0001612720 NextDecade Corp. false --12-31 Q1 2022 1,000 1,000 75,938 75,938 73,713 73,713 1,000 1,000 72,556 72,556 70,433 70,433 1,000 1,000 54,587 54,587 42,490 42,490 0.0001 0.0001 480,000 480,000 121,600 121,600 120,800 120,800 541,258 346,126 0.0001 0.0001 500 500 0 0 0 0 1,621 3,875 16 7,549 0.06 20 0 0 Includes amortization of right-of-use assets for the three months ended March 31, 2020 and 2019 of $294 thousand and $184 thousand, respectively. Permitting costs primarily represent costs incurred in connection with permit applications to the United States Army Corps of Engineers and the U.S. Fish and Wildlife Service for mitigation measures for potential impacts to wetlands and habitat that may be caused by the construction of the Terminal and the Pipeline. Does not include 7.3 million shares for the three months ended March 31, 2022 and 2.6 million shares for the three months ended March 31, 2021, of unvested stock because the performance conditions had not yet been satisfied as of March 31, 2022 and 2021, respectively. The IPO Warrants were issued in connection with our initial public offering in 2015. The IPO Warrants are exercisable at a price of $11.50 per share and expire on July 24, 2022. The Company may redeem the IPO Warrants at a price of $0.01 per IPO Warrant upon 30 days’ notice only if the last sale price of our common stock is at least $17.50 per share for any 20 trading days within a 30 trading day period. 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Table of Contents



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 No. 001-36842

 

NEXTDECADE CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

    

46-5723951

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

1000 Louisiana Street, Suite 3900, Houston, Texas 77002

(Address of principal executive offices) (Zip Code)

 

(713) 574-1880

(Registrant’s telephone number, including area code)

 

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

 

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common Stock, $0.0001 par value

 

NEXT

 

The Nasdaq Stock Market LLC

 


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, 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, the issuer had 127,882,447 shares of common stock outstanding.



 

 

 

NEXTDECADE CORPORATION

 

FORM 10-Q FOR THE QUARTER ENDED March 31, 2022

 

TABLE OF CONTENTS

 

 

Page

Organizational Structure

 
   

Part I. Financial Information

2

Item 1. Consolidated Financial Statements

2

Consolidated Balance Sheets

2

Consolidated Statements of Operations

3

Consolidated Statements of Stockholders’ Equity and Convertible Preferred Stock

4

Consolidated Statements of Cash Flows

5

Notes to Consolidated Financial Statements

6

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

12

Item 3. Quantitative and Qualitative Disclosures About Market Risk

16

Item 4. Controls and Procedures

16

Part II. Other Information

17

Item 1. Legal Proceedings

17

Item 1A. Risk Factors

17

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

17

Item 3. Defaults Upon Senior Securities

17

Item 4. Mine Safety Disclosures

17

Item 5. Other Information

17

Item 6. Exhibits

18

Signatures

19

 

 

 

 

Organizational Structure

 

The following diagram depicts our abbreviated organizational structure as of March 31, 2022 with references to the names of certain entities discussed in this Quarterly Report on Form 10-Q.

 

 

abbreviatedorgchartforkandqm.jpg

 

Unless the context requires otherwise, references to “NextDecade,” the “Company,” “we,” “us” and “our” refer to NextDecade Corporation (NASDAQ: NEXT) and its consolidated subsidiaries.

 

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

NextDecade Corporation

Consolidated Balance Sheets

(in thousands, except per share data)

(unaudited)

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 

Assets

               

Current assets

               

Cash and cash equivalents

  $ 22,358     $ 25,552  

Prepaid expenses and other current assets

    1,029       835  

Total current assets

    23,387       26,387  

Property, plant and equipment, net

    175,172       173,816  

Operating lease right-of-use assets, net

    450       590  

Other non-current assets, net

    22,661       21,312  

Total assets

  $ 221,670     $ 222,105  
                 

Liabilities, Convertible Preferred Stock and Stockholders’ Equity

               

Current liabilities

               

Accounts payable

  $ 516     $ 281  

Share-based compensation liability

    182       182  

Accrued liabilities and other current liabilities

    2,815       5,791  

Current common stock warrant liabilities

    3,291       1,376  

Current operating lease liabilities

    440       596  

Total current liabilities

    7,244       8,226  

Non-current common stock warrant liabilities

    7,620       2,587  

Other non-current liabilities

    23,000       23,000  

Total liabilities

    37,864       33,813  
                 

Commitments and contingencies (Note 12)

                 
                 

Series A Convertible Preferred Stock, $1,000 per share liquidation preference; Issued and outstanding: 75,938 shares and 73,713 shares at March 31, 2022 and December 31, 2021, respectively

    66,016       63,791  

Series B Convertible Preferred Stock, $1,000 per share liquidation preference; Issued and outstanding: 72,556 shares and 70,433 shares at March 31, 2022 and December 31, 2021, respectively

    66,725       64,602  

Series C Convertible Preferred Stock, $1,000 per share liquidation preference; Issued and outstanding: 54,587 shares and 42,490 shares at March 31, 2022 and December 31, 2021, respectively

    51,200       40,007  

Stockholders’ equity

               

Common stock, $0.0001 par value; Authorized: 480.0 million shares at March 31, 2022 and December 31, 2021; Issued and outstanding: 121.6 million shares and 120.8 million shares at March 31, 2022 and December 31, 2021, respectively

    12       12  

Treasury stock: 541,258 shares and 346,126 shares at March 31, 2022 and December 31, 2021, respectively, at cost

    (1,779 )     (1,315 )

Preferred stock, $0.0001 par value; Authorized: 0.5 million, after designation of the Convertible Preferred Stock; Issued and outstanding: none at March 31, 2022 and December 31, 2021

           

Additional paid-in-capital

    183,138       191,264  

Accumulated deficit

    (181,506 )     (170,069 )

Total stockholders’ equity

    (135 )     19,892  

Total liabilities, convertible preferred stock and stockholders’ equity

  $ 221,670     $ 222,105  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

 

 

NextDecade Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

   

Three Months Ended

 
   

March 31,

 
   

2022

   

2021

 

Revenues

  $     $  

Operating expenses

               

General and administrative expense

    3,323       1,369  

Development expense

    1,545        

Lease expense

    219       204  

Depreciation expense

    47       48  

Total operating expenses

    5,134       1,621  

Total operating loss

    (5,134 )     (1,621 )

Other income (expense)

               

Loss on common stock warrant liabilities

    (6,304 )     (2,038 )

Other, net

    1       1  

Total other expense

    (6,303 )     (2,037 )

Net loss attributable to NextDecade Corporation

    (11,437 )     (3,658 )

Preferred stock dividends

    (5,754 )     (3,875 )

Deemed dividends on Series A Convertible Preferred Stock

          (16 )

Net loss attributable to common stockholders

  $ (17,191 )   $ (7,549 )
                 

Net loss per common share - basic and diluted

  $ (0.14 )   $ (0.06 )
                 

Weighted average shares outstanding - basic and diluted

    121,328       118,262  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

 

NextDecade Corporation

Consolidated Statement of Stockholders Equity and Convertible Preferred Stock

(in thousands)

(unaudited)

 

   

For the Three Months Ended March 31, 2022

 
   

Common Stock

   

Treasury Stock

                           

Series A

   

Series B

   

Series C

 
           

Par

                   

Additional

           

Total

   

Convertible

   

Convertible

   

Convertible

 
           

Value

                   

Paid-in

   

Accumulated

   

Stockholders’

   

Preferred

   

Preferred

   

Preferred

 
   

Shares

   

Amount

   

Shares

   

Amount

   

Capital

   

Deficit

   

Equity

   

Stock

   

Stock

   

Stock

 

Balance at December 31, 2021

    120,838     $ 12       346     $ (1,315 )   $ 191,264     $ (170,069 )   $ 19,892     $ 63,791     $ 64,602     $ 40,007  

Share-based compensation

                            (2,372 )           (2,372 )                  

Restricted stock vesting

    911                                                        

Shares repurchased related to share-based compensation

    (195 )           195       (464 )                 (464 )                  

Issuance of Series C Convertible Preferred Stock

                                                          9,806  

Preferred stock dividends

                            (5,754 )           (5,754 )     2,225       2,123       1,387  

Net loss

                                  (11,437 )     (11,437 )                  

Balance at March 31, 2022

    121,554     $ 12       541     $ (1,779 )   $ 183,138     $ (181,506 )   $ (135 )   $ 66,016     $ 66,725     $ 51,200  

 

   

For the Three Months Ended March 31, 2021

 
   

Common Stock

   

Treasury Stock

                           

Series A

   

Series B

   

Series C

 
           

Par

                   

Additional

           

Total

   

Convertible

   

Convertible

   

Convertible

 
           

Value

                   

Paid-in

   

Accumulated

   

Stockholders’

   

Preferred

   

Preferred

   

Preferred

 
   

Shares

   

Amount

   

Shares

   

Amount

   

Capital

   

Deficit

   

Equity

   

Stock

   

Stock

   

Stock

 

Balance at December 31, 2020

    117,829     $ 12       249     $ (1,031 )   $ 209,481     $ (148,030 )   $ 60,432     $ 55,522     $ 56,781     $  

Share-based compensation

                            (3,414 )           (3,414 )                  

Restricted stock vesting

    134                                                        

Shares repurchased related to share-based compensation

    (20 )           20       (44 )                 (44 )                  

Stock dividend

    399                                                        

Issuance of Series C Convertible Preferred Stock

                                                          23,629  

Preferred stock dividends

                            (3,875 )           (3,875 )     1,978       1,884        

Deemed dividends - accretion of beneficial conversion feature

                            (16 )           (16 )     16              

Net loss

                                  (3,658 )     (3,658 )                  

Balance at March 31, 2021

    118,342     $ 12       269     $ (1,075 )   $ 202,176     $ (151,688 )   $ 49,425     $ 57,516     $ 58,665     $ 23,629  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

 

NextDecade Corporation.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

   

Three Months Ended

 
   

March 31,

 
   

2022

   

2021

 

Operating activities:

               

Net loss attributable to NextDecade Corporation

  $ (11,437 )   $ (3,658 )

Adjustment to reconcile net loss to net cash used in operating activities

               

Depreciation

   

47

      48  

Share-based compensation expense (forfeiture)

    (2,372 )     (3,729 )

Loss on common stock warrant liabilities

    6,304       2,038  

Amortization of right-of-use assets

    140       139  

Amortization of other non-current assets

    354       354  

Changes in operating assets and liabilities:

               

Prepaid expenses

    (194 )     (169 )

Accounts payable

    114       (45 )

Operating lease liabilities

    (156 )     (158 )

Accrued expenses and other liabilities

    (2,994 )     1,390  

Net cash used in operating activities

    (10,194 )     (3,790 )

Investing activities:

               

Acquisition of property, plant and equipment

    (1,314 )     (2,384 )

Acquisition of other non-current assets

    (1,703 )     (1,533 )

Net cash used in investing activities

    (3,017 )     (3,917 )

Financing activities:

               

Proceeds from sale of Series C Convertible Preferred Stock

    10,500       24,500  

Equity issuance costs

          (54 )

Preferred stock dividends

    (19 )     (13 )

Shares repurchased related to share-based compensation

    (464 )     (44 )

Net cash provided by financing activities

    10,017       24,389  

Net (decrease) increase in cash and cash equivalents

    (3,194 )     16,682  

Cash and cash equivalents – beginning of period

    25,552       22,608  

Cash and cash equivalents – end of period

  $ 22,358     $ 39,290  
                 

Non-cash investing activities:

               

Accounts payable for acquisition of property, plant and equipment

  $ 339     $ 79  

Accrued liabilities for acquisition of property, plant and equipment

    839       395  

Pipeline assets obtained in exchange for other non-current liabilities

          84  

Non-cash financing activities:

               

Paid-in-kind dividends on Convertible Preferred Stock

    5,735       3,862  

Accrued liabilities for equity issuance costs

    50        

Accretion of deemed dividends on Series A Convertible Preferred Stock

          16  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

NextDecade Corporation

Notes to Consolidated Financial Statements

(unaudited)

 

 

Note 1 — Background and Basis of Presentation

 

NextDecade Corporation engages in development activities related to the liquefaction and sale of liquefied natural gas (“LNG”) and the capture and storage of CO2 emissions. We have focused our development activities on the Rio Grande LNG terminal facility at the Port of Brownsville in southern Texas (the “Terminal”), a carbon capture and storage project at the Terminal (the “Terminal CCS project”) and other carbon capture and storage projects (“CCS projects”) with third-party industrial source facilities.  

 

Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2021. In our opinion, all adjustments, consisting only of normal recurring items, which are considered necessary for a fair presentation of the unaudited consolidated financial statements, have been included. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the operating results for the full year.

 

Certain reclassifications have been made to conform prior period information to the current presentation.  The reclassifications did not have a material effect on our consolidated financial position, results of operations or cash flows.

 

Note 2 — Prepaid Expenses and Other Current Assets

 

Prepaid expenses and other current assets consisted of the following (in thousands):

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 

Prepaid subscriptions

  $ 417     $ 85  

Prepaid insurance

    186       272  

Prepaid marketing and sponsorships

    60       60  

Other

    366       418  

Total prepaid expenses and other current assets

  $ 1,029     $ 835  
 

Note 3 — Sale of Equity Interests in Rio Bravo

 

On March 2, 2020, NextDecade LLC closed the transactions (the “Closing”) contemplated by that certain Omnibus Agreement, dated February 13, 2020, with Spectra Energy Transmission II, LLC, a wholly owned subsidiary of Enbridge Inc. (“Buyer”), pursuant to which NextDecade LLC sold one hundred percent of the equity interests (the “Equity Interests”) in Rio Bravo Pipeline Company, LLC (“Rio Bravo”) to Buyer for consideration of approximately $19.4 million. Buyer paid $15.0 million of the Purchase Price to NextDecade LLC at the Closing and the remainder will be paid within five business days after the date that Rio Grande has received, after a final positive investment decision, the initial funding of financing for the development, construction and operation of the Terminal. Rio Bravo is developing a proposed interstate natural gas pipeline (the “Pipeline”) to supply natural gas to the Terminal.  In connection with the Closing, Rio Grande LNG Gas Supply LLC, an indirect wholly-owned subsidiary of the Company (“Rio Grande Gas Supply”), entered into (i) a Precedent Agreement for Firm Natural Gas Transportation Service for the Rio Bravo Pipeline (the “RBPL Precedent Agreement”) with Rio Bravo and (ii) a Precedent Agreement for Natural Gas Transportation Service (the “VCP Precedent Agreement”) with Valley Crossing Pipeline, LLC (“VCP”). VCP and, as of the Closing, Rio Bravo are wholly owned subsidiaries of Enbridge Inc. The Valley Crossing Pipeline is owned and operated by VCP.

 

Pursuant to the RBPL Precedent Agreement, Rio Bravo agreed to provide Rio Grande Gas Supply with firm natural gas transportation services on the Pipeline in a quantity sufficient to match the full operational capacity of each proposed liquefaction train of the Terminal. Rio Bravo’s obligation to construct, install, own, operate and maintain the Pipeline is conditioned on its receipt, no later than December 31, 2023, of notice that Rio Grande Gas Supply or its affiliate has issued a full notice to proceed to the engineering, procurement and construction contractor (the “EPC Contractor”) for the construction of the Terminal. Under the RBPL Precedent Agreement, in consideration for the provision of such firm transportation services, Rio Bravo will be remunerated on a dollar-per-dekatherm, take-or-pay basis, subject to certain adjustments, over a term of at least twenty years, all in compliance with the federal and state authorizations associated with the Pipeline.

 

Pursuant to the VCP Precedent Agreement, VCP agreed to provide Rio Grande Gas Supply with natural gas transportation services on the Valley Crossing Pipeline in a quantity sufficient to match the commissioning requirements of each proposed liquefaction train of the Terminal. VCP’s obligation to construct, install, own, operate and maintain the necessary interconnection to the Terminal and the Pipeline is conditioned on its receipt, no later than December 31, 2023, of notice that Rio Grande Gas Supply or its affiliate has issued a full notice to proceed to the EPC Contractor for the construction of the Terminal. VCP will be responsible, at its sole cost and expense, to construct, install, own, operate and maintain the tap, riser and valve facilities (the “VCP Transporter Facilities”), which shall connect to Rio Grande Gas Supply’s custody transfer meter and such other facilities as necessary in order for the Terminal to receive gas from the VCP Transporter Facilities (the “Rio Grande Gas Supply Facilities”). Rio Grande Gas Supply will be responsible, at its sole cost and expense, to construct, install, own, operate and maintain the Rio Grande Gas Supply Facilities. Under the VCP Precedent Agreement, in consideration for the provision of the commissioning transportation services, VCP will be remunerated on the same dollar-per-dekatherm, take-or-pay basis as set forth in the RBPL Precedent Agreement for the duration of such commissioning services, all in compliance with the federal and state authorizations associated with the Valley Crossing Pipeline.

 

If Rio Grande or its affiliate fails to issue a full notice to proceed to the EPC Contractor on or prior to December 31, 2023, Buyer has the right to sell the Equity Interests back to NextDecade LLC and NextDecade LLC has the right to repurchase the Equity Interests from Buyer, in each case at a price not to exceed $23 million. Accordingly, the proceeds from the sale of the Equity Interests and additional costs incurred by Buyer are presented as a non-current liability and the assets of Rio Bravo have not been de-recognized in the consolidated balance sheet at March 31, 2022.

 

 

6

 
 

Note 4 — Property, Plant and Equipment

 

Property, plant and equipment consisted of the following (in thousands):

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 

Fixed Assets

               

Computers

  $ 633     $ 633  

Furniture, fixtures, and equipment

    464       464  

Leasehold improvements

    101       101  

Total fixed assets

    1,198       1,198  

Less: accumulated depreciation

    (891 )     (844 )

Total fixed assets, net

    307       354  

Project Assets (not placed in service)

               

Terminal

    153,848       152,445  

Pipeline

    21,017       21,017  

Total Terminal and Pipeline assets

    174,865       173,462  

Total property, plant and equipment, net

  $ 175,172     $ 173,816  

 

Depreciation expense was $47 thousand and $48 thousand for the three months ended  March 31, 2022 and 2021, respectively.

 

 

Note 5 — Leases

 

Our leased assets primarily consist of office space. 

 

Operating lease right-of-use assets are as follows (in thousands):

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 

Office leases

  $ 450     $ 590  

Total operating lease right-of-use assets, net

  $ 450     $ 590  

 

 

Operating lease liabilities are as follows (in thousands):

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 

Office leases

  $ 440     $ 596  

Total current lease liabilities

  $ 440     $ 596  

Non-current office leases

           

Total lease liabilities

  $ 440     $ 596  

 

 

Operating lease expense is as follows (in thousands):

 

   

Three Months Ended March 31,

 
   

2022

   

2021

 

Office leases

  $ 157     $ 150  

Land leases

           

Total operating lease expense

    157       150  

Short-term lease expense

    62       54  

Total lease expense

  $ 219     $ 204  

 

Maturity of operating lease liabilities as of March 31, 2022 are as follows (in thousands, except lease term and discount rate):

 

2022 (remaining)

  $ 460  

2023

     

2024

     

2025

     

2026

     

Thereafter

     

Total undiscounted lease payments

    460  

Discount to present value

    (20 )

Present value of lease liabilities

  $ 440  
         

Weighted average remaining lease term - years

    0.7  

Weighted average discount rate - percent

    12.0  

 

 

7

 

 

Other information related to our operating leases is as follows (in thousands):

 
   

Three Months Ended March 31,

 
   

2022

   

2021

 

Cash paid for amounts included in the measurement of operating lease liabilities:

               

Cash flows from operating activities

  $ 173     $ 170  

 

 

 

Note 6 — Other Non-Current Assets

 

Other non-current assets consisted of the following (in thousands):

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 

Permitting costs(1)

  $ 7,784     $ 7,644  

Enterprise resource planning system, net

          354  

Rio Grande Site Lease initial direct costs

    14,877       13,314  

Total other non-current assets, net

  $ 22,661     $ 21,312  

 

(1)

Permitting costs primarily represent costs incurred in connection with permit applications to the United States Army Corps of Engineers and the U.S. Fish and Wildlife Service for mitigation measures for potential impacts to wetlands and habitat that may be caused by the construction of the Terminal and the Pipeline.

 

 

 

Note 7 — Accrued Liabilities and Other Current Liabilities

 

Accrued expenses and other current liabilities consisted of the following (in thousands):

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 

Employee compensation expense

  $ 1,446     $ 4,358  

Terminal costs

    839       926  

Accrued legal services

    138       70  

Other accrued liabilities

    392       437  

Total accrued liabilities and other current liabilities

  $ 2,815     $ 5,791  

 

 

Note 8 – Preferred Stock and Common Stock Warrants

 

Preferred Stock

 

As of December 31, 2021, the Company had outstanding 73,713 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), 70,433 shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”) and 42,490 shares of Series C Convertible Preferred Stock, par value $0.0001 per share (the “Series C Preferred Stock” and, together with the Series A Preferred Stock and the Series B Preferred Stock, the “Convertible Preferred Stock”).

 

In  March 2022, the Company sold an aggregate of 10,500 shares of Series C Preferred Stock (the “2022 Series C Preferred Stock”), together with associated warrants to purchase Company common stock (the “2022 Series C Warrants”) at $1,000 per share for an aggregate purchase price of $10.5 million and issued an additional 210 shares of Series C Preferred Stock in aggregate as origination fees to the purchasers of the Series C Preferred Stock.

 

Net proceeds from the sales of the 2022 Series C Preferred Stock were allocated on a fair value basis to the 2022 Series C Warrants and on a relative fair value basis to the 2022 Series C Preferred Stock.  The allocation of net cash proceeds is as follows (in thousands):

 

           

Allocation of Proceeds

 
                   

2022 Series C

 
           

2022 Series C

    Preferred  
           

Warrants

    Stock  

Gross proceeds

  $ 10,500                  

Equity issuance costs

    (50 )                

Net proceeds - Initial Fair Value Allocation

  $ 10,450     $ 644     $ 9,806  

Per balance sheet upon issuance

          $ 644     $ 9,806  

 

 

As of March 31, 2022, shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock were convertible into shares of Company common stock at a weighted average conversion price of approximately $6.39 per share, $6.43 per share and $3.43 per share, respectively.

 

The Company has the option to convert all, but not less than all, of the Convertible Preferred Stock into shares of Company common stock at the applicable conversion price on any date on which the volume weighted average trading price of shares of Company common stock for each trading day during any 60 of the prior 90 trading days is equal to or greater than 175% of the Series B Conversion Price, in each case subject to certain terms and conditions. Furthermore, the Company must convert all of the Convertible Preferred Stock into shares of Company common stock at the applicable conversion price on the earlier of (i) ten (10) business days following an FID Event, as defined in the certificates of designations of the Convertible Preferred Stock, and (ii) the respective dates that are the tenth (10th) anniversaries of the closings of the issuances of the Convertible Preferred Stock, as applicable.

 

The shares of Convertible Preferred Stock bear dividends at a rate of 12% per annum, which are cumulative and accrue daily from the respective dates of issuance on the $1,000 stated value. Such dividends are payable quarterly and may be paid in cash or in-kind. During the three months ended March 31, 2022 and 2021, the Company paid-in-kind $5.7 million and $3.9 million of dividends, respectively, to the holders of the Convertible Preferred Stock.  On April 12, 2022, the Company declared dividends to the holders of the Convertible Preferred Stock as of the close of business on March 15, 2022.  On April 15, 2022, the Company paid-in-kind $5.7 million of dividends to the holders of the Convertible Preferred Stock.

 

Common Stock Warrants

 

The Company has issued warrants exercisable to purchase Company common stock in connection with its issuances of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock (collectively, the “Common Stock Warrants”).  The Company revalues the Common Stock Warrants at each balance sheet date and recognized a loss of $6.3 million and $2.0 million during the three months ended March 31, 2022 and 2021, respectively.  The Common Stock Warrant liabilities are included in Level 3 of the fair value hierarchy.

 

The assumptions used in the Monte Carlo simulation model to estimate the fair value of the Common Stock Warrants are as follows:

 

   

March 31,

   

December 31,

 
   

2022

   

2021

 

Stock price

  $ 6.62     $ 2.85  

Exercise price

  $ 0.01     $ 0.01  

Risk-free rate

    2.3 %     0.1 %

Volatility

    59.6 %     62.6 %

Term (years)

    1.6       1.6  

 

 

Note 9 — Net Loss Per Share

 

The following table (in thousands, except for loss per share) reconciles basic and diluted weighted average common shares outstanding for each of the three months ended March 31, 2022 and 2021:

 

   

Three Months Ended

 
   

March 31,

 
   

2022

   

2021

 

Weighted average common shares outstanding:

               

Basic

    121,328       118,262  

Dilutive unvested stock, convertible preferred stock, Common Stock Warrants and IPO Warrants

           

Diluted

    121,328       118,262  
                 

Basic and diluted net loss per share attributable to common stockholders

  $ (0.14 )   $ (0.06 )

 

 

Potentially dilutive securities not included in the diluted net loss per share computations because their effect would have been anti-dilutive were as follows (in thousands):

 

   

Three Months Ended

 
   

March 31,

 
   

2022

   

2021

 

Unvested stock(1)

    1,347       1,350  

Convertible preferred stock

    37,671       20,337  

Common Stock Warrants

    1,452       2,069  

IPO Warrants(2)

    12,082       12,082  

Total potentially dilutive common shares

    52,552       35,838  

 


(1)

Does not include 7.3 million shares for the three months ended March 31, 2022 and 2.6 million shares for the three months ended March 31, 2021, of unvested stock because the performance conditions had not yet been satisfied as of March 31, 2022 and 2021, respectively. 

 

(2)

The IPO Warrants were issued in connection with our initial public offering in 2015. The IPO Warrants are exercisable at a price of $11.50 per share and expire on July 24, 2022. The Company may redeem the IPO Warrants at a price of $0.01 per IPO Warrant upon 30 days’ notice only if the last sale price of our common stock is at least $17.50 per share for any 20 trading days within a 30 trading day period. If the Company redeems the IPO Warrants in this manner, the Company will have the option to do so on a cashless basis with the issuance of an economically equivalent number of shares of Company common stock. 

 

 

Note 10 — Share-based Compensation

 

We have granted shares of Company common stock, restricted Company common stock and restricted stock units to employees, consultants and non-employee directors under our 2017 Omnibus Incentive Plan, as amended (the “2017 Plan”).

 

Total share-based compensation consisted of the following (in thousands):

 

   

Three Months Ended

 
   

March 31,

 
   

2022

   

2021

 

Share-based compensation expense (forfeiture):

               

Equity awards

  $ (2,372 )   $ (3,414 )

Liability awards

           

Total share-based compensation (forfeiture)

    (2,372 )     (3,414 )

Capitalized share-based compensation

          (315 )

Total share-based compensation expense (forfeiture)

  $ (2,372 )   $ (3,729 )

 

 

 

 

Note 11 — Income Taxes

 

Due to our cumulative loss position, we have established a full valuation allowance against our deferred tax assets at March 31, 2022 and December 31, 2021. Due to our full valuation allowance, we have not recorded a provision for federal or state income taxes during either of the three months ended March 31, 2022 or 2021.

 

Note 12 — Commitments and Contingencies

 

Obligation under LNG Sale and Purchase Agreement

 

In March 2019, we entered into a 20-year sale and purchase agreement (the “SPA”) with Shell NA LNG LLC (“Shell”) for the supply of approximately two million tonnes per annum of liquefied natural gas from the Terminal. Pursuant to the SPA, Shell will purchase LNG on a free-on-board (“FOB”) basis starting from the date the first liquefaction train of the Terminal that is commercially operable, with approximately three-quarters of the purchased LNG volume indexed to Brent and the remaining volume indexed to domestic United States gas indices, including Henry Hub.

 

In the first quarter of 2020, pursuant to the terms of the SPA, the SPA became effective upon the conditions precedent in the SPA being satisfied or waived.  The SPA obligates Rio Grande to deliver the contracted volumes of LNG to Shell at the FOB delivery point, subject to the first liquefaction train at the Terminal being commercially operable.

 

Other Commitments

 

On March 6, 2019, Rio Grande entered into a lease agreement (the “Rio Grande Site Lease”) with the Brownsville Navigation District of Cameron County, Texas (“BND”) for the lease by Rio Grande of approximately 984 acres of land situated in Brownsville, Cameron County, Texas for the purposes of constructing, operating, and maintaining (i) a liquefied natural gas facility and export terminal and (ii) gas treatment and gas pipeline facilities.  On April 20, 2022, Rio Grande and the BND amended the Rio Grande Site Lease (the “Rio Grande Site Lease Amendment”) to extend the effective date for commencing the Rio Grande Site Lease to May 6, 2023 (the “Effective Date”). 

 

In connection with the Rio Grande Site Lease, Rio Grande is committed to pay approximately $1.5 million per quarter to the BND through the earlier of the Effective Date and lease commencement.

 

In the fourth quarter of 2021, Rio Grande entered into an amended agreement for wetland mitigation measures.  In connection with the amended agreement, Rio Grande is committed to spend approximately $0.5 million during 2022.

 

Legal Proceedings

 

From time to time the Company may be subject to various claims and legal actions that arise in the ordinary course of business. As of  March 31, 2022, management is not aware of any claims or legal actions that, separately or in the aggregate, are likely to have a material adverse effect on the Company’s financial position, results of operations or cash flows, although the Company cannot guarantee that a material adverse effect will not occur.

 

 

Note 13 — Recent Accounting Pronouncements

 

The following table provides a brief description of recent accounting standards that have been adopted by the Company during the reporting period:

 

Standard

 

Description

 

Date of Adoption

 

Effect on our Consolidated Financial Statements or Other Significant Matters

ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in Entity's Own Equity

 

This standard simplifies the accounting for convertible instruments primarily by eliminating the existing cash conversion and beneficial conversion models within Subtopic 470-20, which will result in fewer embedded conversion options being accounted for separately from the host.  This standard also amends and simplifies the calculation of earnings per share relating to convertible instruments.  

 

January 1, 2022

 

The Company adopted this standard using the modified retrospective approach, which did not have an effect on the Company's consolidated financial statements.

 

 

Note 14 — Subsequent Events

 

On April 6, 2022, the Company entered into a common stock purchase agreement (the “Stock Purchase Agreement”) with HGC NEXT INV LLC (the “Purchaser”), pursuant to which the Company sold 4,618,226 shares of the Company’s common stock to Purchaser, at a purchase price of $6.496 per share for an aggregate purchase price of approximately $30.0 million.  The consummation of the transactions contemplated by the Stock Purchase Agreement occurred on April 7, 2022.

 

The Company has evaluated subsequent events through May 12, 2022, the date the financial statements were issued. Any material subsequent events that occurred during this time have been properly recognized and/or disclosed in these financial statements.

 

11

 
 

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

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q includes forward-looking statements 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”). All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “anticipate,” “contemplate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “would,” “could,” “should,” “can have,” “likely,” “continue,” “design” and other words and terms of similar expressions, are intended to identify forward-looking statements.

 

We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs.

 

Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ from those expressed in our forward-looking statements. Our future financial position and results of operations, as well as any forward-looking statements are subject to change and inherent risks and uncertainties, including those described in the section titled “Risk Factors” in our most recent Annual Report on Form 10-K. You should consider our forward-looking statements in light of a number of factors that may cause actual results to vary from our forward-looking statements including, but not limited to:

 

 

our progress in the development of our liquefied natural gas (“LNG”) liquefaction and export project and any carbon capture and storage projects (“CCS projects”) we may develop and the timing of that progress;

 

 

the timing of achieving a final investment decision (“FID”) in the construction and operation of a 27 million tonne LNG export facility at the Port of Brownsville in southern Texas (the “Terminal”);

 

 

our reliance on third-party contractors to successfully complete the Terminal, the pipeline to supply gas to the Terminal and any CCS projects we develop;

 

 

our ability to develop our NEXT Carbon Solutions business through implementation of our CCS projects;

 

 

our ability to secure additional debt and equity financing in the future to complete the Terminal and other CCS projects on commercially acceptable terms;

 

 

the accuracy of estimated costs for the Terminal and CCS projects;

 

 

our ability to achieve operational characteristics of the Terminal and CCS projects, when completed, including amounts of liquefaction capacities and amount of CO2 captured and stored, and any differences in such operational characteristics from our expectations;

 

 

the development risks, operational hazards and regulatory approvals applicable to our LNG and carbon capture and storage development, construction and operation activities and those of our third-party contractors and counterparties;

 

 

technological innovation which may lessen our anticipated competitive advantage or demand for our offerings;

 

 

the global demand for and price of LNG;

 

 

the availability of LNG vessels worldwide;

 

 

changes in legislation and regulations relating to the LNG and carbon capture industries, including environmental laws and regulations that impose significant compliance costs and liabilities;

 

 

scope of implementation of carbon pricing regimes aimed at reducing greenhouse gas emissions;

 

 

global development and maturation of emissions reduction credit markets;

 

 

adverse changes to existing or proposed carbon tax incentive regimes;

 

 

global pandemics, including the 2019 novel coronavirus (“COVID-19”) pandemic, the Russia-Ukraine conflict, other sources of volatility in the energy markets and their impact on our business and operating results, including any disruptions in our operations or development of the Terminal and the health and safety of our employees, and on our customers, the global economy and the demand for LNG or carbon capture;

 

 

risks related to doing business in and having counterparties in foreign countries;

 

 

our ability to maintain the listing of our securities on the Nasdaq Capital Market or another securities exchange or quotation medium;

 

 

changes adversely affecting the businesses in which we are engaged;

 

 

management of growth;

 

 

general economic conditions;

 

 

our ability to generate cash; and

 

 

the result of future financing efforts and applications for customary tax incentives.

 

 

Should one or more of the foregoing risks or uncertainties materialize in a way that negatively impacts us, or should the underlying assumptions prove incorrect, our actual results may vary materially from those anticipated in our forward-looking statements, and our business, financial condition, and results of operations could be materially and adversely affected.

 

The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q. You should not rely upon forward-looking statements as predictions of future events. In addition, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. 

 

Except as required by applicable law, we do not undertake any obligation to publicly correct or update any forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in our most recent Annual Report on Form 10-K as well as other filings we have made and will make with the Securities and Exchange Commission (the “SEC”) and our public communications. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.

 

Overview

 

NextDecade Corporation engages in development activities related to the liquefaction and sale of LNG and the capture and storage of CO2 emissions.  We have undertaken and continue to undertake various initiatives to evaluate, design and engineer the Terminal, including the Terminal CCS project, that we expect will result in demand for LNG supply at the Terminal, and other CCS projects that would be hosted at industrial source facilities.

 

Unless the context requires otherwise, references to “NextDecade,” “the Company,” “we,” “us,” and “our” refer to NextDecade Corporation and its consolidated subsidiaries.

 

Recent Developments

 

Rio Grande Development Activity

 

LNG Sale and Purchase Agreements and Heads of Agreement

 

In April 2022, we entered into a 20-year sale and purchase agreement (“SPA”) with ENN LNG (Singapore) Pte Ltd (“ENN LNG”) for the supply of 1.5 mtpa of LNG indexed to Henry Hub on a free-on-board basis from the Terminal (“ENN LNG SPA”).  The LNG supplied to ENN LNG will be from the first two trains at the Terminal.

 

In April 2022, we also entered into a 15-year SPA with ENGIE S.A. (“ENGIE”) for the supply of 1.75 mtpa of LNG indexed to Henry Hub on a free-on-board basis from the Terminal (“ENGIE SPA”).  The LNG supplied to ENGIE will be from the first two trains at the Terminal.

 

The ENN LNG SPA and the ENGIE SPA become effective upon the satisfaction of certain conditions precedent, which include a positive final investment decision in the Terminal.

 

In March 2022, we entered into a binding Heads of Agreement (“HOA”) with Guangdong Energy Group Natural Gas Co., Ltd. (“Guangdong Energy”) for the supply of up to 1.5 mtpa of LNG from the Terminal. The HOA provides that Guangdong Energy will purchase LNG indexed to Henry Hub starting from the commercial operation date of the first train of the Terminal. The HOA provides that we will complete the sale and purchase agreement with Guangdong Energy in the second quarter of 2022.

 

Rio Grande Site Lease

 

On March 6, 2019, Rio Grande entered into a lease agreement (the “Rio Grande Site Lease”) with the Brownsville Navigation District of Cameron County, Texas (the “BND”) for the lease by Rio Grande of approximately 984 acres of land situated in Brownsville, Cameron County, Texas for the purposes of constructing, operating, and maintaining (i) a liquefied natural gas facility and export terminal and (ii) gas treatment and gas pipeline facilities.

 

On April 20, 2022, Rio Grande and the BND amended the Rio Grande Site Lease to extend the effective date for commencing the Rio Grande Site Lease to May 6, 2023.

 

Engineering, Procurement and Construction (EPC”) Agreements

 

By amendments dated April 29, 2022, Rio Grande and Bechtel Oil, Gas and Chemicals, Inc. amended each of the Trains 1 and 2 EPC Agreement and the Train 3 EPC Agreement to extend the respective contract validity to July 31, 2023.

 

Financing Activity

 

Private Placement of Company Common Stock

 

In April 2022, we sold 4,618,226 shares of Company common stock for gross proceeds of approximately $30 million to HGC NEXT INV LLC, as described in Note 14 - Subsequent Events in the Notes to Consolidated Financial Statements.

 

Private Placement of Series C Convertible Preferred Stock

 

In March 2022, we sold an aggregate of 10,500 shares of Series C Convertible Preferred Stock, par value $0.0001 per share (the “Series C Preferred Stock”), at $1,000 per share for an aggregate purchase price of $10.5 million and issued an additional 210 shares of Series C Preferred Stock in aggregate as origination fees. Warrants representing the right to acquire an aggregate number of shares of our common stock equal to approximately 14.91 basis points (0.1491%) of all outstanding shares of Company common stock, measured on a fully diluted basis, on the applicable exercise date with a strike price of $0.01 per share were issued together with the issuances of the Series C Preferred Stock.

 

For further descriptions of the Series C Preferred Stock and related warrants, see Note 8 - Preferred Stock and Common Stock Warrants, in the Notes to Consolidated Financial Statements.

 

 

Liquidity and Capital Resources

 

Near Term Liquidity and Capital Resources

 

Our primary cash needs have historically been funding development activities in support of the Terminal and our CCS projects, which include payments of initial direct costs of our Rio Grande site lease and expenses in support of engineering and design activities, regulatory approvals and compliance, commercial and marketing activities and corporate overhead. We spent approximately $37 million on such development activities during 2021, which we funded through our cash on hand and proceeds from the issuances of equity and equity-based securities. Our capital raising activities since January 1, 2022 have included the following:

 

In March 2022, we sold 10,500 shares of Series C Preferred Stock at $1,000 per share for a purchase price of $10.5 million and issued an additional 210 shares of Series C Preferred Stock as origination fees.

 

In April 2022, we sold 4,618,226 shares of Company common stock for approximately $30 million.

 

We expect to spend approximately $3 million per month on similar development activities during the remainder of 2022 and until a positive FID is made on the Terminal or a CCS project.  Because our businesses and assets are in development, we have not historically generated cash flow from operations, nor do we expect to do so during 2022. We intend to fund the remaining portion of 2022 development activities through the sale of additional equity or equity-based securities in us or our subsidiaries. There can be no assurance that we will succeed in selling equity or equity-based securities or, if successful, that the capital we raise will not be expensive or dilutive to stockholders.

 

Long Term Liquidity and Capital Resources

 

The Terminal will not begin to operate and generate significant cash flows unless and until the Terminal is operational, which is expected to be at least four years away, and the construction of the Terminal will require a significant amount of capital expenditure. CCS projects will similarly take an extended period of time to develop, construct and become operational and will require significant capital deployment. We currently expect that the long-term capital requirements for the Terminal and any CCS projects will be financed predominately through project financing and proceeds from future debt, equity-based, and equity offerings by us. Construction of the Terminal and CCS projects would not begin until such financing has been obtained. As a result, our business success will depend, to a significant extent, upon our ability to obtain the funding necessary to construct the Terminal and any CCS projects, to bring them into operation on a commercially viable basis and to finance our staffing, operating and expansion costs during that process. There can be no assurance that we will succeed in securing additional debt and/or equity financing in the future to complete the Terminal or any CCS projects or, if successful, that the capital we raise will not be expensive or dilutive to stockholders. Additionally, if these types of financing are not available, we will be required to seek alternative sources of financing, which may not be available on terms acceptable to us, if at all.

 

Sources and Uses of Cash

 

The following table summarizes the sources and uses of our cash for the periods presented (in thousands):

 

   

Three Months Ended

 
   

March 31,

 
   

2022

   

2021

 

Operating cash flows

  $ (10,194 )   $ (3,790 )

Investing cash flows

    (3,017 )     (3,917 )

Financing cash flows

    10,017       24,389  
                 

Net (decrease) increase in cash and cash equivalents

    (3,194 )     16,682  

Cash and cash equivalents – beginning of period

    25,552       22,608  

Cash and cash equivalents – end of period

  $ 22,358     $ 39,290  

 

Operating Cash Flows

 

Operating cash outflows during the three months ended March 31, 2022 and 2021 were $10.2 million and $3.8 million, respectively.  The increase in operating cash outflows during the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was due to reduced employee costs and lease costs among other actions taken in response to the COVID-19 pandemic during 2021.

 

Investing Cash Flows

 

Investing cash outflows during the three months ended March 31, 2022 and 2021 were $3.0 million and $3.9 million, respectively. Investing cash outflows primarily consist of cash used in the development of the Terminal and CCS project. The decrease in investing cash outflows during the  three months ended March 31, 2022 compared to the same period in 2021 was primarily due to lower spend with our engineering, procurement and construction contractor.

 

Financing Cash Flows

 

Financing cash inflows during the three months ended March 31, 2022 and 2021 were $10.0 million and $24.4 million, respectively, in each case primarily representing proceeds from the sale of Series C Preferred Stock.

 

Contractual Obligations

 

There have been no material changes to our contractual obligations from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

 

 

Results of Operations

 

The following table summarizes costs, expenses and other income for the periods indicated (in thousands):

 

   

For the Three Months Ended

 
   

March 31,

 
   

2022

   

2021

   

Change

 

Revenues

  $     $     $  

General and administrative expense

    3,323       1,369       1,954  

Development expense

    1,545             1,545  

Lease expense

    219       204       15  

Depreciation expense

    47       48       (1 )

Total operating loss

    (5,134 )     (1,621 )     (3,513 )

Loss on common stock warrant liabilities

    (6,304 )     (2,038 )     (4,266 )

Other, net

    1       1        

Net loss attributable to NextDecade Corporation

    (11,437 )     (3,658 )     (7,779 )

Preferred stock dividends

    (5,754 )     (3,875 )     (1,879 )

Deemed dividends on Series A Convertible Preferred Stock

          (16 )     16  

Net loss attributable to common stockholders

  $ (17,191 )   $ (7,549 )   $ (9,642 )

 

Our consolidated net loss was $17.2 million, or $0.14 per common share (basic and diluted), for the three months ended March 31, 2022 compared to a net loss of $7.5 million, or $0.06 per common share (basic and diluted), for the three months ended March 31, 2021. The  $9.6 million increase in net loss was primarily a result of an increase in the loss on common stock warrant liabilities, an increase in general and administrative expenses and development expenses and an increase in preferred stock dividends.

 

General and administrative expense during the three months ended March 31, 2022 increased approximately $2.0 million compared to the same period in 2021 primarily due to an increase in share-based compensation expense of $1.4 million and increases in salaries and wages, professional fees, travel expenses, and IT and communications. The increase in salaries and wages, professional fees, travel expense, and IT and communications is primarily due to fewer pandemic restictions in 2022 and an increase in the number of employees during the three months ended March 31, 2022 compared to the same period of the prior year.

 

Development expense during the three months ended March 31, 2022 increased $1.5 million compared to the same period in 2021 due to NEXT Carbon Solutions' preliminary FEED assessments performed on third-party industrial facilities.  Similar preliminary FEED assessments were not performed during the three months ended March 31, 2021.

 

Loss on common stock warrant liabilities for the three months ended March 31, 2022 and 2021 is primarily due to an increase in the share price of Company common stock.

 

Preferred stock dividends for the three months ended March 31, 2022 of $5.8 million consisted of dividends paid-in kind with the issuance of 2,225 additional shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), 2,123 additional shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), and 1,387 additional shares of Series C Preferred Stock, compared to preferred stock dividends of $3.9 million for the three months ended March 31, 2021 that consisted of dividends paid-in kind with the issuance of 1,978 and 1,884 additional shares of Series A Preferred Stock and Series B Preferred Stock, respectively.

 

 

Summary of Critical Accounting Estimates

 

The preparation of our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures

 

We maintain a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports filed by us under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. As of the end of the period covered by this report, we evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective.

 

During the most recent fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II – OTHER INFORMATION

 

Item 1.   Legal Proceedings

 

None.

 

Item 1A. Risk Factors

 

There were no changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

 

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

 

Purchases of Equity Securities by the Issuer

 

The following table summarizes stock repurchases for the three months ended March 31, 2022:

 

Period

 

Total Number of Shares Purchased (1)

   

Average Price Paid Per Share (2)

   

Total Number of Shares Purchased as a Part of Publicly Announced Plans

   

Maximum Number of Shares That May Yet Be Purchased Under the Plans

 

January 2022

    192,858     $ 2.37              

February 2022

    1,977       2.20              

March 2022

    297       6.36              

 

(1)

Represents shares of Company common stock surrendered to us by participants in the 2017 Plan to settle the participants’ personal tax liabilities that resulted from the lapsing of restrictions on shares awarded to the participants under the 2017 Plan.

 

(2)

The price paid per share of Company common stock was based on the closing trading price of such stock on the dates on which we repurchased shares of Company common stock from the participants under the 2017 Plan.

 

Item 3.   Defaults Upon Senior Securities

 

None.

 

Item 4.   Mine Safety Disclosures

 

Not applicable.

 

Item 5.   Other Information

 

None.

 

 

Item 6. Exhibits 

 

Exhibit No.

    

Description

3.1(1)

 

Second Amended and Restated Certificate of Incorporation of NextDecade Corporation, dated July 24, 2017.

3.2(2)

 

Amended and Restated Bylaws of NextDecade Corporation, dated July 24, 2017.

3.3(3)

 

Certificate of Designations of Series A Convertible Preferred Stock, dated August 9, 2018.

3.4(4)

 

Certificate of Designations of Series B Convertible Preferred Stock, dated September 28, 2018.

3.5(5)   Certificate of Designations of Series C Convertible Preferred Stock, dated March 17, 2021.
3.6(6)   Certificate of Amendment to Certificate of Designations of Series A Convertible Preferred Stock, dated July 12, 2019.
3.7(7)   Certificate of Amendment to Certificate of Designations of Series B Convertible Preferred Stock, dated July 12, 2019.
3.8(8)   Certificate of Increase to Certificate of Designations of Series A Convertible Preferred Stock of NextDecade Corporation, dated July 15, 2019.
3.9(9)   Certificate of Increase to Certificate of Designations of Series B Convertible Preferred Stock of NextDecade Corporation, dated July 15, 2019.
3.10(10)   Amendment No. 1 to the Amended and Restated Bylaws of NextDecade Corporation.

31.1*

 

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

 

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**

 

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**

 

Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

 

Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH*   Inline XBRL Taxonomy Extension Schema Document.
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document.

104

 

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 


(1)

Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed July 28, 2017.

(2)

Incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K, filed July 28, 2017.

(3)

Incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form S-3, filed December 20, 2018.

(4)

Incorporated by reference to Exhibit 3.4 of the Registrant’s Quarterly Report on Form 10-Q, filed November 9, 2018.

(5) Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed March 18, 2021.
(6) Incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K, filed July 15, 2019.
(7) Incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K, filed July 15, 2019.
(8) Incorporated by reference to Exhibit 3.7 of the Registrant's Quarterly Report on Form 10-Q, filed August 6, 2019.
(9) Incorporated by reference to Exhibit 3.8 of the Registrant's Quarterly Report on Form 10-Q, filed August 6, 2019.
(10) Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed March 4, 2021.

 

*

Filed herewith.

**

Furnished herewith.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

NEXTDECADE CORPORATION

 

 

Date:  May 12, 2022

By:

/s/ Matthew K. Schatzman  

 

 

Matthew K. Schatzman

 

 

Chairman of the Board and Chief Executive Officer

 

 

(Principal Executive Officer)

 

 

     

Date:  May 12, 2022

By:

/s/ Brent E. Wahl

 

 

Brent E. Wahl

 

 

Chief Financial Officer

 

 

(Principal Financial Officer)

 

 

19
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