SEC Filing | Radius Global Infrastructure, Inc.

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10-Q

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 June 30, 2023

☐ 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 August 3, 2023, there were 99,717,040 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 (the "Securities Act"), 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, capital expenditures, results of operations, plans and objectives, macroeconomic conditions and our proposed transaction with certain affiliates of EQT Active Core Infrastructure fund (“EQT”) and Public Sector Pension Investment Board (“PSP”). In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe,” “expect,” “anticipate,” “estimate,” “outlook,” “plan,” “continue,” “intend,” “should,” “may,” “will” or similar expressions, their negative or other variations or comparable terminology.

Forward-looking statements are subject to significant risks and uncertainties and 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, liquidity and proposed transaction with affiliates of EQT and PSP. 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:

•

our proposed transaction with certain affiliates of EQT and PSP may not be completed in a timely manner or at all, including the risk that the last remaining direct foreign investment approval is not obtained, is delayed or is subject to unanticipated conditions that could adversely affect us or our ability to satisfy the conditions of the proposed transaction;

•

the possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived, including the failure (a) to receive the last remaining required direct foreign investment approval (or any conditions, limitations or restrictions placed on such approvals) and (b) to satisfy conditions related to (i) there being no event of default under certain of the Company’s existing debt facilities, (ii) certain waivers of change of control provisions under certain of the debt agreements of the Company and its subsidiaries being in full force and effect at the closing, including the possibility that such waivers fail to be in full force and effect at the closing because any two of William H. Berkman, Scott G. Bruce and Richard I. Goldstein have ceased to continue in their current capacities as Chief Executive Officer, President and Chief Operating Officer of the Company, respectively, at the closing and (iii) the Company having a specified minimum cash balance and the Company or any of its subsidiaries having an additional specified amount of additional cash, in each case at the closing;

•

the possibility that compliance with the minimum cash condition to the consummation of the proposed transaction may limit the growth of the Company’s business, depending on the availability to the Company of other sources of capital that are permitted under the terms of the Merger Agreement;

•

the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction, including in circumstances that would require us to pay a termination fee or other expenses;

•

the effect of the announcement or pendency of the proposed transaction on our ability to retain and hire key personnel, our ability to maintain the relationships with our customers, suppliers and others with whom we do business, or our operating results and business generally;

•

risks related to the proposed transaction diverting management’s attention from our ongoing business operations;

•

the risk that stockholder litigation in connection with the proposed transaction may result in significant costs of defense, indemnification and liability;

•

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 to acquire assets;

•

whether the Tenant Leases for the wireless communication tower, antennae or other digital 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, and regulatory risks and other risks to our operations, 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 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 granted to employees 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;

•

the possibility that we have established human capital goals and objectives that we may be unable to achieve or that are too optimistic; 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, 2022 (the “Annual Report”).

The 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 may include 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.

iii

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 June 30, 2023 and December 31, 2022	2

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	3

	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2023 and 2022	4

	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022	5

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	33

Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION	35

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 5.	Other Information	36

Item 6.	Exhibits	37

Signatures		38

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)


	June 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	282,012		$	224,258
Restricted cash		2,817			1,971
Short-term investments		19,914			39,205
Total cash, cash equivalents, restricted cash, and short-term investments		304,743			265,434
Trade receivables, net		10,496			8,200
Prepaid expenses and other current assets		29,091			28,773
Total current assets		344,330			302,407
Real property interests, net:
Right-of-use assets - finance leases, net		458,401			379,052
Telecom real property interests, net		1,651,931			1,569,676
Real property interests, net		2,110,332			1,948,728
Intangible assets, net		12,239			12,121
Property and equipment, net		1,222			1,241
Goodwill		80,509			80,509
Deferred tax asset		1,636			306
Restricted cash, long-term		53,766			88,054
Other long-term assets		18,552			20,124
Total assets	$	2,622,586		$	2,453,490
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	55,383		$	48,767
Rent received in advance		33,781			26,551
Finance lease liabilities, current		13,355			15,589
Telecom real property interest liabilities, current		6,549			7,975
Total current liabilities		109,068			98,882
Finance lease liabilities		22,766			22,277
Telecom real property interest liabilities		1,252			4,483
Long-term debt, net of debt discount and deferred financing costs		1,692,943			1,503,352
Deferred tax liability		147,073			131,229
Other long-term liabilities		12,318			10,473
Total liabilities		1,985,420			1,770,696
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 June 30, 2023 and December 31, 2022, respectively		—			—
Series B Founder Preferred Stock, $0.0001 par value; 1,386,033 shares authorized; 1,386,033 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		—			—
Class A Common Stock, $0.0001 par value; 1,590,000,000 shares authorized; 99,717,040 and 95,283,563 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		10			10
Class B Common Stock, $0.0001 par value; 200,000,000 shares authorized; 10,255,811 and 12,795,694 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		1,088,385			1,060,055
Accumulated other comprehensive loss		(51,324	)		(85,936	)
Accumulated deficit		(426,260	)		(338,819	)
Total stockholders’ equity attributable to Radius Global Infrastructure, Inc.		610,811			635,310
Noncontrolling interest		26,355			47,484
Total liabilities and stockholders’ equity	$	2,622,586		$	2,453,490

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 June 30, 2023			Six months ended June 30, 2023			Three months ended June 30, 2022			Six months ended June 30, 2022
Revenue	$	42,475		$	83,689		$	32,568		$	63,167
Cost of service		2,421			4,313			2,027			2,868
Gross profit		40,054			79,376			30,541			60,299
Operating expenses:
Selling, general and administrative		25,486			54,950			21,205			43,892
Share-based compensation		5,389			10,573			5,496			10,088
Amortization and depreciation		23,950			47,035			19,324			38,075
Impairment - decommissions		1,500			2,550			1,272			2,037
Total operating expenses		56,325			115,108			47,297			94,092
Operating loss		(16,271	)		(35,732	)		(16,756	)		(33,793	)
Other income (expense):
Realized and unrealized gain (loss) on foreign currency debt		(11,982	)		(27,461	)		58,667			82,899
Interest expense		(18,957	)		(36,628	)		(16,714	)		(32,812	)
Other income (expense), net		3,751			6,966			(3,164	)		(2,072	)
Gain on extinguishment of debt		—			—			942			942
Total other income (expense), net		(27,188	)		(57,123	)		39,731			48,957
Income (loss) before income tax expense (benefit)		(43,459	)		(92,855	)		22,975			15,164
Income tax expense (benefit)		(201	)		(1,785	)		(577	)		(3,743	)
Net income (loss)		(43,258	)		(91,070	)		23,552			18,907
Net income (loss) attributable to noncontrolling interest		(1,402	)		(3,629	)		1,385			1,177
Net income (loss) attributable to stockholders		(41,856	)		(87,441	)		22,167			17,730
Stock dividend payment to holders of Series A Founders Preferred Stock		—			—			(40,832	)		(40,832	)
Net loss attributable to common stockholders	$	(41,856	)	$	(87,441	)	$	(18,665	)	$	(23,102	)

Loss per common share:
Basic and diluted	$	(0.43	)	$	(0.90	)	$	(0.20	)	$	(0.25	)
Weighted average common shares outstanding:
Basic and diluted		98,315,969			97,075,883			93,506,412			92,809,563

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 June 30, 2023			Six months ended June 30, 2023			Three months ended June 30, 2022			Six months ended June 30, 2022
Net income (loss)	$	(43,258	)	$	(91,070	)	$	23,552		$	18,907
Other comprehensive income (loss):
Foreign currency translation adjustment		12,891			34,285			(63,046	)		(77,968	)
Unrealized gain on interest rate derivative		407			327			—			—
Comprehensive loss	$	(29,960	)	$	(56,458	)	$	(39,494	)	$	(59,061	)

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 June 30, 2023 and 2022

	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 March 31, 2023		1,600,000	$	-		1,386,033	$	-		99,541,524	$	10		10,378,327		$	-	$	1,082,943	$	(64,622	)	$	(384,404	)	$	27,757		$	661,684
Exercise of stock options		-		-		-		-		3,000		-							53											53
Share-based compensation		-		-		-		-		172,516		-		(122,516	)				5,389											5,389
Foreign currency translation adjustment		-		-		-		-													12,891									12,891
Unrealized gain on interest rate derivative		-		-		-		-													407									407
Net loss		-		-		-		-		-		-		-			-		-		-			(41,856	)		(1,402	)		(43,258	)
Balance at June 30, 2023		1,600,000	$	-		1,386,033	$	-		99,717,040	$	10		10,255,811		$	-	$	1,088,385	$	(51,324	)	$	(426,260	)	$	26,355		$	637,166

Balance at March 31, 2022