NEXTDECADE CORPORATION 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-
? our progress in the development of our liquefied natural gas ("LNG")
liquefaction and export project and any carbon capture and storage projects
("CCS projects") we may develop and the timing of that progress;
? the timing of achieving a final investment decision ("FID") in the
construction and operation of a 27 million tonne LNG export facility at the
Port of Brownsville in southern Texas (the "Terminal");
? our reliance on third-party contractors to successfully complete the
Terminal, the pipeline to supply gas to the Terminal and any CCS projects we
develop;
? our ability to develop our NEXT Carbon Solutions business through
implementation of our CCS projects;
? our ability to secure additional debt and equity financing in the future to
complete the Terminal and other CCS projects on commercially acceptable
terms;
? the accuracy of estimated costs for the Terminal and CCS projects;
? our ability to achieve operational characteristics of the Terminal and CCS
projects, when completed, including amounts of liquefaction capacities and
amount of CO2 captured and stored, and any differences in such operational
characteristics from our expectations;
? the development risks, operational hazards and regulatory approvals
applicable to our LNG and carbon capture and storage development,
construction and operation activities and those of our third-party
contractors and counterparties;
? technological innovation which may lessen our anticipated competitive
advantage or demand for our offerings;
? the global demand for and price of LNG;
? the availability of LNG vessels worldwide;
? changes in legislation and regulations relating to the LNG and carbon capture
industries, including environmental laws and regulations that impose
significant compliance costs and liabilities;
? scope of implementation of carbon pricing regimes aimed at reducing
greenhouse gas emissions;
? global development and maturation of emissions reduction credit markets;
? adverse changes to existing or proposed carbon tax incentive regimes;
? global pandemics, including the 2019 novel coronavirus ("COVID-19") pandemic,
the Russia -Ukraine conflict, other sources of volatility in the energy
markets and their impact on our business and operating results, including any
disruptions in our operations or development of the Terminal and the health
and safety of our employees, and on our customers, the global economy and the
demand for LNG or carbon capture;
? risks related to doing business in and having counterparties in foreign countries;
? our ability to maintain the listing of our securities on the Nasdaq Capital
Market or another securities exchange or quotation medium;
? changes adversely affecting the businesses in which we are engaged;
? management of growth;
? general economic conditions;
? our ability to generate cash; and
? the result of future financing efforts and applications for customary tax
incentives.
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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-
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
Overview
Unless the context requires otherwise, references to "
Recent Developments
Rio Grande Development Activity
LNG Sale and Purchase Agreements and Heads of Agreement
In
In
The ENN LNG SPA and the ENGIE SPA become effective upon the satisfaction of certain conditions precedent, which include a positive final investment decision in the Terminal.
In
Rio Grande Site Lease
On
On
Engineering, Procurement and Construction ("EPC") Agreements
By amendments dated
Financing Activity
Private Placement of Company Common Stock
In
Note 14 - Subsequent Events in the Notes to Consolidated Financial Statements.
Private Placement of Series C Convertible Preferred Stock
In
For further descriptions of the Series C Preferred Stock and related warrants, see Note 8 - Preferred Stock and Common Stock Warrants , in the Notes to Consolidated Financial Statements.
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Liquidity and Capital Resources
Near Term Liquidity and Capital Resources
Our primary cash needs have historically been funding development activities in
support of the Terminal and our CCS projects, which include payments of initial
direct costs of our Rio Grande site lease and expenses in support of engineering
and design activities, regulatory approvals and compliance, commercial and
marketing activities and corporate overhead. We spent approximately
In
In
We expect to spend approximately
Long Term Liquidity and Capital Resources
The Terminal will not begin to operate and generate significant cash flows unless and until the Terminal is operational, which is expected to be at least four years away, and the construction of the Terminal will require a significant amount of capital expenditure. CCS projects will similarly take an extended period of time to develop, construct and become operational and will require significant capital deployment. We currently expect that the long-term capital requirements for the Terminal and any CCS projects will be financed predominately through project financing and proceeds from future debt, equity-based, and equity offerings by us. Construction of the Terminal and CCS projects would not begin until such financing has been obtained. As a result, our business success will depend, to a significant extent, upon our ability to obtain the funding necessary to construct the Terminal and any CCS projects, to bring them into operation on a commercially viable basis and to finance our staffing, operating and expansion costs during that process. There can be no assurance that we will succeed in securing additional debt and/or equity financing in the future to complete the Terminal or any CCS projects or, if successful, that the capital we raise will not be expensive or dilutive to stockholders. Additionally, if these types of financing are not available, we will be required to seek alternative sources of financing, which may not be available on terms acceptable to us, if at all.
Sources and Uses of Cash
The following table summarizes the sources and uses of our cash for the periods
presented (in thousands):
Three Months Ended
March 31,
2022 2021
Operating cash flows $ (10,194 ) $ (3,790 )
Investing cash flows (3,017 ) (3,917 )
Financing cash flows 10,017 24,389
Net (decrease) increase in cash and cash equivalents (3,194 ) 16,682 Cash and cash equivalents - beginning of period
25,552 22,608
Cash and cash equivalents - end of period $ 22,358 $ 39,290
Operating Cash Flows
Operating cash outflows during the three months ended
Investing Cash Flows
Investing cash outflows during the three months ended
Financing Cash Flows
Financing cash inflows during the three months ended
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
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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
March 31,
2022 2021 Change
Revenues $ - $ - $ -
General and administrative expense 3,323 1,369 1,954
Development expense 1,545 - 1,545
Lease expense 219 204 15
Depreciation expense 47 48 (1 )
Total operating loss (5,134 ) (1,621 ) (3,513 )
Loss on common stock warrant liabilities (6,304 ) (2,038 ) (4,266 )
Other, net 1 1 -
Net loss attributable to NextDecade
Corporation (11,437 ) (3,658 ) (7,779 )
Preferred stock dividends (5,754 ) (3,875 ) (1,879 )
Deemed dividends on Series A Convertible
Preferred Stock - (16 ) 16
Net loss attributable to common stockholders
Our consolidated net loss was
General and administrative expense during the three months ended
Development expense during the three months ended
Loss on common stock warrant liabilities for the three months ended
Preferred stock dividends for the three months ended
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Summary of Critical Accounting Estimates
The preparation of our Consolidated Financial Statements in conformity with
accounting principles generally accepted in
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