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

NextDecade Corporation

~~Condensed~~ Consolidated Statements of Operations ~~and Comprehensive Loss~~

(in thousands, except per share ~~data)~~data)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,


2017

2016

2017

2016
Operations

Revenues

$
—

$
—

$
—

$
—
Operating Expenses










General and administrative

14,014


1,885

18,392


5,203
Land option and lease expenses

250


150

733


442
Depreciation expense

26


26

78


73
Impairment loss on capital projects

—


—

—


506
Total operating expenses

14,290


2,061

19,203


6,224
Total operating loss

(14,290)


(2,061)

(19,203)


(6,224)
Other income (expense)










Interest income, net

145


24

236


40
Other expense

(12)


(12)

(31)


(25)
Total other income

133


12

205


15
Net loss

$
(14,157)

$
(2,049)

$
(18,998)

$
(6,209)

Net loss per common share - basic and diluted

$
(0.14)

$
(0.02)

$
(0.19)

$
(0.06)

Weighted average shares outstanding - basic and diluted

103,870


95,680

99,124


95,680

Comprehensive Loss










Net loss

$
(14,157)

$
(2,049)

$
(18,998)

$
(6,209)
Other comprehensive loss:










Change in fair value of investments

6


(1)

9


(1)
Comprehensive loss

$
(14,151)

$
(2,050)

$
(18,989)

$
(6,210)

	*Three Months Ended*						*Nine Months Ended*
	*September 30,*						*September 30,*
	*2021*			*2020*			*2021*			*2020*
Revenues	$	0		$	0		$	0		$	0
Operating expenses
General and administrative expense		2,937			5,069			10,840			16,582
Land option and lease expense		240			423			678			1,281
Depreciation expense		43			65			136			146
Total operating expenses		3,220			5,557			11,654			18,009
Total operating loss		(3,220	)		(5,557	)		(11,654	)		(18,009	)
Other income (expense)
Gain (loss) on common stock warrant liabilities		4,442			(1,627	)		(2,363	)		6,147
Loss on redemption of investment securities		0			0			0			(412	)
Interest income, net		0			7			2			241
Other		0			(1	)		(1	)		(17	)
Total other income (expense)		4,442			(1,621	)		(2,362	)		5,959
Net income (loss) attributable to NextDecade Corporation		1,222			(7,178	)		(14,016	)		(12,050	)
Preferred stock dividends		(5,264	)		(3,613	)		(13,015	)		(10,565	)
Deemed dividends on Series A Convertible Preferred Stock		(16	)		(16	)		(47	)		(113	)
Net loss attributable to common stockholders	$	(4,058	)	$	(10,807	)	$	(27,078	)	$	(22,728	)

Net loss per common share - basic and diluted	$	(0.03	)	$	(0.09	)	$	(0.23	)	$	(0.19	)

Weighted average shares outstanding - basic and diluted		119,374			117,564			118,677			117,450

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

	*For the Three Months Ended September 30, 2020*
	*Common Stock*					*Treasury Stock*														*Series A*		*Series B*
				*Par*							*Additional*						*Total*			*Convertible*		*Convertible*
				*Value*							*Paid-in*			*Accumulated*			*Stockholders’*			*Preferred*		*Preferred*
	*Shares*			*Amount*		*Shares*		*Amount*			*Capital*			*Deficit*			*Equity*			*Stock*		*Stock*
Balance at June 30, 2020		117,492		$	12		178	$	(796	)	$	215,807		$	(138,573	)		76,450		$	51,727	$	53,192
Share-based compensation		—			0		—		0			629			0			629			0		0
Restricted stock vesting		292			0		0		0			0			0			0			0		0
Shares repurchased related to share-based compensation		(64	)		0		64		(211	)		0			0			(211	)		0		0
Preferred stock dividends		—			0		—		0			(3,613	)		0			(3,613	)		1,843		1,757
Deemed dividends - accretion of beneficial conversion feature		—			0		—		0			(16	)		0			(16	)		16		0
Net loss		—			0		—		0			0			(7,178	)		(7,178	)		0		0
Balance at September 30, 2020		117,720		$	12		242	$	(1,007	)	$	212,807		$	(145,751	)	$	66,061		$	53,586	$	54,949

~~Table of Contents~~

~~NextDecade Corporation.~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(in thousands)~~

~~(unaudited)~~

Nine Months Ended

September 30,


2017

2016
Operating activities:




Net loss

$
(18,998)

$
(6,209)
Adjustment to reconcile net loss to net cash used in operating activities




Depreciation

78

73
Share-based compensation expense

10,476

—
Impairment loss on capital projects

—

506
Changes in operating assets and liabilities




Prepaid expenses and other currents assets

53

234
Accounts payable

190

(473)
Accrued expenses and other liabilities

209

639
Net cash used in operating activities

(7,992)

(5,230)
Investing activities:




Acquisition of property, plant and equipment

(10,690)

(15,917)
Issuance of note receivable

(115)

—
Repayment of note receivable

115

—
Cash received in reverse recapitalization

26,774

—
Change in restricted cash

—

17,003
Investments

(54)

(5,009)
Net cash (used in) provided by investing activities

16,030

(3,923)
Financing activities:




Proceeds from equity issuances

30,100

—
Equity issuance costs

(5,953)

—
Net cash provided by financing activities

24,147

—
Net increase (decrease) in cash

32,185

(9,153)
Cash – Beginning of the period

12,524

27,127
Cash – End of the period

$
44,709

$
17,974

Non-cash investing activities:




Accounts payable for acquisition of property, plant and equipment

$
1,266

$
1,371
Accrued liabilities for acquisition of property, plant and equipment

1,845

875

	*For the Nine Months Ended September 30, 2020*
	*Common Stock*					*Treasury Stock*														*Series A*		*Series B*
				*Par*							*Additional*						*Total*			*Convertible*		*Convertible*
				*Value*							*Paid-in*			*Accumulated*			*Stockholders’*			*Preferred*		*Preferred*
	*Shares*			*Amount*		*Shares*		*Amount*			*Capital*			*Deficit*			*Equity*			*Stock*		*Stock*
Balance at December 31, 2019		117,329		$	12		137	$	(685	)	$	224,091		$	(133,701	)		89,717		$	48,084	$	49,814
Share-based compensation		—			0		—		0			(606	)		0			(606	)		0		0
Restricted stock vesting		496			0		0		0			0			0			0			0		0
Shares repurchased related to share-based compensation		(105	)		0		105		(322	)		0			0			(322	)		0		0
Preferred stock dividends		—			0		—		0			(10,565	)		0			(10,565	)		5,389		5,135
Deemed dividends - accretion of beneficial conversion feature		—			0		—		0			(113	)		0			(113	)		113		0
Net loss		—			0		—		0			0			(12,050	)		(12,050	)		0		0
Balance at September 30, 2020		117,720		$	12		242	$	(1,007	)	$	212,807		$	(145,751	)	$	66,061		$	53,586	$	54,949

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

Table of Contents

NextDecade Corporation.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	*Nine Months Ended*
	*September 30,*
	*2021*			*2020*
Operating activities:
Net loss attributable to NextDecade Corporation	$	(14,016	)	$	(12,050	)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation		136			146
Share-based compensation expense (forfeiture)		(5,571	)		(759	)
Loss (gain) on common stock warrant liabilities		2,363			(6,147	)
Realized loss on investment securities		0			423
Amortization of right-of-use assets		414			984
Amortization of other non-current assets		1,062			1,042
Changes in operating assets and liabilities:
Prepaid expenses		(234	)		61
Accounts payable		76			(478	)
Operating lease liabilities		(396	)		(710	)
Accrued expenses and other liabilities		3,914			(5,258	)
Net cash used in operating activities		(12,252	)		(22,746	)
Investing activities:
Acquisition of property, plant and equipment		(8,390	)		(30,088	)
Acquisition of other non-current assets		(4,666	)		(9,390	)
Proceeds from sale of investment securities		0			61,972
Purchase of investment securities		0			(188	)
Net cash (used in) provided by investing activities		(13,056	)		22,306
Financing activities:
Proceeds from sale of Rio Bravo		0			15,000
Proceeds from sale of Series C Convertible Preferred Stock		39,500			0
Proceeds from sale of common stock		389			0
Equity issuance costs		(117	)		0
Preferred stock dividends		(50	)		(41	)
Shares repurchased related to share-based compensation		(279	)		(322	)
Net cash provided by financing activities		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

Non-cash investing activities:
Accounts payable for acquisition of property, plant and equipment	$	329		$	479
Accrued liabilities for acquisition of property, plant and equipment		996			382
Pipeline assets obtained in exchange for other non-current liabilities		84			6,670
Non-cash financing activities:
Paid-in-kind dividends on Convertible Preferred Stock		12,965			10,524
Accretion of deemed dividends on Series A Convertible Preferred Stock		47			113
Accounts payable for equity issuance costs		148			0
Accrued liabilities for equity issuance costs		35			0

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

Table of Contents

NextDecade Corporation

Notes to ~~Condensed~~ Consolidated Financial Statements

~~(unaudited)~~(unaudited)

Note 1 — ~~Nature of Operations~~Background and Basis of Presentation

NextDecade Corporation engages in development activities related to the liquefaction and sale of liquefied natural gas (“LNG”) ~~in international markets.~~and the reduction of CO₂ emissions. We have focused and continue to focus our development activities on the Rio Grande LNG terminal facility at the Port of Brownsville in southern Texas (the “Terminal”) and ~~an associated 137-mile Rio Bravo pipeline to supply gas to~~a carbon capture and storage project at the Terminal (the ~~“Pipeline” together with the Terminal, the “Project”~~“CCS project”). The Company estimates the Project will commence commercial operations in 2023. We have also secured, through December 2019, an approximate 1,000-acre site near Texas City, Texas for a potential LNG terminal (the “Shoal Point Terminal”).

Basis of Presentation

The accompanying unaudited ~~condensed~~ 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‑~~10-01 of Regulation ~~S-X.~~S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial ~~statements.~~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, 2020. In our opinion, all adjustments, consisting only of normal recurring items, which are considered necessary for a fair presentation of the unaudited ~~condensed~~ consolidated financial statements, have been included. The results of operations for the three ~~and nine~~ months ended September 30, ~~2017,~~2021 are not necessarily indicative of the operating results for the full year.

The information included herein should be read in conjunction with the consolidated financial statements and accompanying notes of NextDecade LLC as of and for the year ended December 31, 2016, which is included in our definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) on June 29, 2017. Such financial statements are also incorporated by reference in our Current Report on Form 8‑K filed with the SEC on July 28, 2017 following the completion of a merger (the “Merger”) by a subsidiary of Harmony Merger Corp. (“Harmony”) with and into NextDecade LLC on July 24, 2017 (the “Merger Date”). Harmony changed its corporate name to NextDecade Corporation after completing the Merger.

The Merger was accounted for as a reverse acquisition and recapitalization, with NextDecade LLC being treated as the accounting acquirer. As such, the historical condensed consolidated comparative information as of December 31, 2016 and for all periods in 2016, contained in this report, relate to NextDecade LLC and its subsidiaries. Subsequent to the Merger Date, the information relates to the consolidated entities of NextDecade, with Harmony reflected as the accounting acquiree. The Company continues to operate in a single operating segment for financial reporting purposes.

In connection with the Merger, the issued and outstanding membership interests in NextDecade LLC were exchanged for 98,490,409 shares of Harmony common stock. All share and per share amounts in the Condensed Consolidated Financial Statements and related notes have been retroactively adjusted for all periods presented to give effect to this exchange.

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An “emerging growth company” may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company, as an emerging growth

~~Table of Contents~~

company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards adopted.

~~Note 2 — Merger~~

~~As discussed in Note 1 –~~ ~~Nature of Operations and Basis of Presentation,~~ a subsidiary of Harmony merged with and into NextDecade LLC on July 24, 2017. Immediately following the Merger, the pre-Merger members and management of NextDecade LLC held approximately 94%, or 98,490,409 shares, of our outstanding common stock. The pre-Merger members and management of NextDecade LLC also have the right to receive an additional 4,893,326 shares (up to 19,573,304 shares in aggregate) of the Company’s common stock (“Additional Shares”) upon the achievement by NextDecade of each of the following milestones (the “Additional Share Milestones”):

●

~~Milestone 1 — We or one or more of our subsidiaries receive a Final Environment Impact Statement issued by the Federal Energy Regulatory Commission (“FERC”) by June 30, 2018.~~

●

Milestone 2 — The execution by us or one or more of our subsidiaries of a binding sale and purchase or tolling agreement (with customary conditions precedent) for the sale and purchase of, or the provision of tolling services with respect to, at least one million tons of LNG per annum by June 30, 2018.

●

Milestone 3 — The execution by us or one or more of our subsidiaries of an engineering procurement and construction contract (with customary conditions precedent) for the construction of the Terminal by December 31, 2018.


	●	~~Milestone 4 — An affirmative vote of our board of directors to make a final investment decision for the Terminal or the Pipeline by June 30, 2019.~~

The Merger has been accounted for as a reverse acquisition and recapitalization, with NextDecade LLC being treated as the accounting acquirer. In connection with the completion of the Merger, approximately $26.8 million was released from Harmony’s trust account to NextDecade LLC to be used for development activities.

Note 32 — Prepaid Expenses and Other Current Assets

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

September 30,

December 31,

2017

2016
Rio Grande LNG site option

$
57

$
495
Short-term security deposits

364

349
Shoal Point Leases

75

—
Prepaid insurance

281

21
Other

266

231
Total prepaid expenses and other current assets

$
1,043

$
1,096

	*September 30,*		*December 31,*
	*2021*		*2020*
Prepaid subscriptions	$	203	$	29
Prepaid insurance		389		314
Prepaid marketing and sponsorships		60		60
Other		231		267
Total prepaid expenses and other current assets	$	883	$	670

Note 43 — ~~Investment Securities~~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 100 percent of the equity interests (the “Equity Interests”) in Rio Bravo Pipeline Company, LLC (“Rio Bravo”) to Buyer for consideration of approximately $19.4 million. Buyer paid $15.0 million of the Purchase Price to NextDecade LLC at the Closing and the remainder will be paid within five business days after the date that Rio Grande has received, after a final positive investment decision, the initial funding of financing for the development, construction and operation of the Terminal. Rio Bravo is developing a proposed interstate natural gas pipeline (the “Pipeline”) to supply natural gas to the Terminal. In connection with the Closing, Rio Grande LNG Gas Supply LLC, an indirect wholly-owned subsidiary of the Company (“Rio Grande Gas Supply”), entered into (i) a Precedent Agreement for Firm Natural Gas Transportation Service for the Rio Bravo Pipeline (the “RBPL Precedent Agreement”) with Rio Bravo and (ii) a Precedent Agreement for Natural Gas Transportation Service (the “VCP Precedent Agreement”) with Valley Crossing Pipeline, LLC (“VCP”). VCP and, as of the Closing, Rio Bravo are wholly owned subsidiaries of Enbridge Inc. The ~~Company maintains cash reserves~~Valley Crossing Pipeline is owned and operated by VCP.

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

Pursuant to the VCP Precedent Agreement, VCP agreed to provide Rio Grande Gas Supply with natural gas transportation services on the Valley Crossing Pipeline in a quantity sufficient to match the commissioning requirements of each proposed liquefaction train of the Terminal. VCP’s obligation to construct, install, own, operate and maintain the necessary interconnection to the Terminal and the Pipeline is conditioned on its receipt, no later than December 31, 2023, of notice that Rio Grande Gas Supply or its affiliate has issued a full notice to proceed to the EPC Contractor for the construction of the Terminal. VCP will be responsible, at its sole cost and expense, to construct, install, own, operate and maintain the tap, riser and valve facilities (the “VCP Transporter Facilities”), which shall connect to Rio Grande Gas Supply’s custody transfer meter and such other facilities as necessary in order for the Terminal to receive gas from the VCP Transporter Facilities (the “Rio Grande Gas Supply Facilities”). Rio Grande Gas Supply will be responsible, at its sole cost and expense, to construct, install, own, operate and maintain the Rio Grande Gas Supply Facilities. Under the VCP Precedent Agreement, in consideration for the provision of the commissioning transportation services, VCP will be remunerated on the same dollar-per-dekatherm, take-or-pay basis as set forth in the ~~Ultra-Short-Term Bond Fund~~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 ~~Short-Term Bond Index Fund, which are managed by The Vanguard Group, Inc. The target investment allocation between~~assets of Rio Bravo have not been de-recognized in the Ultra-Short-Term Bond Fund and the Short-Term Bond Index Fund are 75% and 25%, respectively. The Ultra-Short-Term Bond Fund has an average maturity of approximately one year, and approximately 46% of such fund’s holdings are AAA-rated, with 0% non-investment grade rated. The Short-Term Bond Index Fund has an average maturity of approximately three years, andconsolidated balance sheet at September 30, 2021.

Table of Contents

~~70% of such fund’s holdings are AAA-rated, with 0% non-investment grade rated. Investment securities are classified as available-for-sale and consisted of the following (in thousands):~~

September 30,

December 31,

2017

2016


Fair value

Cost

Fair value

Cost
Ultra-Short-Term Bond Fund

$
3,804

$
3,805

$
3,760

$
3,767
Short-Term Bond Index Fund

1,256

1,273

1,237

1,257
Total investments

$
5,060

$
5,078

$
4,997

$
5,024

Note 54 — Property, Plant and Equipment

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

September 30,

December 31,

2017

2016
Fixed Assets




Computers

$
60

$
42
Furniture, fixtures, and equipment

233

232
Leasehold improvements

264

264
Total fixed assets

557

538
Less: accumulated depreciation

(343)

(265)
Total fixed assets, net

214

273
Project Assets (not placed in service)




Rio Grande

57,922

48,087
Rio Bravo

9,466

7,873
Total project assets

67,388

55,960
Total property, plant and equipment, net

$
67,602

$
56,233

	*September 30,*			*December 31,*
	*2021*			*2020*
Fixed Assets
Computers	$	487		$	487
Furniture, fixtures, and equipment		464			464
Leasehold improvements		101			101
Total fixed assets		1,052			1,052
Less: accumulated depreciation		(797	)		(660	)
Total fixed assets, net		255			392
Project Assets (not placed in service)
Terminal		149,160			140,253
Pipeline		21,016			21,017
Total Terminal and Pipeline assets		170,176			161,270
Total property, plant and equipment, net	$	170,431		$	161,662

Depreciation expense was $43 thousand and $65 thousand for the three ~~and nine~~ months ended September 30, ~~2017 was $26~~2021 and 2020, respectively, and $136 thousand and ~~$78~~$146 thousand ~~respectively. Depreciation expense~~ for the ~~three and~~ nine months ended September 30, ~~2016 was $26 thousand~~2021 and ~~$73 thousand,~~2020, respectively.

Note 5 — Leases

Our leased assets primarily consist of office space and land sites.

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

	*September 30,*		*December 31,*
	*2021*		*2020*
Office leases	$	727	$	429
Total operating lease right-of-use assets, net	$	727	$	429

Operating lease liabilities are as follows (in thousands):

	*September 30,*		*December 31,*
	*2021*		*2020*
Office leases	$	579	$	432
Total current lease liabilities	$	579	$	432
Non-current office leases		169		0
Total lease liabilities	$	748	$	432

Operating lease expense is as follows (in thousands):

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2021*		*2020*		*2021*		*2020*
Office leases	$	156	$	238	$	470	$	691
Land leases		0		113		0		332
Total operating lease expense		156		351		470		1,023
Short-term lease expense		84		72		208		249
Land option expense		0		0		0		9
Total land option and lease expense	$	240	$	423	$	678	$	1,281

Maturity of operating lease liabilities as of September 30, 2021 are as follows (in thousands, except lease term and discount rate):

2021 (remaining)	$	115
2022		690
2023		0
2024		0
2025		0
Thereafter		0
Total undiscounted lease payments		805
Discount to present value		(57	)
Present value of lease liabilities	$	748

Weighted average remaining lease term - years		1.2
Weighted average discount rate - percent		12.0

Table of Contents

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

	*Nine Months Ended September 30,*
	*2021*		*2020*
Cash paid for amounts included in the measurement of operating lease liabilities:
Cash flows from operating activities	$	509	$	600
Noncash right-of-use assets recorded for operating lease liabilities:
In exchange for new operating lease liabilities during the period		712		605

Note 6 — Other Non-Current Assets

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

	*September 30,*		*December 31,*
	*2021*		*2020*
Permitting costs⁽¹⁾	$	7,409	$	7,385
Enterprise resource planning system, net		743		1,805
Rio Grande Site Lease initial direct costs		11,751		7,109
Total other non-current assets, net	$	19,903	$	16,299

⁽¹⁾

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

Note 7 — Accrued Liabilities and Other Current Liabilities

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

	*September 30,*		*December 31,*
	*2021*		*2020*
Employee compensation expense	$	3,725	$	14
Terminal costs		996		650
Accrued legal services		42		5
Other accrued liabilities		543		363
Total accrued liabilities and other current liabilities	$	5,306	$	1,032

September 30,

December 31,

2017

2016
Employee compensation expense

$
1,776

$
1,535
Project asset costs

1,845

1,810
Accrued legal services

119

91
Other accrued liabilities

365

331
Total accrued liabilities and other current liabilities

$
4,105

$
3,767

Note 8 – Preferred Stock andCommon Stock Warrants

~~Certain employee contracts provide~~Preferred Stock

In August 2018, we sold an aggregate of 50,000 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock), at $1,000 per share for an aggregate purchase price of $50 million and we issued an additional 1,000 shares of Series A Preferred Stock in aggregate as origination fees to the purchasers of the Series A Preferred Stock.

In September 2018, we sold an aggregate of 29,055 shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), at $1,000 per share for an aggregate purchase price of $29.055 million and we issued an additional 581 shares of Series B Preferred Stock in aggregate as origination fees to the purchasers of the Series B Preferred Stock.

In May 2019, we sold an aggregate of 20,945 shares of Series B Preferred Stock at $1,000 per share for an aggregate purchase price of $20.945 million and we issued an additional 418 shares of Series B Preferred Stock in aggregate as origination fees to the purchasers of such shares of Series B Preferred Stock.

In March 2021, we sold an aggregate of 24,500 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”), at $1,000 per share for an aggregate purchase price of $24.5 million and we issued an additional 490 shares of Series C Preferred Stock in aggregate as origination fees to the purchasers of the Series C Preferred Stock.

In April 2021, we sold 10,000 shares of Series C Preferred Stock, at $1,000 per share for a purchase price of $10 million and we issued an additional 200 shares of Series C Preferred Stock as an origination fee to the purchaser of the Series C Preferred Stock.

In July 2021, we sold 5,000 shares of Series C Preferred Stock, at $1,000 per share for a purchase price of $5 million and we issued an additional 100 shares of Series C Preferred Stock as an origination fee to the purchaser of the Series C Preferred Stock.

Warrants, exercisable for Company common stock, were issued together with the shares of Convertible Preferred Stock (collectively, “Common Stock Warrants”).

The shares of Convertible Preferred Stock bear dividends at a rate of 12% per annum, which are cumulative and accrue daily from the respective dates of issuance on the $1,000 stated value. Such dividends are payable quarterly and may be paid in cash ~~bonuses upon~~or in-kind. During the nine months ended September 30, 2021 and 2020, the Company paid-in-kind $13.0 million and $10.5 million of dividends, respectively, to the holders of the Convertible Preferred Stock. On October 12, 2021, the Company declared dividends to the holders of the Convertible Preferred Stock as of the close of business on September 15, 2021. On October 15, 2021, the Company paid-in-kind $5.3 million of dividends to the holders of the Convertible Preferred Stock.

As of September 30, 2021, shares of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock were convertible into shares of Company common stock at a ~~positive final investment decision~~weighted average conversion price of $6.54 per share, $6.57 per share and $3.29 per share, respectively.

Initial Fair Value Allocation

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

				Allocation of Proceeds
						Series C
				*Series C*		*Preferred*
				*Warrants*		*Stock*
Gross proceeds	$	39,500
Equity issuance costs		(61	)
Net proceeds - Initial Fair Value Allocation	$	39,439		$	1,631	$	37,808
Per balance sheet upon issuance				$	1,631	$	37,808

Common Stock Warrants

The Company revalues the Common Stock Warrants at each balance sheet date and recognized a gain of $4.4 million and a loss of $1.6 million during the three months ended September 30, 2021 and 2020, respectively, and a loss of $2.4 million and a gain of $6.1 million during the nine months ended September 30, 2021 and 2020, respectively. The Common Stock Warrant liabilities are included in Level 3 of the fair value hierarchy.

The Company used a Monte Carlo simulation model to estimate the fair value of the Common Stock Warrants using the following assumptions:

	*September 30,*			*December 31,*
	*2021*			*2020*
Stock price	$	2.78		$	2.09
Exercise price	$	0.01		$	0.01
Risk-free rate		0.5	%		0.1	%
Volatility		58.2	%		58.6	%
Term (years)		1.9			0.8

Beneficial Conversion Feature

ASC 470-20-20 – Debt – Debt with conversion and Other Options (“ASC 470-20”) defines a beneficial conversion feature (“BCF”) as a nondetachable conversion feature that is in the ~~Project (“FID”), subject~~money at the issuance date. The Company was required by ASC 470-20 to ~~approval by~~allocate a portion of the ~~Company’s board~~proceeds from the Series A Preferred Stock equal to the intrinsic value of ~~directors. At~~ the BCF to additional paid-in capital. The Company is recording the accretion of the $2.5 million Series A Preferred Stock discount attributable to the BCF as a deemed dividend using the effective yield method over the period prior to the expected conversion date.

Note 9 — Stockholders' Equity

Common Stock Purchase Agreement

On October 24, 2019, the Company entered into a Common Stock Purchase Agreement with Ninteenth Investment Company LLC, an affiliate of Mubadala Investment Company PJSC (the “Purchaser”). During the three and nine months ended September 30, ~~2017,~~2021, the Company issued an additional 399 thousand and ~~December 31, 2016, non-current compensation liabilities related~~798 thousand shares of Company common stock, respectively, to ~~engineering staff were $0.7 million~~the Purchaser pursuant to the terms of the Common Stock Purchase Agreement.

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. During the three and $1.1 million, respectively, which were recognized as an addition to project assets. In addition, non-current compensation liabilities related to certain executive staff were $1.3 million and $1.6 million as of nine months ended September 30, ~~2017,~~2021, the Company sold approximately 0.1 million shares for proceeds of approximately $0.4 million.

Common Stock Warrants

During the three months ended September 30, 2021, Common Stock Warrants were exercised by certain holders of Series A Preferred Stock and ~~December 31, 2016, respectively.~~Series B Preferred Stock. In connection with the exercises of Common Stock Warrants, the Company issued an aggregate of approximately 1.5 million shares of Company common stock.

Note 710 — Net Loss Per Share

~~Net~~

The following table (in thousands, except for loss per ~~share (“EPS”) is computed in accordance with GAAP. Basic EPS excludes dilution~~share) reconciles basic and ~~is computed by dividing net income (loss) by the~~diluted weighted average ~~number of~~ common shares outstanding ~~during the period. Diluted EPS reflects potential dilution and is computed by dividing net income (loss) by the weighted average number of common~~

~~Table of Contents~~

shares outstanding during the period increased by the number of additional common shares that would have been outstanding if the potential common shares had been issued and were dilutive. The dilutive effect of unvested stock and warrants is calculated using the treasury-stock method. Basic and diluted EPS for all periods presented are the same since our unvested stock of 25,011,173 shares for each of the three and nine months ended September 30, ~~2017 is excluded from~~2021 and 2020:

	*Three Months Ended*						*Nine Months Ended*
	*September 30,*						*September 30,*
	*2021*			*2020*			*2021*			*2020*
Weighted average common shares outstanding:
Basic		119,374			117,564			118,677			117,450
Dilutive unvested stock, convertible preferred stock, Common Stock Warrants and IPO Warrants		0			0			0			0
Diluted		119,374			117,564			118,677			117,450

Basic and diluted net loss per share attributable to common stockholders	$	(0.03	)	$	(0.09	)	$	(0.23	)	$	(0.19	)

Table of Contents

Potentially dilutive ~~shares~~securities not included in the diluted net loss per share computations because ~~the performance conditions had not yet~~their effect would have been ~~satisfied~~anti-dilutive were as of September 30, 2017. Outstanding warrants of 12,081,895 and 12,058,500 for each of the three and nine months ended September 30, 2017 and September 30, 2016, respectively, are also excluded from dilutive shares as the effect was anti-dilutive. follows (in thousands):

	*Three Months Ended*				*Nine Months Ended*
	*September 30,*				*September 30,*
	*2021*		*2020*		*2021*		*2020*
Unvested stock ⁽¹⁾		1,831		848		1,581		993
Convertible preferred stock		34,095		16,869		29,174		16,386
Common Stock Warrants		2,510		1,979		2,486		1,972
IPO Warrants⁽²⁾		12,082		12,082		12,082		12,082
Total potentially dilutive common shares		50,518		31,778		45,323		31,433

⁽¹⁾

Does not include 8.3 million shares for each of the three and nine months ended September 30, 2021 and 3.0 million shares for each of the three and nine months ended September 30, 2020, of unvested stock because the performance conditions had not yet been satisfied as of September 30, 2021 and 2020, respectively.

⁽²⁾

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

Note 811 — Share-based Compensation

We ~~recognize share-based compensation at fair value on the date~~have granted shares of ~~grant. The fair value is recognized as expense (net of any capitalization) over the requisite service period. For equity-classified share-based compensation awards (which include grants of~~Company common stock, restricted Company common stock and restricted stock to employees), compensation cost is recognized based on the grant-date fair value using the quoted market price of our common stock and not subsequently remeasured. The fair value is recognized as expense (net of any capitalization) using the straight-line basis for awards that vest based on service conditions and using the graded-vesting attribution method for awards that vest based on performance conditions. We estimate the service periods for performance awards utilizing a probability assessment based on when we expect to achieve the performance conditions. For liability classified share-based compensation awards (which include grants of stock and restricted stock to non-employees), compensation cost is initially recognized on the grant date using estimated payout levels. Compensation cost is subsequently adjusted quarterly to reflect the updated estimated payout levels based on the changes in the Company’s stock price.

~~As discussed in Note 2 –~~ ~~Merger~~, the stockholders of the Company approved the issuance of Additional Shares upon the achievement of the Additional Share Milestones. In aggregate, 2,429,396 shares and 287,388 Additional Shares will be awarded to management and consultants, respectively, upon the achievement of the Additional Share Milestones.

In addition, in connection with the Merger, the stockholders of the Company also approved the issuance of restricted shares of our common stock to certain employees and consultants (“Restricted Shares”) in an amount based on the number of shares of common stock outstanding at the time of achieving each of the milestones. In aggregate, we estimate that total Restricted Shares to vest upon achievement of the milestones belowunits to employees, consultants and ~~consultants are 3,942,455 shares and 1,495,414 shares, respectively, with vesting percentage by milestone~~non-employee directors under our 2017 Omnibus Incentive Plan, as ~~follows:~~amended (the “2017 Plan”).

●

~~Milestone 1 — 6.25% upon the execution by the Company of a final agreement with an engineering, procurement and construction contractor for an LNG facility.~~


	●	Milestone 2 — 25.00% upon the execution of one or more binding LNG sale and purchase or tolling agreements, with customary conditions precedent, providing for an aggregate of at least 3.825 million tons per annum.

●

~~Milestone 3 — 68.75% upon reaching a positive final investment decision for the Terminal.~~

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


	Three months ended				Nine months ended				*Three months Ended*					*Nine Months Ended*
	September 30,				September 30,				*September 30,*					*September 30,*
	2017		2016		2017		2016		*2021*			*2020*		*2021*			*2020*
Share-based compensation:
Equity awards	$	8,830	$	—	$	8,830	$	—	$	(3,653	)	$	629	$	(5,799	)	$	(606	)
Liability awards		2,305		—		2,305		—		0			0		0			0
Total share-based compensation		11,135		—		11,135		—		(3,653	)		629		(5,799	)		(606	)
Capitalized share-based compensation		(659)		—		(659)		—		944			211		228			(153	)
Total share-based compensation expense	$	10,476	$	—	$	10,476	$	—	$	(2,709	)	$	840	$	(5,571	)	$	(759	)

During each of the three and nine months ended September 30, 2017, the weighted average grant date fair value of equity-classified awards was $10.26 per share, and the total grant date fair value of equity-classified awards was $65.4 million. The total unrecognized compensation costs at September 30, 2017 relating to equity-classified awards and liability-classified awards were $56.6 million and $15.7 million, respectively, which is expected to be recognized over a weighted average period of 1.75 years.

~~Table of Contents~~

Note 912 — Income Taxes

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements. Deferred tax assets and liabilities are included in the Consolidated Financial Statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the current period’s provision for income taxes. A valuation allowance is recorded to reduce the carrying value of our deferred tax assets when it is more likely than not that a portion or all of the deferred tax assets will expire before realization of the benefit or future deductibility is not probable. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the tax position.

~~As of September 30, 2017, we have net operating loss (“NOL”) carryforwards for federal and state income tax reporting purposes. However, due~~Due to our cumulative loss position, we have established a full valuation allowance against our deferred tax assets at September 30, ~~2017~~2021 and December 31, ~~2016. Accordingly, the Company has~~ 2020. Due to our full valuation allowance, we have not recorded a provision for federal or state income taxes during either of the three and nine months ended September 30, ~~2017~~2021 or 2020.

In response to the global pandemic related to COVID-19, President Trump signed into law the Coronavirus Aid, Relief, and ~~2016.~~Economic Security Act (the “CARES Act”) on March 27, 2020 and the Consolidated Appropriations Act, 2021 (the “CAA”) on December 27, 2020. The CARES Act and the CAA provide numerous relief provisions for corporate taxpayers, including modification of the utilization limitations on NOLs, favorable expansions of the deduction for business interest expense under Internal Revenue Code Section 163(j), and the ability to accelerate timing of refundable alternative minimum tax credits. For the three and nine months ended September 30, 2021, there were no material tax impacts to our consolidated financial statements from the CARES Act, the CAA or other COVID-19 measures. The Company continues to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.

Note 1013 — Commitments and Contingencies

In January 2017, NextDecade LLC executed surface lease agreements with the City of Texas City and the State of Texas for an approximate 1,000‑acre site for the Shoal Point Terminal (collectively, the “Shoal Point Leases”). The term of the Shoal Point Leases is 36 months with an option to extend for an additional 12 months and NextDecade LLC has the right to terminate the Shoal Point Leases after the first 12 months at no additional cost to the Company or at any time thereafter with a $50 thousand termination payment to each lessor.

In Rio Grande Site Lease

On March ~~2017, NextDecade LLC executed~~6, 2019, Rio Grande entered into a lease agreement (the “Rio Grande Site Lease”) with the Brownsville Navigation District ~~for a ten‑acre tract subsumed within the site~~of Cameron County, Texas (“BND”) for the ~~Terminal~~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 ~~“Brownsville Lease”~~“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 ~~Brownsville~~Rio Grande Site Lease ~~has an eight‑month primary term with the option to renew such lease for six additional six-month terms and NextDecade LLC~~Amendment further provides that Rio Grande has the right, ~~to terminate such lease after the primary eight-month term or at the end of any six-month term at no additional cost to the Company.~~

~~Total remaining commitments if NextDecade LLC elects~~exercisable in its sole discretion, to extend the ~~Shoal Point Leases~~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 delivered a notice to the Port of Brownsville electing to extend the Effective Date of the Rio Grande Site Lease Amendment to May 6, 2022.

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.

Table of Contents

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 ~~Brownsville Lease through their extended~~remaining volume indexed to domestic United States gas indices, including Henry Hub.

In the first quarter of 2020, pursuant to the terms ~~are as follows (in thousands):~~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.

2017

2018

2019

2020

2021
Shoal Point Leases

$
—

$
400

$
500

$
600

$
—
Brownsville Lease


29


59

59


29


—

$
29

$
459

$
559

$
629

$
—

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. ~~Management~~As of September 30, 2021, 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 ~~event may~~ effect will not occur.

Note 15 — Subsequent Events

The Company has evaluated subsequent events through November 10, 2021, the date the financial statements were issued. Any material subsequent events that occurred during this time have been properly recognized and/or disclosed in these financial statements.

Table of Contents

~~ASU 2016‑16,~~ ~~Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory~~

This standard requires the immediate recognition of the tax consequences of intercompany asset transfers other than inventory. This standard may be early adopted, but only at the beginning of an annual period, and must be adopted using a modified retrospective approach.

~~January 1, 2018~~

~~We are currently evaluating the impact of the provisions of this standard on our Consolidated Financial Statements and related disclosures.~~

~~ASU 2016‑18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash~~

~~This standard requires that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.~~

~~December 31, 2017~~

Upon the adoption of this standard, our Consolidated Statements of Cash Flows will reconcile the balance of total cash and restricted cash from the beginning of the period to the end of the period, which will result in changes to previously reported cash flows from investing activities.

~~Additionally, the following table provides a brief description of recent accounting standards that were adopted by the Company during the reporting period:~~


~~Standard~~	~~Description~~	Date of Adoption	Effect on our Consolidated Financial Statements or Other Significant Matters
~~ASU 2016‑09,~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~	This standard primarily requires the recognition of excess tax benefits for share-based awards in the statement of operations and the classification of excess tax benefits as an operating activity within the statement of cash flows. The standard also allows an entity to elect to account for forfeitures when they occur. This standard may be early adopted, but the entire standard must be adopted in the same period.	~~July 1, 2017~~	Upon adoption of this standard, we elected to account for forfeitures as they occur. The adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures.
~~ASU 2017‑09,~~ ~~Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting~~	This standard clarifies what changes to the terms and conditions of share-based awards require an entity to apply modification accounting. Modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions.	~~July 1, 2017~~	~~The adoption of this guidance did not have a material impact on our Consolidated Financial Statements or related disclosures.~~
~~ASU 2017‑01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business~~	This standard clarifies the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses by providing a screen to determine when an integrated set of assets or activities is not a business.	~~July 1, 2017~~	~~The adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures.~~

~~Table of Contents~~

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

Forward-Looking Statements

This Quarterly Report on Form ~~10‑Q~~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~~,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 ~~entitled~~titled “Risk Factors” in our most recent Annual Report on Form ~~10-K, Quarterly Reports on Form 10-Q, and Definitive Proxy Statement, or any subsequently filed Annual Report on Form 10-K or Quarterly Reports on Form 10-Q.~~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 ~~ability to maintain~~progress in the ~~listing~~development of our ~~Common Stock and Warrants on Nasdaq or another securities exchange;~~

·~~changes adversely affecting the business in which we are engaged;~~

·~~management of growth;~~

·~~general economic conditions;~~

·~~our development~~ liquefied natural gas (“LNG”) liquefaction and export ~~projects;~~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 at the Port of Brownsville in southern Texas (the “Terminal”) and an associated 137-mile pipeline to supply gas to the Terminal (the “Pipeline” together with the Terminal, the “Project”);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 ~~Project;~~Terminal;

●

·the ~~governmental approval~~accuracy of ~~construction and operation of~~estimated costs for the ~~Project;~~CCS project;

●

·statements that the ~~successful completion~~Terminal and the CCS project, when completed, will have certain characteristics, including amounts of ~~the Project by third-party contractors;~~liquefaction capacities and amount of CO₂ reduction;

●

·~~our~~ ~~ability to generate cash;~~

·the development risks, operational hazards, regulatory approvals applicable to ~~Rio Grande’s~~the Terminal’s, the CCS project's and ~~Rio Bravo’s~~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 ~~natural gas (versus the price of imported LNG);~~LNG;

●

·thethe availability of LNG vessels worldwide;

●

·changes in legislation and regulations relating to the LNG ~~industry;~~industry, including environmental laws and regulations that impose significant compliance costs and liabilities;

●

·~~negotiations for~~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 ~~site lease~~ and ~~right-of-way options~~the health and safety of our employees, and on our customers, the global economy and the demand for ~~the Pipeline route;~~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.~~efforts and applications for customary tax incentives.

Table of Contents

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. ~~The forward-looking statements contained in this prospectus are made~~

Except as ~~of the date hereof, and~~required by applicable law, we ~~assume no~~do not undertake any obligation to ~~update~~publicly correct or ~~supplement~~update any forward-looking statements.

Please read “Risk Factors” contained in the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Definitive Proxy Statement and other filings we make with the Securities and Exchange Commission (the “SEC”) for a more complete discussion of the risks and uncertainties mentioned above and for a discussion of other risks and uncertainties. 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 ~~Quarterly Reports on Form 10-Q, Definitive Proxy Statement~~as well as other filings we have made and ~~hereafter in~~will make with the Securities and Exchange Commission (the “SEC”) and our ~~other SEC filings and~~ public communications. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties. Note that forward-looking statements speak only as of the date of this Current Report on Form 10-Q. Except as required by applicable law, we do not undertake any obligation to publicly correct or update any forward-looking statement.

Overview

NextDecade Corporation ~~is a~~engages in development activities related to the liquefaction and sale of LNG ~~development company focused on LNG export projects~~ and ~~associated pipelines~~the reduction of CO₂ emissions, in part, through the ~~State of Texas.~~CCS project. We have focused and continue to focus our development activities on the ~~Project.~~ 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 ~~Project is well-positioned among the second wave of U.S. LNG projects. We also believe we maintain key~~Terminal possesses competitive advantages ~~involving~~in several important areas, including, engineering, design, commercial, regulatory, emission reductions, and gas ~~supply considerations.~~supply. We submitted a pre-filing request for the ~~Project~~Terminal to the Federal Energy Regulatory Commission ~~(“FERC”~~(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 in place, and have signed significant non-binding customer commitments to date. We~~ ~~estimate that the Project will commence commercial operations in 2023.~~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 ~~Company~~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 ~~result~~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 ~~merger~~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 ~~“Merger”~~“Series C Preferred Stock”) by, 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 ~~Harmony Merger Corp. (“Harmony”) with and into NextDecade LNG, LLC (“NextDecade LLC”). Harmony was incorporated in Delaware on May 21, 2014 and was formed~~Occidental Petroleum Corporation, for the ~~purpose~~offtake and storage of a~~cquiring, through a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities. Harmony completed its IPO in March 2015, raising approximately $115.0 million in cash proceeds. Harmony neither engaged in any operations nor generated any revenue prior to the Merger.~~

On July 24, 2017 (the “Merger Date”), Harmony consummated the Merger pursuant to that certain Agreement and Plan of Merger, dated as of April 17, 2017, by and among Harmony, Harmony Merger Sub, LLC, NextDecade LLC and the other signatories thereto. In connection with the closing of the Merger, Harmony changed its name from “Harmony Merger Corp.” to “NextDecade Corporation” and its common stock and warrants began trading on the Nasdaq Capital Market under the symbols “NEXT” and “NEXTW,” respectively.

~~As previously disclosed, the Company received a notice~~CO₂captured from the Staff of the Listing Qualifications Department of The Nasdaq Stock Market LLC indicating that, based upon the Company’s non-compliance with the minimum number of round lot shareholders for the listing of its (i) common stock as set forth in Nasdaq Listing Rule 5505(a)(3) and (ii) warrants as set forth in Nasdaq Listing Rule 5515(a)(4) on The Nasdaq Capital Market, such Company securities may be subject to delisting from The Nasdaq Capital Market unless the Company timely requests a hearing before a Nasdaq Hearings Panel (the “Panel”). The Company timely requested a hearing before the Panel and, on October 26, 2017, the Company appeared before the Panel to present its plan to regain compliance with Nasdaq Listing Rules 5505(a)(3) and 5515(a)(4) with respect to its common stock and warrants, respectively.

On November 3, 2017, the Company was notified that the Panel had determined to grant the Company’s request for the continued listing of its common stock and warrants on The Nasdaq Capital Market pursuant to an extension to evidence compliance with Nasdaq Listing Rules 5505(a)(3) and 5515(a)(4) with respect to its common stock and warrants, respectively, by March 6, 2018. The continued listing of the Company’s common stock and warrants on the Nasdaq Capital

~~Table of Contents~~

~~Market through March 6, 2018 is subject to the Company’s compliance with~~ ~~interim progress reporting requirements~~. ~~The Company continues to work diligently to timely satisfy~~Terminal. Under the terms of the ~~Panel’s decision.~~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.

Table of Contents

Rio Grande Site Lease

On March6, 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 ~~Project~~Terminal, CCS project, and general working capital needs through our cash on hand and proceeds from the issuance of ~~equity.~~equity and equity-based securities. Our capital resources ~~consist~~consisted of approximately ~~$44.7~~$36.7 million of cash and ~~$5.1 million of available-for-sale investment securities~~cash equivalents as of September 30, ~~2017.~~2021.

Sources and Uses of Cash

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

For the Nine Months Ended

September 30,

2017

2016
Operating cash flows

$
(7,992)

$
(5,230)
Investing cash flows

16,030

(3,923)
Financing cash flows

24,147

—

Net increase (decrease) in cash

32,185

(9,153)
Cash - beginning of period

12,524

27,127
Cash - end of period

$
44,709

$
17,974

	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, ~~2017~~2021 and ~~2016~~2020 were ~~$8.0~~$12.3 million and ~~$5.2~~$22.7 million, respectively. The ~~increase~~decrease in operating cash outflows ~~in 2017 compared to 2016 was primarily related to increased cash used as a result of additional employees and increased professional fees.~~

~~Investing Cash Flows~~

~~Investing cash inflows~~ during the nine months ended September 30, ~~2017 of $16.0 million were primarily~~2021 compared to the ~~result of cash acquired~~nine months ended September 30, 2020 was due to reduced employee costs and lease costs among other actions taken in response to the ~~Merger of $26.8 million offset by cash used in the development of the Project of $10.7 million.~~ COVID-19 pandemic.

Investing Cash Flows

Investing cash outflows during the nine months ended September 30, ~~2016 of $3.9~~2021 were $13.1 million ~~was~~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 ~~Project~~Terminal and CCS project of ~~$15.9~~$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 ~~and an~~of investment ~~in available-for-sale~~ securities ~~of $5.0 million~~partially offset by ~~a decrease~~cash used in ~~restricted cash~~the development of ~~$17.0~~the Terminal of $39.5 million.

Financing Cash Flows

Financing cash inflows during the nine months ended September 30, ~~2017~~2021 and 2020 were ~~$24.1~~$39.4 million ~~as a~~and $14.6 million, respectively. For the nine months ended September 30, 2021 financing cash inflows were primarily the result of ~~$30.1~~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 ~~equity issued offset by $6.0~~proceeds from the sale of Rio Bravo.

Table of Contents

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 ~~equity issuance costs.~~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 ~~Project,~~Terminal and the CCS project, which ~~will~~may require ~~significant~~ additional capital to support further project development, engineering, regulatory approvals and compliance, and commercial activities in advance of a ~~final investment decision (“FID”)~~FID made to finance and construct the ~~Project.~~Terminal and CCS project. Even if successfully completed, the ~~Project~~Terminal will not begin to operate and generate significant cash flows until at least several years from ~~now, which management currently estimates being 2023.~~now. Construction of the Terminal and ~~Pipeline~~CCS project would not begin until, ~~FERC issues an order granting the necessary authorizations under the Natural Gas Act and once~~among other requirements for project financing, all required federal, state and local permits have been obtained. ~~We estimate that we will receive all regulatory approvals and commence construction in 2018 and commence commercial operations in 2023.~~ As a result, our business success will depend, to a significant extent, upon our ability to obtain the funding necessary to construct the ~~Project,~~Terminal and CCS project, to bring itthem into operation on a commercially viable basis and to finance ~~the costs of~~our staffing, operating and ~~expanding our company~~expansion costs during that process.

~~Table of Contents~~

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. Additionally, we have negotiated a non-binding term sheet with GE Oil & Gas, Inc. for $150 million of pre-FID “bridge loan financing” which, subject to the achievement of certain development milestones, may be utilized to fund certain pre-FID development activities.

We currently expect that the long-term capital requirements for the ~~Project~~Terminal and the CCS project will be financed predominately through project financing and proceeds from future debt and equity ~~offerings.~~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 ~~Project~~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.

Table of Contents

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,


2017

2016

Change

2017

2016

Change
Revenues

$
—

$
—

$
—

$
—

$
—

$
—
General and administrative

14,014

1,885

12,129

18,392

5,203

13,189
Land option and lease expenses

250

150

100

733

442

291
Depreciation expense

26

26

—

78

73

5
Impairment loss on capital projects

—

—

—

—

506

(506)
Operating loss

(14,290)

(2,061)

(12,229)

(19,203)

(6,224)

(12,979)
Interest income, net

145

24

121

236

40

196
Other expense

(12)

(12)

—

(31)

(25)

(6)
Net loss

$
(14,157)

$
(2,049)

$
(12,108)

$
(18,998)

$
(6,209)

$
(12,789)

	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 ~~$14.2~~$4.1 million, or ~~$0.14~~$0.03 per common share (basic and diluted), for the three months ended September 30, ~~2017,~~2021 compared to a net loss of ~~$2.0~~$10.8 million, or ~~$0.02~~$0.09 per common share (basic and diluted), for the three months ended September 30, ~~2016. This $12.1~~2020. The $6.7 million ~~increase~~decrease in net loss was primarily a result of ~~increased~~a gain on common stock warrant liabilities and a decrease in general and administrative expenses ~~discussed separately below.~~partially offset by an increase in preferred stock dividends.

Our consolidated net loss was ~~$19.0~~$27.1 million, or ~~$0.19~~$0.23 per common share (basic and diluted), for the nine months ended September 30, ~~2017,~~2021 compared to a net loss of ~~$6.2~~$22.7 million, or ~~$0.06~~$0.19 per common share (basic and diluted), for the nine months ended September 30, ~~2016. This $12.8~~2020. The $4.4 million increase in net loss was primarily a result of ~~increased general~~an increase in the loss on common stock warrant liabilities and ~~administrative expenses~~preferred stock dividends partially offset by a decrease in ~~impairment losses on capital projects discussed separately below.~~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, ~~2017 increased $12.1~~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 ~~$13.2 million, respectively,~~1,159 additional shares of Series C Preferred Stock, compared to preferred stock dividends of $3.6 million for the ~~same periods in 2016 due primarily~~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 ~~(i) share-based compensation expense~~preferred stock dividends of ~~$10.5~~$10.6 million ~~in each~~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, ~~2017, which was not incurred in 2016,~~2021 and ~~(ii)~~2020 represents the ~~addition~~accretion of ~~employees and increased professional fees of $2.9 million and $6.3 million~~the beneficial conversion feature associated with the Series A Preferred Stock issued in the ~~three and nine months ended September 30, 2017, respectively, compared to $1.5 million and $4.0 million incurred in the three and nine months ended September 30, 2016, respectively.~~

Land option and lease expenses during the three and nine months ended September 30, 2017, increased $0.1 million and $0.3 million, respectively, compared to the same periods in 2016 due to lease expense associated with an approximate 1,000-acre site with the Citythird quarter of ~~Texas City and the State of Texas (the “Shoal Point Leases”) of $0.1 million and $0.2 million in the three and nine months ended September 30, 2017, respectively, which were not incurred in 2016~~.2018.

Impairment loss on capital projects decreased in the three and nine months ended September 30, 2017 compared to the same periods in 2016 due to an approximate $0.5 million impairment charge recognized in May 2016, when we decided to abandon several early-stage, non-core projects to focus on development of the Project.

Table of Contents

Interest income, net during the three and nine months ended September 30, 2017 increased $0.1 million and $0.2 million, respectively, compared to the same periods in 2016 due to increased yield and higher average balances maintained in our cash accounts and investments with The Vanguard Group, Inc.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, ~~2017.~~2021.

Summary of Critical Accounting Estimates

The preparation of our ~~Condensed~~ 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. ~~Management evaluates its estimates and related assumptions regularly, including those related~~There have been no significant changes to the value of properties, plant, and equipment, share-based compensation and income taxes. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates. Management considers the following to be its mostour critical accounting estimates ~~that involve significant judgment.~~

~~Impairment of Long-Lived Assets~~

~~A long-lived asset, including an intangible asset, is evaluated for potential impairment whenever events or changes~~from those disclosed in circumstances indicate that its carrying value may not be recoverable. Recoverability generally is determined by comparing the carrying value of the asset to the expected undiscounted future cash flows of the asset. If the carrying value of the asset is not recoverable, the amount of impairment loss is measured as the excess, if any, of the carrying value of the asset over its estimated fair value. We use a variety of fair value measurement techniques when market informationour Annual Report on Form 10-K for the same or similar assets does not exist. Projections of future operating results and cash flows may vary significantly from results. Management reviews its estimates of cash flows on an ongoing basis using historical experience and other factors, including the current economic and commodity price environment.

~~Share-based Compensation~~

The assumptions used in calculating the fair value of share-based payment awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future.

~~For additional information regarding our share-based compensation, see Note 8 –~~ ~~Share-based Compensation~~ ~~of our Notes to Condensed Consolidated Financial Statements.~~

~~Income Taxes~~

~~Provisions for income taxes are based on taxes payable or refundable for the current~~ year and deferred taxes on temporary differences between the tax basis of assets and liabilities and their reported amounts in the Consolidated Financial Statements. Deferred tax assets and liabilities are included in the Consolidated Financial Statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the current period’s provision for income taxes. We routinely assess our deferred tax assets and reduce such assets by a valuation allowance if we deem it is more likely than not that some portion or all of the deferred tax assets will not be realized. This assessment requires significant judgment and is based upon our assessment of our ability to generate future taxable income among other factors.ended December 31, 2020.

~~Recent Accounting Standards~~

~~For descriptions of recently issued accounting standards, see Note 11 –~~ ~~Recent Accounting Pronouncements~~ ~~of our Notes to Condensed Consolidated Financial Statements.~~

~~Table of Contents~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

~~The Company is exposed to market risk in the form of equity price risk related to investments in marketable securities.~~

~~Equity Price Risk~~

At September 30, 2017, the fair value of our investments in securities available-for-sale was $5.1 million. We determined the fair value of our investment based on the closing market price where these securities were listed on September 30, 2017. In order to test the sensitivity of the fair value of the available-for-sale securities to changes in equity prices, management modeled a 10% change in the closing market price. This 10% change in closing market price would have resulted in a $0.5 million change in the fair value of available-for-sale securities as of September 30, 2017 and December 31, 2016.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of ~~“our disclosure~~our “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the fiscal quarter ended September 30, ~~2017, as such term is defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act.~~2021. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of September 30, ~~2017,~~2021, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

~~Following~~

During the ~~completion of the Merger, we have undertaken a variety of efforts to adapt~~most recent fiscal quarter, there were no changes in our internal ~~control~~controls over financial reporting that have materially affected, or are reasonably likely to ~~the nature and scope of~~materially affect, our Company following the Merger, including through the hiring of additional personnel with control responsibilities and expertise and the implementation of new controls. Other than these activities, there have been no material changes in internal control over financial reporting.

Table of Contents

PART II – OTHER INFORMATION

Item 1.Legal Proceedings

None.

Item 1A.Risk Factors

~~We are subject to uncertainties~~

The information presented below updates, and ~~risks due to~~should be read in conjunction with, the ~~nature of the business activities we conduct. For a discussion of these risks, see “Item 1A. Risk Factors” of~~risk factors disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016 filed with the SEC on March 10, 2017, “Risk Factors” in our Definitive Proxy Statement filed with the SEC on June 29, 2017, and “Risk Factors” in our Registration Statement on Form S-3,~~2020. Except as ~~amended, filed on August 30, 2017. These risks could materially and adversely affect our business, financial condition, cash flows and result of operations. There have been~~presented below, there were no ~~material~~ changes to the risk factors ~~described~~previously disclosed in the ~~Definitive Proxy Statement~~Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Technological innovation, competition or ~~the Form S-3 described above. We~~other factors may ~~experience additional risks and uncertainties not currently known to us~~negatively impact our anticipated competitive advantage or ~~as a result of~~our processes.

Our success will depend on our ability to create and maintain a competitive position in the natural gas liquefaction industry. We do not have any exclusive rights to any of the LNG technologies that we will be utilizing. In addition, the LNG technology we anticipate using in the Terminal may face competition due to the technological advances of other companies or solutions, including more efficient and cost-effective processes or entirely different approaches developed by one or more of our competitors or others.

The technology we intend to use in our carbon capture and storage project at the Terminal to reduce expected carbon dioxide emissions at the Terminal may not achieve expected results.

Table of Contents

~~developments occurring in the future, conditions that we currently deem to be immaterial may also materially and adversely affect our business, financial condition and results of operations.~~

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

Issuances of Unregistered Securities

On July 7, 2021, pursuant to the terms of the Common Stock Purchase Agreement, dated as of October 24, 2019, by and between the Company and Ninteenth Investment Company LLC (“Ninteenth”), the Company issued 398,725 shares of Company common stock to Ninteenth.

During the three months ended September 30, 2021, the Company issued an aggregate of 1,485,198 shares of Company common stock to warrant holders who exercised outstanding warrants pursuant to the warrants’ cashless exercise provision. These warrants had an exercise price of $0.01 per share. The warrants were originally issued to purchasers of our Series A Preferred Stock and Series B Preferred Stock in August and September 2018.

All of the shares of Company common stock described in this Item 2 were issued in transactions exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof as transactions by an issuer not involving any public offering.

Purchases of Equity Securities by the Issuer

The following table summarizes stock repurchases for the three months ended September 30, 2021:

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 Units That May Yet Be Purchased Under the Plans
July 2021		13,696	$	4.00		—		—
August 2021		—		—		—		—
September 2021		30,270		2.76		—		—

⁽¹⁾	Represents shares of Company common stock surrendered to us by participants in the 2017 Plan to settle the participants’ personal tax liabilities that resulted from the lapsing of restrictions on shares awarded to the participants under the 2017 Plan.

⁽²⁾	The price paid per share of Company common stock was based on the closing trading price of such stock on the dates on which we repurchased shares of Company common stock from the participants under the 2017 Plan.

~~None.~~

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

Table of Contents

Item 6.~~Exhibits.~~ Exhibits

Exhibit No.		Description
3.1⁽¹⁾
~~2.1~~		Merger Agreement, dated as of April 17, 2017, by and among Harmony Merger Corp., Harmony Merger Sub, LLC, NextDecade, LLC, and certain members of NextDecade and entities affiliated with such members (incorporated by reference to Annex A of the Company’s definitive proxy statement filed with the SEC on June 29, 2017).

~~3.1~~		Second Amended and Restated Certificate of Incorporation of NextDecade Corporation, ~~(incorporated by reference to Exhibit 3.1 of the Company’s Form 8‑K filed with the SEC on~~dated July ~~28, 2017).~~24, 2017.
3.2⁽²⁾
~~3.2~~		Amended and Restated Bylaws of NextDecade Corporation, ~~(incorporated by reference to Exhibit 3.2 of the Company’s Form 8‑K filed with the SEC on~~dated July ~~28, 2017).~~24, 2017.
3.3⁽³⁾
~~10.1~~		~~Indemnity Escrow Agreement (incorporated by reference to Exhibit 10.1~~Certificate of ~~the Company’s Form 8‑K filed with the SEC on July 28, 2017).~~Designations of Series A Convertible Preferred Stock, dated August 9, 2018.
3.4⁽⁴⁾
~~10.2~~		~~Registration Rights Agreement (incorporated by reference to Exhibit 10.2~~Certificate of ~~the Company’s Form 8‑K filed with the SEC on July~~Designations of Series B Convertible Preferred Stock, dated September 28, ~~2017).~~2018.
3.5⁽⁵⁾		Certificate of Designations of Series C Convertible Preferred Stock, dated March 17, 2021.
~~10.3~~ 3.6⁽⁶⁾		~~Form~~Certificate of ~~Lock-Up Agreement (incorporated by reference~~Amendment to ~~Exhibit 10.3~~Certificate of ~~the Company’s Form 8‑K filed with the SEC on~~Designations of Series A Convertible Preferred Stock, dated July ~~28, 2017).~~12, 2019.
3.7⁽⁷⁾		Certificate of Amendment to Certificate of Designations of Series B Convertible Preferred Stock, dated July 12, 2019.
~~10.4†~~ 3.8⁽⁸⁾		~~Employment Agreement~~Certificate of ~~Kathleen Eisbrenner,~~Increase to Certificate of Designations of Series A Convertible Preferred Stock of NextDecade Corporation, dated ~~May 20, 2015 (incorporated by reference to Exhibit 10.4 of the Company’s Form 8‑K filed with the SEC on~~ July ~~28, 2017).~~15, 2019.
3.9⁽⁹⁾		Certificate of Increase to Certificate of Designations of Series B Convertible Preferred Stock of NextDecade Corporation, dated July 15, 2019.
~~10.5†~~ 3.10⁽¹⁰⁾		~~Letter Agreement with Kathleen Eisbrenner, dated April 17, 2017 (incorporated by reference~~Amendment No. 1 to ~~Exhibit 10.5~~the Amended and Restated Bylaws of ~~the Company’s Form 8‑K filed with the SEC on July 28, 2017).~~NextDecade Corporation.

~~10.6†~~		~~Letter Agreement with Kathleen Eisbrenner, dated November 13, 2015 (incorporated by reference to Exhibit 10.6 of the Company’s Form 8‑K filed with the SEC on July 28, 2017).~~

~~10.7†~~		~~Employment Agreement of Matthew K. Schatzman, dated September 8, 2017 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8‑K filed with the SEC on September 11, 2017).~~

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.INS* 101.SCH*		~~XBRL Instance Document.~~

101.SCH*		Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase ~~Document~~ Document.
101.PRE*
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

⁽¹⁾	Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed July 28, 2017.

⁽²⁾	Incorporated by reference to Exhibit 3.2 of the Registrant’s Current Report on Form 8-K, filed July 28, 2017.

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

⁽⁴⁾	Incorporated by reference to Exhibit 3.4 of the Registrant’s Quarterly Report on Form 10-Q, filed November 9, 2018.
⁽⁵⁾	Incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K, filed March 18, 2021.

~~† Indicates management contract or compensatory plan.~~

* Filed herewith.

** Furnished herewith.

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

^*	Filed herewith.

^**	Furnished herewith.

Table of Contents

~~SIGNATURES~~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 ~~8, 2017~~10, 2021	By:	/s/ ~~Kathleen Eisbrenner~~Matthew K. Schatzman
		~~Kathleen Eisbrenner~~Matthew K. Schatzman
		Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)	~~(Principal Executive Officer)~~


Date: November ~~8, 2017~~10, 2021	By:	/s/ ~~Benjamin Atkins~~ Brent E. Wahl
		~~Benjamin Atkins~~Brent E. Wahl
		Chief Financial Officer
		(Principal Financial Officer)	~~(Principal Financial Officer)~~


Delaware	~~46‑5723951~~46-5723951
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)	~~Identification No.)~~

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


Large accelerated filer	☐	Accelerated filer	☒ ☐
Non-accelerated filer	☐ ~~(Do not check if a smaller reporting company)~~☒	Smaller reporting company	☐☒
		Emerging growth company	☒ ☐

	Page
Organizational Structure

Part I. Financial Information	1
Item 1. ~~Condensed~~ Consolidated Financial Statements	1
~~Condensed~~ Consolidated Balance Sheets	1
~~Condensed~~ Consolidated Statements of Operations ~~and Comprehensive Loss~~	2
~~Condensed~~ Consolidated ~~Statement~~Statements of Stockholders’ Equity and Convertible Preferred Stock	3
~~Condensed~~ Consolidated Statements of Cash Flows	4 5
Notes to ~~Unaudited Condensed~~Consolidated Financial Statements	5 6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk	17 16
Item 4. Controls and Procedures	17 16
Part II. Other Information	17
Item 1. Legal Proceedings	17
Item 1A. Risk Factors	17
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3. Defaults Upon Senior Securities	18
Item 4. Mine Safety Disclosures	18
Item 5. Other Information	18
Item 6. Exhibits	19
Signatures	20


	September 30,		December 31,
	2017		2016		*September 30,*			*December 31,*
	(Unaudited)				*2021*			*2020*
Assets
Current assets
Cash	$	44,709	$	12,524
Deferred equity issuance costs		—		578
Investments		5,060		4,997
Cash and cash equivalents					$	36,743		$	22,608
Prepaid expenses and other current assets		1,043		1,096		883			670
Total current assets		50,812		19,195		37,626			23,278
Property, plant and equipment, net		67,602		56,233		170,431			161,662
Other assets		349		349
Operating lease right-of-use assets, net						727			429
Other non-current assets, net						19,903			16,299
Total assets	$	118,763	$	75,777	$	228,687		$	201,668

Liabilities and Stockholders’ Equity
Liabilities, Convertible Preferred Stock and Stockholders’ Equity
Current liabilities
Accounts payable	$	1,820	$	1,167	$	744		$	207
Share-based compensation liability		993		—		182			182
Accrued liabilities and other current liabilities		4,105		3,767		5,306			1,032
Current common stock warrant liabilities						1,330			3,290
Current operating lease liabilities						579			432
Total current liabilities		6,918		4,934		8,141			5,143
Non-current compensation liabilities		2,015		2,745
Non-current share-based compensation liability		1,312		—
Non-current common stock warrant liabilities						2,463			874
Non-current operating lease liabilities						169			0
Other non-current liabilities						23,000			22,916
Total liabilities		10,245		7,679		33,773			28,933
Commitments and contingencies (Note 9)

Commitments and contingencies (Note 13)

Series A Convertible Preferred Stock, $1,000 per share liquidation preference Issued and outstanding: 71,552 shares and 65,507 shares at September 30, 2021 and December 31, 2020, respectively						61,614			55,522
Series B Convertible Preferred Stock, $1,000 per share liquidation preference Issued and outstanding: 68,373 shares and 62,612 shares at September 30, 2021 and December 31, 2020, respectively						62,542			56,781
Series C Convertible Preferred Stock, $1,000 per share liquidation preference Issued and outstanding: 41,449 shares and no shares at September 30, 2021 and December 31, 2020, respectively						38,966			0
Stockholders’ equity
Preferred stock, $0.0001 par value, 1.0 million shares authorized, none issued		—		—
Common stock, $0.0001 par value Authorized: 480.0 million shares at September 30, 2017 and December 31, 2016 Issued and outstanding: 106.3 million shares and 95.7 million shares at September 30, 2017 and December 31, 2016, respectively		11		10
Common stock, $0.0001 par value Authorized: 480.0 million shares at September 30, 2021 and December 31, 2020 Issued and outstanding: 120.7 million shares and 117.8 million shares at September 30, 2021 and December 31, 2020, respectively						12			12
Treasury stock: 344,459 shares and 249,742 shares at September 30, 2021 and December 31, 2020, respectively, at cost						(1,310	)		(1,031	)
Preferred stock, $0.0001 par value Authorized: 0.8 million, after designation of the Convertible Preferred Stock Issued and outstanding: none at September 30, 2021 and December 31, 2020						0			0
Additional paid-in-capital		147,814		88,406		195,136			209,481
Accumulated deficit		(39,289)		(20,291)		(162,046	)		(148,030	)
Accumulated other comprehensive loss		(18)		(27)
Total stockholders’ equity		108,518		68,098		31,792			60,432
Total liabilities and stockholders’ equity	$	118,763	$	75,777
Total liabilities, convertible preferred stock and stockholders’ equity					$	228,687		$	201,668


	Common Stock							Accumulated
		Par		Additional				Other		Total
		Value		Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Loss		Equity
Balance at December 31, 2016	95,680	$	10	$	88,406	$	(20,291)	$	(27)	$	68,098
Pre-merger equity issuance	2,810		—		20,100		—		—		20,100
Reverse recapitalization	6,759		1		26,773		—		—		26,774
Issuance of common stock	1,026		—		10,000		—		—		10,000
Equity issuance costs	—		—		(6,295)		—		—		(6,295)
Share-based compensation	—		—		8,830		—		—		8,830
Other comprehensive loss	—		—		—		—		9		9
Net Loss	—		—		—		(18,998)		—		(18,998)
Balance at September 30, 2017	106,275	$	11	$	147,814	$	(39,289)	$	(18)	$	108,518


	2017		2018		2019		2020		2021
Shoal Point Leases	$	—	$	400	$	500	$	600	$	—
Brownsville Lease		29		59		59		29		—
	$	29	$	459	$	559	$	629	$	—

Standard	Description	Expected Date of Adoption	Effect on our Consolidated Financial Statements or Other Significant Matters
~~Accounting Standards Update (ASU) 2014‑09,~~ ~~Revenue from Contracts~~ASU 2020-06, Debt - Debt with ~~Customers (Topic 606), and subsequent amendments thereto~~	This standard amends existing revenue recognition guidance and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard may be early adopted beginning January 1, 2017, and may be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption.	~~January 1, 2018~~	~~The adoption of this new standard will not affect the amounts shown in our Consolidated Financial Statements or related disclosures as the Company has no revenues.~~
~~ASU 2017‑04,~~ ~~Intangibles - Goodwill~~Conversion and Other ~~(Topic 350)~~Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): ~~Simplifying the Test~~Accounting for ~~Goodwill Impairment~~Convertible Instruments and Contracts in Entity's Own Equity	This standard simplifies the ~~measurement of goodwill impairment~~accounting for convertible instruments primarily by eliminating the ~~requirement~~existing cash conversion and beneficial conversion models within Subtopic 470-20, which will result in fewer embedded conversion options being accounted for ~~an entity to perform a hypothetical purchase price allocation. An entity will instead measure~~separately from the ~~impairment as the difference between the carrying amount and the fair value of the reporting unit.~~host. This standard ~~may be early adopted beginning January 1, 2017,~~also amends and ~~must be adopted prospectively.~~simplifies the calculation of earnings per share relating to convertible instruments.	January 1, ~~2018~~2022	~~The adoption of~~We plan to adopt this standard ~~is not expected to have a material impact on our Consolidated Financial Statements or related disclosures.~~
~~ASU 2016‑02,~~ ~~Leases (Topic 842)~~	~~This standard requires a lessee to recognize leases on its balance sheet by recording a lease liability representing~~using the obligation to make future lease payments and a right-of-use asset representing the right to use the underlying asset for the lease term. A lessee is permitted to make an election not to recognize lease assets and liabilities for leases with a term of 12 months or less. The standard also modifies the definition of a lease and requires expanded disclosures. This standard may be early adopted, and must be adopted using a modified retrospective ~~approach with certain available practical expedients.~~	~~January 1, 2019~~	~~We continue to evaluate the effect of this standard on our Consolidated Financial Statements.~~approach. Preliminarily, we anticipate a material impact from the requirement to recognize all leases upon our Consolidated Balance Sheets. Because this assessment is preliminary and the accounting for leases is subject to significant judgment, this conclusion could change as we finalize our assessment. We have not yet determined the impact of the adoption of ~~this standard upon~~ASU 2020-06 will not have an effect on our ~~results of operations or cash flows, whether we will elect to early adopt this standard or which, if any, practical expedients we will elect upon transition.~~ consolidated financial statements.