What the changes say
- NextDecade is heavily focused on constructing the Rio Grande LNG Facility, securing customer contracts, and managing substantial debt and regulatory approvals.
What changed since the prior 10-K
New
- NewRisks Related to our Business and the Industry in which we Operate
Our projects are in the development and construction phases, and the success of such projects is unpredictable
Cash flows depend entirely on completing Phase 1, Train 4, and Train 5 of the Rio Grande LNG Facility and carbon capture systems.
- NewRisks Related to our Business and the Industry in which we Operate
We face risks related to the uncertainty regarding the future of international trade agreements and the potential for retaliatory tariffs on LNG
International trade uncertainty and potential retaliatory tariffs on LNG exports could increase project costs and reduce customer demand.
- NewRisks Related to our Business and the Industry in which we Operate
We have not yet entered into any definitive commercial arrangements to install any CCS systems. We also have not entered into, and may never be able to enter into, satisfactory commercial arrangements with third-party suppliers of feedstock or other required supplies to the Rio Grande LNG Facility
The company lacks definitive commercial arrangements for carbon capture systems or feedstock supplies for the Rio Grande LNG Facility.
- NewRisks Related to our Business and the Industry in which we Operate
significant construction delay, whatever the cause, could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects
Rio Grande LNG Facility operations face physical hazards like hurricanes, equipment malfunctions, and waterway sedimentation that could cause severe construction delays.
- NewRisks Related to our Business and the Industry in which we Operate
We rely on a combination of internal procedures, nondisclosure agreements, licenses, patents, trademarks and copyright law to protect our intellectual property and know-how. Our intellectual property rights may not be successfully asserted in the future or may be invalidated, circumvented or challenged
Protecting intellectual property involves expensive litigation, and confidentiality agreements with potential partners could be breached.
- NewRisks Related to Governmental Regulation
flow, liquidity and prospects
Federal and state regulatory permits contain ongoing conditions, and government shutdowns or lack of quorums could delay approvals.
- NewRisks Relating to our Securities
obligations and evolving legal and regulatory requirements, to which we may be subject. Enhanced sustainability and climate-related disclosure requirements could lead to reputational or other harm to our relationships with regulators, employees, customers, investors or other stakeholders
Enhanced climate-related disclosure rules increase the risk of ESG litigation and greenwashing claims regarding public statements and net-zero targets.
Dropped
- DroppedRisks Related to our Business and the Industry in which we Operate
A breach of the covenants and other restrictions in any of Rio Grande’s indebtedness could result in an event of default thereunder. Such a default may allow the holders of such indebtedness to accelerate the related indebtedness which may result in foreclosure on Rio Grande’s assets or equity interests in Rio Grande
- DroppedRisks Related to our Business and the Industry in which we Operate
Our projects are in the development and construction phases, and the success of such projects is unpredictable; as such, positive cash flows and even revenues will be several years away, if they occur at all
- DroppedRisks Related to our Business and the Industry in which we Operate
Tariffs issued by the United States government could have an adverse effect on our future operations
Default under Rio Grande's Corporate Credit Agreement could lead to foreclosure on assets.
- DroppedRisks Related to our Business and the Industry in which we Operate
We depend on our intellectual property for our CCS projects, and our failure to protect that intellectual property could adversely affect the future growth and success of our CCS business
- DroppedRisks Related to our Business and the Industry in which we Operate
and the investment of substantial management time and there is no assurance we ultimately would prevail or that a successful outcome would lead to an economic benefit that is greater than the investment in the litigation
Project success is unpredictable and positive cash flows are several years away.
- DroppedRisks Related to Governmental Regulation
We may not be able to utilize any future federal income tax credits
- DroppedRisks Relating to our Securities
The 2024 Warrants were issued on December 31, 2024 in two equal tranches and are exercisable at any time before December 31, 2029 for an aggregate of approximately 7.2 million shares of Company common stock, with the first tranche exercisable at $7.15 per share and the second tranche exercisable at $9.30 per share
Reworded
- 98% rewrittenRisks Relating to our Securities
The exercise of outstanding warrants and exchangeable loans may have a dilutive effect on our common stock
Added details regarding the May 2025 upsize of the Corporate Credit Agreement and the issuance of 2.0 million 2025 Warrants exercisable at $9.30 per share.
Was: The exercise of outstanding warrants may have a dilutive effect on our common stock
- 82% rewrittenRisks Related to Governmental Regulation
The construction and operation of the Rio Grande LNG Facility remains subject to further governmental approvals, and some approvals may be subject to further conditions, review and/or revocation and other legal and regulatory risks, which may result in delays, increased costs or decreased cash flows
Specified that FERC's authorization of the Rio Grande LNG Facility is currently being challenged in an appeal in the D.C. Circuit Court.
- 72% rewrittenRisks Related to our Business and the Industry in which we Operate
Restrictions in debt agreements may prevent certain beneficial transactions
Expanded debt covenant restrictions from applying specifically to Rio Grande to now encompass all subsidiaries, adding default risk language.
- 72% rewrittenRisks Relating to our Securities
Attention to sustainability and environmental, social and governance matters may impact our business, financial results or stock price and climate change concerns may pose challenges to our operating model
Updated ESG and climate change risk framing regarding stakeholder pressure without changing core advocacy group descriptions.
- 62% rewrittenRisks Related to our Business and the Industry in which we Operate
Our ability to generate cash is substantially dependent upon us entering into satisfactory contracts with third parties and the performance of those third parties under those contracts
Changed references from nine specific commercial arrangements to long-term commercial arrangements with customers for the Rio Grande LNG Facility.
- 49% rewrittenRisks Related to our Business and the Industry in which we Operate
The substantial amount of indebtedness incurred to finance construction of the Rio Grande LNG Facility may adversely affect our subsidiaries' cash flow and the ability to operate their business, remain in compliance with debt covenants and make payments on indebtedness
Broadened debt-related risks from solely affecting Rio Grande to now explicitly include all subsidiaries and Rio Grande Project Entities.
Was: The substantial amount of indebtedness incurred to finance construction of Phase 1 of the Rio Grande LNG Facility may adversely affect Rio Grande’s cash flow and its ability to operate its business, remain in compliance with debt covenants and make payments on its indebtedness
- 42% rewrittenRisks Related to our Business and the Industry in which we Operate
Conducting a portion of our operations through joint ventures in which we do not have 100% ownership interest, and which are not operated solely for the benefit of our stockholders, exposes us and our stockholders to risks and uncertainties, many of which are outside of our control
Updated joint venture references from a single intermediate holding entity to multiple Joint Ventures managed by respective JV Boards.
- 42% rewrittenRisks Related to our Business and the Industry in which we Operate
Opposition from local communities or environmental groups can impede or delay the construction and operation of the Rio Grande LNG Facility
Added administrative and judicial challenges by environmental groups to local opposition risks affecting the Rio Grande LNG Facility.
Was: Objections from local communities or environmental groups can delay the Rio Grande LNG Facility
- 41% rewrittenRisks Related to our Business and the Industry in which we Operate
Our exposure to the performance and credit risks of counterparties may adversely affect our operating results, liquidity and access to financing
- 29% rewrittenRisks Relating to our Securities
Cyberattacks targeting systems and infrastructure used in our business may adversely impact our operations
- 27% rewrittenRisks Related to our Business and the Industry in which we Operate
Costs for the Rio Grande LNG Facility and any CCS projects are subject to various factors
Was: Costs for the Rio Grande LNG Facility and CCS projects are subject to various factors
- 27% rewrittenRisks Related to our Business and the Industry in which we Operate
We plan to operate in the highly competitive area of LNG production and face intense competition from independent, technology-driven companies as well as from both major and other independent oil and natural gas companies and utilities
- 22% rewrittenRisks Related to Governmental Regulation
The Rio Grande LNG Facility will be subject to a number of environmental laws and regulations that impose significant compliance costs, and existing and future environmental and similar laws and regulations could result in increased compliance costs, liabilities or additional operating restrictions
All 43 risk factors
Headings as the filing states them, in filing order.
Risks Related to our Business and the Industry in which we Operate
- 01The substantial amount of indebtedness incurred to finance construction of the Rio Grande LNG Facility may adversely affect our subsidiaries' cash flow and the ability to operate their business, remain in compliance with debt covenants and make payments on indebtedness49% rewritten
- 02Restrictions in debt agreements may prevent certain beneficial transactions72% rewritten
- 03Conducting a portion of our operations through joint ventures in which we do not have 100% ownership interest, and which are not operated solely for the benefit of our stockholders, exposes us and our stockholders to risks and uncertainties, many of which are outside of our control42% rewritten
- 04Our projects are in the development and construction phases, and the success of such projects is unpredictableNew
- 05We will be required to seek additional debt and equity financing in the future to complete future phases of the Rio Grande LNG Facility and the development of any CCS projects and may not be able to secure such financing on acceptable terms, or at all
- 06We may be subject to risks related to doing business in, and having counterparties based in, foreign countries
- 07We face risks related to the uncertainty regarding the future of international trade agreements and the potential for retaliatory tariffs on LNGNew
- 08Costs for the Rio Grande LNG Facility and any CCS projects are subject to various factors27% rewritten
- 09The construction of the Rio Grande LNG Facility is expected to take several years, will be confined to a limited geographic area and could be subject to delays, cost overruns, labor disputes and other factors that could adversely affect financial performance or impair our ability to execute our scheduled business plan
- 10Our ability to generate cash is substantially dependent upon us entering into satisfactory contracts with third parties and the performance of those third parties under those contracts62% rewritten
- 11We have not yet entered into any definitive commercial arrangements to install any CCS systems. We also have not entered into, and may never be able to enter into, satisfactory commercial arrangements with third-party suppliers of feedstock or other required supplies to the Rio Grande LNG FacilityNew
- 12Our exposure to the performance and credit risks of counterparties may adversely affect our operating results, liquidity and access to financing41% rewritten
- 13significant construction delay, whatever the cause, could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospectsNew
- 14We may experience increased labor costs, and the unavailability of skilled workers or our failure to attract and retain qualified personnel could adversely affect us. In addition, changes in our senior management or other key personnel could affect our business operations
- 15Technological innovation, competition or other factors may negatively impact our anticipated competitive advantage or our processes
- 16We rely on a combination of internal procedures, nondisclosure agreements, licenses, patents, trademarks and copyright law to protect our intellectual property and know-how. Our intellectual property rights may not be successfully asserted in the future or may be invalidated, circumvented or challengedNew
- 17Failure of LNG exported from the U.S. Gulf Coast to be a competitive source of energy for international markets could adversely affect our customers and could materially and adversely affect our business, contracts, financial condition, operating results, cash flow, liquidity and prospects
- 18Decreases in the global demand for and price of natural gas (versus the price of imported LNG) could lead to reduced development of LNG projects worldwide
- 19The reduction or elimination of government incentives could adversely affect our business, financial condition, future results and cash flows
- 20We plan to operate in the highly competitive area of LNG production and face intense competition from independent, technology-driven companies as well as from both major and other independent oil and natural gas companies and utilities27% rewritten
- 21There may be shortages of LNG vessels worldwide, which could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects
- 22We will rely on third-party engineers to estimate the future capacity ratings and performance capabilities of the Rio Grande LNG Facility and any CCS projects, and these estimates may prove to be inaccurate
- 23We may not be successful in developing or constructing all of our proposed expansion projects
- 24Carbon credit markets may not develop as quickly or efficiently as we anticipate or at all
- 25We are dependent on a limited number of customers for the purchase of LNG
- 26Opposition from local communities or environmental groups can impede or delay the construction and operation of the Rio Grande LNG Facility42% rewritten
- 27The Rio Grande LNG Facility will be dependent on the availability of gas supply at the Agua Dulce Hub
- 28Litigation could expose us to significant costs and adversely affect our business, financial condition, and results of operations
Risks Related to Governmental Regulation
- 29The construction and operation of the Rio Grande LNG Facility remains subject to further governmental approvals, and some approvals may be subject to further conditions, review and/or revocation and other legal and regulatory risks, which may result in delays, increased costs or decreased cash flows82% rewritten
- 30flow, liquidity and prospectsNew
- 31The Rio Grande LNG Facility will be subject to a number of environmental laws and regulations that impose significant compliance costs, and existing and future environmental and similar laws and regulations could result in increased compliance costs, liabilities or additional operating restrictions22% rewritten
- 32Unethical conduct and non-compliance with applicable laws could have a significant adverse effect on our business
- 33Our ability to utilize our net operating loss carryforwards (“NOLs”) may be limited as a result of ownership changes under Section 382 of the Code
Risks Relating to our Securities
- 34Our common stock could be delisted from Nasdaq
- 35The market price of our common stock has fluctuated in the past and is likely to fluctuate in the future. Holders of our common stock could lose all or part of their investment
- 36Raising additional capital may cause dilution to existing stockholders, restrict our operations or require us to relinquish rights. Additionally, sales of a substantial number of shares of our common stock or other securities in the public market could cause our stock price to fall
- 37Our Second Amended and Restated Certificate of Incorporation grants our board of directors the power to designate and issue additional shares of common and/or preferred stock
- 38The exercise of outstanding warrants and exchangeable loans may have a dilutive effect on our common stock98% rewritten
- 39Provisions of our charter documents or Delaware law could discourage, delay or prevent us from being acquired even if being acquired would be beneficial to our stockholders and could make it more difficult to change management
- 40Attention to sustainability and environmental, social and governance matters may impact our business, financial results or stock price and climate change concerns may pose challenges to our operating model72% rewritten
- 41obligations and evolving legal and regulatory requirements, to which we may be subject. Enhanced sustainability and climate-related disclosure requirements could lead to reputational or other harm to our relationships with regulators, employees, customers, investors or other stakeholdersNew
- 42Cyberattacks targeting systems and infrastructure used in our business may adversely impact our operations29% rewritten
- 43Terrorist attacks, including cyberterrorism, or military campaigns involving us or our projects could result in delays in, or cancellation of, construction or closure of the Rio Grande LNG Facility
Other NextDecade 10-Ks
- FY2024 10-K risk factors43 risks
NextDecade faces heavy indebtedness and cash flow risks tied to the construction phase of Phase 1 of the Rio Grande LNG Facility. The company depends heavily on third-party contractors, suppliers at the Agua Dulce Hub, and commercial counterparties. Future growth relies on successfully developing CCS projects, obtaining additional financing, and maintaining regulatory approvals and permits.
Filed Feb 28, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.