SEC Filing | Radius Global Infrastructure, Inc.

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radi-10q_20220331.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39568

Radius Global Infrastructure, Inc.

(Exact name of registrant as speciﬁed in its charter)

Delaware	88-1807259
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identiﬁcation No.)
3 Bala Plaza East, Suite 502
Bala Cynwyd, Pennsylvania	19004
(Address of principal executive offices)	(Zip Code)

(610) 660-4910

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former ﬁscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	RADI	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 6, 2022, there were 92,733,191 shares of Class A Common Stock outstanding.

Cautionary Note Regarding Forward-Looking Statements

We make forward-looking statements in this Quarterly Report on Form 10-Q (this “Quarterly Report”) within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are subject to risks and uncertainties. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may,” “will” or similar expressions, their negative or other variations or comparable terminology.

Forward-looking statements are based on current beliefs, assumptions and expectations based upon our historical performance and on our current plans, estimates and expectations in light of information available to us. Any forward-looking statement speaks only as of the date on which it is made. Except as required by law, we are not obligated to, and do not intend to, publicly update or revise any forward-looking statements made herein after the date of this Quarterly Report, whether as a result of new information, future events or otherwise. Forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. Actual results may differ materially from those set forth in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

Certain important factors that we think could cause our actual results to differ materially from expected results are summarized below. Other factors besides those listed could also adversely affect us. We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for management to predict all such risks and uncertainties or how they may affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Important factors that could cause our actual results to differ materially from those indicated in these statements include, but are not limited to:

•

the extent that wireless carriers (mobile network operators, or “MNOs”) or tower companies consolidate their operations, exit the wireless communications business or share site infrastructure to a significant degree;

•

the extent that new technologies reduce demand for wireless infrastructure;

•

competition for assets;

•

whether the Tenant Leases for the wireless communication tower, antennae or other communications infrastructure located on our real property interests are renewed with similar rates or at all;

•

the extent of unexpected lease cancellations, given that most of the Tenant Leases associated with our assets may be terminated upon limited notice by the MNO or tower company and unexpected lease cancellations could materially impact cash flow from operations;

•

economic, political, cultural, regulatory and other risks to our operations outside the U.S., including risks associated with fluctuations in foreign currency exchange rates and local inflation rates;

•

the effect of the Electronic Communications Code in the United Kingdom, which may limit the amount of lease income we generate in the United Kingdom;

•

the extent that we continue to grow at an accelerated rate, which may prevent us from achieving profitability or positive cash flow at a company level (as determined in accordance with GAAP) for the foreseeable future, particularly given our history of net losses and negative net cash flow;

•

the fact that we have incurred a significant amount of debt and may in the future incur additional indebtedness;

•

the extent that the terms of our debt agreements limit our flexibility in operating our business;

•

the impact of the ongoing COVID-19 pandemic and the response thereto;

•

the extent that unfavorable capital markets environments impair our growth strategy, which requires access to new capital;

•

the adverse effect that increased market interest rates may have on our interest costs, the value of our assets and on the growth of our business;

•

the adverse effect that perceived health risks from radio frequency energy may have on the demand for wireless communication services;

•

our ability to protect and enforce our real property interests in, or contractual rights to, the revenue streams generated by leases on our communications sites;

•

the loss, consolidation or financial instability of any of our limited number of customers;

•

our ability to pay dividends or satisfy our financial obligations;

•

whether we are required to issue additional shares of Class A Common Stock pursuant to the terms of the Series A Founder Preferred Stock or the APW OpCo LLC Agreement or upon the exercise of options to acquire shares of Class A Common Stock, which would dilute the interests of holders of our Class A Common Stock;

•

the possibility that securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our securities adversely; and

•

the other risks and uncertainties described under “Risk Factors” in Part I, Item 1A of the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”).

These risks included here are not exhaustive and should be read in conjunction with the other cautionary statements that are included elsewhere in this Quarterly Report, in the “Risk Factors” section of the Annual Report, and in our other filings with the Securities and Exchange Commission. Other sections of this Quarterly Report describe additional factors that could adversely affect our business and financial performance. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.

References in this Quarterly Report to “Radius,” the “Company,” “we,” “our,” or “us” mean Radius Global Infrastructure, Inc. together with its subsidiaries except where the context otherwise requires. Any capitalized terms not otherwise defined above have been defined elsewhere in this Quarterly Report.

RADIUS GLOBAL INFRASTRUCTURE, INC.

TABLE OF CONTENTS

		Page

PART I.	FINANCIAL INFORMATION	2

Item 1.	Unaudited Condensed Consolidated Financial Statements	2

	Condensed Consolidated Balance Sheets at March 31, 2022 and December 31, 2021	2

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021	3

	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2022 and 2021	4

	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021	5

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	27

Item 4.	Controls and Procedures	27

PART II.	OTHER INFORMATION	29

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 5.	Other Information	29

Item 6.	Exhibits	30

Signatures		31

PART I.

FINANCIAL INFORMATION

ITEM 1.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except share amounts)

	March 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	565,739		$	456,146
Restricted cash		1,942			2,085
Trade receivables, net		9,747			7,933
Prepaid expenses and other current assets		21,546			20,685
Total current assets		598,974			486,849
Real property interests, net:
Right-of-use assets - finance leases, net		318,961			301,865
Telecom real property interests, net		1,222,573			1,174,186
Real property interests, net		1,541,534			1,476,051
Intangible assets, net		8,095			7,914
Property and equipment, net		1,085			1,789
Goodwill		80,509			80,509
Deferred tax asset		853			160
Restricted cash, long-term		224,579			173,962
Other long-term assets		7,090			9,701
Total assets	$	2,462,719		$	2,236,935
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	39,831		$	36,995
Rent received in advance		28,241			24,485
Finance lease liabilities, current		12,656			10,567
Telecom real property interest liabilities, current		5,779			3,828
Total current liabilities		86,507			75,875
Finance lease liabilities		23,215			24,766
Telecom real property interest liabilities		9,779			12,884
Long-term debt, net of debt discount and deferred financing costs		1,492,993			1,272,225
Deferred tax liability		76,527			62,296
Other long-term liabilities		4,927			5,231
Total liabilities		1,693,948			1,453,277
Commitments and contingencies
Stockholders’ equity:
Series A Founder Preferred Stock, $0.0001 par value; 1,600,000 shares authorized; 1,600,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		—			—
Series B Founder Preferred Stock, $0.0001 par value; 1,386,033 shares authorized; 1,386,033 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		—			—
Class A Common Stock, $0.0001 par value; 1,590,000,000 shares authorized; 92,731,191 and 92,159,612 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		9			9
Class B Common Stock, $0.0001 par value; 200,000,000 shares authorized; 12,657,689 and 11,551,769 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		—			—
Additional paid-in capital		1,043,420			1,038,740
Accumulated other comprehensive loss		(42,706	)		(27,784	)
Accumulated deficit		(282,569	)		(278,132	)
Total stockholders’ equity attributable to Radius Global Infrastructure, Inc.		718,154			732,833
Noncontrolling interest		50,617			50,825
Total liabilities and stockholders’ equity	$	2,462,719		$	2,236,935

See accompanying notes to condensed consolidated financial statements.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except share and per share amounts)

	Three months ended March 31, 2022			Three months ended March 31, 2021
Revenue	$	30,599		$	22,172
Cost of service		841			295
Gross profit		29,758			21,877
Operating expenses:
Selling, general and administrative		22,687			15,389
Share-based compensation		4,592			4,103
Amortization and depreciation		18,751			14,080
Impairment - decommissions		765			687
Total operating expenses		46,795			34,259
Operating loss		(17,037	)		(12,382	)
Other income (expense):
Realized and unrealized gain on foreign currency debt		24,232			14,607
Interest expense, net		(16,098	)		(8,987	)
Other income (expense), net		1,092			(2,145	)
Total other income (expense), net		9,226			3,475
Loss before income tax expense (benefit)		(7,811	)		(8,907	)
Income tax expense (benefit)		(3,166	)		(722	)
Net loss		(4,645	)		(8,185	)
Net loss attributable to noncontrolling interest		(208	)		(606	)
Net loss attributable to stockholders		(4,437	)		(7,579	)
Stock dividend payment to holders of Series A Founders Preferred Stock		—			(31,391	)
Net loss attributable to common stockholders	$	(4,437	)	$	(38,970	)

Loss per common share:
Basic and diluted	$	(0.05	)	$	(0.66	)
Weighted average common shares outstanding:
Basic and diluted		92,104,971			59,479,707

See accompanying notes to condensed consolidated financial statements.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(in thousands)

	Three months ended March 31, 2022			Three months ended March 31, 2021
Net loss	$	(4,645	)	$	(8,185	)
Other comprehensive loss:
Foreign currency translation adjustment		(14,922	)		(14,302	)
Comprehensive loss	$	(19,567	)	$	(22,487	)

See accompanying notes to condensed consolidated financial statements.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in thousands, except share amounts)


	Three months ended March 31, 2022 and 2021

	Series A Founder Preferred Stock				Series B Founder Preferred Stock				Common Shares				Class B Shares				Additional		Accumulated other									Total
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		paid-in capital		comprehensive income (loss)			Accumulated deficit			Noncontrolling interest			stockholders' equity
Balance at January 1, 2022		1,600,000	$	-		1,386,033	$	-		92,159,612	$	9		11,551,769	$	-	$	1,038,740	$	(27,784	)	$	(278,132	)	$	50,825		$	783,658
Exercise of stock options		-		-		-		-		10,985		-		-		-		88		-			-			-			88
Share-based compensation		-		-		-		-		560,594		-		1,105,920		-		4,592		-			-			-			4,592
Foreign currency translation adjustment		-		-		-		-		-		-		-		-		-		(14,922	)		-			-			(14,922	)
Net loss		-		-		-		-		-		-		-		-		-		-			(4,437	)		(208	)		(4,645	)
Balance at March 31, 2022		1,600,000	$	-		1,386,033	$	-		92,731,191	$	9		12,657,689	$	-	$	1,043,420	$	(42,706	)	$	(282,569	)	$	50,617		$	768,771

Balance at January 1, 2021		1,600,000	$	-		1,386,033	$	-		58,425,000	$	-		11,414,030	$	-	$	673,955	$	15,768		$	(213,237	)	$	55,582		$	532,068
Stock dividend		-		-		-		-		2,474,421		-		197,739		-		-		-			-			-			—
Exercise of warrants		-		-		-		-		100		-		-		-		-		-			-			-			—
Exercise of stock options		-		-		-		-		2,600		-		-		-		-		-			-			-			—
Share-based compensation		-		-		-		-		309,921		-		-		-		4,103		-			-			-			4,103
Foreign currency translation adjustment		-		-		-		-		-		-		-		-		-		(14,302	)		-			-			(14,302	)
Net loss		-		-		-		-		-		-		-		-		-		-			(7,579	)		(606	)		(8,185	)
Balance at March 31, 2021		1,600,000	$	-		1,386,033	$	-		61,212,042	$	-		11,611,769	$	-	$	678,058	$	1,466		$	(220,816	)	$	54,976		$	513,684

See accompanying notes to condensed consolidated financial statements.

RADIUS GLOBAL INFRASTRUCTURE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)

	Three months ended March 31, 2022			Three months ended March 31, 2021
Cash flows from operating activities:
Net loss	$	(4,645	)	$	(8,185	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization and depreciation		18,751			14,080
Amortization of finance lease and telecom real property interest liabilities discount		367			317
Impairment – decommissions		765			687
Realized and unrealized gain on foreign currency debt		(24,232	)		(14,607	)
Amortization of debt discount and deferred financing costs		1,106			135
Provision for bad debt expense		98			(45	)
Share-based compensation		4,592			4,103
Deferred income taxes		(3,986	)		(1,909	)
Change in assets and liabilities:
Trade receivables, net		(1,707	)		(151	)
Prepaid expenses and other assets		1,563			(1,878	)
Accounts payable, accrued expenses and other long-term liabilities		(1,309	)		4,084
Rent received in advance		3,978			3,969
Net cash provided by (used in) operating activities		(4,659	)		600

Cash flows from investing activities:
Investments in real property interests and related intangible assets		(73,128	)		(104,684	)
Purchases of property and equipment