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 September 30, ~~2022~~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 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 November ~~4, 2022,~~7, 2023, the issuer had ~~144,392,130~~256,575,167 shares of common stock outstanding.

Table of Contents

NEXTDECADE CORPORATION

FORM 10-Q FOR THE QUARTER ENDED September 30, ~~2022~~2023

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	6
Notes to Consolidated Financial Statements	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1316
Item 3. Quantitative and Qualitative Disclosures About Market Risk	1926
Item 4. Controls and Procedures	1926
Part II. Other Information	2027
Item 1. Legal Proceedings	2027
Item 1A. Risk Factors	2027
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2029
Item 3. Defaults Upon Senior Securities	2029
Item 4. Mine Safety Disclosures	2029
Item 5. Other Information	2029
Item 6. Exhibits	2130
Signatures	2231

Table of Contents

Organizational Structure

The following diagram depicts our abbreviated organizational structure ~~as of September 30, 2022~~ with references to the names of certain entities discussed in this Quarterly Report on Form 10-Q.

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

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

NextDecade Corporation

Consolidated Balance Sheets

(in thousands, except per share data)

(unaudited)

	*September 30,*			*December 31,*			*September 30,*			*December 31,*
	*2022*			*2021*			*2023*			*2022*
Assets
Current assets
Cash and cash equivalents	$	109,223		$	25,552		$	50,847		$	62,789
Restricted cash								395,012			—
Current derivative asset								21,047			—
Prepaid expenses and other current assets		1,309			835			2,270			1,149
Total current assets		110,532			26,387			469,176			63,938
Property, plant and equipment, net		182,818			173,816			1,713,796			218,646
Operating lease right-of-use assets, net		1,065			590			172,146			1,474
Other non-current assets, net		26,301			21,312
Debt issuance costs, net of amortization								401,668			—
Non-current derivative assets								130,609			—
Other non-current assets								11,021			28,372
Total assets	$	320,716		$	222,105		$	2,898,416		$	312,430

Liabilities, Convertible Preferred Stock and Stockholders’ Equity
Current liabilities
Accounts payable	$	4,887		$	281		$	326,818		$	1,084
Share-based compensation liability		182			182
Accrued liabilities and other current liabilities		10,988			5,791			213,111			23,184
Current common stock warrant liabilities		—			1,376			7,359			—
Current operating lease liabilities		968			596			3,379			1,093
Total current liabilities		17,025			8,226			550,667			25,361
Non-current common stock warrant liabilities		8,234			2,587			1,951			6,790
Non-current operating lease liabilities		143			—			146,338			465
Non-current debt, net of unamortized debt issuance costs								1,381,825			—
Other non-current liabilities		23,000			23,000			—			23,000
Total liabilities		48,402			33,813			2,080,781			55,616

Commitments and contingencies (Note 13)
Commitments and contingencies (Note 16)

Series A Convertible Preferred Stock, $1,000 per share liquidation preference; Issued and outstanding: 80,516 shares and 73,713 shares at September 30, 2022 and December 31, 2021, respectively		70,594			63,791
Series B Convertible Preferred Stock, $1,000 per share liquidation preference; Issued and outstanding: 76,922 shares and 70,433 shares at September 30, 2022 and December 31, 2021, respectively		71,091			64,602
Series C Convertible Preferred Stock, $1,000 per share liquidation preference; Issued and outstanding: 57,630 shares and 42,490 shares at September 30, 2022 and December 31, 2021, respectively		54,273			40,007
Series A Convertible Preferred Stock, $1,000 per share liquidation preference; Issued and outstanding: none and 82,948 shares at September 30, 2023 and December 31, 2022, respectively								—			73,026
Series B Convertible Preferred Stock, $1,000 per share liquidation preference ; Issued and outstanding: none and 79,239 shares at September 30, 2023 and December 31, 2022, respectively								—			73,408
Series C Convertible Preferred Stock, $1,000 per share liquidation preference; Issued and outstanding: none and 59,366 shares at September 30, 2023 and December 31, 2022, respectively								—			56,009
Stockholders’ equity
Common stock, $0.0001 par value Authorized: 480.0 million shares at September 30, 2022 and December 31, 2021; Issued and outstanding: 143.2 million shares and 120.8 million shares at September 30, 2022 and December 31, 2021, respectively		14			12
Treasury stock: 889,713 shares and 346,126 shares at September 30, 2022 and December 31, 2021, respectively, at cost		(4,127	)		(1,315	)
Preferred stock, $0.0001 par value Authorized: 0.5 million, after designation of the Convertible Preferred Stock Issued and outstanding: none at September 30, 2022 and December 31, 2021		—			—
Common stock, $0.0001 par value Authorized: 480.0 million shares at September 30, 2023 and December 31, 2022; Issued and outstanding: 256.5 million shares and 143.5 million shares at September 30, 2023 and December 31, 2022, respectively								26			14
Treasury stock: 2.2 million shares and 1.0 million shares at September 30, 2023 and December 31, 2022, respectively, at cost								(14,194	)		(4,587	)
Preferred stock, $0.0001 par value Authorized: 0.5 million, after designation of the Convertible Preferred Stock Issued and outstanding: none at September 30, 2023 and December 31, 2022								—			—
Additional paid-in-capital		291,684			191,264			753,673			289,084
Accumulated deficit		(211,215	)		(170,069	)		(262,507	)		(230,140	)
Total stockholders’ equity		76,356			19,892
Total stockholders' equity								476,998			54,371
Non-controlling interest								340,637			—
Total equity								817,635			54,371
Total liabilities, convertible preferred stock and stockholders’ equity	$	320,716		$	222,105		$	2,898,416		$	312,430

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

Table of Contents

NextDecade Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

	*Three Months Ended*						*Nine Months Ended*						Three Months Ended						Nine Months Ended
	*September 30,*						*September 30,*						September 30,						September 30,
	*2022*			*2021*			*2022*			*2021*			2023			2022			2023			2022
Revenues	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Operating expenses
General and administrative expense		14,616			2,937			29,233			10,840			32,128			14,616			85,195			29,233
Development expense, net		1,133			—			3,870			—			1,083			1,133			1,965			3,870
Lease expense		299			240			808			678			2,582			299			3,245			808
Depreciation expense		41			43			129			136			42			41			117			129
Total operating expenses		16,089			3,220			34,040			11,654			35,835			16,089			90,522			34,040
Total operating loss		(16,089	)		(3,220	)		(34,040	)		(11,654	)		(35,835	)		(16,089	)		(90,522	)		(34,040	)
Other income (expense)
Gain (loss) on common stock warrant liabilities		(2,773	)		4,442			(7,192	)		(2,363	)		3,302			(2,773	)		(2,520	)		(7,192	)
Derivative gain														240,265			—			152,816			—
Interest income														966			—			1,329			—
Interest expense, net of capitalized interest														(32,536	)		—			(32,536	)		—
Other, net		65			—			86			1			5,682			65			5,641			86
Total other expense		(2,708	)		4,442			(7,106	)		(2,362	)
Net loss attributable to NextDecade Corporation		(18,797	)		1,222			(41,146	)		(14,016	)
Preferred stock dividends		(6,248	)		(5,264	)		(17,777	)		(13,015	)
Deemed dividends on Series A Convertible Preferred Stock		—			(16	)		—			(47	)
Net loss attributable to common stockholders	$	(25,045	)	$	(4,058	)	$	(58,923	)	$	(27,078	)
Total other income (expense)														217,679			(2,708	)		124,730			(7,106	)
Net income (loss) attributable to NextDecade Corporation														181,844			(18,797	)		34,208			(41,146	)
Less: net income attributable to non-controlling interest														67,204			—			67,204			—
Less: preferred stock dividends														7,030			6,248			20,484			17,777
Net income (loss) attributable to common stockholders													$	107,610		$	(25,045	)	$	(53,480	)	$	(58,923	)

Net loss per common share - basic and diluted	$	(0.19	)	$	(0.03	)	$	(0.47	)	$	(0.23	)
Net income (loss) per common share - basic													$	0.48		$	(0.19	)	$	(0.31	)	$	(0.47	)
Net income (loss) per common share - diluted													$	0.48		$	(0.19	)	$	(0.31	)	$	(0.47	)

Weighted average shares outstanding - basic and diluted		129,418			119,374			125,716			118,677
Weighted average shares outstanding - basic														222,466			129,418			173,720			125,716
Weighted average shares outstanding - diluted														226,336			129,418			173,720			125,716

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

Table of Contents

NextDecade Corporation

Consolidated Statement of Stockholders’ Equity and Convertible Preferred Stock

(in thousands)

(unaudited)

	*For the Three Months Ended September 30, 2022*																									For the Three Months Ended September 30, 2023
	*Common Stock*					*Treasury Stock*														*Series A*		*Series B*		*Series C*		Total Stockholders' Equity
				*Par*							*Additional*						*Total*			*Convertible*		*Convertible*		*Convertible*		Common Stock					Treasury Stock																Series A			Series B			Series C
				*Value*							*Paid-in*			*Accumulated*			*Stockholders’*		��	*Preferred*		*Preferred*		*Preferred*					Par							Additional						Non-		Total			Convertible			Convertible			Convertible
	*Shares*			*Amount*		*Shares*		*Amount*			*Capital*			*Deficit*			*Equity*			*Stock*		*Stock*		*Stock*					Value							Paid-in			Accumulated			Controlling		Equity			Preferred			Preferred			Preferred
Balance at June 30, 2022		127,254		$	13		742	$	(3,067	)	$	213,749		$	(192,418	)	$	18,277		$	68,259	$	68,863	$	52,604
																										Shares			Amount		Shares		Amount			Capital			Deficit			Interest		(Deficit)			Stock			Stock			Stock
Balance at June 30, 2023																											157,494		$	16		1,003	$	(4,657	)	$	362,735		$	(377,776	)	$	—	$	(19,682	)	$	78,056		$	78,206		$	59,602
Share-based compensation		—			—		—		—			3,041			—			3,041			—		—		—		—			—		—		—			9,570			—			—		9,570			—			—			—
Restricted stock vesting		620			—		—		—			—			—			—			—		—		—		3,806			—		—		—			558			—			—		558			—			—			—
Shares repurchased related to share-based compensation		(147	)		—		147		(1,060	)		—			—			(1,060	)		—		—		—		(1,182	)		—		1,182		(9,537	)		—			—			—		(9,537	)		—			—			—
Issuance of common stock, net		15,454			1		—		—			81,142			—			81,143			—		—		—		36,874			4		—		—			179,396			—			—		179,400			—			—			—
Rio Bravo Pipeline, LLC de-consolidation																											—			—		—		—			—			629			—		629			—			—			—
Sale of equity in Intermediate Holdings																											—			—		—		—			(14,424	)		—			273,433		259,009			—			—			—
Preferred stock dividends		—			—		—		—			(6,248	)		—			(6,248	)		2,335		2,228		1,669		—			—		—		—			(7,030	)		—			—		(7,030	)		2,628			2,506			1,876
Preferred stock conversion																											59,542			6		—		—			222,868			—			—		222,874			(80,684	)		(80,712	)		(61,478	)
Net income		—			—		—		—			—			(18,797	)		(18,797	)		—		—		—		—			—		—		—			—			114,640			67,204		181,844			—			—			—
Balance at September 30, 2022		143,181		$	14		889	$	(4,127	)	$	291,684		$	(211,215	)	$	76,356		$	70,594	$	71,091	$	54,273
Balance at September 30, 2023																											256,534		$	26		2,185	$	(14,194	)	$	753,673		$	(262,507	)	$	340,637	$	817,635		$	—		$	—		$	—

	*For the Nine Months Ended September 30, 2022*																									For the Nine Months Ended September 30, 2023
	*Common Stock*					*Treasury Stock*														*Series A*		*Series B*		*Series C*		Total Stockholders' Equity
				*Par*							*Additional*						*Total*			*Convertible*		*Convertible*		*Convertible*		Common Stock					Treasury Stock																Series A			Series B			Series C
				*Value*							*Paid-in*			*Accumulated*			*Stockholders’*			*Preferred*		*Preferred*		*Preferred*					Par							Additional						Non-		Total			Convertible			Convertible			Convertible
	*Shares*			*Amount*		*Shares*		*Amount*			*Capital*			*Deficit*			*Equity*			*Stock*		*Stock*		*Stock*					Value							Paid-in			Accumulated			Controlling		Equity			Preferred			Preferred			Preferred
Balance at December 31, 2021		120,838		$	12		346	$	(1,315	)	$	191,264		$	(170,069	)	$	19,892		$	63,791	$	64,602	$	40,007
																										Shares			Amount		Shares		Amount			Capital			Deficit			Interest		(Deficit)			Stock			Stock			Stock
Balance at December 31, 2022																											143,549		$	14		991	$	(4,587	)	$	289,084		$	(230,140	)	$	—	$	54,371		$	73,026		$	73,408		$	56,009
Share-based compensation		—			—		—		—			3,555			—			3,555			—		—		—		—			—		—		—			21,677			—			—		21,677			—			—			—
Restricted stock vesting		2,293			—		—		—			—			—			—			—		—		—		3,901			—		—		—			558			—			—		558			—			—			—
Shares repurchased related to share-based compensation		(543	)		—		543		(2,812	)		—			—			(2,812	)		—		—		—		(1,194	)		—		1,194		(9,607	)		—			—			—		(9,607	)		—			—			—
Issuance of common stock, net		20,072			2		—		—			111,078			—			111,080			—		—		—		50,736			6		—		—			254,394			—			—		254,400			—			—			—
Exercise of common stock warrants		521			—		—		—			3,564			—			3,564			—		—		—
Issuance of Series C Convertible Preferred Stock		—			—		—		—			—			—			—			—		—		9,836
Rio Bravo Pipeline, LLC de-consolidation																											—			—		—		—			—			629			—		629			—			—			—
Sale of equity in Intermediate Holdings																											—			—		—		—			(14,424	)		—			273,433		259,009			—			—			—
Preferred stock dividends		—			—		—		—			(17,777	)		—			(17,777	)		6,803		6,489		4,430		—			—		—		—			(20,484	)		—			—		(20,484	)		7,658			7,304			5,469
Net loss		—			—		—		—			—			(41,146	)		(41,146	)		—		—		—
Balance at September 30, 2022		143,181		$	14		889	$	(4,127	)	$	291,684		$	(211,215	)	$	76,356		$	70,594	$	71,091	$	54,273
Preferred stock conversion																											59,542			6		—		—			222,868			—			—		222,874			(80,684	)		(80,712	)		(61,478	)
Net income (loss)																											—			—		—		—			—			(32,996	)		67,204		34,208			—			—			—
Balance at September 30, 2023																											256,534		$	26		2,185	$	(14,194	)	$	753,673		$	(262,507	)	$	340,637	$	817,635		$	—		$	—		$	—

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

Table of Contents

	For the Three Months Ended September 30, 2021																									*For the Three Months Ended September 30, 2022*
	Common Stock					Treasury Stock														Series A		Series B		Series C		*Common Stock*					*Treasury Stock*														*Series A*		*Series B*		*Series C*
				Par							Additional						Total			Convertible		Convertible		Convertible					*Par*							*Additional*						*Total*			*Convertible*		*Convertible*		*Convertible*
				Value							Paid-in			Accumulated			Stockholders’			Preferred		Preferred		Preferred					*Value*							*Paid-in*			*Accumulated*			*Stockholders’*			*Preferred*		*Preferred*		*Preferred*
	Shares			Amount		Shares		Amount			Capital			Deficit			Equity			Stock		Stock		Stock		*Shares*			*Amount*		*Shares*		*Amount*			*Capital*			*Deficit*			*Equity*			*Stock*		*Stock*		*Stock*
Balance at June 30, 2021		118,482		$	12		300	$	(1,171	)	$	199,553		$	(163,268	)		35,126		$	59,509	$	60,549	$	33,173
Balance at June 30, 2022																											127,254		$	13		742	$	(3,067	)	$	213,749		$	(192,418	)		18,277		$	68,259	$	68,863	$	52,604
Share-based compensation		—			—		—		—			(3,653	)		—			(3,653	)		—		—		—		—			—		—		—			3,041			—			3,041			—		—		—
Restricted stock vesting		285			—		—		—			—			—			—			—		—		—		620			—		—		—			—			—			—			—		—		—
Shares repurchased related to share-based compensation		(44	)		—		44		(139	)		—			—			(139	)		—		—		—		(147	)		—		147		(1,060	)		—			—			(1,060	)		—		—		—
Issuance of common stock, net		116			—		—		—			151			—			151			—		—		—		15,454			1		—		—			81,142			—			81,143			—		—		—
Stock dividend		399			—		—		—			—			—			—			—		—		—
Exercise of common stock warrants		1,485			—		—		—			4,365			—			4,365			—		—		—
Issuance of Series C Convertible Preferred Stock		—			—		—		—			—			—			—			—		—		4,634
Preferred stock dividends		—			—		—		—			(5,264	)		—			(5,264	)		2,089		1,993		1,159		—			—		—		—			(6,248	)		—			(6,248	)		2,335		2,228		1,669
Deemed dividends - accretion of beneficial conversion feature		—			—		—		—			(16	)		—			(16	)		16		—		—
Net loss		—			—		—		—			—			1,222			1,222			—		—		—		—			—		—		—			—			(18,797	)		(18,797	)		—		—		—
Balance at September 30, 2021		120,723		$	12		344	$	(1,310	)	$	195,136		$	(162,046	)	$	31,792		$	61,614	$	62,542	$	38,966
Balance at September 30, 2022																											143,181		$	14		889	$	(4,127	)	$	291,684		$	(211,215	)	$	76,356		$	70,594	$	71,091	$	54,273

	*For the Nine Months Ended September 30, 2021*																									*For the Nine Months Ended September 30, 2022*
	*Common Stock*					*Treasury Stock*														*Series A*		*Series B*		*Series C*		*Common Stock*					*Treasury Stock*														*Series A*		*Series B*		*Series C*
				*Par*							*Additional*						*Total*			*Convertible*		*Convertible*		*Convertible*					*Par*							*Additional*						*Total*			*Convertible*		*Convertible*		*Convertible*
				*Value*							*Paid-in*			*Accumulated*			*Stockholders’*			*Preferred*		*Preferred*		*Preferred*					*Value*							*Paid-in*			*Accumulated*			*Stockholders’*			*Preferred*		*Preferred*		*Preferred*
	*Shares*			*Amount*		*Shares*		*Amount*			*Capital*			*Deficit*			*Equity*			*Stock*		*Stock*		*Stock*		*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	$	-
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		—			—		—		—			(5,799	)		—			(5,799	)		—		—		—		—			—		—		—			3,555			—			3,555			—		—		—
Restricted stock vesting		590			—		—		—			—			—			—			—		—		—		2,293			—		—		—			—			—			—			—		—		—
Shares repurchased related to share-based compensation		(95	)		—		95		(279	)		—			—			(279	)		—		—		—		(543	)		—		543		(2,812	)		—			—			(2,812	)		—		—		—
Issuance of common stock, net		116			—		—		—			151			—			151			—		—		—		20,072			2		—		—			111,078			—			111,080			—		—		—
Stock dividend		798			—		—		—			—			—			—			—		—		—
Exercise of common stock warrants		1,485			—		—		—			4,365			—			4,365			—		—		—		521			—		—		—			3,564			—			3,564			—		—		—
Issuance of Series C Convertible Preferred Stock		—			—		—		—			—			—			—			—		—		37,807		—			—		—		—			—			—			—			—		—		9,836
Preferred stock dividends		—			—		—		—			(13,015	)		—			(13,015	)		6,045		5,761		1,159		—			—		—		—			(17,777	)		—			(17,777	)		6,803		6,489		4,430
Deemed dividends - accretion of beneficial conversion feature		—			—		—		—			(47	)		—			(47	)		47		—		—
Net loss		—			—		—		—			—			(14,016	)		(14,016	)		—		—		—		—			—		—		—			—			(41,146	)		(41,146	)		—		—		—
Balance at September 30, 2021		120,723		$	12		344	$	(1,310	)	$	195,136		$	(162,046	)	$	31,792		$	61,614	$	62,542	$	38,966
Balance at September 30, 2022																											143,181		$	14		889	$	(4,127	)	$	291,684		$	(211,215	)	$	76,356		$	70,594	$	71,091	$	54,273

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

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NextDecade Corporation.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	*Nine Months Ended*						Nine Months Ended
	*September 30,*						September 30,
	*2022*			*2021*			2023			2022
Operating activities:
Net loss attributable to NextDecade Corporation	$	(41,146	)	$	(14,016	)
Net income (loss) attributable to NextDecade Corporation							$	34,208		$	(41,146	)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation		129			136			117			129
Share-based compensation expense (forfeiture)		3,555			(5,571	)
Share-based compensation expense								22,055			3,555
Loss on common stock warrant liabilities		7,192			2,363			2,520			7,192
Derivative gain								(152,816	)		—
Net cash provided by settlement of derivative instruments								1,160			—
Amortization of right-of-use assets		522			414			570			522
Gain on sale of assets								(6,020	)		—
Amortization of debt issuance costs								25,670			—
Interest Expense								2,929			—
Amortization of other non-current assets		354			1,062			—			354
Changes in operating assets and liabilities:
Prepaid expenses		(460	)		(234	)
Prepaid expenses and other current assets								(1,121	)		(460	)
Accounts payable		294			76			3,313			294
Operating lease liabilities		(482	)		(396	)		330			(482	)
Accrued expenses and other liabilities		2,081			3,914			14,458			2,081
Net cash used in operating activities		(27,961	)		(12,252	)		(52,627	)		(27,961	)
Investing activities:
Acquisition of property, plant and equipment		(5,673	)		(8,390	)		(996,467	)		(5,673	)
Acquisition of other non-current assets		(5,343	)		(4,666	)		(13,971	)		(5,343	)
Net cash used in investing activities		(11,016	)		(13,056	)		(1,010,438	)		(11,016	)
Financing activities:
Proceeds from debt issuance								1,409,000			—
Proceeds from sale of equity in Intermediate Holdings								278,962			—
Proceeds from sale of Rio Bravo Pipeline, LLC								4,393			—
Proceeds from sale of Series C Convertible Preferred Stock		10,500			39,500			—			10,500
Proceeds from sale of common stock		115,000			389			254,400			115,000
Equity issuance costs		(2	)		(117	)
Debt and equity issuance costs								(490,960	)		(2	)
Preferred stock dividends		(38	)		(50	)		(53	)		(38	)
Shares repurchased related to share-based compensation		(2,812	)		(279	)		(9,607	)		(2,812	)
Net cash provided by financing activities		122,648			39,443			1,446,135			122,648
Net increase in cash and cash equivalents		83,671			14,135			383,070			83,671
Cash and cash equivalents – beginning of period		25,552			22,608			62,789			25,552
Cash and cash equivalents – end of period	$	109,223		$	36,743		$	445,859		$	109,223

Non-cash investing activities:
Accounts payable for acquisition of property, plant and equipment	$	470		$	329
Accrued liabilities for acquisition of property, plant and equipment		3,904			996
Pipeline assets obtained in exchange for other non-current liabilities		—			84
Non-cash financing activities:
Paid-in-kind dividends on Convertible Preferred Stock		17,722			12,965
Accounts payable for equity issuance costs		3,888			148
Accretion of deemed dividends on Series A Convertible Preferred Stock		—			47
Accrued liabilities for equity issuance costs		83			35
Balance per Consolidated Balance Sheets:
							*September 30, 2023*
Cash and cash equivalents							$	50,847
Restricted cash								395,012
Total cash, cash equivalents and restricted cash							$	445,859

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

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NextDecade Corporation

Notes to Consolidated Financial Statements

(unaudited)

Note 1 — Background and Basis of Presentation

NextDecade Corporation ~~engages~~(“we” or the “Company”) is engaged in construction and development activities related to the liquefaction of natural gas and sale of liquefied natural gas (“LNG”) and the capture and storage of CO₂ emissions. We ~~have focused our development activities~~are constructing a natural gas liquefaction and export facility located in the Rio Grande Valley in Brownsville, Texas (the “Rio Grande LNG Facility”). In July 2023, we commenced construction on the firstthree liquefaction trains and related common facilities (“Phase 1”) of the Rio Grande LNG ~~terminal facility~~Facility following a positive final investment decision (“FID”) and the closing of project financing by our subsidiary, Rio Grande LNG, LLC (“Rio Grande”). We are also developing two more Federal Energy Regulatory Commission approved liquefaction trains at the ~~Port of Brownsville in southern Texas (the “Terminal”),~~Rio Grande LNG Facility, a planned carbon capture and storage (“CCS”) project at the ~~Terminal (the “Terminal CCS project”)~~Rio Grande LNG Facility, and other ~~carbon capture and storage~~potential CCS projects ~~(“CCS projects”) with~~that would be located at 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~~2022. 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 and ninemonths ended September 30, ~~2022~~2023 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~~the Company's financial position, results of operations or cash flows.

The Company has incurred operating losses since its inception and management expects operating losses and negative cash flows to continue ~~for~~until the ~~foreseeable future~~commencement of operations at the Rio Grande LNG Facility and, as a result, the Company will require additional capital to fund its operations and execute its business plan. As of September 30, ~~2022~~2023, the Company had ~~$109.2~~$50.8 million in cash and cash equivalents, which may not be sufficient to fund the Company's planned operations and development activities for future phases of the Rio Grande LNG Facility and CCS projects through one year after the date the consolidated financial statements are issued. Accordingly, there is substantial doubt about the Company's ability to continue as a going concern. The analysis used to determine the Company's ability to continue as a going concern does not include cash sources outside of the Company's direct control that management expects to be available within the next twelve months.

The Company plans to alleviate the going concern issue by obtaining sufficient funding through additional equity, equity-based or debt instruments or any other means and by managing certain operating and overhead costs. The Company's ability to raise additional capital in the equity and debt markets, should the Company choose to do so, is dependent on a number of factors, including, but not limited to, the market demand for the Company's equity or debt securities, which itself is subject to a number of business risks and uncertainties, as well as the uncertainty that the Company would be able to raise such additional capital at a price or on terms that are satisfactory to the Company. In the event the Company is unable to obtain sufficient additional funding, there can be no assurance that it will be able to continue as a going concern.

These consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern.

Note 2 — Prepaid Expenses and Other Current Assets

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

	*September 30,*		*December 31,*		*September 30,*		*December 31,*
	*2022*		*2021*		*2023*		*2022*
Prepaid subscriptions	$	278	$	85	$	1,112	$	423
Prepaid insurance		484		272		1,032		619
Prepaid marketing and sponsorships		—		60
Other		547		418		126		107
Total prepaid expenses and other current assets	$	1,309	$	835	$	2,270	$	1,149

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~~sale of the equity interests (the “Equity Interests”) in Rio Bravo Pipeline Company, LLC (“Rio Bravo”) to ~~Buyer~~Spectra Energy Transmission II, LLC, a wholly owned subsidiary of Enbridge Inc. (“Buyer”), for consideration of approximately $19.4 million.

If Rio Grande or its affiliate failed to issue a full notice to proceed to the Bechtel Energy, Inc. (“Bechtel”) under the EPC agreements for Phase 1 on or prior to December 31, 2024, Buyer had the right to sell the Equity Interests back to NextDecade LLC and NextDecade LLC had the right to repurchase the Equity Interests from Buyer. Rio Grande issued a full notice to proceed to Bechtel on July 12, 2023. Accordingly, the assets of Rio Bravo have been de-recognized in the consolidated balance sheet at September 30, 2023.

Buyer paid $15.0 million of the ~~Purchase Price~~purchase price to NextDecade LLC at the ~~Closing~~closing of the transaction and the remainder ~~will be~~of approximately $4.4 million was paid ~~within~~in ~~five~~July 2023 ~~business days after the date that~~upon Rio ~~Grande has received, after a final positive investment decision, the initial funding of financing for the development, construction and operation~~Grande’s issuance of the ~~Terminal. Rio Bravo is developing a proposed interstate natural gas pipeline (the “Pipeline”)~~full notice to ~~supply natural gas~~proceed 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.Bechtel.

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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~~ ~~September 30, 2022~~.

Note 4 — Property, Plant and Equipment

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

	*September 30,*			*December 31,*			*September 30,*			*December 31,*
	*2022*			*2021*			*2023*			*2022*
Fixed Assets
Computers	$	697		$	633		$	779		$	780
Furniture, fixtures, and equipment		664			464			610			610
Vehicles								166			0
Leasehold improvements		101			101			3,086			101
Total fixed assets		1,462			1,198			4,641			1,491
Less: accumulated depreciation		(973	)		(844	)		(1,123	)		(1,006	)
Total fixed assets, net		489			354			3,518			485
Project Assets (not placed in service)
Terminal		161,312			152,445
Rio Grande LNG Facility								1,710,278			197,144
Pipeline		21,017			21,017			—			21,017
Total Terminal and Pipeline assets		182,329			173,462
Total Project Assets								1,710,278			218,161
Total property, plant and equipment, net	$	182,818		$	173,816		$	1,713,796		$	218,646

Depreciation expense was ~~$41~~$42 thousand and ~~$43~~$41 thousand for the three months ended September 30, ~~2022~~2023 and ~~2021~~2022, respectively, and ~~$129~~$117 thousand and ~~$136~~$129 thousand for the nine months ended September 30, 2023 and 2022, respectively.

Note 5 — Derivatives

In July 2023, Rio Grande entered into interest rate swaps agreements (the “Swaps”) to protect against interest rate volatility by hedging a portion of the floating-rate interest payments associated with the credit facilities described in Note 9 — Debt. As of September30,2023, Rio Grande has the following Swaps outstanding (in thousands):

Initial Notional Amount				Maximum Notional Amount				Maturity				Weighted Average Fixed Interest Rate Paid				Variable Interest Rate Received
$	123,000			$	8,500,000				July 12, 2030				3.4	%			USD - SOFR

The Swaps are not designated as cash flow hedging instruments, and changes in fair value are recorded within our Consolidated Statements of Operations.

The Company values the Swaps using an income-based approach based on observable inputs to the valuation model including interest rate curves, risk adjusted discount rates, credit spreads and other relevant data. The fair value of the Swaps is approximately $151.7 million as of September 30, 2023, and is classified as Level ~~2021~~2~~, respectively.~~ in the fair value hierarchy.

Note 56 — Leases

Our leased assets ~~primarily~~ consist of office ~~space.~~ space and the Rio Grande site lease. On July 12, 2023, Rio Grande delivered the effective date notice to the Brownsville Navigation District and commenced the Rio Grande site lease.

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

	*September 30,*		*December 31,*		*September 30,*		*December 31,*
	*2022*		*2021*		*2023*		*2022*
Office leases	$	1,065	$	590	$	14,263	$	1,474
Land lease						157,883		—
Total operating lease right-of-use assets, net	$	1,065	$	590	$	172,146	$	1,474

Operating lease liabilities are as follows (in thousands):

	*September 30,*		*December 31,*		*September 30,*		*December 31,*
	*2022*		*2021*		*2023*		*2022*
Office leases	$	968	$	596	$	856	$	1,093
Land lease						2,523		—
Total current lease liabilities	$	968	$	596	$	3,379	$	1,093
Non-current office leases		143		—		13,782		465
Non-current land leases						132,556		—
Total lease liabilities	$	1,111	$	596	$	149,717	$	1,558

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Operating lease expense is as follows (in thousands):

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*				*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2022*		*2021*		*2022*		*2021*		*2023*		*2022*		*2023*		*2022*
Office leases	$	230	$	156	$	608	$	470	$	676	$	230	$	1,286	$	608
Land lease										1,880		—		1,880		—
Total operating lease expense		230		156		608		470		2,556		230		3,166		608
Short-term lease expense		69		84		200		208		26		69		79		200
Total lease expense	$	299	$	240	$	808	$	678	$	2,582	$	299	$	3,245	$	808

Maturity of operating lease liabilities as of September 30, ~~2022~~2023 are as follows (in thousands, except lease term and discount rate):

2022 (remaining)	$	169
2023		1,027
2023 (remaining)				$	2,166
2024		—			8,022
2025		—			7,609
2026		—			9,522
2027					9,565
Thereafter		—			208,851
Total undiscounted lease payments		1,196			245,735
Discount to present value		(85	)		(96,018	)
Present value of lease liabilities	$	1,111		$	149,717

Weighted average remaining lease term - years		1.3			27.9
Weighted average discount rate - percent		12.0			4.0

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

Nine Months Ended September 30,

2022

2021

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

Cash flows from operating activities

$ 684

$ 509

Noncash right-of-use assets recorded for operating lease liabilities:

In exchange for new operating lease liabilities during the period
1,332 712

	*Nine Months Ended September 30,*
	*2023*		*2022*
Cash paid for amounts included in the measurement of operating lease liabilities:
Cash flows from operating activities	$	968	$	684
Noncash right-of-use assets recorded for operating lease liabilities:
In exchange for new operating lease liabilities during the period	$	147,829	$	1,332

Note 67 — Other Non-Current Assets

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

September 30,

December 31,

2022

2021

Permitting costs⁽¹⁾
$ 8,250 $ 7,644
Enterprise resource planning system, net
— 354
Rio Grande Site Lease initial direct costs
18,051 13,314
Total other non-current assets, net
$ 26,301 $ 21,312

	*September 30,*		*December 31,*
	*2023*		*2022*
Permitting costs⁽¹⁾	$	—	$	8,540
Rio Grande Site Lease initial direct costs ⁽²⁾		—		19,647
Contributions in aid of construction		7,534		—
Deposits and other		3,487		185
Total other non-current assets	$	11,021	$	28,372

⁽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~~Rio Grande LNG Facility. Permitting costs were reclassified to property, plant and equipment in July 2023 with the ~~Pipeline.~~positive final investment decision on phase 1 of the Rio Grande LNG Facility.

⁽²⁾

Rio Grande Site Lease initial direct costs were reclassified to operating lease right-of-use asset in July 2023 upon commencement of the Rio Grande site lease.

Note 78 — Accrued Liabilities and Other Current Liabilities

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

	*September 30,*		*December 31,*		September 30,		December 31,
	*2022*		*2021*		2023		2022
Employee compensation expense	$	4,619	$	4,358	$	7,534	$	6,650
Terminal costs		3,905		926
Rio Grande LNG Facility costs						191,957		12,046
Debt issuance costs						536		—
Accrued interest						12,232		—
Permitting costs						—		279
Accrued legal services		485		70		—		3,124
Share-based compensation liability						—		182
Other accrued liabilities		1,979		437		852		903
Total accrued liabilities and other current liabilities	$	10,988	$	5,791	$	213,111	$	23,184

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Note 9 — Debt

Our debt consists of long-term secured debt securities and credit agreements with banks and other lenders. Debt issuances are placed directly by us or through securities dealers, underwriters, or lead arrangers and are held by institutional investors, banks and other lenders.

Debt is recorded on our Consolidated Balance Sheets at outstanding principal value, net of unamortized debt issuance costs related to term notes and loans. Debt issuance costs consist primarily of arrangement fees, professional fees, legal fees and in certain cases, commitment fees. If debt issuance costs are incurred in connection with a line of credit arrangement or on undrawn funds, the debt issuance costs are presented as an asset on our Consolidated Balance Sheets. Discounts, premiums and debt issuance costs directly related to the issuance of debt are amortized over the life of the debt and are recorded in interest expense, net of capitalized interest using the effective interest method.

We classify debt as current or non-current on our Consolidated Balance Sheets based on contractual maturity; however, long-term debt extinguished after the balance sheet date but before the financial statements are issued would be classified based on facts and circumstances existing as of the balance sheet date.

Debt consisted of the following (in thousands):

	*September 30, 2023*		*December 31, 2022*
Senior Secured Notes and Loans
6.67% Senior Secured Notes due 2033	$	700,000	$	—
6.72% Senior Secured Loans due 2033		356,000		—
Total Senior Secured Notes and Loans		1,056,000		—
Credit Facilities
CD Senior Working Capital Facility		—		—
CD Credit Facility		327,000		—
TCF Credit Facility		26,000		—
Total Debt		1,409,000		—

Current Portion of debt		—		—
Non-current portion of unamortized debt issuance costs, net		27,175		—
Total non-current debt, net of unamortized debt issuance costs	$	1,381,825	$	—

Senior Secured Notes and Loans

Rio Grande 6.67% Senior Secured Notes due 2033

The 6.67% Senior Secured Notes (the “Senior Secured Notes”) are senior secured obligations of Rio Grande, ranking senior in right of payment to any and all of Rio Grande’s future indebtedness that is subordinated to the Senior Secured Notes and equal in right of payment with Rio Grande’s other existing and future indebtedness that is senior and secured by the same collateral securing the Senior Secured Notes. The Senior Secured Notes are secured on a first-priority basis by a security interest in all of the membership interests in Rio Grande and substantially all of Rio Grande’s assets, pari passu with the Senior Secured Loans, the CD Credit Agreement and the loans made under the TCF Credit Facility.

Rio Grande 6.72% Senior Secured Loans due 2033

The 6.72% Senior Secured Loans (the “Senior Secured Loans”) are senior secured obligations of Rio Grande, ranking senior in right of payment to any and all of Rio Grande’s future indebtedness that is subordinated to the Senior Secured Loans and equal in right of payment with Rio Grande’s other existing and future indebtedness that is senior and secured by the same collateral securing the Senior Secured Loans. The Senior Secured Loans are secured on a first-priority basis by a security interest in all of the membership interests in Rio Grande and substantially all of Rio Grande’s assets, pari passu with the Senior Secured Notes, the CD Credit Agreement and the loans made under the TCF Credit Facility.

Debt Maturities

Years Ending December 31,	*Principal Payments*
2023	$	—
2024		—
2025		—
2026		—
2027		—
Thereafter		1,409,000
Total	$	1,409,000

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Credit Facilities

Below is a summary of our committed credit facilities outstanding as of September 30, 2023 (in thousands):

	CD Senior Working Capital Facility ⁽¹⁾			CD Credit Facility ⁽¹⁾			TCF Credit Facility ⁽²⁾
Total Facility Size	$	500,000		$	9,963,000		$	800,000
Less:
Outstanding balance		—			327,000			26,000
Letters of credit issued		66,362			—			—
Available commitment	$	433,638		$	9,636,000		$	774,000

Priority ranking	Senior secured			Senior secured			Senior secured
Interest rate on outstanding balance	SOFR plus margin of 2.25%			SOFR plus margin of 2.25%			SOFR plus margin of 2.25%
Commitment fees on undrawn balance		0.68	%		0.68	%		0.68	%
Maturity Date	July 12, 2030			July 12, 2030			July 12, 2030

⁽¹⁾

The obligations of Rio Grande under the CD Senior Working Capital Facility and CD Credit Facility are secured by substantially all of the assets of Rio Grande as well as a pledge of all of the membership interests in Rio Grande on a first-priority basis, pari passu with the Senior Secured Notes, the Senior Secured Loans and the loans made under the TCF Credit Facility.

⁽²⁾

The obligations of Rio Grande under the TCF Credit Agreement are secured by substantially all of the assets of Rio Grande as well as a pledge of all of the membership interests in Rio Grande on a first-priority basis, pari passu with the Senior Secured Notes, the Senior Secured Loans and the loans made under the CD Credit Agreement. Total Energies Holdings SAS (“Total Holdings”) provides contingent credit support to the lenders under the TCF Credit Agreement to pay past due amounts owing from Rio Grande under the agreement upon demand.

Restrictive Debt Covenants

The CD Credit Facility and the TCF Credit Facility (collectively, the “Facilities”) include certain covenants and events of default that are supplemental to the covenants and events of default set forth in the P1 Common Terms Agreement and that are customary for project financing facilities of this type, including a requirement that interest rates for a minimum of 75% of the projected principal amount of Senior Secured Debt outstanding be hedged or have fixed interest rates. In addition, certain covenants and events of default in the Facilities are more restrictive than the corresponding covenants and events of default in the P1 Common Terms Agreement, including covenants limiting Rio Grande’s ability to incur additional indebtedness, make certain investments or pay dividends (which are subject to customary conditions set out in the Facilities and certain related financing documents) or distributions on equity interests or subordinated indebtedness or purchase, redeem, or retire equity interests, sell or transfer assets, incur liens, dissolve, liquidate, consolidate, merge, sell, or lease all or substantially all of Rio Grande’s assets or enter into certain LNG sales contracts. The Facilities include a requirement for Rio Grande to maintain a historical debt service coverage ratio of at least 1.10:1.00 at the end of each fiscal quarter starting from the Initial Principal Payment Date, a default of which may be cured with equity contributions.

The Senior Secured Notes also contain customary terms and events of default and certain covenants that, among other things, limit Rio Grande’s ability to incur additional indebtedness, make certain investments or pay dividends or distributions on equity interests or subordinated indebtedness or purchase, redeem, or retire equity interests, sell or transfer assets, incur liens, dissolve, liquidate, consolidate, merge, or sell or lease all or substantially all of Rio Grande’s assets. The Senior Secured Notes further require Rio Grande to submit certain reports and information to the trustee and holders of the Senior Secured Notes, maintain certain LNG offtake agreements, and maintain a debt service coverage ratio of at least 1.10:1.00 at the end of each fiscal quarter starting from the Initial Principal Payment Date. With respect to certain events, including a change of control event and receipt of certain proceeds from asset sales, events of loss or liquidated damages, the indenture governing the Senior Secured Notes requires Rio Grande to make an offer to repurchase the Senior Secured Notes at 101% (with respect to a change of control event) or par (with respect to each other event), in each case on the terms specified in the Indenture. The Senior Secured Notes covenants are subject to a number of important limitations and exceptions, including the terms and covenants contained in the P1 Common Terms Agreement.

The Senior Secured Loan Agreement contains customary terms and events of default and certain covenants that, among other things, limit Rio Grande’s ability to incur additional indebtedness, make certain investments or pay dividends or distributions on equity interests or subordinated indebtedness or purchase, redeem, or retire equity interests, sell or transfer assets, incur liens, dissolve, liquidate, consolidate, merge, or sell or lease all or substantially all of Rio Grande’s assets. The Senior Secured Loan Agreement further requires Rio Grande to submit certain reports and information to the Administrative Agent and the lenders, maintain certain LNG offtake agreements, and maintain a debt service coverage ratio of at least 1.10:1.00 at the end of each fiscal quarter starting from the first quarterly payment date to occur on or after the date that is ninety days following the project completion date. With respect to certain events, including a change of control event and receipt of certain proceeds from asset sales, events of loss or liquidated damages, the Senior Secured Loan Agreement requires Rio Grande to make an offer to the lenders to have their Senior Secured Loans prepaid at 101% (with respect to a change of control event) or par (with respect to each other event), in each case, on the terms specified in the Senior Secured Loan Agreement. The Senior Secured Loan Agreement covenants are subject to a number of important limitations and exceptions, including the terms and covenants contained in the P1 Common Terms Agreement.

As of September 30, 2023, Rio Grande was in compliance with all covenants related to its respective debt agreements.

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Interest Expense

Total interest expense, net of capitalized interest, consisted of the following (in thousands):

	*September 30, 2023*			*December 31, 2022*
Interest cost of Non-current Debt
Interest per contractual rate	$	16,169		$	—
Amortization of debt issuance costs		25,670			—
Total Interest cost		41,839			—
Capitalized interest		(9,303	)		—
Total interest expense, net of capitalized interest	$	32,536		$	—

Fair Value Disclosures

The following table shows the carrying amount and estimated fair value of our debt (in thousands):

September 30, 2023

December 31, 2023

Carrying Amount

Estimated Fair Value ⁽¹⁾

Carrying Amount

Estimated Fair Value

Senior Notes - Level 2

700,000

—

Senior Loans - Level 2

356,000

—

⁽¹⁾

The Level 2 estimated fair value approximates the carrying amount due to the close proximity of the issuance of the debt and September 30, 2023.

Note 810 – Preferred Stock and Common Stock Warrants

Preferred Stock

As of December 31, ~~2021,~~2022, the Company had outstanding ~~73,713~~82,948 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), ~~70,433~~79,239 shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”) and ~~42,490~~59,366 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”).

~~Table of Contents~~

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
(20 )
Net proceeds - Initial Fair Value Allocation
$ 10,480 $ 644 $ 9,836
Per balance sheet upon issuance
$ 644 $ 9,836

~~As of~~ ~~September 30, 2022~~, shares of Series A Preferred Stock and Series B Preferred Stock were convertible into shares of Company common stock at a conversion price of approximately $5.48 per share and $5.53 per share, respectively, and shares of Series C Preferred Stock were convertible into shares of Company common stock at a weighted average conversion price of approximately $2.98 per share.

~~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.~~value per share. Such dividends are payable quarterly and may be paid in cash or in-kind. During the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022, the Company paid-in-kind ~~$17.7~~$20.5 million and ~~$13.0~~$17.7 million of dividends, respectively, to the holders of the Convertible Preferred Stock. On ~~October 12, 2022,~~July 13, 2023, the Company declared dividends to the holders of the Convertible Preferred Stock as of the close of business on ~~September~~June 15, ~~2022.~~2023. On ~~October~~July 17, 2023, ~~17,~~~~2022,~~the Company paid-in-kind ~~$6.5~~$7.0 million of dividends to the holders of the Convertible Preferred Stock.

On July 26, 2023, the Convertible Preferred Stock was converted into 59,542,066 shares of common 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~~gain of ~~$2.8~~$3.3 million and a ~~gain~~loss of ~~$4.4~~$2.8 million during the three months ended September 30, ~~2022~~2023 and ~~2021~~2022,, respectively, and ~~a loss~~losses of ~~$7.2~~$2.5 million and ~~$2.4~~$7.2 million for the nine months ended September 30, ~~2022~~2023 and ~~2021~~2022, 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:

	*September 30,*			*December 31,*			*September 30,*			*December 31,*
	*2022*			*2021*			*2023*			*2022*
Stock price	$	6.02		$	2.85		$	5.12		$	4.94
Exercise price	$	0.01		$	0.01		$	0.01		$	0.01
Risk-free rate		4.2	%		0.1	%		5.3	%		4.6	%
Volatility		55.9	%		62.6	%		81.9	%		52.5	%
Term (years)		2.0			1.6			0.7			1.5

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Note 11 — Variable Interest Entity

The Company consolidates Variable Interest Entities ("VIEs") where it has been determined that the Company is the primary beneficiary of the applicable entities’ operations. For each VIE, the primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to such VIE. In evaluating whether the Company is the primary beneficiary of each entity, the Company evaluates its power to direct the most significant activities of the VIE by considering the purpose and design of each entity and the risks each entity was designed to create and pass through to its respective variable interest holders. The Company also evaluates its economic interests in each of the VIEs.

Intermediate Holdings and its wholly owned subsidiaries, including Rio Grande, have been formed to undertake Phase 1 of the construction and operation of the Rio Grande LNG Facility. The Company is not obligated to fund losses of Rio Grande, however, the Company's capital account, which would be considered in allocating the net assets of Rio Grande were it to be liquidated, continues to share in losses of Rio Grande. Further, Rio Grande has granted the Company decision-making rights regarding the construction of Phase 1 of the Rio Grande LNG Facility and key aspects of its operation, which may only be terminated by equity holders for cause, via agreements with NextDecade LLC. Due to the foregoing, the Company determined that it holds a variable interest in Rio Grande and is its primary beneficiary and therefore consolidates Rio Grande in these Consolidated Financial Statements.

The following table presents the summarized assets and liabilities (in thousands) of Rio Grande, which are included in the Company's Consolidated Balance Sheets. The assets in the table below may only be used to settle the obligations of Rio Grande. In addition, there is no recourse to us for the consolidated VIE’s liabilities. The assets and liabilities in the table below include assets and liabilities of Rio Grande only and exclude intercompany balances between Rio Grande and NextDecade, which are eliminated in the Consolidated Financial Statements of NextDecade.

	September 30,		December 31,
	2023		2022
Assets
Current assets
Cash	$	395,012	$	—
Current derivative asset		21,047		—
Prepaid expenses and other current assets		188		24
Total current assets		416,247		24
Property, plant and equipment, net		1,707,530		194,289
Operating lease right-of-use assets, net		157,883		—
Debt issuance costs, net of amortization		401,668		—
Non-current derivative assets		130,609		—
Other non-current assets		9,374		28,187
Total assets	$	2,823,311	$	222,500

Liabilities
Current liabilities
Accounts payable	$	320,277	$	108
Accrued liabilities and other current liabilities		204,304		15,457
Current operating lease liabilities		2,531		—
Total current liabilities		527,112		15,565
Non-current operating lease liabilities		132,549		—
Non-current debt, net of unamortized debt issuance costs		1,381,825		—
Total liabilities	$	2,041,486	$	15,565

Note 912 — Stockholders' Equity

Common Stock Purchase ~~Agreements~~Agreement

On ~~April 6, 2022,~~ February 3, 2023,the Company entered into a common stock purchase agreement (the “Stock Purchase Agreement”) for a private placement with HGC NEXT INV LLC ~~(the “Purchaser”),~~and Ninteenth Investment Company LLC, pursuant to which the Company sold ~~4,618,226~~an aggregate of 5,835,277 shares of the ~~Company's~~Company common stock ~~to the Purchaser,~~ at a purchase price of ~~$6.496~~$5.998 per share, representing the average closing trading price of the Company common stock for the five trading days immediately preceding signing the Stock Purchase Agreement, for an aggregate purchase price of ~~approximately $30~~$35.0 million. ~~The consummation of the transactions contemplated by the Stock Purchase Agreement occurred on~~ ~~April 7, 2022.~~

On ~~September 14, 2022,~~June 13, 2023, the Company entered into a common stock purchase agreement for athree private ~~placement~~placements (the ~~“Private~~“TTE Private Placement”) with ~~several institutional investors (collectively, the “Purchasers”~~Global LNG North America Corp., an affiliate of TotalEnergies SE (the “TTE Purchaser”), pursuant to which ~~the Company~~we agreed to sell ~~and the Purchasers severally agreed to purchase, an aggregate~~(i) 8,026,165 shares (the “Tranche 1 Shares”) of ~~15,454,160 shares of the Company’s~~Company common stock at a purchase price of ~~$5.50~~$4.9837 per share, for an aggregate purchase price of ~~approximately $85.0 million. The Private Placement closed on~~$40.0 million, (ii) promptly after conversion of the Convertible Preferred Stock, 22,072,103 shares (the “Tranche ~~September 19, 2022.~~

~~Common Stock Warrants~~

~~During the~~ ~~nine~~2 ~~months ended~~ ~~September 30, 2022~~~~, Common Stock Warrants were exercised by certain holders~~Shares”) of ~~Series B Preferred Stock. In connection with the exercises~~Company common stock, at a purchase price of ~~Common Stock Warrants, the Company issued~~$4.9837 per share, for an aggregate purchase price of ~~520,335~~$110.0 million, and (iii) promptly after, and conditioned upon, receipt of approval of the Company’s stockholders, a number of shares of Company common ~~stock.~~

stock such that, following the conversion of the Convertible Preferred Stock, the TTE Purchaser will own, when including the Tranche 1 Shares and Tranche 2 Shares, an aggregate of 17.5% of the Company common stock then-outstanding (the “Tranche 3 Shares” and together with the Tranche 1 Shares and Tranche 2 Shares, the “Shares”), for an aggregate purchase price of $69.4 million. On June 14, 2023, the Company closed the sale of the Tranche 1 Shares, and on July 26, 2023, the Company closed the sale of the Tranche 2 Shares. On September 8, 2023, following receipt of approval of the Company’s stockholders, the Company closed the sale of 14,802,055 shares of common stock, representing the Tranche 3 Shares.

1013

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Note 1013 — Net ~~Loss~~Income (Loss) Per Share

The following table (in thousands, except for ~~loss~~income (loss) per ~~share)~~share amounts) reconciles basic and diluted weighted average common shares outstanding for each of the three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022:

	*Three Months Ended*						*Nine Months Ended*						Three Months Ended					Nine Months Ended
	*September 30,*						*September 30,*						September 30,					September 30,
	*2022*			*2021*			*2022*			*2021*			2023		2022			2023			2022
Weighted average common shares outstanding:
Basic		129,418			119,374			125,716			118,677			222,466		129,418			173,720			125,716
Dilutive unvested stock, convertible preferred stock, Common Stock Warrants and IPO Warrants		—			—			—			—
Dilutive unvested stock and Common Stock Warrants														3,870		—			—			—
Diluted		129,418			119,374			125,716			118,677			226,336		129,418			173,720			125,716

Basic and diluted net loss per share attributable to common stockholders	$	(0.19	)	$	(0.03	)	$	(0.47	)	$	(0.23	)
Net income (loss) per share attributable to common stockholders - basic													$	0.48	$	(0.19	)	$	(0.31	)	$	(0.47	)
Net income (loss) per share attributable to common stockholders - diluted													$	0.48	$	(0.19	)	$	(0.31	)	$	(0.47	)

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

	*Three Months Ended*				*Nine Months Ended*				*Three Months Ended*				*Nine Months Ended*
	*September 30,*				*September 30,*				*September 30,*				*September 30,*
	*2022*		*2021*		*2022*		*2021*		*2023*		*2022*		*2023*		*2022*
Unvested stock and stock units ⁽¹⁾		1,918		1,831		1,751		1,581		—		1,918		2,133		1,751
Convertible preferred stock(2)		47,707		34,095		45,653		29,174		—		47,707		—		45,653
Common Stock Warrants		1,240		2,510		1,388		2,486		—		1,240		1,456		1,388
IPO Warrants⁽²⁾		—		12,082		—		12,082
Total potentially dilutive common shares		50,865		50,518		48,792		45,323		—		50,865		3,589		48,792

⁽¹⁾	Includes the impact of unvested shares containing performance conditions to the extent that the underlying performance conditions are satisfied based on actual results as of the respective dates.

⁽²⁾	~~The IPO Warrants were issued in connection with our initial public offering in~~ ~~2015~~ ~~and expired on~~On July ~~24, 2022.~~26, 2023, the Convertible Preferred Stock was converted into 59,542,066 shares of common stock.

Note 1114 — 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

Nine Months Ended

September 30,

September 30,

2022

2021

2022

2021

Share-based compensation expense (forfeiture):

Equity awards
$ 3,041 $ (3,653 ) $ 3,555 $ (5,799 )
Liability awards
— — — —
Total share-based compensation (forfeiture)
3,041 (3,653 ) 3,555 (5,799 )
Capitalized share-based compensation
— 944 — 228
Total share-based compensation expense (forfeiture)
$ 3,041 $ (2,709 ) $ 3,555 $ (5,571 )

	*Three Months Ended*				*Nine Months Ended*
	*September 30,*				*September 30,*
	*2023*		*2022*		*2023*		*2022*
Share-based compensation expense:
Equity awards	$	9,570	$	3,041	$	21,677	$	3,555
Liability awards		159		—		378		—
Total share-based compensation expense	$	9,729	$	3,041	$	22,055	$	3,555

Note 1215 — Income Taxes

Due to our cumulative loss position, we have established a full valuation allowance against our deferred tax assets at September 30, ~~2022~~2023 and December 31, ~~2021~~2022. Due to our full valuation allowance, we have not recorded a provision for federal or state income taxes during either of the three ~~and~~or nine months ended September 30, ~~2022~~2023 or ~~2021~~2022.

Note 1316 — 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.~~

~~Table of Contents~~

~~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 Amendment, 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 September 30, ~~2022~~2023, 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.

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Note 1417 — 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 18 — Supplemental Cash Flows

The following table provides supplemental disclosure of cash flow information (in thousands):

	*Nine Months Ended*
	*September 30,*
	*2023*		*2022*
Cash paid for interest, net of amounts capitalized	$	1,330	$	—
Non-cash investing activities:
Accounts payable for acquisition of property, plant and equipment	$	322,539	$	470
Accrued liabilities for acquisition of property, plant and equipment		191,911		3,904
Non-cash financing activities:
Paid-in-kind dividends on Convertible Preferred Stock	$	20,431	$	17,722
Accounts payable for debt and equity issuance costs		—		3,888
Accrued liabilities for debt and equity issuance costs		536		83

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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.~~10-K as supplemented by Item 1A of this Quarterly Report on Form 10-Q. 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:

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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;

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the timing and cost of ~~achieving a final investment decision (“FID”) in~~ the development, construction and operation of ~~a 27 million tonne per annum~~the first three liquefaction trains and related common facilities (“~~mtpa”~~Phase 1”) of the multi-plant integrated natural gas and liquefaction and LNG export terminal facility to be located at the Port of Brownsville in southern Texas (the ~~“Terminal”~~“Rio Grande LNG Facility”);

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the availability and frequency of cash distributions available to us from our joint venture owning Phase 1 of the Rio Grande LNG Facility;

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the timing and cost of the development of subsequent liquefaction trains at the Rio Grande LNG Facility;

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the ability to generate sufficient cash flow to satisfy Rio Grande's significant debt service obligations or to refinance such obligations ahead of their maturity;

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restrictions imposed by Rio Grande's debt agreements that limit flexibility in operating its business;

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increases in interest rates increasing the cost of servicing Rio Grande's indebtedness;

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

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

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our ability to secure additional debt and equity financing in the future, ~~to complete the Terminal and other CCS projects~~including any refinancing of outstanding indebtedness, on commercially acceptable terms and to continue as a going concern;

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the accuracy of estimated costs for the ~~Terminal~~Rio Grande LNG Facility and CCS projects;

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our ability to achieve operational characteristics of the ~~Terminal~~Rio Grande LNG Facility 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;

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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;

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

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the global demand for and price of LNG;

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the availability of LNG vessels worldwide;

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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;

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

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global development and maturation of emissions reduction credit markets;

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adverse changes to existing or proposed carbon tax incentive regimes;

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global pandemics, including the 2019 novel coronavirus (“COVID-19”) pandemic, the Russia-Ukraine conflict, the Isreal-Hamas 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~~Rio Grande LNG Facility and the health and safety of our employees, and on our customers, the global economy and the demand for LNG or carbon capture;

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

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

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changes adversely affecting the businesses in which we are engaged;

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management of growth;

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general economic ~~conditions;~~conditions, including inflation and rising interest rates;

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our ability to generate cash; and

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

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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.

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Overview of Business and Significant Developments

Overview of Business

NextDecade Corporation, ~~engages~~a Delaware corporation, is a Houston-based energy company primarily engaged in construction and development activities related to the liquefaction of natural gas and sale of LNG and the capture and storage of CO₂ emissions. We ~~have undertaken~~are constructing a natural gas liquefaction and ~~continue to undertake various initiatives to evaluate, design and engineer~~export facility located in the ~~Terminal, including the Terminal CCS project, that we expect will result~~Rio Grande Valley in ~~demand for~~Brownsville, Texas (the “Rio Grande LNG ~~supply~~Facility”). We are also developing two more Federal Energy Regulatory Commission (“FERC”) approved liquefaction trains at the ~~Terminal,~~Rio Grande LNG Facility, a planned carbon capture and storage (“CCS”) project at the Rio Grande LNG Facility, and other potential CCS projects that would be ~~hosted~~located at third-party industrial source facilities through our NEXT Carbon Solutions business.

Through our partially owned subsidiary, Rio Grande LNG, LLC (“Rio Grande”), we are constructing the Rio Grande LNG Facility on the north shore of the Brownsville Ship Channel. The site is located on 984 acres of land which has been leased long-term and includes 15 thousand feet of frontage on the Brownsville Ship Channel. We believe the site is advantaged due to its proximity to abundant natural gas resources in the Permian and Eagle Ford basins, access to an uncongested waterway for vessel loading, and location in a region that has historically been subject to fewer and less severe weather events relative to other locations along the US Gulf Coast. The Rio Grande LNG Facility has been permitted by the FERC to export up to 27 million tonnes per annum (“MTPA”) of LNG from up to five liquefaction trains.

In July 2023, Rio Grande commenced construction on the first three liquefaction trains and related infrastructure (“Phase 1”) of the Rio Grande LNG Facility following a positive final investment decision (“FID”) and the closing of project financing by Rio Grande, which will own Phase 1 of the Rio Grande LNG Facility. Construction will be completed by Bechtel Energy Inc. (“Bechtel”) under fully wrapped, lump-sum turnkey engineering, procurement, and construction (“EPC”) contracts, and will utilize APCI liquefaction technology, which is the predominant liquefaction technology utilized globally.

Pursuant to a joint venture agreement with equity partners for ownership of Rio Grande, we expect to receive up to approximately 20.8% of distributions of available cash generated from Phase 1 operations; provided, that a majority of the cash distributions to which we are otherwise entitled will be paid for any distribution period only after our equity partners receive an agreed distribution threshold in respect of such distribution period and certain other deficit payments from prior distribution periods, if any, are made.

Rio Grande has entered into long-term LNG Sales and Purchase Agreements (“SPAs”) for over 90% of the expected nameplate capacity of Phase 1, pursuant to which Rio Grande customers are generally required to pay a fixed fee with respect to the contracted volumes, irrespective of whether they cancel or suspend deliveries of LNG cargoes. These SPAs create a stable foundation of predictable, long-term cash flows to Rio Grande. We believe our SPAs are attractive to our customers for several reasons, including long-term reliable supply, volumes to support growing demand for LNG and to replace customers’ contracts with legacy LNG suppliers, diversification of supply portfolios in terms of geography, price indexation, delivery points, and/or tenor, flexibility of volumes with no destination restrictions, and compatibility of some of our customers’ ESG goals with our planned CCS project at the Rio Grande LNG Facility. We plan to sell any LNG volumes produced above contracted SPA volumes (“portfolio volumes”) into the LNG market through spot, short-term, and medium-term agreements.

Rio Grande will provide a number of services in support of producing and selling LNG from the Rio Grande LNG Facility pursuant to its SPAs, including natural gas feedstock procurement and transportation, liquefaction, and delivery of LNG to customers either at the loading dock of the Rio Grande LNG Facility or at the customer’s global delivery points via chartered vessels.

We are focused on constructing and operating the Rio Grande LNG Facility safely, efficiently, reliably, and sustainably. We seek to provide a less carbon-intensive and more sustainable LNG through project design, responsibly sourced gas, proposed net-zero power, and our planned CCS project at the Rio Grande LNG Facility. We also seek to make measurable contributions toward a net-zero future through NEXT Carbon Solutions by developing carbon capture and storage projects to reduce greenhouse gas emissions at the Rio Grande LNG Facility and other industrial facilities.

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

Significant Recent Developments

Significant developments since January 1, 2023 and through the filing date of this 10-Q include the following:

Development and Construction

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On July 12, 2023, the Company announced a positive FID to construct Phase 1 of the Rio Grande LNG Facility, and Rio Grande issued full notice to proceed (“NTP”) to Bechtel under the EPC contracts for Phase 1.

At FID, the final EPC cost of Phase 1 was approximately $12.0 billion.

Other costs included in Phase 1 as estimated at the time of FID, totaled approximately $6.0 billion, including owner’s costs and contingencies of approximately $2.3 billion, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of more than 4,000 acres of wetland and installation of utilities of approximately $600 million, and interest during construction and other financing costs of approximately $3.1 billion.

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As of September 2023, Bechtel has made meaningful progress on purchase orders for Train 3 and is focused on mobilizing labor and equipment and preparing temporary facilities at the site.

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Strategic and Commercial

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In January 2023, Rio Grande entered into a 15-year LNG SPA with Itochu Corporation (“Itochu”) for the supply of 1.0 MTPA of LNG, indexed to Henry Hub and sold on a free-on-board (“FOB”) basis from the Rio Grande LNG Facility.

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In June 2023, Rio Grande entered into a 20-year LNG SPA with TotalEnergies SE (“TotalEnergies”) for the supply of 5.4 MTPA of LNG, indexed to Henry Hub and sold on an FOB basis from the Rio Grande LNG Facility.

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We have started the front-end engineering and design (“FEED”) and EPC contract processes with Bechtel for Train 4 and are progressing numerous discussions with potential buyers of LNG to provide commercial support for Train 4.

Financial

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In February 2023, we sold approximately 5.8 million shares of our common stock for gross proceeds of $35 million to HGC NEXT INV LLC and Ninteenth Investment Company.

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In June 2023, we entered into a common stock purchase agreement for three private placements with Global LNG North America Corp., an affiliate of TotalEnergies, pursuant to which we sold a total of approximately 44.9 million shares of our common stock for an aggregate purchase price of $219.4 million in three transactions occurring in June, July and September 2023.

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On July 12, 2023, in conjunction with the positive FID of Phase 1 of the Rio Grande LNG Facility, we and certain of our subsidiaries closed an approximately $18.4 billion project financing for Phase 1. This financing underscores the critical role that LNG and natural gas are expected to play in the global energy transition and included the closing of:

A joint venture agreement which included approximately $5.9 billion of financial commitments from Global Infrastructure Partners (GIP), GIC, Mubadala Investment Company, and TotalEnergies;

A commitment by the Company to invest approximately $283 million in Phase 1, which was completed in September 2023 and included $125 million of pre-FID capital investments and additional funds contributed from the proceeds of sales of the Company’s common stock to an affiliate of TotalEnergies;

Senior secured non-recourse bank credit facilities of $11.6 billion with a 7-year maturity, consisting of $11.1 billion in construction term loans and a $500 million working capital facility; and

An offering of $700 million senior secured non-recourse private placement notes, which will mature in July 2033 and will accrue interest at a fixed rate of 6.67%.

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We hold equity interests in the Phase 1 joint venture that entitle the Company to receive up to 20.8% of the distributions of available cash during operations.

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In September 2023, Rio Grande entered into a credit agreement with a group of lenders for $356 million of senior secured loans to finance a portion of Phase 1. The senior secured loans were disbursed in one advance of $356 million on September 15, 2023, which resulted in a reduction in the commitments outstanding under Rio Grande’s existing bank credit facilities for Phase 1.

These senior secured loans will mature in July 2033, will accrue interest at a fixed rate of 6.72%, and rank pari passu to Rio Grande’s existing senior secured financings.

This financing illustrates our commitment to extending and spreading out debt maturities, diversifying sources of capital, reducing bank commitments to provide potential capacity for financing future LNG expansions, and mitigating interest rate exposure.

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As of September 2023, Rio Grande’s outstanding fixed-rate debt and executed interest rate swaps have reduced its exposure to movements in interest rates for over 80% of the debt currently projected to be incurred in support of Phase 1 construction.

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Rio Grande has completed a syndication of a portion of its bank credit facility commitments, resulting in a supporting lender group of over 30 international banks.

Rio Grande ~~Development~~LNG Facility Activity

Liquefaction Facilities Overview

We are constructing the Rio Grande LNG Facility on the north shore of the Brownsville Ship Channel in south Texas through our partially owned subsidiary Rio Grande. The site is located on 984 acres of land which has been leased long-term and includes 15,000 feet of frontage on the Brownsville Ship Channel.

The Rio Grande LNG Facility has received all necessary approvals and authorizations required for construction, including those from the FERC.

In July 2023, construction commenced on Phase 1 of the Rio Grande LNG Facility following a positive FID and the closing of project financing by Rio Grande, which will own Phase 1 of the Rio Grande LNG Facility. Phase 1 includes three liquefaction trains with a total expected nameplate capacity of approximately 17.6 MTPA, two 180,000 cubic meter full containment LNG storage tanks, two jetty berthing structures designed to load LNG carriers up to 216,000 cubic meters in capacity, and associated site infrastructure and common facilities including feed gas pretreatment facilities, electric and water utilities, two totally enclosed ground flares for the LNG tanks and marine facilities, two ground flares for the liquefaction trains, roads, levees surrounding the entire site, and warehouses, administrative, operations control room and maintenance buildings.

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As of September 2023, the project completion percentage for Trains 1 and 2 of the Rio Grande LNG Facility was approximately 8.1%, which is in line with the schedule under the EPC contract. Within this project completion percentage, engineering was 35.7% complete, procurement was 14.1% complete, and construction was 0.2% complete. As of September 2023, Bechtel has made meaningful progress on purchase orders for Train 3 and is focused on mobilizing labor and equipment and preparing temporary facilities at the site.

LNG Sale and Purchase Agreements

~~In April 2022, we~~Rio Grande has entered into ~~a 20-year sale and purchase agreement (“SPA”)~~long-term LNG SPAs with ~~ENN LNG (Singapore) Pte Ltd (“ENN LNG”)~~nine creditworthy counterparties for ~~the supply~~aggregate volumes of ~~1.5 mtpa~~approximately 16.2 MTPA of LNG, ~~indexed~~which is over 90% of the expected Phase 1 LNG nameplate capacity. The SPAs have a weighted average term of 19.2 years. Under these SPAs, the customers will purchase LNG from Rio Grande for a price consisting of a fixed fee per MMBtu of LNG plus a variable fee per MMBtu of LNG, with the variable fees structured to ~~Henry Hub on a free-on-board basis from~~cover the ~~Terminal (“ENN~~expected cost of natural gas plus fuel and other sourcing costs to produce LNG. In certain circumstances, customers may elect to cancel or suspend deliveries of LNG ~~SPA”). The LNG supplied~~cargoes, in which case the customers would still be required to ~~ENN LNG~~pay the fixed fee with respect to cargoes that are not delivered. A portion of the fixed fee under each SPA will be ~~from~~subject to annual adjustment for inflation. The SPAs and contracted volumes to be made available under the ~~first two trains at~~SPAs are not tied to a specific train; however, the ~~Terminal.~~commencement of the term of each SPA is tied to a specified train.

~~In April 2022, we also entered into a 15-year SPA with ENGIE S.A. (“ENGIE”) for the supply of 1.75 mtpa~~Rio Grande’s portfolio of LNG ~~indexed to Henry Hub on a free-on-board basis from~~SPAs for Phase 1 of the ~~Terminal (“ENGIE SPA”). The~~Rio Grande LNG ~~supplied to ENGIE will be from the first two trains at the Terminal.~~Facility was as follows:

In July 2022, we entered into a 20-year SPA with China Gas Hongda Energy Trading Co., LTD (“China Gas”) for the supply of 1.0 mtpa of LNG indexed to Henry Hub on a free-on-board basis from the Terminal (“China Gas SPA”). The LNG supplied to China Gas will be from the second train at the Terminal.

In July 2022, we also entered into a 20-year SPA with Guangdong Energy Group (“Guangdong Energy”) for the supply of 1.0 mtpa of LNG indexed to Henry Hub delivered on an ex-ship basis from the Terminal (“Guangdong Energy SPA”). The LNG supplied to Guangdong Energy will be from the first train at the Terminal.

In July 2022, we also entered into a 20-year SPA with ExxonMobil LNG Asia Pacific (“EMLAP”), an affiliate of ExxonMobil, for the supply of 1.0 mtpa of LNG indexed to Henry Hub delivered on a free-on-board basis from the Terminal (“EMLAP SPA”). The LNG supplied to EMLAP will be from the first two trains at the Terminal.

Customer	Volume (MTPA)	Tenor (years)	Delivery Model ⁽¹⁾
TotalEnergies	5.4	20	FOB
Shell NA LNG LLC (“Shell”)	2.0	20	FOB
ENN LNG Singapore Pte Ltd.	2.0	20	FOB
ENGIE S.A.	1.75	15	FOB
China Gas Hongda Energy Trading Co., LTD	1.0	20	FOB
Guangdong Energy Group	1.0	20	DES
Exxon Mobil LNG Asia Pacific	1.0	20	FOB
Galp Trading S.A.	1.0	20	FOB
Itochu	1.0	15	FOB
Total	16.15	19.2 years weighted average
⁽¹⁾ FOB - free on board; DES - delivered ex-ship

Each of these SPAs is currently effective, and deliveries of LNG under these SPAs will commence on the ~~ENN~~respective Date of First Commercial Delivery (“DFCD”), which is primarily tied to the substantial completion or guaranteed substantial completion dates of specific trains as defined in each SPA. In aggregate, approximately 14.65 MTPA of Phase 1 Henry Hub-linked SPAs have average fixed fees, unadjusted for inflation, totaling approximately $1.8 billion expected to be paid annually.

Marketing of Uncontracted Volumes

Rio Grande expects to sell any commissioning LNG volumes and operational LNG volumes in excess of SPA ~~ENGIE~~volumes into the LNG market through spot, short-term, and medium-term agreements. Rio Grande has entered into certain charter agreements and expects to enter into additional charter agreements with vessel owners to provide shipping capacity for its existing DES SPA, ~~China~~commissioning volumes, and expected portfolio volumes.

Engineering, Procurement and Construction (“EPC”)

Rio Grande entered into fully wrapped, lump-sum turnkey contracts with Bechtel for the engineering, procurement, and construction of Phase 1 at the Rio Grande LNG Facility, under which Bechtel has generally guaranteed cost, performance, and schedule. Under the Phase 1 EPC contracts, Bechtel is responsible for the engineering, procurement, construction, commissioning, and startup of three liquefaction trains and associated infrastructure.

Bechtel is a well-established and reputable LNG engineering and construction firm with a strong track record for liquefaction facility project execution. Bechtel has built over one-third of all LNG facilities worldwide and has completed nine liquefaction trains on the US Gulf Coast, all within budget and on or ahead of schedule.

On July 12, 2023, Rio Grande issued final notice to proceed to Bechtel Energy Inc. under the EPC agreements for Phase 1. The final EPC lump-sum contract pricing for Phase 1 was approximately $12.0 billion at FID. Total expected capital costs for Phase 1 are estimated to be approximately $18.0 billion, including estimated owner’s costs, contingencies, and financing costs, and including amounts spent prior to FID under limited notices to proceed.

Natural Gas ~~SPA, Guangdong Energy SPA~~Transportation and ~~EMLAP SPA become~~Supply

Rio Grande has entered into a firm transportation agreement for capacity on the Rio Bravo Pipeline to transport natural gas feedstock to the Rio Grande LNG Facility. The Rio Bravo Pipeline is being constructed and will be operated by a wholly owned subsidiary of Enbridge Inc. (“Enbridge”). The Rio Bravo Pipeline will provide Rio Grande access to purchase natural gas supplies at Agua Dulce and will connect to six regional intra and interstate pipelines, giving Rio Grande access to prolific gas production from the Permian and Eagle Ford basins and providing significant flexibility to obtain competitively priced natural gas feedstock.

The Rio Bravo Pipeline is under construction and is expected to be completed prior to the start of commissioning of Train 1 at the Rio Grande LNG Facility. Rio Grande has also entered into an agreement for capacity on an interruptible basis with Enbridge’s Valley Crossing Pipeline to provide redundant capacity for commissioning and operations.

We have proposed and are in the process of executing a substantial and diversified natural gas feedstock sourcing strategy to spread risk exposure across multiple contracts, counterparties, and pricing hubs. We expect to enter into gas supply arrangements with a wide range of suppliers, and we also expect to leverage trading platforms and exchanges to lock in natural gas supply prices and/or hedge risk. Certain of our LNG offtake counterparties have the option to sell to Rio Grande some or all of the natural gas required to produce their respective contracted LNG volumes pursuant to structured options which define how much volume can be supplied and how much notice must be provided to switch to and from self-sourcing.

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We believe our proximity to major reserve basins, increasing pipeline capacity in the area, a significant amount of natural gas production and infrastructure investment, as well as our existing contacts and discussions with some of the largest regional operators, represent key elements of a comprehensive and effective ~~upon~~feed gas strategy.

Final Investment Decision on Train 4 and Train 5 at the ~~satisfaction of certain conditions precedent, which include~~Rio Grande LNG Facility

We expect to make a positive final investment decision and commence construction of Train 4 and related infrastructure, and subsequently Train 5 and related infrastructure, at the Rio Grande LNG Facility subject to, among other things, finalizing and entering into EPC contracts, entering into appropriate commercial arrangements, and obtaining adequate financing to construct each train and related infrastructure.

In connection with consummating the Phase 1 equity joint venture, our equity partners each have options to invest in Train 4 and Train 5 equity, which would provide 60% of the estimated equity funding required for each of Train 4 and Train 5. We currently expect to fund 40% of the equity commitments for each of Train 4 and Train 5, and to have an initial economic interest of 40% in each of Train 4 and Train 5, increasing to 60% after the Financial Investors achieve certain returns on their investments in the ~~initial phase~~respective train.

TotalEnergies’ right to invest in Train 4 and Train 5 is conditioned on exercising its LNG purchase rights of 1.5 MTPA for the respective train. If TotalEnergies exercises its LNG purchase rights, the Company currently estimates that an additional approximately 3 MTPA must be contracted on a long-term basis for each of Train 4 and Train 5 prior to making a positive final investment decision for the respective train.

We have commenced certain pre-FID activities for Train 4, including the FEED and EPC contract processes with Bechtel.

FERC Update

On April 21, 2023, the FERC issued the order on remand (the “Remand Order”) reaffirming the order issued by FERC on November 22, 2019, authorizing the siting, construction and operation of the ~~Terminal.~~Rio Grande LNG Facility (the “Order”). The Remand Order reaffirmed that the Rio Grande LNG Facility is not inconsistent with the public interest under the Natural Gas Act Section 3.

The Remand Order was issued as a result of the decision of the U.S. Court of Appeals for the District of Columbia dated August 3, 2021, which denied all petitions filed by parties who filed requests for re-hearing of the Order, except for two technical issues dealing with environmental justice and GHG emissions, which were remanded to the FERC for further consideration.

On May 22, 2023, Vecinos para el Bienestar de la Comunidad Costera, Sierra Club, City of Port Isabel and the Carrizo/Comecrudo Tribe of Texas (the “Petitioners”) filed a joint request for rehearing of the Order on Remand. The request for rehearing was denied by operation of law on June 22, 2023 (the 30-day period for FERC to respond to the rehearing request expired). On July 10, 2023, the Petitioners petitioned the D.C. Circuit for review of the Order on Remand. Consistent with federal appellate practice, the petition for review does not include any arguments by the Petitioners. The petition only initiates the appeal process.

We do not expect the appeal process to have any material negative impact on construction or operations of Phase 1 or our expected Train 4 and Train 5 expansions at the Rio Grande LNG Facility.

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 (the “Rio Grande Site Lease Amendment”) to extend the effective date for commencing the Rio Grande Site Lease to May 6, 2023.

~~Engineering, Procurement and Construction (~~“~~EPC~~”) ~~Agreements~~

~~In April 2022,~~ The Rio Grande ~~and Bechtel Energy Inc. (formerly known as Bechtel Oil, Gas and Chemicals, Inc., “Bechtel”) amended each of~~Site Lease Amendment further provides that Rio Grande has the ~~Trains 1 and 2 EPC Agreement and the Train 3 EPC Agreement~~right, exercisable in its sole discretion, to extend the ~~respective contract validity~~effective date for commencing the Rio Grande Site Lease to ~~July 31,~~May 6, 2024 by providing the BND with written notice of its election no later than May 6, 2023. Rio Grande delivered such written notice on April 24, 2023.

~~In September 2022,~~On July 12, 2023, Rio Grande issued the effective date notice to BND and ~~Bechtel amended each of~~commenced the Trains 1 and 2 EPC Agreement and the Train 3 EPC Agreement. The amendments to the EPC Agreements primarily give effect to certain updated lump-sum, separated contract pricing components. Consistent with information previously disclosed by the Company, we currently estimate the lump-sum EPC cost to construct Trains 1-3 of the Terminal at approximately $11.4 billion. The final EPC lump-sum contract pricing for Trains 1-3 of the Terminal will be determined prior to an FID on Trains 1-3.Rio Grande Site Lease.

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NEXT Carbon Solutions Development Activity

Front-end Engineering and Design (“FEED”) ~~Agreements~~Agreement

In May 2022, we entered into an agreement with California Resources Corporation, whereby NEXT Carbon Solutions will perform a FEED study for the post combustion capture and compression of up to 95% of the CO₂ produced at the Elk Hills Power Plant. ~~During~~The FEED study was successfully completed in the ~~FEED,~~first quarter of 2023. NEXT Carbon Solutions and California Resources Corporation ~~expect~~continue to ~~finalize definitive~~review the FEED results and are engaging in commercial ~~documents allowing~~discussions to progress the ~~project to proceed with a final investment decision.~~project.

~~In June 2022, we entered into agreements with an energy infrastructure fund~~Corporate and Other Activities

We are required to ~~perform preliminary FEED studies~~maintain corporate and general and administrative functions to serve our business activities described above. We are also in various stages of developing other projects, such as Train 4 and Train 5 at ~~two power generation facilities. Through performance of~~ the ~~preliminary FEED studies, we have generated cash proceeds of $0.7 million~~Rio Grande LNG Facility, additional liquefaction expansions at the Rio Grande LNG Facility, and ~~expect to generate an additional $0.3 million in the fourth quarter of 2022.~~potential NEXT Carbon Solutions projects.

Financing Activity

Private ~~Placements~~Placement of Company Common Stock

In ~~April 2022,~~February 2023, we sold ~~4,618,226~~5,835,277 shares of Company common stock for gross proceeds of ~~approximately $30~~$35 million to HGC NEXT INV LLC ~~as described in~~ ~~Note 9 -~~ ~~Stockholders' Equity~~~~in the Notes to Consolidated Financial Statements.~~and Ninteenth Investment Company.

~~In September 2022,~~

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On June 13, 2023, we ~~sold 15,454,160~~entered into a common stock purchase agreement for three private placements (the “TTE Private Placement”) with Global LNG North America Corp., an affiliate of TotalEnergies SE (the “TTE Purchaser”), pursuant to which we agreed to sell (i) 8,026,165 shares (the “Tranche 1 Shares”) of Company common stock ~~for gross proceeds~~at a purchase price of ~~approximately $85 million. The Private Placement closed on September 19, 2022, as described in~~ ~~Note 9 -~~ ~~Stockholders' Equity~~~~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~~$4.9837 per share, for an aggregate purchase price of ~~$10.5~~$40.0 million, (ii) promptly after conversion of the Convertible Preferred Stock, 22,072,103 shares (the “Tranche 2 Shares”) of Company common stock, at a purchase price of $4.9837 per share, for an aggregate purchase price of $110.0 million, and ~~issued an additional 210 shares~~(iii) promptly after, and conditioned upon, receipt of ~~Series C Preferred Stock in aggregate as origination fees. Warrants representing~~approval of the ~~right to acquire an aggregate~~Company’s stockholders, a 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~~such that, following the conversion of the Convertible Preferred Stock, the TTE Purchaser will own, when including the Tranche 1 Shares and Tranche 2 Shares, an aggregate of 17.5% of the Company common stock then-outstanding (the “Tranche 3 Shares”). On June 14, 2023, the Company closed the sale of the Tranche 1 Shares, and on July 26, we closed the sale of the Tranche 2 Shares. On September 8, 2023, we closed the sale of 14,802,055 shares of common stock (Tranche 3 Shares) for a ~~fully diluted basis, on the applicable exercise date with a strike~~purchase price of ~~$0.01 per share~~$69.4 million.

Project Financing for Phase 1 at the Rio Grande LNG Facility

FID Equity Transactions

On July 12, 2023, in conjunction with the positive FID to construct Phase 1 of the Rio Grande LNG Facility, Rio Grande LNG Intermediate Super Holdings, LLC, an indirect subsidiary of the Company (the “NextDecade Member”) entered into an amended and restated limited liability company agreement (the “JV Agreement”) of Rio Grande LNG Intermediate Holdings, LLC (“Intermediate Holdings”), and the other members party thereto. The members of Intermediate Holdings, including the NextDecade Member and subsidiaries of Global Infrastructure Partners (GIP), GIC, Mubadala Investment Company (collectively with GIP and GIC, the “Financial Investors”), and TotalEnergies, committed to fund $6.2 billion in aggregate to Intermediate Holdings. The NextDecade Member committed to fund cash contributions of approximately $283 million to Intermediate Holdings, including approximately $125 million in contributions paid before FID, and completed its remaining equity commitment in September 2023 utilizing proceeds from the sale of common stock to the TTE Purchaser as described above.

FID Debt Transactions

On July 12, 2023, Rio Grande entered into a Credit Agreement (the “CD Credit Agreement”) that provides for the following facilities:

●

A construction/term loan in an amount up to $10.3 billion available to partially finance the design, engineering, development, procurement, construction, installation, testing, completion, ownership, operation and maintenance of Phase 1, to pay certain fees and expenses associated with the CD Credit Agreement and the loans made thereunder; and

●

A revolving loan and letter of credit facility in an amount up to $500 million available to Rio Grande to finance certain working capital requirements of Rio Grande.

On July 12, 2023, Rio Grande entered into the TCF Credit Agreement (the “TCF Credit Agreement”) that provides for a construction/term loan facility in an aggregate amount up to $800 million available to Rio Grande to partially finance the design, engineering, development, procurement, construction, installation, testing, completion, ownership, operation and maintenance of Phase 1 of the Rio Grande LNG Facility and to pay certain fees and expenses associated with the TCF Credit Agreement and the loans made thereunder. TotalEnergies Holdings SAS (“Total Holdings”) agreed to provide contingent support to the lenders under the TCF Credit Agreement pursuant to, and subject to the terms and conditions of, a support agreement entered into on July 12, 2023, pursuant to which Total Holdings agreed that it will pay past due amounts owing from Rio Grande under the TCF Credit Agreement upon demand.

On July 12, 2023, Rio Grande entered into a Note Purchase Agreement through which it sold $700 million of 6.67% Senior Secured Notes due 2033 (the “Notes”). The Notes were issued ~~together with the issuances of the Series C Preferred Stock.~~pursuant to an indenture between Rio Grande and Wilmington Trust, National Association as trustee and accrue interest that is payable semi-annually in arrears on March 30 and September 30 each year, beginning on September 30, 2023.

~~For further descriptions~~Conversion of ~~the Series C~~Convertible Preferred Stock, ~~and related warrants, see~~ Issuance of Common Stock

The Company’s convertible preferred stock converted into approximately 59.5 million shares of common stock on July 26, 2023. Refer to Note ~~8 -~~ 10 –Preferred Stock and Common Stock Warrants, for further information.

Rio Grande Credit Agreement for Senior Loans

On September 15, 2023, Rio Grande entered into a credit agreement with a group of lenders for $356 million of senior secured loans to finance a portion of Phase 1. The senior secured loans were disbursed in one advance for $356 million on September 15, 2023, which resulted in a reduction in the ~~Notes~~commitments outstanding under Rio Grande’s existing bank credit facilities for Phase 1. These senior secured loans will mature in July 2033, will accrue interest at a fixed rate of 6.72%, and rank pari passu to ~~Consolidated Financial Statements.~~Rio Grande’s existing senior secured financings.

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Liquidity and Capital Resources

Phase 1 FID Rio Grande Financing

In connection with the FID of Phase 1 of the Rio Grande LNG Facility, Rio Grande obtained approximately $6.2 billion in equity capital commitments, inclusive of commitments from the NextDecade Member, entered into senior secured non-recourse bank credit facilities of $11.6 billion, consisting of $11.1 billion in construction term loans and a $500 million working capital facility, and closed a $700 million senior secured non-recourse private notes offering. Rio Grande will utilize these capital resources to fund the approximately $18.0 billion total cost of Phase 1, including EPC cost, which was approximately $12.0 billion at FID, and to fund owner’s costs and contingencies, dredging for the Brazos Island Harbor Channel Improvement Project, conservation of more than 4,000 acres of wetland and wildlife habitat area and installation of utilities, and interest during construction and other financing costs.

Near Term Liquidity and Capital Resources of NextDecade Corporation

~~Our~~In connection with the FID of Phase 1, the Company, through NextDecade Member, its wholly owned subsidiary, committed to invest approximately $283 million, including $125 million of pre-FID capital investments, into construction of Phase 1 of the Rio Grande LNG Facility. As of September 30, 2023, the Company has funded its full equity commitment, utilizing proceeds of the sale of the third tranche of common stock to the TTE Purchaser.

Prior to the FID on Phase 1 of the Rio Grande LNG Facility, our primary cash needs ~~have~~ historically ~~been~~were funding development activities in support of the ~~Terminal~~Rio Grande LNG Facility and our CCS projects, which ~~include~~included payments of initial direct costs of ~~our~~the 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~~$97.7 million on such development activities ~~during 2021,~~year-to-date through FID on July 12, 2023, 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~~Following the FID of Phase 1 ~~2022 have included~~of the ~~following:~~Rio Grande LNG Facility, costs associated with the Phase 1 EPC agreements, Rio Grande site lease, and other Phase 1 related costs are being funded by debt and equity proceeds received by Rio Grande.

In March 2022, we sold 10,500 shares of Series C Preferred Stock at $1,000 per share together with associated warrants to purchase Company common stock 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.~~

~~In September 2022, we sold 15,454,160 shares of Company common stock for approximately $85 million.~~

During the three and nine months ended September 30, 2022 we spent approximately $16 million and $42 million, respectively, on development activities, and we expect spending on development activities to continue to increase during the three months ending December 31, 2022, as we increase headcount, engage consultants, ramp up our contractors, including Bechtel, in preparation for a positive FID of the initial phase of the Terminal. Because our businesses and assets are under construction or in development, we have not historically generated significant cash flow from operations, nor do we expect to do so until liquefaction trains at the ~~Terminal is operational~~Rio Grande LNG Facility begin operating or until we install CCS systems onat third-party industrial facilities. We intend to fund development activities for the foreseeable future with cash and cash equivalents on hand and through the sale of additional equity, equity-based or debt securities in us or in our subsidiaries. There can be no assurance that we will succeed in selling ~~such~~equity or equity-based securities or, if successful, that the capital we raise will not be expensive or dilutive to stockholders.

Our consolidated financial statements as of and for the three and nine months ended September 30, ~~2022~~2023 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Based on our balance of cash and cash equivalents of ~~$109.2~~$50.8 million at September 30, ~~2022,~~2023, there is substantial doubt about our ability to continue as a going concern within one year after the date that our consolidated financial statements were issued. Our ability to continue as a going concern will depend on managing certain operating and overhead costs and our ability to raise capital through equity, equity-based or debt financings. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, which could have a material adverse effect on our financial condition.

Our capital raising activities since January 1, 2023 have included the following:

In February 2023, we sold 5,835,277 shares of Company common stock for $35.0 million.

In June, July and September 2023, we sold 44,900,323 shares of Company common stock in the three tranches of the TTE Private Placement for approximately $219.4 million.

Long Term Liquidity and Capital Resources of NextDecade Corporation

~~The Terminal~~We will not ~~begin to operate and generate~~receive significant cash flows ~~unless and~~from Phase 1 of the Rio Grande LNG Facility until ~~the Terminal~~it is operational, ~~which~~and the commercial operation date for the first train of Phase 1 is expected to beoccur in late 2027 based on the schedule under the EPC contracts. Any future phases of development at ~~least four years away,~~the Rio Grande LNG Facility 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 future phases of development at the ~~Terminal~~Rio Grande LNG Facility and any CCS projects will be financed ~~predominately~~predominantly through ~~project financing and~~the proceeds from future debt, equity-based, and equity offerings by us ~~and that construction of the Terminal~~ or ~~any CCS projects would not begin until such financing has been obtained.~~our subsidiaries. As a result, our business success will depend, to a significant extent, upon our ability to obtain financing required to fund future phases of development and construction at the ~~funding necessary to construct the Terminal~~Rio Grande LNG Facility and any CCS projects, to bring them into operation on a commercially viable basis and to finance ~~our~~any required increases in 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~~fund future phases of development and construction at the ~~Terminal~~Rio Grande LNG Facility or complete 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.

Table of Contents

Sources and Uses of Cash

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

Nine Months Ended

September 30,

2022

2021

Operating cash flows
$ (27,961 ) $ (12,252 )
Investing cash flows
(11,016 ) (13,056 )
Financing cash flows
122,648 39,443
Net increase in cash and cash equivalents
83,671 14,135
Cash and cash equivalents – beginning of period
25,552 22,608
Cash and cash equivalents – end of period
$ 109,223 $ 36,743

	Nine Months Ended
	September 30,
	2023			2022
Operating cash flows	$	(52,627	)	$	(27,961	)
Investing cash flows		(1,010,438	)		(11,016	)
Financing cash flows		1,446,135			122,648

Net increase in cash and cash equivalents		383,070			83,671
Cash and cash equivalents – beginning of period		62,789			25,552
Cash and cash equivalents – end of period	$	445,859		$	109,223

Operating Cash Flows

Operating cash outflows during the nine months ended September 30, 2023 and 2022 ~~and 2021~~ were ~~$28.0~~$52.6 million and ~~$12.3~~$28.0 million, respectively. The increase in operating cash outflows during the nine months ended September 30, ~~2022~~2023 compared to the nine months ended September 30, ~~2021~~2022 was primarily due to an increase in employee costs and professional fees paid to consultants as we ~~prepare~~prepared for and achieved a positive FID in ~~the initial phase~~Phase 1 of the ~~Terminal.~~Rio Grande LNG Facility in July 2023.

Investing Cash Flows

Investing cash outflows during the nine months ended September 30, 2023 and 2022 ~~and 2021~~ were ~~$11.0~~$1,010.4 million and ~~$13.1~~$11.0 million, respectively. Investing cash outflows primarily consist of cash used in the construction and development of Phase 1 of the ~~Terminal and CCS project.~~Rio Grande LNG Facility. The ~~decrease~~increase in investing cash outflows during the nine months ended September 30, ~~2022~~2023 compared to the same period in ~~2021~~2022 was primarily due to ~~lower spend with Bechtel. During~~a positive FID in Phase 1 of the ~~third quarter~~Rio Grande LNG Facility and the mobilization of ~~2022, we issued a limited notice to proceed to~~the Bechtel ~~to begin ramping up its personnel and initiate site preparation work; as a result, investing cash outflows will increase~~workforce that began in ~~the fourth quarter of 2022 relative to the quarterly investing cash outflows during the nine months ended September 30, 2022 and 2021.~~July 2023.

~~Table of Contents~~

Financing Cash Flows

Financing cash inflows during the nine months ended September 30, 2023 and 2022 were $1,446.1 million and ~~2021 were~~ $122.6 million, respectively. Financing cash inflows during 2023 are primarily comprised of proceeds from the issuance of debt of $1,409.0 million, proceeds from the sale of equity in Intermediate Holdings of $279.0 million and ~~$39.4~~proceeds from the sale of Company common stock of $254.4 million, ~~respectively,~~partially offset by debt and equity issuance costs of $491.0 million and repurchases of common stock related to share-based compensation of $9.6 million. Financing cash inflows during 2022 were primarily ~~representing~~comprised of the sale of Company common stock of $115 million and proceeds from the sale of Series C Preferred Stock ~~and the sale~~ of ~~common stock in 2022 and the sale of Series C Preferred Stock in 2021.~~

~~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.~~$10.5 million.

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Results of Operations

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

	For the Three Months Ended									For the Nine Months Ended									For the Three Months Ended									For the Nine Months Ended
	September 30,									September 30,									September 30,									September 30,
	2022			2021			Change			2022			2021			Change			2023			2022			Change			2023			2022			Change
Revenues	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
General and administrative expense		14,616			2,937			11,679			29,233			10,840			18,393			32,128			14,616			17,512			85,195			29,233			55,962
Development expense, net		1,133			—			1,133			3,870			—			3,870			1,083			1,133			(50	)		1,965			3,870			(1,905	)
Lease expense		299			240			59			808			678			130			2,582			299			2,283			3,245			808			2,437
Depreciation expense		41			43			(2	)		129			136			(7	)		42			41			1			117			129			(12	)
Total operating loss		(16,089	)		(3,220	)		(12,869	)		(34,040	)		(11,654	)		(22,386	)		(35,835	)		(16,089	)		(19,746	)		(90,522	)		(34,040	)		(56,482	)
Gain (loss) on common stock warrant liabilities		(2,773	)		4,442			(7,215	)		(7,192	)		(2,363	)		(4,829	)		3,302			(2,773	)		6,075			(2,520	)		(7,192	)		4,672
Derivative gain																				240,265			—			240,265			152,816			—			152,816
Interest income																				966			—			966			1,329			—			1,329
Interest expense, net of capitalized interest																				(32,536	)		—			(32,536	)		(32,536	)		—			(32,536	)
Other, net		65			—			65			86			1			85			5,682			65			5,617			5,641			86			5,555
Net loss attributable to NextDecade Corporation		(18,797	)		1,222			(20,019	)		(41,146	)		(14,016	)		(27,130	)
Preferred stock dividends		(6,248	)		(5,264	)		(984	)		(17,777	)		(13,015	)		(4,762	)
Deemed dividends on Series A Convertible Preferred Stock		—			(16	)		16			—			(47	)		47
Net loss attributable to common stockholders	$	(25,045	)	$	(4,058	)	$	(20,987	)	$	(58,923	)	$	(27,078	)	$	(31,845	)
Net income (loss) attributable to NextDecade Corporation																				181,844			(18,797	)		200,641			34,208			(41,146	)		75,354
Less: net income attributable to non-controlling interest																				67,204			—			67,204			67,204			—			67,204
Less: preferred stock dividends																				7,030			6,248			782			20,484			17,777			2,707
Net income (loss) attributable to common stockholders																			$	107,610		$	(25,045	)	$	132,655		$	(53,480	)	$	(58,923	)	$	5,443

~~Our consolidated~~Net income attributable to common stockholders was $107.6 million, or $0.48 per common share (basic and diluted) for the three months ended September 30, 2023 compared to a net loss ~~was $25.0~~of $25.0 million, or ~~$0.20~~$(0.19) per common share (basic and diluted), for the three months ended September 30, ~~2022 compared to a net loss of $4.1 million, or $0.03 per common share (basic and diluted), for the three months ended September 30, 2021.~~2022. The ~~$21.0~~$132.7 million increase in net ~~loss~~income was primarily a result of derivative gain, partially offset by increases in general and administrative expense, ~~development~~net income attributable to non-controlling interest and interest expense, net ~~preferred stock dividends and loss on common stock warrant liabilities.~~of capitalized interest.

~~Our consolidated net~~Net loss attributable to common stockholders was ~~$58.9~~$53.5 million, or ~~$0.47~~$(0.31) per common share (basic and diluted), for the nine months ended September 30, ~~2022~~2023 compared to a net loss of ~~$27.1~~$58.9 million, or ~~$0.23~~$(0.47) per common share (basic and diluted), for the nine months ended September 30, ~~2021.~~2022. The ~~$31.8~~$5.4 million ~~increase~~decrease in net loss was primarily a result of the derivative gain partially offset by increases in general and administrative expense, ~~development~~net income attributable to non-controlling interest and interest expense, net ~~preferred stock dividends and loss on common stock warrant liabilities.~~of capitalized interest.

Derivative gain during the three months ended September 30, 2023 of $240.3 million is due to the reversal of derivative liabilities recognized at June 30, 2023 and an increase in forward SOFR rates from July 12, 2023 to September 30, 2023 relative to the fixed interest rates under Rio Grande's interest rate swap agreements.

Derivative gain during the nine months ended September 30, 2023 of $152.8 million is due to an increase in forward SOFR rates from July 12, 2023 to September 30, 2023 relative to the fixed interest rates under Rio Grande's interest rate swap agreements..

General and administrative expense during the three months ended September 30, ~~2022~~2023 increased approximately ~~$11.7~~$17.5 million compared to the same period in ~~2021~~2022 primarily due to an increase in professional fees, employee costs and share-based compensation ~~expense~~expense. The primary driver of ~~$5.8 million and increases in salaries and wages, professional fees, travel expenses, and IT and communications. The~~the increase in share-based compensation expense ~~for~~between periods of $6.7 million was the ~~three months ended September 30, 2022 was primarily due to forfeitures~~recognition of compensation cost on restricted stock awards ~~upon the departure~~and units that vested at FID of ~~certain employees during 2021. The increase in salaries~~Phase 1. Professional fees and wages, professional fees, travel expense, and IT and communications is primarily due to fewer pandemic restrictions in 2022 and an increase in the average number of employees during the three months ended September 30, 2021employee costs increased compared to the same period of the prior ~~year.~~year as we prepared for a positive FID in Phase 1 of the Rio Grande LNG Facility.

General and administrative expense during the nine months ended September 30, ~~2022~~2023 increased approximately ~~$18.4~~$56.0 million compared to the same period in ~~2021~~2022 primarily due to an increase in professional fees, employee costs and share-based compensation ~~expense~~expense. The primary driver of ~~$9.1 million and increases in salaries and wages, professional fees, travel expenses, and IT and communications. The~~the increase in share-based compensation expense ~~for~~between periods of $18.5 million was the ~~nine months ended September 30, 2022 was primarily due to~~recognition of compensation cost on restricted stock awards and units that vested at FID of Phase 1 and the forfeitures of awards ~~upon the departure of~~previously granted to certain employees ~~during 2021. The increase in salaries and wages, professional fees, travel expense, and IT and communications is primarily due to fewer pandemic restrictions in 2022 and an increase in~~who departed the ~~average number of employees~~Company during the ~~nine months ended September 30, 2022~~prior year period. Professional fees and employee costs increased compared to the same period of the prior ~~year.~~year as we prepared for a positive FID in Phase 1 of the Rio Grande LNG Facility.

~~Development expense, net~~Net income attributable to non-controlling interest during the three and nine months ended September 30, ~~2022 were $1.1~~2023 of $67.2 million ~~and $3.9 million, respectively,~~is due to ~~NEXT Carbon Solutions’ preliminary FEED~~the sale of equity in Intermediate Holdings in July 2023 and ~~FEED studies performed on third-party industrial facilities. Similar preliminary FEED and FEED studies were not performed during either~~the subsequent derivative gains of ~~the three or nine months ended September 30, 2021.~~$152.8 million, partially offset by expenses of approximately $47.1 million.

~~Gain (loss) on common stock warrant liabilities for~~Interest expense, net of capitalized interest during the three and nine months ended September 30, ~~2022 and 2021 is primarily due to changes~~2023 of $28.5 million represents total interest cost on debt of $32.5 million, net of capitalized interest of $9.3 million. The Company did not have debt in the ~~share price of Company common stock.~~comparable prior periods.

Preferred stock dividends for the three months ended September 30, 2022 of $6.2 million consisted of dividends paid-in kind with the issuance of 2,335 additional shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), 2,228 additional shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), and 1,669 additional shares of Series C Preferred Stock, compared to preferred stock dividends of $5.3 million for the three months ended September 30, 2021 that consisted of dividends paid-in kind with the issuance of 2,089, 1,993 and 1,159 additional shares of Series A Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock, respectively.

Preferred stock dividends for the nine months ended September 30, 2022 of $17.8 million consisted of dividends paid-in kind with the issuance of 6,803 additional shares of Series A Preferred Stock, 6,489 additional shares of Series B Preferred Stock and 4,430 additional shares of Series C Preferred Stock, compared to preferred stock dividends of $13.0 million for the nine months ended September 30, 2021 that consisted of dividends paid-in kind with the issuance of 6,045, 5,761 and 1,159 additional shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, respectively.

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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~~Except as disclosed below, 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.~~2022.

Derivative Instruments

All derivative instruments, other than those that satisfy specific exceptions, are recorded at fair value. We record changes in the fair value of our derivative positions based on the value for which the derivative instrument could be exchanged between willing parties. If market quotes are not available to estimate fair value, management's best estimate of fair value is based on the quoted market price of derivatives with similar characteristics or determined through industry-standard valuation approaches. Such evaluation may involve significant judgment and the results are based on expected future events or conditions, particularly for those valuations using inputs unobservable in the market.

Our derivative instruments consist of interest rate swaps. We value our interest rate swaps using observable inputs including interest rate curves, risk adjusted discount rates, credit spreads and other relevant data.

Gains and losses on derivative instruments are recognized in earnings. The ultimate fair value of our derivative instruments is uncertain, and we believe that it is reasonably possible that a change in the estimated fair value could occur in the near future as interest rates change.

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, as of September 30, 2023, our disclosure controls and procedures ~~are~~were 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.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

~~The information presented~~Except as disclosed below, ~~updates, and should be read in conjunction with,~~there were no material changes to the risk factors previously disclosed in the ~~Company’s~~Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021. Except as presented below, 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.~~2022.

~~There is~~The substantial ~~doubt about our~~amount of indebtedness incurred to finance construction of Phase 1 of theRio Grande LNG Facilitymay adversely affect Rio Grande’s cash flow and its ability to ~~continue~~operate its business, remain in compliance with debt covenants and make payments on its indebtedness.

Rio Grande has incurred a substantial amount of indebtedness. This substantial level of indebtedness increases the possibility that Rio Grande may be unable to generate cash sufficient to pay, when due, the principal or interest on such indebtedness or to refinance such indebtedness ahead of its scheduled maturity. This indebtedness and obligations thereunder could have other important consequences to you as a ~~going concern.~~stockholder. For example:

●

any failure to comply with the obligations of any of Rio Grande’s debt instruments, including financial and other restrictive covenants could result in an event of default under the applicable instrument;

●

we may be more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse change in government regulation affecting Rio Grande’s ability to pay obligations when due;

●

Rio Grande may need to dedicate a substantial portion of its cashflow from operations to payments on indebtedness, thereby reducing the availability of cashflows to fund working capital, capital expenditures, acquisitions, other general corporate purposes and any future dividends;

	●	the ability to refinance Rio Grande’s indebtedness will depend on the condition of credit markets and capital markets, and its financial condition at such time. Any refinancing could be at higher interest rates and may require compliance with more onerous covenants, which could further restrict business operations;
	●	we may have limited flexibility in planning for, or reacting to, changes in Rio Grande’s business and the industry in which it operates; and

●

our indebtedness may place Rio Grande at a competitive disadvantage compared to its competitors that have less debt.

Restrictions in agreements governing Rio Grande’s indebtedness may prevent it from engaging in certain beneficial transactions.

In addition to restrictions on the ability of Rio Grande to make distributions or incur additional indebtedness, the agreements governing Rio Grande’s indebtedness also contain various other covenants that may prevent it from engaging in beneficial transactions, including limitations on the ability of Rio Grande or certain of its subsidiaries to:

●

make distributions or certain investments;

●

incur additional indebtedness;

●

purchase, redeem or retire equity interests;

●

sell or transfer assets;

●

incur liens;

●

enter into transactions with affiliates; and

●

consolidate, merge, sell or lease all or substantially all of its assets.

A breach of the covenants and other restrictions in any of Rio Grande’s indebtedness could result in an event of default thereunder. Such a default may allow the holders of such indebtedness to accelerate the related indebtedness which may result in foreclose on Rio Grande’s assets.

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Conducting a portion of our operations through joint ventures in which we do not have 100% ownership interest, and which are not operated solely for the benefit of our stockholders, exposes us and our stockholders to risks and uncertainties, many of which are outside of our control.

We currently operate parts of our business through a joint venture, Rio Grande LNG Intermediate Holdings, LLC (“Intermediate Holdings”) in which we do not have ~~incurred operating losses since our inception~~100% ownership interest, and ~~management expects operating losses~~we may enter into additional joint ventures in the future. Joint ventures and ~~negative cash flows to continue~~minority investments inherently involve a lesser degree of control over business operations, thereby potentially increasing the financial, legal, operational and/or compliance risks associated with the joint venture or minority investment. For example, except for the ~~foreseeable future~~Member Reserved Matters (as defined below), the affairs of Intermediate Holdings will otherwise be managed by a board of managers (the “Intermediate Holdings Board”). The Intermediate Holdings Board will be composed of up to four managers appointed by the NextDecade Member (the “Class A Managers”), including one Class A Manager designated by the Global LNG North America Corp., a subsidiary of TotalEnergies SE, and asmanagers appointed by members holding a ~~result, we~~minimum percentage of the Class B limited liability company interests in Intermediate Holdings (the “Class B Managers”). Approval of any matter by the Intermediate Holdings Board will require the consent of a majority of the Class A Managers voting on the matter and Class B Managers representing a majority of the Class B limited liability company interests in Intermediate Holdings for such matter, as applicable; provided that (i) certain specified “qualified matters,” “supermajority matters,” and “unanimous matters” are reserved to the approval of the members of Intermediate Holdings (the "Member Reserved Matters") holding a requisite percentage of the applicable classes of limited liability company interests in Intermediate Holdings, and (ii) related party transactions will be subject to approval in accordance with the procedures specified in the JV Agreement. Pursuant to the JV Agreement, the NextDecade Member will be entitled to receive up to approximately 20.8% of distributions of available cash of Intermediate Holdings to its members during operations; provided, that a majority of the Intermediate Holdings distributions to which the NextDecade Member is otherwise entitled will be paid for any distribution period only after the Financial Investors receive an agreed distribution threshold in respect of such distribution period and certain other deficit payments from prior distribution periods, if any, are made. Any such shortfall in distributions that the NextDecade Member would otherwise have been entitled to will accrue as an arrearage to be paid out in future periods in which Intermediate Holdings meets the applicable target distribution threshold for the Financial Investors. Challenges and risks presented by joint venture structures not otherwise present with respect to our wholly-owned subsidiaries and direct operations, include:

●

our joint ventures may fail to generate the expected financial results, and the return may be insufficient to justify our investment of effort and/or funds;

●

we may not control the joint ventures or our venture partners may hold veto rights over certain actions;

●

the level of oversight, control and access to management information we are able to exercise with respect to these operations may be lower compared to our wholly-owned businesses, which may increase uncertainty relating to the financial condition of these operations, including the credit risk profile;

●

we may experience impasses or disputes with our joint venture partners on certain decisions, which could require us to expend additional resources to resolve such impasses or disputes, including litigation or arbitration;

●

we may not have control over the timing or amount of distributions from the joint ventures;

●

our joint venture partners may have business or economic interests that are inconsistent with ours and may take actions contrary to our interests;

●

our joint venture partners may fail to fund capital contributions or fail to fulfill their obligations as partners;

●

the arrangements governing our joint ventures may contain restrictions on the conduct of our business and may contain certain conditions or milestone events that may never be satisfied or achieved;

●

we may suffer losses as a result of actions taken by our venture partners with respect to our joint ventures; and

●

it may be difficult for us to exit joint ventures if an impasse arises or if we desire to sell our interest for any reason.

We believe an important element in the success of any joint venture is a solid relationship between the members of that venture. If there is a change in ownership, a change of control, a change in management or management philosophy, a change in business strategy or another event with respect to a member of our joint venture that adversely impacts the relationship between the venture partners, it could adversely impact such venture.

If our partners are unable or unwilling to invest in our joint venture in the manner that is anticipated or otherwise fail to meet their contractual obligations, the joint venture may be unable to adequately perform and conduct its respective operations, or may require us to provide, or make other arrangements for additional ~~capital to fund our operations and execute our business plan. As of September 30, 2022,~~financing for the ~~Company had $109.2 million in cash and cash equivalents, which~~joint venture. Such financing may not be sufficient to fund the Company's planned operations through one year after the date the consolidated financial statements are issued. Accordingly, there is substantial doubt about the Company's ability to continue as a going concern. The analysis used to determine the Company's ability to continue as a going concern does not include cash sources outside of the Company's direct control that management expects to be available ~~within the next twelve months.~~

Our ability to continue as a going concern is dependent upon our ability to obtain sufficient funding through additional debt or equity financing and to manage operating and overhead costs. There can be no assurance that we will be able to raise sufficient capital on ~~acceptable or satisfactory~~favorable terms, ~~to the Company,~~ or at all.

Joint venture partners, controlling shareholders, management or other persons or entities who control them may have economic or business interests, strategies or goals that are inconsistent with ours. Business decisions or other actions or omissions of the joint venture partners, controlling shareholders, management or other persons or entities who control them may adversely affect the value of our investment, result in litigation or regulatory action against us and otherwise damage our reputation. Any such circumstance could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

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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 September 30, ~~2022:~~2023:

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

July 2022
— $ — — —
August 2022
60,397 7.46 — —
September 2022
87,053 7.00 — —

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
July 2023		994,757	$	8.48		—		—
August 2023		62,720		5.50		—		—
September 2023		—		—		—		—

⁽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 awards made 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.~~Securities Trading Plans of Directors and Executive Officers

During the three months ended September 30, 2023, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

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Item 6. Exhibits

Exhibit No.		Description
3.1⁽¹⁾		Second Amended and Restated Certificate of Incorporation of NextDecade Corporation, dated July 24, ~~2017.~~2017(Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed July 28, 2017).
3.2⁽²⁾		Amended and Restated Bylaws of NextDecade Corporation, as amended March 3, ~~2021.~~2021(Incorporated by reference to Exhibit 4.2 of the Registrant’s Registration Statement on Form S-1 filed June 24, 2022).
3.3⁽³⁾		Certificate of Designations of Series A Convertible Preferred Stock, dated August 9, ~~2018.~~2018 (Incorporated by reference to Exhibit 4.3 of the Registrant’s Registration Statement on Form S-3, filed December 20, 2018).
3.4⁽⁴⁾		Certificate of Designations of Series B Convertible Preferred Stock, dated September 28, ~~2018.~~2018 (Incorporated by reference to Exhibit 3.4 of the Registrant’s Quarterly Report on Form 10-Q, filed November 9, 2018).
3.5⁽⁵⁾		Certificate of Designations of Series C Convertible Preferred Stock, dated March 17, ~~2021.~~2021 (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed March 18, 2021).
3.6⁽⁶⁾		Certificate of Amendment to Certificate of Designations of Series A Convertible Preferred Stock, dated July 12, ~~2019.~~2019 (Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed July 15, 2019).
3.7⁽⁷⁾		Certificate of Amendment to Certificate of Designations of Series B Convertible Preferred Stock, dated July 12, ~~2019.~~2019 (Incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K, filed July 15, 2019).
3.8⁽⁸⁾		Certificate of Increase to Certificate of Designations of Series A Convertible Preferred Stock of NextDecade Corporation, dated July 15, ~~2019.~~2019 (Incorporated by reference to Exhibit 3.7 of the Registrant's Quarterly Report on Form 10-Q, filed August 6, 2019).
3.9⁽⁹⁾		Certificate of Increase to Certificate of Designations of Series B Convertible Preferred Stock of NextDecade Corporation, dated July 15, ~~2019.~~2019 (Incorporated by reference to Exhibit 3.8 of the Registrant’s Quarterly Report on Form 10-Q, filed August 6, 2019).
~~10.1*+~~10.1		~~Fifth Amendment to the Fixed Price Turnkey Agreement for the Engineering, Procurement and Construction of Trains 1 and 2 of the Rio Grande Natural Gas Liquefaction Facility, made and executed~~Indenture, dated as of ~~September 14, 2022,~~July 12, 2023, by and between Rio Grande LNG, LLC and ~~Bechtel Energy Inc.~~Wilmington Trust, National Association, as Trustee (Incorporated by reference to Exhibit 10.6 of the Registrants Quarterly Report on Form 10-Q filed August 14, 2023).
~~10.2*+~~10.2		~~Fifth Amendment to the Fixed Price Turnkey~~Credit Agreement, ~~for the Engineering, Procurement and Construction of Train 3 of the Rio Grande Natural Gas Liquefaction Facility, made and executed~~dated as of ~~September 15, 2022,~~July 12, 2023, by and ~~between~~among Rio Grande LNG, LLC, as Borrower, MUFG Bank, Ltd., as P1 Administrative Agent, Mizuho Bank (USA), as P1 Collateral Agent, and ~~Bechtel Energy Inc.~~the other agents and lenders party thereto (Incorporated by reference to Exhibit 10.7 of the Registrants Quarterly Report on Form 10-Q filed August 14, 2023).
10.3⁽¹⁰⁾		Credit Agreement, dated as of July 12, 2023, by and among Rio Grande LNG, LLC, as Borrower, TotalEnergies Holdings SAS, MUFG Bank, Ltd., as TCF Administrative Agent, Mizuho Bank (USA), as TCF Collateral Agent, and the other agents and lenders party thereto (Incorporated by reference to Exhibit 10.8 of the Registrants Quarterly Report on Form 10-Q filed August 14, 2023).
10.4		Common ~~Stock Purchase~~Terms Agreement, dated as of July 12, 2023, by and among Rio Grande LNG, LLC, as Borrower, MUFG Bank, Ltd., as P1 Intercreditor Agent, and the senior secured debt holder representatives party thereto from time to time (Incorporated by reference to Exhibit 10.9 of the Registrants Quarterly Report on Form 10-Q filed August 14, 2023).
10.5		Collateral and Intercreditor Agreement, dated as of July 12, 2023, by and among Rio Grande LNG, LLC, as Borrower, MUFG Bank, Ltd., as P1 Intercreditor Agent, Mizuho Bank (USA), as P1 Collateral Agent, and the senior secured debt holder representatives party thereto from time to time (Incorporated by reference to Exhibit 10.10 of the Registrants Quarterly Report on Form 10-Q filed August 14, 2023).
10.6		Pledge Agreement, dated as of July 12, 2023, by and among Rio Grande LNG Holdings, LLC, as Pledgor, and Mizuho Bank (USA), as P1 Collateral Agent (Incorporated by reference to Exhibit 10.11 of the Registrants Quarterly Report on Form 10-Q filed August 14, 2023).
10.7		Accounts Agreement, dated as of July 12, 2023, by and among Rio Grande LNG, LLC, as Borrower, Mizuho Bank (USA), as P1 Collateral Agent, and JPMorgan Chase Bank, N.A., as P1 Accounts Bank (Incorporated by reference to Exhibit 10.12 of the Registrants Quarterly Report on Form 10-Q filed August 14, 2023).
10.8+		Amended and Restated Limited Liability Company Agreement of Rio Grande LNG Intermediate Holdings, LLC (Incorporated by reference to Exhibit 10.13 of the Registrants Quarterly Report on Form 10-Q filed August 14, 2023).
10.9*		Credit Agreement, dated as of September ~~14, 2022,~~15, 2023, by and ~~between the Company~~among Rio Grande LNG, LLC, as Borrower, Wilmington Trust, National Association, as Administrative Agent, Mizuho Bank (USA) as P1 Collateral Agent, and the ~~Purchasers named therein.~~
~~10.4~~⁽¹¹⁾		~~Registration Rights Agreement, dated September 14, 2022, by and between the Company and the Purchasers named therein.~~senior lenders party thereto.
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 4.2 of the Registrant’s Registration Statement on Form S-1 filed June 24, 2022.~~

⁽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 10.1 of the Registrant’s Current Report on Form 8-K, filed September 19, 2022.~~
⁽¹¹⁾	~~Incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K, filed September 19, 2022.~~

^*	Filed herewith.

^**	Furnished herewith.
+	Certain portions of this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

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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: November ~~10, 2022~~13, 2023	By:	/s/ Matthew K. Schatzman
		Matthew K. Schatzman
		Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)



Date: November ~~10, 2022~~13, 2023	By:	/s/ Brent E. Wahl
		Brent E. Wahl
		Chief Financial Officer
		(Principal Financial Officer)

2231

				Allocation of Proceeds
						2022 Series C
				*2022 Series C*		*Preferred*
				*Warrants*		*Stock*
Gross proceeds	$	10,500
Equity issuance costs		(20	)
Net proceeds - Initial Fair Value Allocation	$	10,480		$	644	$	9,836
Per balance sheet upon issuance				$	644	$	9,836