Forward-Looking Statements





This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). All statements other than statements of historical fact contained in this
Quarterly Report on Form 10-Q, including statements regarding our future results
of operations and financial position, strategy and plans, and our expectations
for future operations, are forward-looking statements. The words "anticipate,"
"contemplate," "estimate," "expect," "project," "plan," "intend," "believe,"
"may," "might," "will," "would," "could," "should," "can have," "likely,"
"continue," "design" and other words and terms of similar expressions, are
intended to identify forward-looking statements.



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



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



  ? our progress in the development of our liquefied natural gas ("LNG")
    liquefaction and export projects and the timing of that progress;



? our final investment decision ("FID") in the construction and operation of a

LNG terminal at the Port of Brownsville in southern Texas (the "Terminal") and


    the timing of that decision;



? the successful completion of the Terminal by third-party contractors and a

pipeline to supply gas to the Terminal being developed by a third-party;






  ? our ability to develop the carbon capture and storage project at the

Terminal (the "CCS project") to reduce carbon emissions from the Terminal;

? our ability to secure additional debt and equity financing in the future to


    complete the Terminal;



? our ability to secure additional debt and equity financing in the future to


    complete the CCS project, if implemented;




  ? the accuracy of estimated costs for the Terminal;




  ? the accuracy of estimated costs for the CCS project;



? statements that the Terminal and the CCS project, when completed, will have

certain characteristics, including amounts of liquefaction capacities and


    amount of CO2 reduction;



? the development risks, operational hazards, regulatory approvals applicable to

the Terminal's, the CCS project's and the third-party pipeline's construction


    and operations activities;




  ? technological innovation which may lessen our anticipated competitive
    advantage;




  ? the global demand for and price of LNG;




  ? the availability of LNG vessels worldwide;



? changes in legislation and regulations relating to the LNG industry, including

environmental laws and regulations that impose significant compliance costs


    and liabilities;



? global pandemics, including the 2019 novel coronavirus ("COVID-19") pandemic,

and their impact on our business and operating results, including any

disruptions in our operations or development of the Terminal and the health

and safety of our employees, and on our customers, the global economy and the


    demand for LNG;




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



? our ability to maintain the listing of our securities on a securities exchange


    or quotation medium;




  ? changes adversely affecting the business in which we are engaged;




  ? management of growth;




  ? general economic conditions;




  ? our ability to generate cash;




  ? compliance with environmental laws and regulations; and



? 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.



Overview



NextDecade Corporation engages in development activities related to the
liquefaction and sale of LNG and the reduction of CO2 emissions, in part,
through the CCS project. We have focused and continue to focus our development
activities on the Terminal and recently announced our planned development of the
CCS project (described further under "Recent Developments").  We have undertaken
and continue to undertake various initiatives to evaluate, design and engineer
the Terminal and the CCS project that we expect will result in demand for LNG
supply at the Terminal, which would enable us to seek construction financing to
develop the Terminal and the CCS project. We believe the Terminal possesses
competitive advantages in several important areas, including, engineering,
design, commercial, regulatory, emission reductions, and gas supply. We
submitted a pre-filing request for the Terminal to the Federal Energy Regulatory
Commission (the "FERC") in March 2015 and filed a formal application with the
FERC in May 2016. In November 2019, the FERC issued an order authorizing the
siting, construction and operation of the Terminal.  We also believe we have
robust commercial offtake and gas supply strategies.



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





Recent Developments


COVID-19 Pandemic and its Effect on our Business





The business environment in which we operate has been impacted by the recent
downturn in the energy market as well as the outbreak of COVID-19 and its
progression into a pandemic in March 2020.  We have modified and may continue to
modify certain business and workforce practices to protect the safety and
welfare of our employees.  Furthermore, we have implemented and may continue to
implement certain mitigation efforts to ensure business continuity. We will
continue to actively monitor the situation and may take further actions altering
our business operations that we determine are in the best interests of our
employees, customers, partners, suppliers, and stakeholders, or as required by
federal, state, or local authorities.  It is not clear what the potential
effects any such alterations or modifications may have on our business,
including the effects on our customers, employees, and prospects, or on our
financial results for fiscal year 2021 or beyond.



NEXT Carbon Solutions



On March 18, 2021, we announced the formation of NEXT Carbon Solutions that is
expected to (i) develop one of the largest CCS projects in North America at the
Terminal, (ii) advance proprietary processes to lower the cost of utilizing CCS
technology, (iii) help other energy companies to reduce their greenhouse gas
("GHG") emissions associated with the production, transportation, and use of
natural gas, and (iv) generate high-quality, verifiable carbon offsets to
support companies in their efforts to achieve net-zero emissions. NEXT Carbon
Solutions' CCS project is expected to reduce permitted CO2 emissions at the
Terminal by more than 90 percent without major design changes to the Terminal.



Series C Convertible Preferred Stock Offering





In March, April and July 2021, we sold an aggregate of 39,500 shares of Series C
Convertible Preferred Stock, par value $0.0001 per share (the "Series
C Preferred Stock"), at $1,000 per share for an aggregate purchase price of
$39.5 million and issued an additional 790 shares of Series C Preferred Stock in
aggregate as origination fees. Warrants were issued together with the issuances
of the Series C Preferred Stock.



For further descriptions of the Series C Preferred Stock, see Note 8 -


    Preferred Stock and Common Stock Warrants  , and for additional details on
the issuances of the Series C Preferred Stock and the transactions in connection
therewith, please refer to our Current Reports on Form 8-K filed with the SEC on
March 18, 2021, March 29, 2021 and August 2, 2021.



CCS project



On March 25, 2021, we announced the execution of a term sheet with Oxy Low
Carbon Ventures ("OLCV"), a subsidiary of Occidental Petroleum Corporation, for
the offtake and storage of CO2 captured from the Terminal. Under the terms of
the agreement, OLCV will offtake and transport CO2 from the Terminal and
permanently sequester it in an underground geologic formation in the Rio Grande
Valley, where there is believed to be vast CO2 storage capacity, pursuant to a
CO2 Offtake Agreement and a Sequestration and Monitoring Agreement to be
negotiated by the parties.



We have partnered with Mitsubishi Heavy Industries, an experienced developer of post-combustion carbon capture technology, to assist with the planned CCS project at the Terminal.





Terminal



In April 2021, we announced a joint pilot project with Project Canary for the
monitoring, reporting, and independent third-party measurement and certification
of the GHG intensity of LNG to be sold from the Terminal.



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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 30, 2020, 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, 2021 (the "Effective Date").  The Rio Grande
Site Lease Amendment further provides that Rio Grande has the right, exercisable
in its sole discretion, to extend the Effective Date to May 6, 2022 by providing
the BND with written notice of its election no later than the close of business
on the Effective Date.


On April 28, 2021, Rio Grande extended the Effective Date to May 6, 2022.





At-the-Market Program



In August 2021, the Company entered into an at-the-market sales agreement with
Virtu Americas LLC ("Virtu") pursuant to which the Company may sell shares of
Company common stock from time to time through Virtu acting as sales agent, for
aggregate proceeds of up to $50 million.



Liquidity and Capital Resources





Capital Resources



We have funded and continue to fund the development of the Terminal, CCS
project, and general working capital needs through our cash on hand and proceeds
from the issuance of equity and equity-based securities.  Our capital resources
consisted of approximately $36.7 million of cash and cash equivalents as of
September 30, 2021.



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,
                                                    2021          2020
Operating cash flows                              $ (12,252 )   $ (22,746 )
Investing cash flows                                (13,056 )      23,306
Financing cash flows                                 39,443        14,637

Net increase in cash and cash equivalents            14,135        14,197

Cash and cash equivalents - beginning of period 22,608 15,736 Cash and cash equivalents - end of period $ 36,743 $ 29,933






Operating Cash Flows



Operating cash outflows during the nine months ended September 30, 2021 and 2020
were $12.3 million and $22.7 million, respectively.  The decrease in operating
cash outflows during the nine months ended September 30, 2021 compared to
the nine months ended September 30, 2020 was due to reduced employee costs and
lease costs among other actions taken in response to the COVID-19 pandemic.



Investing Cash Flows


Investing cash outflows during the nine months ended September 30, 2021 were $13.1 million and investing cash inflows during the nine months ended September 30, 2020 were $23.3 million. The investing cash outflows during the nine months ended September 30, 2021 were primarily the result of cash used in the development of the Terminal and CCS project of $13.1 million. The investing cash inflows during the nine months ended September 30, 2020 were primarily the result of the sale of $62.0 million of investment securities partially offset by cash used in the development of the Terminal of $39.5 million.





Financing Cash Flows



Financing cash inflows during the nine months ended September 30, 2021 and 2020
were $39.4 million and $14.6 million, respectively. For the nine months ended
September 30, 2021 financing cash inflows were primarily the result of proceeds
from the sale of Series C Preferred Stock.  For the nine months ended September
30, 2020 financing cash inflows were primarily the result of $15.0 million of
proceeds from the sale of Rio Bravo.



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Pre-FID Liquidity



In 2021, we expect to incur $39 million on pre-FID development activities in
support of the Terminal and the CCS project. Approximately $10 million and $27
million of these costs were incurred in the three and nine months ended
September 30, 2021, respectively.



Capital Development Activities





We are primarily engaged in developing the Terminal and the CCS project, which
may require additional capital to support further project development,
engineering, regulatory approvals and compliance, and commercial activities in
advance of a FID made to finance and construct the Terminal and CCS project.
Even if successfully completed, the Terminal will not begin to operate and
generate significant cash flows until at least several years from now.
Construction of the Terminal and CCS project would not begin until, among other
requirements for project financing, all required federal, state and local
permits have been obtained. As a result, our business success will depend, to a
significant extent, upon our ability to obtain the funding necessary to
construct the Terminal and CCS project, to bring them into operation on a
commercially viable basis and to finance our staffing, operating and expansion
costs during that process.



We have engaged SG Americas Securities, LLC (a business unit of Société Générale) and Macquarie Capital (USA) Inc. to advise and assist us in raising capital for post-FID construction activities.





We currently expect that the long-term capital requirements for the Terminal and
the CCS project will be financed predominately through project financing and
proceeds from future debt and equity offerings by us. There can be no assurance
that we will succeed in securing additional debt and/or equity financing in the
future to complete the Terminal and CCS project 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.



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, 2020.



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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
                                    September 30,                             September 30,
                          2021          2020         Change         2021          2020         Change
Revenues                $       -     $       -     $       -     $       -     $       -     $       -
General and
administrative
expense                     2,937         5,069        (2,132 )      10,840        16,582        (5,742 )
Land option and lease
expense                       240           423          (183 )         678         1,281          (603 )
Depreciation expense           43            65           (22 )         136           146           (10 )
Operating loss             (3,220 )      (5,557 )       2,337       (11,654 )     (18,009 )       6,355
Gain (loss) on common
stock warrant
liabilities                 4,442        (1,627 )       6,069        (2,363 )       6,147        (8,510 )
Loss on redemption of
investment securities           -             -             -             -          (412 )         412
Interest income, net            -             7            (7 )           2           241          (239 )
Other                           -            (1 )           1            (1 )         (17 )          16
Net income (loss)
attributable to
NextDecade
Corporation                 1,222        (7,178 )       8,400       (14,016 )     (12,050 )      (1,966 )
Preferred stock
dividends                  (5,264 )      (3,613 )      (1,651 )     (13,015 )     (10,565 )      (2,450 )
Deemed dividends on
Series A Convertible
Preferred Stock               (16 )         (16 )           -           (47 )        (113 )          66
Net loss attributable
to common
stockholders            $  (4,058 )   $ (10,807 )   $   6,749     $ (27,078

)   $ (22,728 )   $  (4,350 )




Our consolidated net loss was $4.1 million, or $0.03 per common share (basic and
diluted), for the three months ended September 30, 2021 compared to a net loss
of $10.8 million, or $0.09 per common share (basic and diluted), for the three
months ended September 30, 2020.  The $6.7 million decrease in net loss was
primarily a result of a gain on common stock warrant liabilities and a  decrease
in general and administrative expenses partially offset by an increase in
preferred stock dividends.



Our consolidated net loss was $27.1 million, or $0.23 per common share (basic
and diluted), for the nine months ended September 30, 2021 compared to a net
loss of $22.7 million, or $0.19 per common share (basic and diluted), for the
nine months ended September 30, 2020. The $4.4 million increase in net loss was
primarily a result of an increase in the loss on common stock warrant
liabilities and preferred stock dividends partially offset by a decrease
in general and administrative expenses.



General and administrative expense during the three months ended September 30,
2021 decreased $2.1 million compared to the same period in 2020 primarily due to
a decrease in share-based compensation expense of $3.5 million partially offset
by increases in salaries and wages, professional fees, travel expenses, and IT
and communications in the aggregate of $1.4 million. The increase in salaries
and wages, professional fees, travel expense, and IT and communications is
primarily due to additional head count added during 2021.



General and administrative expense during the nine months ended September 30,
2021 decreased $5.7 million compared to the same period in 2020 primarily due to
decreases in share-based compensation expense, professional fees, travel
expenses and IT and communications expenses in the aggregate of $7.0 million
partially offset by an increase in salaries and wages of $1.2 million.



Gain (loss) on common stock warrant liabilities for the three and nine months
ended September 30, 2021 and 2020 is primarily due to changes in the share price
of Company common stock and an increase in the number of common stock warrants
outstanding with the issuance of Series C Preferred Stock.



Preferred stock dividends for the three months ended September 30, 2021 of $5.3
million consisted of dividends paid-in kind with the issuance of 2,089
additional shares of Series A Convertible Preferred Stock, par value $0.0001 per
share (the "Series A Preferred Stock"), 1,993 additional shares of Series B
Convertible Preferred Stock, par value $0.0001 per share (the "Series B
Preferred Stock"), and 1,159 additional shares of Series C Preferred Stock,
compared to preferred stock dividends of $3.6 million for the three months ended
September 30, 2020 that consisted of dividends paid-in kind with the issuance of
1,789 and 1,757 additional shares of Series A Preferred Stock and Series B
Preferred Stock, respectively.



Preferred stock dividends for the nine months ended September 30, 2021
of $13.0 million consisted of dividends paid-in kind with the issuance of 6,045
additional shares of Series A Preferred Stock, 5,761  additional shares of
Series B Preferred Stock and 1,159 additional shares of Series C Preferred
Stock compared to preferred stock dividends of $10.6 million for the nine months
ended September 30, 2020 that consisted of dividends paid-in kind with the
issuance of 5,389 additional shares of Series A Preferred Stock and 5,135
additional shares of Series B Preferred Stock.



Deemed dividends on the Series A Preferred Stock for the three and nine months
ended September 30, 2021 and 2020 represents the accretion of the beneficial
conversion feature associated with the Series A Preferred Stock issued in the
third quarter of 2018.



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Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2021.

Summary of Critical Accounting Estimates





The preparation of our Consolidated Financial Statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make certain estimates and assumptions that
affect the amounts reported in the Consolidated Financial Statements and the
accompanying notes. There have been no significant changes to our critical
accounting estimates from those disclosed in our Annual Report on Form 10-K for
the year ended December 31, 2020.

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