 31, 2023   1,631,338   $10.55 
Granted   2,156,218    7.04 
Vested   (1,277,945)   9.18 
Forfeited   (83,587)   7.14 
Outstanding, September 30, 2024   2,426,024   $8.27 

 

The total unrecognized compensation cost for the RSUs outstanding is $14,831,795 which is expected to be recognized over a weighted average period of 1.33 years.

 

Stock Options

 

The following table reflects the continuity of stock option transactions:

 

   Nine months ended September 30, 2024 
   Service Conditions   Performance Conditions 
   Number  

Weighted Average

Exercise Price

   Number  

Weighted Average

Exercise Price

 
Outstanding, beginning of year   65,004,839   $0.50    358,249   $9.42 
Granted   3,068,682    6.65    
-
    
-
 
Exercised   (1,580,468)   0.19    
-
    
-
 
Forfeited   (5,463,736)   4.92    
-
    
-
 
Outstanding, end of period   61,029,317   $0.69    358,249   $9.42 
                     
Vested and exercisable   58,535,187   $0.20    
-
   $
-
 

 

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s Class A Common Stock for those stock options that had exercise prices lower than the fair value of the Company’s Class A Common Stock. As of September 30, 2024, the aggregate intrinsic value of options outstanding was $297,246,733 and the aggregate intrinsic value of the options vested and exercisable was $297,227,311.

 

The total unrecognized compensation cost for options with a service only condition and options with a performance condition as of September 30, 2024 was $17,262,049 and $3,000,000, respectively. For the options with a service only condition, as of September 30, 2024, the cost is expected to be recognized over a weighted average period of 2.58 years.

 

As of December 31, 2024, the Company had 2,592,616 stock options outstanding included within the service condition awards that had market based vesting conditions if the closing price of the Company’s Class A Common Stock is greater than or equal to $15.00 and $17.50, respectively (with 50% released at each target, or if the latter target is reached first, 100)% for a period of 20 trading days during any 30 trading-day period. As of September 30, 2024, there were no such market based awards outstanding.

 

As of September 30, 2024, the Company has determined that it is not probable that the conditions related to the performance-based stock options will be met, and therefore, the Company has not recognized the related expense in the consolidated statement of operations.

 

The weighted average grant date fair value of the outstanding options with a service only condition and options with a performance condition as of September 30, 2024 was $1.10 and $8.37, respectively.

 

Rights to Acquisition Related Post-Combination Expense

 

As described in Note 3, share-based compensation expense relates to rights to contingent consideration that were accounted for as post-combination expense. Share-based compensation expense recognized in the condensed consolidated interim statement of operations related to the rights to contingent consideration was $220,378 and $1,058,030 for the three months ended September 30, 2024 and 2023, respectively. Share-based compensation expense recognized in the condensed consolidated interim statement of operations related to the rights to contingent consideration was $2,254,159 and $1,566,163 for the nine months ended September 30, 2024 and 2023, respectively.

 

As discussed in Note 3, certain milestones were met during the nine months ended September 30, 2024. As a result, 135,771 shares of Class A Common Stock were issued and $2,284,085 of cash was paid to settle the rights to contingent consideration.

 

As of September 30, 2024, there was $570,588 of total unrecognized compensation cost related to rights with a service only condition. That cost is expected to be recognized over a weighted average period of 0.62 years.