Business Context and Reporting Period
This Form 8-K Current Report, dated March 26, 2021, details a material definitive agreement entered into by NextDecade Corporation (the "Company"). The filing reports the execution of a Series C Convertible Preferred Stock Purchase Agreement with OGCI Climate Investments Holdings LLP.
Key Financial Metrics and Transaction Terms
- Aggregate Purchase Price: $10 million.
- Securities Issued: 10,000 shares of Series C Convertible Preferred Stock (par value $0.0001) plus 200 shares issued as an origination fee.
- Price Per Share: $1,000.
- Dividend Rate: 12% per annum, cumulative, payable quarterly in cash or in-kind (Company anticipates in-kind payment).
- Warrants: Detached warrants issued with the preferred stock representing the right to acquire approximately 0.142% of outstanding common stock on a fully diluted basis.
- Warrant Exercise Price: $0.01 per share.
- Warrant Term: Fixed three-year term from the Closing Date.
- Closing Date: Expected on or prior to April 16, 2021.
Material Changes and Conversion Mechanics
The transaction introduces a new class of preferred stock with specific conversion and dilution mechanics:
- Optional Conversion: The Company may convert all Series C Preferred Stock into common stock at a conversion price of $2.9632 per share if the volume-weighted average trading price of common stock meets specific thresholds relative to Series A and Series B preferred stock conversion prices.
- Mandatory Conversion: Conversion is mandatory on the earlier of 10 business days following a "FID Event" or March 17, 2031.
- Dilution Cap: Unless stockholder approval is obtained, the aggregate issuance of common stock upon conversion of Series C Preferred Stock and exercise of warrants is capped at 19.99% of the total shares of common stock outstanding as of the effective date.
- Stockholder Approval: The Company intends to seek stockholder approval at its annual meeting on or before June 30, 2021, to permit issuance up to the maximum amount.
Outlook, Risks, and Contingencies
- Regulatory Status: The offering is conducted in reliance on Regulation D exemptions; the securities are not registered under the Securities Act of 1933.
- Closing Conditions: The transaction is subject to customary closing conditions.
- Registration Rights: Holders of Series C Preferred Stock will receive customary demand and piggy-back registration rights for underlying common stock.
- Anti-Dilution: Conversion and warrant exercise prices are subject to proportional adjustments for stock splits, dividends, and certain additional issuances.
Investor Verification Checklist
- Verify the final closing date and receipt of the $10 million aggregate purchase price.
- Confirm the outcome of the stockholder vote regarding the 19.99% dilution cap at the annual meeting (expected by June 30, 2021).
- Review the full text of the Certificate of Designations (Exhibit 3.1) for detailed definitions of "FID Event" and "Parity Stock."
- Monitor the Company's election regarding cash versus in-kind dividend payments.
- Check for any subsequent filings regarding the registration of the underlying common stock.