10-Q

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10‑Q

(MARK ONE)

☒      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

☐      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to                    

Commission File No. 001‑36842

NEXTDECADE CORPORATION

(Exact name of registrant as specified in its charter)

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

3 Waterway Square Place, Suite 400, The Woodlands, Texas 77380

(Address of principal executive offices) (Zip Code)

(713)  574‑1880

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).  Yes ☐  No ☒

As of May 7, 2018, the issuer had 106,397,702 shares of common stock outstanding.

NEXTDECADE CORPORATION

FORM 10‑Q FOR THE QUARTER ENDED MARCH 31, 2018

TABLE OF CONTENTS

	Page
Organizational Structure
Part I. Financial Information	1
Item 1. Consolidated Financial Statements	1
Consolidated Balance Sheets	1
Consolidated Statements of Operations and Comprehensive Loss	2
Consolidated Statement of Stockholders’ Equity	3
Consolidated Statements of Cash Flows	4
Notes to Consolidated Financial Statements	5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3. Quantitative and Qualitative Disclosures About Market Risk	15
Item 4. Controls and Procedures	15
Part II. Other Information	16
Item 1. Legal Proceedings	16
Item 1A. Risk Factors	16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3. Defaults Upon Senior Securities	16
Item 4. Mine Safety Disclosures	16
Item 5. Other Information	16
Item 6. Exhibits	17
Signatures	18

Organizational Structure

The following diagram depicts our abbreviated organizational structure as of March 31, 2018 with references to the names of certain entities discussed in this Quarterly Report on Form 10-Q.

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

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

NextDecade Corporation

Consolidated Balance Sheets

(in thousands, except share data)

	March 31,		December 31,
	2018		2017
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	24,705	$	35,703
Investments		5,065		5,063
Prepaid expenses and other current assets		2,282		2,099
Total current assets		32,052		42,865
Property, plant and equipment, net		79,364		73,226
Total assets	$	111,416	$	116,091
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	247	$	726
Share-based compensation liability		1,949		1,815
Accrued liabilities and other current liabilities		5,469		5,856
Total current liabilities		7,665		8,397
Non-current compensation liabilities		1,000		2,015
Non-current share-based compensation liability		3,419		2,587
Total liabilities		12,084		12,999
Commitments and contingencies (Note 9)
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 March 31, 2018 and December 31, 2017 Issued and outstanding: 106.4 million shares and 106.3 million shares at March 31, 2018 and December 31, 2017, respectively		11		11
Additional paid-in-capital		171,178		158,738
Accumulated deficit		(71,857)		(55,617)
Accumulated other comprehensive loss		—		(40)
Total stockholders’ equity		99,332		103,092
Total liabilities and stockholders’ equity	$	111,416	$	116,091

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

1

NextDecade Corporation

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)

	Three Months Ended
	March 31,
	2018		2017
Operations
Revenues	$	—	$	—
Operating Expenses
General and administrative expenses		16,001		2,155
Land option and lease expenses		250		236
Depreciation expense		29		26
Total operating expenses		16,280		2,417
Total operating loss		(16,280)		(2,417)
Other income (expense)
Interest income, net		122		37
Other expense		(42)		(8)
Total other income		80		29
Net loss	$	(16,200)	$	(2,388)
Net loss per common share - basic and diluted	$	(0.15)	$	(0.02)
Weighted average shares outstanding - basic and diluted		106,388		95,689
Comprehensive Loss
Net loss	$	(16,200)	$	(2,388)
Other comprehensive loss:
Change in fair value of investments		—		5
Comprehensive loss	$	(16,200)	$	(2,383)

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

2

NextDecade Corporation

Consolidated Statement of Stockholders’ Equity

(in thousands)

(unaudited)

	Common Stock							Accumulated
		Par		Additional				Other		Total
		Value		Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Loss		Equity
Balance at December 31, 2017	106,275	$	11	$	158,738	$	(55,617)	$	(40)	$	103,092
Share-based compensation	—		—		12,440		—		—		12,440
Restricted stock vesting	123		—		—		—		—		—
Adoption of ASU 2016-01	—		—		—		(40)		40		—
Net loss	—		—		—		(16,200)		—		(16,200)
Balance at March 31, 2018	106,398	$	11	$	171,178	$	(71,857)	$	—	$	99,332

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

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NextDecade Corporation.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Three Months Ended
	March 31,
	2018		2017
Operating activities:
Net loss	$	(16,200)	$	(2,388)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation		29		26
Share-based compensation expense		12,234		—
Loss on investment securities		22		—
Changes in operating assets and liabilities:
Prepaid expenses and other currents assets		(183)		(1,351)
Accounts payable		(156)		235
Accrued expenses and other liabilities		(1,543)		161
Net cash used in operating activities		(5,797)		(3,317)
Investing activities:
Acquisition of property, plant and equipment		(5,177)		(3,382)
Issuance of note receivable		—		(115)
Investments		(24)		(16)
Net cash used in investing activities		(5,201)		(3,513)
Financing activities:
Proceeds from equity issuance		—		100
Net cash provided by financing activities		—		100
Net decrease in cash and cash equivalents		(10,998)		(6,730)
Cash and cash equivalents – beginning of period		35,703		12,524
Cash and cash equivalents – end of period	$	24,705	$	5,794
Non-cash investing activities:
Accounts payable for acquisition of property, plant and equipment	$	175	$	352
Accrued liabilities for acquisition of property, plant and equipment		4,471		3,182
Accrued liability for deferred financing cost		—		891

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

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NextDecade Corporation

Notes to Consolidated Financial Statements

(unaudited)

Note 1 — Background and Basis of Presentation

NextDecade Corporation engages in development activities related to the liquefaction and sale of liquefied natural gas (“LNG”). 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 the Terminal (the “Pipeline” together with the Terminal, the “Project”).  We have also secured, through December 2019, a 994-acre site near Texas City, Texas for another potential LNG terminal (the “Galveston Bay Terminal”).

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with Rule 10‑01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2017. In our opinion, all adjustments, consisting only of normal recurring items, which are considered necessary for a fair presentation of the unaudited consolidated financial statements, have been included.  The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results for the full year.

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 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.

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Note 2 — Prepaid Expenses and Other Current Assets

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

	March 31,		December 31,
	2018		2017
Rio Grande LNG site option	$	921	$	1,080
Short-term security deposits		367		364
Galveston Bay leases		125		100
Rio Bravo Pipeline options		97		111
Prepaid insurance		167		208
Prepaid marketing and sponsorships		353		55
Other		252		181
Total prepaid expenses and other current assets	$	2,282	$	2,099

Note 3 — Investment Securities

The Company maintains cash reserves in the Ultra-Short-Term Bond Fund and the Short-Term Bond Index Fund, which are managed by The Vanguard Group, Inc. The target investment allocation between 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  43% of such fund’s holdings are AAA-rated, with 1%  non-investment grade rated. The Short-Term Bond Index Fund has an average maturity of approximately three years, and 70% of such fund’s holdings are AAA-rated, with  0% non-investment grade rated. Investment securities consisted of the following (in thousands):

	March 31,				December 31,
	2018				2017
	Fair value		Cost		Fair value		Cost
Ultra-Short-Term Bond Fund	$	3,819	$	3,842	$	3,811	$	3,825
Short-Term Bond Index Fund		1,246		1,284		1,252		1,278
Total investments	$	5,065	$	5,126	$	5,063	$	5,103

Note 4 — Property, Plant and Equipment

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

	March 31,		December 31,
	2018		2017
Fixed Assets
Computers	$	82	$	69
Furniture, fixtures, and equipment		257		246
Leasehold improvements		266		264
Total fixed assets		605		579
Less: accumulated depreciation		(400)		(371)
Total fixed assets, net		205		208
Project Assets (not placed in service)
Rio Grande		68,591		62,866
Rio Bravo		10,568		10,152
Total project assets		79,159		73,018
Total property, plant and equipment, net	$	79,364	$	73,226

Depreciation expense for the three months ended March 31, 2018 and 2017 was $29 thousand and $26 thousand, respectively.  

6

Note 5 — Accrued Liabilities and Other Current Liabilities

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

	March 31,		December 31,
	2018		2017
Employee compensation expense	$	651	$	1,851
Project asset costs		4,471		3,317
Accrued legal services		75		141
Other accrued liabilities		272		547
Total accrued liabilities and other current liabilities	$	5,469	$	5,856

Note 6 — Net Loss Per Share

The following table (in thousands, except for loss per share) reconciles basic and diluted weighted average common shares outstanding for the three months ended March 31, 2018 and 2017:

	Three months ended
	March 31,
	2018		2017
Weighted average common shares outstanding:
Basic		106,388		95,689
Dilutive unvested common stock and common stock warrants		—		—
Diluted		106,388		95,689
Basic and diluted net loss per share	$	(0.15)	$	(0.02)

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

	Three months ended
	March 31,
	2018		2017
Unvested stock (1)		464		—
Common stock warrants		12,082		12,059
Total dilutive common shares		12,546		12,059

⁽¹⁾ Does not include 26.4 million shares and zero shares for the three months ended March 31, 2018 and 2017, respectively, of unvested stock because the performance conditions had not yet been satisfied.

Note 7 — Share-based Compensation

 We have granted shares of Company common stock and restricted stock to employees, consultants and a non-employee director under the 2017 Omnibus Incentive Plan (the “2017 Plan”) and in connection with the special of meeting of stockholders on July 24, 2017.

In January 2018, our Nominating, Governance, and Compensation Committee of our Board of Directors (the “NCGC Committee”) granted 0.1 million fully-vested shares of Company common stock and 2.1 million shares of restricted common stock awards (the “Restricted Stock Awards”) to employees, consultants and a non-employee director of the Company under the 2017 Plan.  The Restricted Stock Awards are comprised of (i) approximately 1.7 million shares of restricted common stock that vest upon the achievement of certain Company milestones (the “Company Milestones”) and (ii) approximately 0.4 million shares of restricted common stock that vest ratably over a three-year service period.  The Company Milestones consist of (i) the execution of an engineering, procurement and construction contract, (ii) the execution of binding LNG sale and purchase or tolling agreements for aggregate 3.825 million tons per annum, (iii) the receipt of a final environmental impact statement issued by the Federal Energy Regulatory Commission, and (iv) reaching a positive final investment decision in the Project. 

7

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

	Three months ended
	March 31,
	2018		2017
Share-based compensation:
Equity awards	$	12,440	$	—
Liability awards		(47)		—
Total share-based compensation		12,393		—
Capitalized share-based compensation		(159)		—
Total share-based compensation expense	$	12,234	$	—

Certain employee contracts provided for cash bonuses upon a positive FID in the Project (the “FID bonus”).  In January 2018, the NCGC Committee approved, and certain employees party to such contracts accepted, an amendment to such contracts whereby the FID bonuses would be settled in shares of Company common stock equal to 110% of the FID bonus.  The associated liability for FID bonuses to be settled in shares of common stock of $1.0 million is included in non-current share-based compensation liabilities in our Consolidated Balance Sheets at March 31, 2018.

Note 8 — Income Taxes

Due to our cumulative loss position, we have established a full valuation allowance against our deferred tax assets at March 31, 2018 and December 31, 2017. Due to NextDecade LLC’s previous pass-through status and our full valuation allowance, we have not recorded a provision for federal or state income taxes during the three months ended March 31, 2018 and 2017.

Note 9 — Commitments and Contingencies

Legal Proceedings

From time to time the Company may be subject to various claims and legal actions that arise in the ordinary course of business. As of March 31, 2018, 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 not occur.

8

Note 10 — Recent Accounting Pronouncements

The following table provides a brief description of recent accounting standards that have not been adopted by the Company as of March 31, 2018:

Standard	Description	Expected Date of Adoption	Effect on our Consolidated Financial Statements or Other Significant Matters
ASU 2016‑02, Leases (Topic 842)	This standard requires a lessee to recognize leases on its balance sheet by recording a lease liability representing 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. Preliminarily, we anticipate a material impact from the requirement to recognize all leases upon our Consolidated Balance Sheets and no impact to cash flows. 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 our results of operations, whether we will elect to early adopt this standard or which, if any, practical expedients we will elect upon transition.

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
Accounting Standards Update (ASU) 2014‑09, Revenue from Contracts 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. We elected to adopt this standard using a full retrospective approach.	January 1, 2018	The adoption of this new standard did not affect the amounts shown in our Consolidated Financial Statements or related disclosures as the Company has no revenues.
ASU 2017‑04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	This standard simplifies the measurement of goodwill impairment by eliminating the requirement for an entity to perform a hypothetical purchase price allocation. An entity will instead measure the impairment as the difference between the carrying amount and the fair value of the reporting unit. This standard may be early adopted beginning January 1, 2017 and must be adopted prospectively.	January 1, 2018	The adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures.

9

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	The adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures.
ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	This standard principally affects accounting standards for equity investments, financial liabilities where the fair value option has been elected, and the presentation and disclosure requirements for financial instruments. Upon the effective date of the new standards, all equity investments in unconsolidated entities, other than those accounted for using the equity method of accounting, will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification and therefore, no changes in fair value will be reported in other comprehensive income (loss) for equity securities with readily determinable fair values.	January 1, 2018	Upon the adoption of this standard, we made a cumulative effect adjustment of $40 thousand to accumulated deficit for unrealized losses on our available-for-sale investment securities.

Note 11 – Subsequent Events

As previously disclosed, the Company recently commenced a private offering of Series A Convertible Preferred Stock (the “Convertible Preferred Stock”), which include associated warrants (the “Convertible Preferred Equity Offering”).  In connection with the Convertible Preferred Equity Offering, on April 11, 2018, we entered into backstop commitment agreements (the “Backstop Agreements”) with accounts managed by (i) York Capital Management Global Advisors LLC and its affiliates (the “York Group”), (ii) Valinor and its affiliates (the “Valinor Group”), and (iii) Halcyon and its affiliates (the “Halcyon Group”) pursuant to which the York Group, the Valinor Group, and the Halcyon Group (each a “Backstop Party”) each agreed to purchase, at our election, up to approximately $23.2 million, $8.0 million and $3.8 million, respectively, in shares of Convertible Preferred Stock, which include associated warrants. Such warrants represent the right to acquire in the aggregate 50 basis points (0.50%) of the fully diluted shares of all outstanding Company common stock on the exercise date with a strike price of $0.01 per share.

In exchange for each Backstop Party’s commitment under its Backstop Agreement, we agreed to issue to such Backstop Party, or its designated affiliates, additional shares of Company common stock ranging from approximately 219 thousand shares of Company common stock up to approximately 328 thousand shares of Company common stock in aggregate, dependent on the timing of closing of the Convertible Preferred Equity Offering. 

In addition, we agreed to pay the Backstop Parties a fee (the “Drawdown Fee”) equal to two and three quarters percent (2.75%) of the portion of the backstop amounts drawn on by us.  The Drawdown Fee will be paid in additional shares of Company common stock up to approximately 200 thousand shares of Company common stock in aggregate.

We also agreed to indemnify each Backstop Party under certain circumstances for losses arising out of or in connection with its Backstop Agreement, the definitive documentation related to the Convertible Preferred Equity Offering, or the transactions contemplated thereby.  The Backstop Parties have the right to terminate the Backstop Agreements under certain circumstances, including if the closing of the Convertible Preferred Equity Offering does not occur on or before August 9, 2018, unless extended by the mutual consent of the parties. 

There can be no assurance that the Company will be successful in raising capital at all or on terms acceptable to the Company. The Company has not yet sold any shares of Convertible Preferred Stock, which include associated warrants, in the Convertible Preferred Equity Offering.

10

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

Forward-Looking Statements

This Quarterly Report on Form 10‑Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact contained in this Quarterly Report on Form 10‑Q, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements. The words “anticipate,” “contemplate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “might,” “will,” “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 “Risk Factors” in our most recent Annual Report on Form 10-K. You should consider our forward-looking statements in light of a number of factors that may cause actual results to vary from our forward-looking statements including, but not limited to:

· 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;

· 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”);

· the accuracy of estimated costs for the Project;

· the governmental approval of construction and operation of the Project;

· the successful completion of the Project by third-party contractors;

· our ability to generate cash;

· the development risks, operational hazards, regulatory approvals applicable to Rio Grande’s and Rio Bravo’s construction and operations activities;

· our anticipated competitive advantage;

· the global demand for and price of natural gas (versus the price of imported LNG);

· the availability of LNG vessels worldwide;

· legislation and regulations relating to the LNG industry;

· negotiations for the Terminal site lease and right-of-way options for the Pipeline route;

· compliance with environmental laws and regulations; and

· the result of financing efforts, including our recently commenced private offering of Series A Convertible Preferred Stock (the “Convertible Preferred Stock”), which include associated warrants (the “Convertible Preferred Equity Offering”).

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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.

Please read “Risk Factors” contained in the our most recent Annual Report on Form 10-K as well as other filings we have made and will make with the Securities and Exchange Commission (the “SEC”) 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 as well as other filings we have made and will make with the SEC and our 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 Quarterly 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

We are a LNG development company focused on LNG export projects and associated pipelines in the State of Texas. We have focused and continue to focus our development activities on the Project.  We believe we maintain key competitive advantages involving engineering, commercial, and gas supply considerations. We submitted a pre-filing request for the Project to the Federal Energy Regulatory Commission (“FERC”) in March 2015 and filed a formal application with the FERC in May 2016. We also believe we have robust commercial offtake and gas supply strategies in place and we estimate that the Project will commence commercial operations as early as 2023.

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

Recent Developments

Backstop Agreements

As previously disclosed, the Company recently commenced the Convertible Preferred Equity Offering.  In connection with the Convertible Preferred Equity Offering, on April 11, 2018, we entered into backstop commitment agreements (the “Backstop Agreements”) with accounts managed by (i) York Capital Management Global Advisors LLC and its affiliates (the “York Group”), (ii) Valinor and its affiliates (the “Valinor Group”), and (iii) Halcyon and its affiliates (the “Halcyon Group”) pursuant to which the York Group, the Valinor Group, and the Halcyon Group (each a “Backstop Party”) each agreed to purchase, at our election, up to approximately $23.2 million, $8.0 million and $3.8 million, respectively, in shares of Convertible Preferred Stock, which include associated warrants. Such warrants represent the right to acquire in the aggregate 50 basis points (0.50%) of the fully diluted shares of all outstanding Company common stock on the exercise date with a strike price of $0.01 per share.

In exchange for each Backstop Party’s commitment under its Backstop Agreement, we agreed to issue to such Backstop Party, or its designated affiliates, additional shares of Company common stock ranging from approximately 219 thousand shares of Company common stock up to approximately 328 thousand shares of Company common stock in aggregate, dependent on the timing of closing of the Convertible Preferred Equity Offering. 

In addition, we agreed to pay the Backstop Parties a fee (the “Drawdown Fee”) equal to two and three quarters percent (2.75%) of the portion of the backstop amounts drawn on by us.  The Drawdown Fee will be paid in additional shares of Company common stock up to approximately 200 thousand shares of Company common stock in aggregate.

We also agreed to indemnify each Backstop Party under certain circumstances for losses arising out of or in connection with its Backstop Agreement, the definitive documentation related to the Convertible Preferred Equity Offering, or the transactions contemplated thereby. 

There can be no assurance that the Company will be successful in raising capital at all or on terms acceptable to the Company. The Company has not yet sold any shares of Convertible Preferred Stock, which include associated warrants, in the Convertible Preferred Equity Offering.  For additional details on the Convertible Preferred Equity Offering and the

12

Backstop Agreements, please refer to our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 12, 2018.

Liquidity and Capital Resources

Capital Resources

We have funded and continue to fund the development of the Project and general working capital needs through our cash on hand and proceeds from the issuance of equity. As discussed above “Recent Developments – Backstop Agreements,” the Company recently commenced the Convertible Preferred Equity Offering.  The Company has not yet sold any of the Convertible Preferred Stock, which include associated warrants, in the Convertible Preferred Equity.  Our capital resources consisted of approximately $24.7 million of cash and $5.1 million of investment securities as of March 31, 2018.

Sources and Uses of Cash

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

	For the Three Months Ended
	March 31,
	2018		2017
Operating cash flows	$	(5,797)	$	(3,317)
Investing cash flows		(5,201)		(3,513)
Financing cash flows		—		100
Net decrease in cash and cash equivalents		(10,998)		(6,730)
Cash and cash equivalents – beginning of period		35,703		12,524
Cash and cash equivalents – end of period	$	24,705	$	5,794

Operating Cash Flows

Operating cash outflows during the three months ended March 31, 2018 and 2017 were $5.8 million and $3.3 million, respectively.  The increase in operating cash outflows during the three months ended March 31, 2018 compared to the three months ended March 31, 2017 was primarily related to increased cash used as a result of additional employees and increased professional fees.

Investing Cash Flows

Investing cash outflows during the three months ended March 31, 2018 and 2017 were $5.2 million and $3.5 million, respectively. The increase in investing cash outflows during the three months ended March 31, 2018 compared to the three months ended March 31, 2017 was primarily the result of increased cash used for development of the Project. 

Financing Cash Flows

Financing cash inflows during the three months ended March 31, 2017 included $0.1 million from an  equity issuance to GE Oil & Gas, Inc.

Capital Development Activities

We are primarily engaged in developing the Project, which will 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”) made to finance and construct the Project. Even if successfully completed, the Project will not begin to operate and generate significant cash flows until at least several years from now, which management currently estimates being as early as 2023. Construction of the Project would not begin until the FERC issues an order granting the necessary authorizations under the Natural Gas Act and once all required federal, state and local permits have been obtained. We estimate that we will receive all regulatory approvals and begin construction to support the commencement of commercial operations as early as 2023. As a result, our business success will depend, to a significant

13

extent, upon our ability to obtain the funding necessary to construct the Project, to bring it into operation on a commercially viable basis and to finance our staffing, operating and expansion costs during that process.

We have engaged SG Americas Securities, LLC (a business unit of Société Générale) and Macquarie Capital (USA) Inc. to advise and assist us in raising capital for post-FID construction activities. 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 will be financed predominately through project financing and proceeds from future debt and equity offerings by us. There can be no assurance that we will succeed in securing additional debt and/or equity financing in the future to complete the 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.

Results of Operations

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

	For the Three Months Ended
	March 31,
	2018		2017		Change
Revenues	$	—	$	—	$	—
General and administrative expenses		16,001		2,155		13,846
Land option and lease expenses		250		236		14
Depreciation expense		29		26		3
Operating loss		(16,280)		(2,417)		(13,863)
Interest income, net		122		37		85
Other expense		(42)		(8)		(34)
Net loss	$	(16,200)	$	(2,388)	$	(13,812)

Our consolidated net loss was $16.2 million, or $0.15 per share (basic and diluted), for the three months ended March 31, 2018, compared to a net loss of $2.4 million, or $0.02 per share (basic and diluted), for the three months ended March 31, 2017.  This $13.8 million increase in net loss was primarily a result of increased general and administrative expenses discussed separately below.

General and administrative expenses during the three months ended March 31, 2018 increased $13.9 million compared to the same periods in 2017 due primarily to (i) share-based compensation expense of $12.2 million in the three months ended March 31, 2018, which was not incurred in 2017, and (ii) increases in the number of employees and amount of professional fees from $1.7 million in the three months ended March 31, 2017 to $2.9 million in the three months ended March 31, 2018.

Interest income, net during the three months ended March 31, 2018 increased $0.1 million compared to the same period in 2017 due to increased yield and higher average balances maintained in our cash and cash equivalent and investment securities accounts.

Other expense during the three months ended March 31, 2018 increased $34 thousand compared to the same period in 2017 primarily due to losses on investment securities.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2018.

Summary of Critical Accounting Estimates

The preparation of our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that

14

affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. There have been no significant changes to our critical accounting estimates from those disclosed in our annual report on Form 10-K for the year ended December 31, 2017.

Recent Accounting Standards

For descriptions of recently issued accounting standards, see Note 10 – Recent Accounting Pronouncements of our Notes to Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk in the form of equity price risk related to investments in marketable securities and capital market risk related to future debt and equity offerings.

Equity Price Risk

At March 31, 2018, the fair value of our investment securities was $5.1 million.  We determined the fair value of our investment based on the closing market price where these securities were listed on March 31, 2018.  In order to test the sensitivity of the fair value of the investment 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 investment securities as of March 31, 2018 and December 31, 2017.

Capital Market Risk

We currently have no revenues and depend on funds raised through other sources.  Two sources of funding are through future debt or equity offerings.  Our ability to raise funds in these manners depends upon capital market forces affecting the share price of our common stock.

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 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 March 31, 2018. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of March 31, 2018, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

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

15

PART II – OTHER INFORMATION

Item 1.Legal Proceedings

None.

Item 1A.Risk Factors

There were no changes to the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

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

None.

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description
3.1(1)	Second Amended and Restated Certificate of Incorporation of NextDecade Corporation, dated July 24, 2017
3.2(2)	Amended and Restated Bylaws of NextDecade Corporation, dated July 24, 2017
3.3(3)	Form of Certificate of Designation of Series A Convertible Preferred Stock
4.1(4)	Specimen Common Share Certificate
4.2(5)	Specimen Unit Certificate
4.3(6)	Specimen Warrant Certificate
4.4(7)	Form of Warrant Agreement between Harmony Merger Corp. and Continental Stock Transfer & Trust Company
10.1(8)	Backstop Commitment Agreement, dated as of April 11, 2018, by and between NextDecade Corporation and York Capital Management Global Advisors, LLC, severally on behalf of certain funds or accounts advised by it or its affiliates
10.2(9)	Backstop Commitment Agreement, dated as of April 11, 2018, by and between NextDecade Corporation and Valinor Management, L.P., severally on behalf of certain funds or accounts for which it is investment manager
10.3(10)	Backstop Commitment Agreement, dated as of April 11, 2018, by and between NextDecade Corporation and Halcyon Capital Management LP, severally on behalf of certain funds or accounts advised by it or its affiliates
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*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.

(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 3.1 of the Registrant’s Current Report on Form 8-K, filed April 12, 2018.

(4) Incorporated by reference to Exhibit 4.2 of the Amendment No. 2 to the Registrant’s Registration Statement on Form S-1, filed October 10, 2014

(5) Incorporated by reference to Exhibit 4.1 of the Amendment No. 7 to the Registrant’s Registration Statement on Form S-1, filed March 13, 2015.

(6) Incorporated by reference to Exhibit 4.3 of the Amendment No. 7 to the Registrant’s Registration Statement on Form S-1, filed March 13, 2015.

(7) Incorporated by reference to Exhibit 4.4 of the Amendment No. 7 to the Registrant’s Registration Statement on Form S-1, filed March 13, 2015.

(8) Incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K, filed April 12, 2018.

(9) Incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K, filed April 12, 2018. 

(10) Incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K, filed April 12, 2018.

*     Filed herewith.

**   Furnished herewith.

17

SIGNATURES

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

	NEXTDECADE CORPORATION
Date:  May 9, 2018	By:	/s/ Matthew K. Schatzman
		Matthew K. Schatzman
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:  May 9, 2018	By:	/s/ Benjamin A. Atkins
		Benjamin A. Atkins
		Chief Financial Officer
		(Principal Financial Officer)

18

EX-31.1

Exhibit 31.1

CERTIFICATION BY CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT

I, Matthew K. Schatzman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of NextDecade Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2018	/s/ Matthew K. Schatzman
	Matthew K. Schatzman
	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION BY CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT 

I, Benjamin A. Atkins, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of NextDecade Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2018	/s/ Benjamin A. Atkins
	Benjamin A. Atkins
	Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Matthew K. Schatzman,  President and Chief Executive Officer of NextDecade Corporation (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 9, 2018	/s/ Matthew K. Schatzman
	Matthew K. Schatzman
	President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Benjamin A. Atkins, Chief Financial Officer of NextDecade Corporation (the “Company”), hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended March 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 9, 2018	/s/ Benjamin A. Atkins
	Benjamin A. Atkins
	Chief Financial Officer (Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 07, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	NextDecade Corp.
Entity Central Index Key	0001612720
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Common Stock Outstanding		106,397,702
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets
Cash and cash equivalents	$ 24,705	$ 35,703
Investments	5,065	5,063
Prepaid expenses and other current assets	2,282	2,099
Total current assets	32,052	42,865
Property, plant and equipment, net	79,364	73,226
Total assets	111,416	116,091
Current liabilities
Accounts payable	247	726
Share-based compensation liability	1,949	1,815
Accrued liabilities and other current liabilities	5,469	5,856
Total current liabilities	7,665	8,397
Non-current compensation liabilities	1,000	2,015
Non-current share-based compensation liability	3,419	2,587
Total liabilities	12,084	12,999
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.0001 par value, 1.0 million shares authorized, none issued
Common stock	11	11
Additional paid-in-capital	171,178	158,738
Accumulated deficit	(71,857)	(55,617)
Accumulated other comprehensive loss		(40)
Total stockholders’ equity	99,332	103,092
Total liabilities and stockholders’ equity	$ 111,416	$ 116,091

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions	Mar. 31, 2018	Dec. 31, 2017
Consolidated Balance Sheets
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1.0	1.0
Preferred stock, shares issued	0.0	0.0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	480.0	480.0
Common stock, shares issued	106.4	106.3
Common stock, shares outstanding	106.4	106.3

XML

Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operations
Revenues	$ 0	$ 0
Operating Expenses
General and administrative expenses	16,001	2,155
Land option and lease expenses	250	236
Depreciation expense	29	26
Total operating expenses	16,280	2,417
Total operating loss	(16,280)	(2,417)
Other income (expense)
Interest income, net	122	37
Other expense	(42)	(8)
Total other income	80	29
Net loss	$ (16,200)	$ (2,388)
Net loss per common share - basic and diluted	$ (0.15)	$ (0.02)
Weighted average shares outstanding - basic and diluted	106,388	95,689
Comprehensive Loss
Net loss	$ (16,200)	$ (2,388)
Other comprehensive loss:
Change in fair value of investments		5
Comprehensive loss	$ (16,200)	$ (2,383)

XML

Consolidated Statement of Stockholders’ Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Increase (decrease) in equity
Adoption of ASU 2016-01 | Accounting Standards Update 2016-01			$ (40)	$ 40
Balance at the beginning of the period at Dec. 31, 2017	$ 11	$ 158,738	(55,617)	$ (40)	$ 103,092
Balance at the beginning of the period (in shares) at Dec. 31, 2017	106,275				106,300
Increase (decrease) in equity
Share-based compensation		12,440			$ 12,440
Restricted stock vesting	123
Net loss			(16,200)		(16,200)
Balance at the end of the period at Mar. 31, 2018	$ 11	$ 171,178	$ (71,857)		$ 99,332
Balance at the end of the period (in shares) at Mar. 31, 2018	106,398				106,400

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Operating activities:
Net loss	$ (16,200)	$ (2,388)
Adjustment to reconcile net loss to net cash used in operating activities
Depreciation	29	26
Share-based compensation expense	12,234
Loss on investment securities	22
Changes in operating assets and liabilities:
Prepaid expenses and other currents assets	(183)	(1,351)
Accounts payable	(156)	235
Accrued expenses and other liabilities	(1,543)	161
Net cash used in operating activities	(5,797)	(3,317)
Investing activities:
Acquisition of property, plant and equipment	(5,177)	(3,382)
Issuance of note receivable		(115)
Investments	(24)	(16)
Net cash used in investing activities	(5,201)	(3,513)
Financing activities:
Proceeds from equity issuances		100
Net cash provided by financing activities		100
Net decrease in cash and cash equivalents	(10,998)	(6,730)
Cash and cash equivalents – beginning of year	35,703	12,524
Cash and cash equivalents – end of year	24,705	5,794
Non-cash investing activities:
Accounts payable for acquisition of property, plant and equipment	175	352
Accrued liabilities for acquisition of property, plant and equipment	$ 4,471	3,182
Accrued liability for deferred financing cost		$ 891

XML

Nature of Operations and Basis of Presentation

3 Months Ended

Mar. 31, 2018

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

Note 1 — Background and Basis of Presentation

NextDecade Corporation engages in development activities related to the liquefaction and sale of liquefied natural gas (“LNG”). 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 the Terminal (the “Pipeline” together with the Terminal, the “Project”).  We have also secured, through December 2019, a 994-acre site near Texas City, Texas for another potential LNG terminal (the “Galveston Bay Terminal”).

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with Rule 10‑01 of Regulation S-X. Accordingly, they do not include all the information and disclosures required by GAAP for complete financial statements and should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2017. In our opinion, all adjustments, consisting only of normal recurring items, which are considered necessary for a fair presentation of the unaudited consolidated financial statements, have been included.  The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the operating results for the full year.

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 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.

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Prepaid Expenses and Other Current Assets

3 Months Ended

Mar. 31, 2018

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

Note 2 — Prepaid Expenses and Other Current Assets

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

	March 31,		December 31,
	2018		2017
Rio Grande LNG site option	$	921	$	1,080
Short-term security deposits		367		364
Galveston Bay leases		125		100
Rio Bravo Pipeline options		97		111
Prepaid insurance		167		208
Prepaid marketing and sponsorships		353		55
Other		252		181
Total prepaid expenses and other current assets	$	2,282	$	2,099

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Investment Securities

3 Months Ended

Mar. 31, 2018

Investment Securities

Investment Securities

Note 3 — Investment Securities

The Company maintains cash reserves in the Ultra-Short-Term Bond Fund and the Short-Term Bond Index Fund, which are managed by The Vanguard Group, Inc. The target investment allocation between 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 43% of such fund’s holdings are AAA-rated, with 1% non-investment grade rated. The Short-Term Bond Index Fund has an average maturity of approximately three years, and 70% of such fund’s holdings are AAA-rated, with 0% non-investment grade rated. Investment securities consisted of the following (in thousands):

	March 31,				December 31,
	2018				2017
	Fair value		Cost		Fair value		Cost
Ultra-Short-Term Bond Fund	$	3,819	$	3,842	$	3,811	$	3,825
Short-Term Bond Index Fund		1,246		1,284		1,252		1,278
Total investments	$	5,065	$	5,126	$	5,063	$	5,103

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Property, Plant and Equipment

3 Months Ended

Mar. 31, 2018

Property, Plant and Equipment

Property, Plant and Equipment

Note 4 — Property, Plant and Equipment

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

	March 31,		December 31,
	2018		2017
Fixed Assets
Computers	$	82	$	69
Furniture, fixtures, and equipment		257		246
Leasehold improvements		266		264
Total fixed assets		605		579
Less: accumulated depreciation		(400)		(371)
Total fixed assets, net		205		208
Project Assets (not placed in service)
Rio Grande		68,591		62,866
Rio Bravo		10,568		10,152
Total project assets		79,159		73,018
Total property, plant and equipment, net	$	79,364	$	73,226

Depreciation expense for the three months ended March 31, 2018 and 2017 was $29 thousand and $26 thousand, respectively.  

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Accrued Liabilities and Other Current Liabilities

3 Months Ended

Mar. 31, 2018

Accrued Liabilities and Other Current Liabilities

Accrued Liabilities and Other Current Liabilities

Note 5 — Accrued Liabilities and Other Current Liabilities

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

	March 31,		December 31,
	2018		2017
Employee compensation expense	$	651	$	1,851
Project asset costs		4,471		3,317
Accrued legal services		75		141
Other accrued liabilities		272		547
Total accrued liabilities and other current liabilities	$	5,469	$	5,856

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Net Loss Per Share

3 Months Ended

Mar. 31, 2018

Net Loss Per Share

Net Loss Per Share

Note 6 — Net Loss Per Share

The following table (in thousands, except for loss per share) reconciles basic and diluted weighted average common shares outstanding for the three months ended March 31, 2018 and 2017:

	Three months ended
	March 31,
	2018		2017
Weighted average common shares outstanding:
Basic		106,388		95,689
Dilutive unvested common stock and common stock warrants		—		—
Diluted		106,388		95,689
Basic and diluted net loss per share	$	(0.15)	$	(0.02)

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

	Three months ended
	March 31,
	2018		2017
Unvested stock (1)		464		—
Common stock warrants		12,082		12,059
Total dilutive common shares		12,546		12,059

⁽¹⁾ Does not include 26.4 million shares and zero shares for the three months ended March 31, 2018 and 2017, respectively, of unvested stock because the performance conditions had not yet been satisfied.

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Share-based Compensation

3 Months Ended

Mar. 31, 2018

Share-based Compensation.

Share-based Compensation

Note 7 — Share-based Compensation

 We have granted shares of Company common stock and restricted stock to employees, consultants and a non-employee director under the 2017 Omnibus Incentive Plan (the “2017 Plan”) and in connection with the special of meeting of stockholders on July 24, 2017.

In January 2018, our Nominating, Governance, and Compensation Committee of our Board of Directors (the “NCGC Committee”) granted 0.1 million fully-vested shares of Company common stock and 2.1 million shares of restricted common stock awards (the “Restricted Stock Awards”) to employees, consultants and a non-employee director of the Company under the 2017 Plan.  The Restricted Stock Awards are comprised of (i) approximately 1.7 million shares of restricted common stock that vest upon the achievement of certain Company milestones (the “Company Milestones”) and (ii) approximately 0.4 million shares of restricted common stock that vest ratably over a three-year service period.  The Company Milestones consist of (i) the execution of an engineering, procurement and construction contract, (ii) the execution of binding LNG sale and purchase or tolling agreements for aggregate 3.825 million tons per annum, (iii) the receipt of a final environmental impact statement issued by the Federal Energy Regulatory Commission, and (iv) reaching a positive final investment decision in the Project. 

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

	Three months ended
	March 31,
	2018		2017
Share-based compensation:
Equity awards	$	12,440	$	—
Liability awards		(47)		—
Total share-based compensation		12,393		—
Capitalized share-based compensation		(159)		—
Total share-based compensation expense	$	12,234	$	—

Certain employee contracts provided for cash bonuses upon a positive FID in the Project (the “FID bonus”).  In January 2018, the NCGC Committee approved, and certain employees party to such contracts accepted, an amendment to such contracts whereby the FID bonuses would be settled in shares of Company common stock equal to 110% of the FID bonus.  The associated liability for FID bonuses to be settled in shares of common stock of $1.0 million is included in non-current share-based compensation liabilities in our Consolidated Balance Sheets at March 31, 2018.

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Income Taxes

3 Months Ended

Mar. 31, 2018

Income Taxes

Income Taxes

Note 8 — Income Taxes

Due to our cumulative loss position, we have established a full valuation allowance against our deferred tax assets at March 31, 2018 and December 31, 2017. Due to NextDecade LLC’s previous pass-through status and our full valuation allowance, we have not recorded a provision for federal or state income taxes during the three months ended March 31, 2018 and 2017.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies

Commitments and Contingencies

Note 9 — Commitments and Contingencies

Legal Proceedings

From time to time the Company may be subject to various claims and legal actions that arise in the ordinary course of business. As of March 31, 2018, 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 not occur.

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2018

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Note 10 — Recent Accounting Pronouncements

The following table provides a brief description of recent accounting standards that have not been adopted by the Company as of March 31, 2018:

Standard	Description	Expected Date of Adoption	Effect on our Consolidated Financial Statements or Other Significant Matters
ASU 2016‑02, Leases (Topic 842)	This standard requires a lessee to recognize leases on its balance sheet by recording a lease liability representing 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. Preliminarily, we anticipate a material impact from the requirement to recognize all leases upon our Consolidated Balance Sheets and no impact to cash flows. 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 our results of operations, whether we will elect to early adopt this standard or which, if any, practical expedients we will elect upon transition.

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
Accounting Standards Update (ASU) 2014‑09, Revenue from Contracts 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. We elected to adopt this standard using a full retrospective approach.	January 1, 2018	The adoption of this new standard did not affect the amounts shown in our Consolidated Financial Statements or related disclosures as the Company has no revenues.
ASU 2017‑04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	This standard simplifies the measurement of goodwill impairment by eliminating the requirement for an entity to perform a hypothetical purchase price allocation. An entity will instead measure the impairment as the difference between the carrying amount and the fair value of the reporting unit. This standard may be early adopted beginning January 1, 2017 and must be adopted prospectively.	January 1, 2018	The adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures.
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	The adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures.
ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	This standard principally affects accounting standards for equity investments, financial liabilities where the fair value option has been elected, and the presentation and disclosure requirements for financial instruments. Upon the effective date of the new standards, all equity investments in unconsolidated entities, other than those accounted for using the equity method of accounting, will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification and therefore, no changes in fair value will be reported in other comprehensive income (loss) for equity securities with readily determinable fair values.	January 1, 2018	Upon the adoption of this standard, we made a cumulative effect adjustment of $40 thousand to accumulated deficit for unrealized losses on our available-for-sale investment securities.

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Subsequent Events

Subsequent Events

Note 11 – Subsequent Events

As previously disclosed, the Company recently commenced a private offering of Series A Convertible Preferred Stock (the “Convertible Preferred Stock”), which include associated warrants (the “Convertible Preferred Equity Offering”).  In connection with the Convertible Preferred Equity Offering, on April 11, 2018, we entered into backstop commitment agreements (the “Backstop Agreements”) with accounts managed by (i) York Capital Management Global Advisors LLC and its affiliates (the “York Group”), (ii) Valinor and its affiliates (the “Valinor Group”), and (iii) Halcyon and its affiliates (the “Halcyon Group”) pursuant to which the York Group, the Valinor Group, and the Halcyon Group (each a “Backstop Party”) each agreed to purchase, at our election, up to approximately $23.2 million, $8.0 million and $3.8 million, respectively, in shares of Convertible Preferred Stock, which include associated warrants. Such warrants represent the right to acquire in the aggregate 50 basis points (0.50%) of the fully diluted shares of all outstanding Company common stock on the exercise date with a strike price of $0.01 per share.

In exchange for each Backstop Party’s commitment under its Backstop Agreement, we agreed to issue to such Backstop Party, or its designated affiliates, additional shares of Company common stock ranging from approximately 219 thousand shares of Company common stock up to approximately 328 thousand shares of Company common stock in aggregate, dependent on the timing of closing of the Convertible Preferred Equity Offering. 

In addition, we agreed to pay the Backstop Parties a fee (the “Drawdown Fee”) equal to two and three quarters percent (2.75%) of the portion of the backstop amounts drawn on by us.  The Drawdown Fee will be paid in additional shares of Company common stock up to approximately 200 thousand shares of Company common stock in aggregate.

We also agreed to indemnify each Backstop Party under certain circumstances for losses arising out of or in connection with its Backstop Agreement, the definitive documentation related to the Convertible Preferred Equity Offering, or the transactions contemplated thereby.  The Backstop Parties have the right to terminate the Backstop Agreements under certain circumstances, including if the closing of the Convertible Preferred Equity Offering does not occur on or before August 9, 2018, unless extended by the mutual consent of the parties. 

There can be no assurance that the Company will be successful in raising capital at all or on terms acceptable to the Company. The Company has not yet sold any shares of Convertible Preferred Stock, which include associated warrants, in the Convertible Preferred Equity Offering.

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Prepaid Expenses and Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2018

Prepaid Expenses and Other Current Assets

Schedule of prepaid expenses and other current assets

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

	March 31,		December 31,
	2018		2017
Rio Grande LNG site option	$	921	$	1,080
Short-term security deposits		367		364
Galveston Bay leases		125		100
Rio Bravo Pipeline options		97		111
Prepaid insurance		167		208
Prepaid marketing and sponsorships		353		55
Other		252		181
Total prepaid expenses and other current assets	$	2,282	$	2,099

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Investment Securities (Tables)

3 Months Ended

Mar. 31, 2018

Investment Securities

Schedule of investment securities

Investment securities consisted of the following (in thousands):

	March 31,				December 31,
	2018				2017
	Fair value		Cost		Fair value		Cost
Ultra-Short-Term Bond Fund	$	3,819	$	3,842	$	3,811	$	3,825
Short-Term Bond Index Fund		1,246		1,284		1,252		1,278
Total investments	$	5,065	$	5,126	$	5,063	$	5,103

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Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 31, 2018

Property, Plant and Equipment

Schedule of property, plant and equipment

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

	March 31,		December 31,
	2018		2017
Fixed Assets
Computers	$	82	$	69
Furniture, fixtures, and equipment		257		246
Leasehold improvements		266		264
Total fixed assets		605		579
Less: accumulated depreciation		(400)		(371)
Total fixed assets, net		205		208
Project Assets (not placed in service)
Rio Grande		68,591		62,866
Rio Bravo		10,568		10,152
Total project assets		79,159		73,018
Total property, plant and equipment, net	$	79,364	$	73,226

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Accrued Liabilities and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2018

Accrued Liabilities and Other Current Liabilities

Schedule of accrued expenses and other current liabilities

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

	March 31,		December 31,
	2018		2017
Employee compensation expense	$	651	$	1,851
Project asset costs		4,471		3,317
Accrued legal services		75		141
Other accrued liabilities		272		547
Total accrued liabilities and other current liabilities	$	5,469	$	5,856

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Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2018

Net Loss Per Share

Schedule of basic and diluted weighted average common shares outstanding

The following table (in thousands, except for loss per share) reconciles basic and diluted weighted average common shares outstanding for the three months ended March 31, 2018 and 2017:

	Three months ended
	March 31,
	2018		2017
Weighted average common shares outstanding:
Basic		106,388		95,689
Dilutive unvested common stock and common stock warrants		—		—
Diluted		106,388		95,689
Basic and diluted net loss per share	$	(0.15)	$	(0.02)

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Share-based Compensation (Tables)

3 Months Ended

Mar. 31, 2018

Share-based Compensation.

Schedule of share-based compensation

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

	Three months ended
	March 31,
	2018		2017
Share-based compensation:
Equity awards	$	12,440	$	—
Liability awards		(47)		—
Total share-based compensation		12,393		—
Capitalized share-based compensation		(159)		—
Total share-based compensation expense	$	12,234	$	—

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Recent Accounting Pronouncements (Tables)

3 Months Ended

Mar. 31, 2018

Recent Accounting Pronouncements

Schedule of recent accounting standards not yet adopted

Standard	Description	Expected Date of Adoption	Effect on our Consolidated Financial Statements or Other Significant Matters
ASU 2016‑02, Leases (Topic 842)	This standard requires a lessee to recognize leases on its balance sheet by recording a lease liability representing 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. Preliminarily, we anticipate a material impact from the requirement to recognize all leases upon our Consolidated Balance Sheets and no impact to cash flows. 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 our results of operations, whether we will elect to early adopt this standard or which, if any, practical expedients we will elect upon transition.

Schedule of recent accounting standards that were adopted

Note 10 — Recent Accounting Pronouncements

The following table provides a brief description of recent accounting standards that have not been adopted by the Company as of March 31, 2018:

Standard	Description	Expected Date of Adoption	Effect on our Consolidated Financial Statements or Other Significant Matters
ASU 2016‑02, Leases (Topic 842)	This standard requires a lessee to recognize leases on its balance sheet by recording a lease liability representing 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. Preliminarily, we anticipate a material impact from the requirement to recognize all leases upon our Consolidated Balance Sheets and no impact to cash flows. 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 our results of operations, whether we will elect to early adopt this standard or which, if any, practical expedients we will elect upon transition.

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
Accounting Standards Update (ASU) 2014‑09, Revenue from Contracts 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. We elected to adopt this standard using a full retrospective approach.	January 1, 2018	The adoption of this new standard did not affect the amounts shown in our Consolidated Financial Statements or related disclosures as the Company has no revenues.
ASU 2017‑04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment	This standard simplifies the measurement of goodwill impairment by eliminating the requirement for an entity to perform a hypothetical purchase price allocation. An entity will instead measure the impairment as the difference between the carrying amount and the fair value of the reporting unit. This standard may be early adopted beginning January 1, 2017 and must be adopted prospectively.	January 1, 2018	The adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures.
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	The adoption of this standard did not have a material impact on our Consolidated Financial Statements or related disclosures.
ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities	This standard principally affects accounting standards for equity investments, financial liabilities where the fair value option has been elected, and the presentation and disclosure requirements for financial instruments. Upon the effective date of the new standards, all equity investments in unconsolidated entities, other than those accounted for using the equity method of accounting, will generally be measured at fair value through earnings. There will no longer be an available-for-sale classification and therefore, no changes in fair value will be reported in other comprehensive income (loss) for equity securities with readily determinable fair values.	January 1, 2018	Upon the adoption of this standard, we made a cumulative effect adjustment of $40 thousand to accumulated deficit for unrealized losses on our available-for-sale investment securities.

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Nature of Operations and Basis of Presentation (Details)	3 Months Ended
	Mar. 31, 2018 a mi
Organization and Nature of Operations
Length of pipeline to supply gas | mi	137
Shoal Point Leases
Organization and Nature of Operations
Area available for lease | a	994

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Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Prepaid Expenses and Other Current Assets
Rio Grande LNG site option	$ 921	$ 1,080
Short-term security deposits	367	364
Galveston Bay leases	125	100
Rio Bravo Pipeline options	97	111
Prepaid insurance	167	208
Prepaid marketing sponsorships	353	55
Other	252	181
Total prepaid expenses and other current assets	$ 2,282	$ 2,099

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Investment Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Investment securities
Fair Value	$ 5,065	$ 5,063
Cost	$ 5,126	5,103
Ultra-Short-Term Bond Fund
Investment securities
Target investment allocation (as a percent)	75.00%
Non-investment grade rated holdings (as a percent)	1.00%
Maturity period of mutual funds	1 year
Fair Value	$ 3,819	3,811
Cost	$ 3,842	3,825
Short-Term Bond Index Fund
Investment securities
Target investment allocation (as a percent)	25.00%
Non-investment grade rated holdings (as a percent)	0.00%
Maturity period of mutual funds	3 years
Fair Value	$ 1,246	1,252
Cost	$ 1,284	$ 1,278
AAA rated | Ultra-Short-Term Bond Fund
Investment securities
Investment holdings grade rated (as a percent)	43.00%
AAA rated | Short-Term Bond Index Fund
Investment securities
Investment holdings grade rated (as a percent)	70.00%

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Property, Plant and Equipment
Total property, plant and equipment, net	$ 79,364		$ 73,226
Depreciation expense	29	$ 26
Non project assets
Property, Plant and Equipment
Property, plant and equipment, gross	605		579
Less: accumulated depreciation	(400)		(371)
Total property, plant and equipment, net	205		208
Computers
Property, Plant and Equipment
Property, plant and equipment, gross	82		69
Furniture, fixtures, and equipment
Property, Plant and Equipment
Property, plant and equipment, gross	257		246
Leasehold improvements
Property, Plant and Equipment
Property, plant and equipment, gross	266		264
Project assets
Property, Plant and Equipment
Project assets in progress	79,159		73,018
Rio Grande
Property, Plant and Equipment
Project assets in progress	68,591		62,866
Rio Bravo
Property, Plant and Equipment
Project assets in progress	$ 10,568		$ 10,152

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Accrued Liabilities and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accrued Liabilities and Other Current Liabilities
Employee compensation expense	$ 651	$ 1,851
Project asset costs	4,471	3,317
Accrued legal services	75	141
Other accrued liabilities	272	547
Total accrued liabilities and other current liabilities	$ 5,469	$ 5,856

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Net Loss Per Share (Details) - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Weighted average common shares outstanding:
Basic	106,388	95,689
Dilutive unvested common stock and common stock warrants	0	0
Diluted	106,388	95,689
Basic and diluted net loss per share (in dollar per share)	$ (0.15)	$ (0.02)

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Net Loss Per Share - Anti-Dilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive stock options not considered in computing diluted earnings per common share	12,546	12,059
Shares excluded as performance conditions not yet satisfied	26,400	0
Unvested Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive stock options not considered in computing diluted earnings per common share	464
Common Stock Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share
Anti-dilutive stock options not considered in computing diluted earnings per common share	12,082	12,059

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Share-based Compensation - Plan Information (Details) - 2017 Plan T in Thousands	1 Months Ended
	Jan. 31, 2018 T shares
Fully-Vested Common Stock Awards
Summary of changes in restricted stock outstanding
Granted shares	0.1
Restricted Stock Awards
Summary of changes in restricted stock outstanding
Granted shares	2.1
Milestone Performance Shares
Summary of changes in restricted stock outstanding
Granted shares	1.7
Restricted stock
Summary of changes in restricted stock outstanding
Granted shares	0.4
Vesting period	3 years
Milestone 2 upon execution of one or more binding LNG sale and purchase or tolling agreements, with customary conditions precedent
Summary of changes in restricted stock outstanding
Threshold volume per annum for issuance of restricted shares (in tons) | T	3,825

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Share-based Compensation - Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Summary of changes in restricted stock outstanding
Total share-based compensation	$ 12,393
Capitalized share-based compensation	(159)
Total share-based compensation expense	$ 12,234
Percentage of FID bonus to be settled in shares of common stock	110.00%
Liability for FID bonuses to be settled in shares of common stock	$ 1,000	$ 2,015
Equity awards
Summary of changes in restricted stock outstanding
Total share-based compensation expense	12,440
Liability awards
Summary of changes in restricted stock outstanding
Total share-based compensation expense	$ (47)

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Taxes
Income tax provision	$ 0	$ 0

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Recent Accounting Pronouncements (Details) $ in Thousands	Jan. 01, 2018 USD ($)
Accounting Standards Update 2016-01 | Adjustment
Recent Accounting Pronouncements
Cumulative effect on retained earnings	$ (40)

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Subsequent Events (Details) - Backstop Agreements - Subsequent Events $ / shares in Units, shares in Thousands, $ in Millions	Apr. 11, 2018 USD ($) $ / shares shares
Subsequent Events
Basis of acquired diluted common stock - warrants rights (as a percent)	0.50%
Strike price of warrants (in dollars per share) | $ / shares	$ 0.01
Drawdown fee (as a percent)	2.75%
Minimum
Subsequent Events
Additional number of shares to be issued to each Backstop Party | shares	219
Maximum
Subsequent Events
Additional number of shares to be issued to each Backstop Party | shares	328
Aggregate number of shares to be issued for as payment of the Drawdown fee | shares	200
York Group | Maximum
Subsequent Events
Purchase value commitment of shares, including warrants | $	$ 23.2
Valinor Group | Maximum
Subsequent Events
Purchase value commitment of shares, including warrants | $	8.0
Halcyon Group | Maximum
Subsequent Events
Purchase value commitment of shares, including warrants | $	$ 3.8