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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;

i


 

 

 

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.

 

 

ii


 

 

 

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

 

1


 

 

 

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.

2


 

 

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.

3


 

 

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.

 

 

4


 

 

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.

 

5


 

 

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