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Item 1A. Risk Factors

2026-03-02 compared with 2025-02-28 · 152 added, 160 removed, 403 unchanged (44% of the section changed)

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This section does not describe all risks applicable to us, our industry or our business, and it is intended only as a summary of known material risks that are specific to us.

We may experience additional risks and uncertainties not currently

known to us or that we currently deem to be immaterial which may materially and adversely affect our business, financial condition and results of operations.

We may experience additional risks and uncertainties not currently known to us or that we currently deem to be immaterial which may materially and adversely affect our business, financial condition and results of operations.

Risks Related to our Business and the Industry in which we Operate

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.

Rio Grande has incurred a substantial amount of indebtedness.

This substantial level of indebtedness increases the possibility that Rio Grande may be unable to generate cash sufficient to pay, when due, the principal or interest on such indebtedness or to refinance such indebtedness ahead of its scheduled maturity.

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.

Our subsidiaries have incurred a substantial amount of indebtedness.

This substantial level of indebtedness increases the possibility that they may be unable to generate cash sufficient to pay, when due, the principal or interest on such indebtedness or to refinance such indebtedness ahead of its scheduled maturity.

This indebtedness and obligations thereunder could have other important consequences to you as a stockholder.

• any failure to comply with the obligations of any of Rio Grande’s debt instruments, including financial and other restrictive covenants, could result in an event of default under the applicable instrument;

• Rio Grande may be more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse change in government regulation affecting Rio Grande’s ability to pay obligations when due;

• Rio Grande may need to dedicate a substantial portion of its future cashflow from operations to payments on indebtedness, thereby reducing the availability of cash flows to fund working capital, capital expenditures, acquisitions, other general corporate purposes and any future dividends or share repurchases;

• the ability to refinance Rio Grande’s indebtedness will depend on the condition of credit markets and capital markets, and its financial condition at such time.

• any failure to comply by our subsidiaries, including the Rio Grande Project Entities, with the obligations under their debt instruments, including financial and other restrictive covenants, could result in an event of default under the applicable instrument;

• we may be more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse change in government regulation affecting our subsidiaries' ability to pay obligations when due;

• our subsidiaries may need to dedicate a substantial portion of their future cash flow from operations to payments on indebtedness, thereby reducing the availability of cash flows to fund working capital, capital expenditures, acquisitions, other general corporate purposes and any future dividends or share repurchases;

• the ability to refinance indebtedness will depend on the condition of credit markets and capital markets, and our subsidiaries' financial condition at such time.

Any refinancing could be at higher interest rates and may require compliance with more onerous covenants, which could further restrict business operations;

• we may have limited flexibility in planning for, or reacting to, changes in Rio Grande’s business and the industry in which it operates;

• our indebtedness may place Rio Grande at a competitive disadvantage compared to its competitors that have less debt.

• we may have limited flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• our indebtedness may place us and our subsidiaries, including the Rio Grande Project Entities, at a competitive disadvantage compared to competitors that have less debt.

Restrictions in debt agreements may prevent certain beneficial transactions.

In addition to restrictions on the ability of Rio Grande to make distributions or incur additional indebtedness, the agreements governing Rio Grande’s indebtedness also contain various other covenants that may prevent it from engaging in beneficial transactions, including limitations on the ability of Rio Grande or certain of its subsidiaries to:

In addition to restrictions on the ability of our subsidiaries to make distributions or incur additional indebtedness, the agreements governing our subsidiaries' indebtedness also contain various other covenants that may prevent them from engaging in beneficial transactions, including limitations on the ability of certain of our subsidiaries to:

• make distributions or certain investments;

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• enter into transactions with affiliates;

• consolidate, merge, sell or lease all or substantially all of its assets.

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.

Our wholly owned subsidiary, Rio Grande LNG Super Holdings, LLC ("Super Holdings"), has entered into a credit agreement (the "Corporate Credit Agreement") that provides for a $175 million senior secured loan.

The Corporate Credit Agreement includes covenants that, among other things, limit the ability of Super Holdings to incur additional indebtedness, make certain investments or pay dividends or distributions on equity interests or subordinated indebtedness or purchase, redeem, or retire equity interests, sell or transfer assets, incur liens or dissolve, liquidate, consolidate, merge.

Upon the occurrence and continuation of an event of default under the Corporate Credit Agreement (and after all applicable cure periods have elapsed), the majority lenders may, by notice to Super Holdings accelerate the loans thereunder, terminate any outstanding loan commitments and exercise all contractual and legal rights in relation to the collateral.

• consolidate, merge, sell or lease all or substantially all of their assets.

A breach of the covenants and other restrictions in any of our subsidiaries' 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 the assets owned by the applicable subsidiary, which in the case of the Rio Grande Project Entities, includes the equity interests in the Rio Grande Project Entities, and in the case of the ND Finance Subsidiaries, includes the equity interests in the entities that own NextDecade's interests in the Joint Ventures.

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.

We currently operate parts of our business through a joint venture, Rio Grande LNG Intermediate Holdings, LLC (“Intermediate Holdings”) in which we do not have 100% ownership interest, and we may enter into additional joint ventures in the future.

We currently operate parts of our business through the Joint Ventures, in which we do not have 100% ownership interest, and we may enter into additional joint ventures in the future.

Joint ventures and minority investments inherently involve a lesser degree of control over business operations, thereby potentially increasing the financial, legal, operational and/or compliance risks associated with the joint venture or minority investment.

For example, except for the Member Reserved Matters (as defined below), the affairs of Intermediate Holdings will otherwise be managed by a board of managers (the “Intermediate Holdings Board”).

The Intermediate Holdings Board will be composed of up to four managers appointed by us (the “Class A Managers”), including one Class A Manager designated by Global LNG North America Corp., a subsidiary of TotalEnergies SE, and managers appointed by members holding a minimum percentage of the Class B limited liability company interests in Intermediate Holdings (the “Class B Managers”).

Approval of any matter by the Intermediate Holdings Board will require the consent of a majority of the Class A Managers voting on the matter and Class B Managers representing a majority of the Class B limited liability company interests in Intermediate Holdings voting for such matter, as applicable;

provided that (i) certain specified “qualified matters,” “supermajority matters,” and “unanimous matters” are reserved to the approval of the members of Intermediate Holdings (the "Member Reserved Matters") holding a requisite percentage of the applicable classes of limited liability company interests in Intermediate Holdings, and (ii) related party transactions will be subject to approval in accordance with the procedures specified in the JV Agreement.

Pursuant to the JV Agreement, we will be entitled to receive up to approximately 20.8% of distributions of available cash of Intermediate Holdings to its members during operations;

provided, that a majority of the Intermediate Holdings distributions to which we are otherwise entitled will be paid for any distribution period only after the Financial Investors receive an agreed distribution threshold in respect of such distribution period and certain other deficit payments from prior distribution periods, if any, are made.

Any such shortfall in distributions that we would otherwise have been entitled to will accrue as an arrearage to be paid out in future periods in which Intermediate Holdings meets the applicable target distribution threshold for the Financial Investors.

For example, except for the Member Reserved Matters (as defined below), the affairs of the Joint Ventures will otherwise be managed by their respective boards of managers (the “JV Boards”).

The JV Boards are composed of (i) up to four managers appointed by us (the “Class A Managers”), including, in respect of the Phase 1 Holdings board of managers, one Class A Manager designated by Global LNG North America Corp., a subsidiary of TotalEnergies SE, and (ii) managers appointed by members holding a minimum percentage of the Class B limited liability company interests in the respective Joint Venture (the “Class B Managers”).

Approval of any matter by a JV Board will require the consent of a majority of the Class A Managers voting on the matter and Class B Managers representing a majority of the Class B limited liability company interests in such Joint Venture voting for such matter, as applicable;

provided that (i) certain specified “qualified matters,” “supermajority matters,” and “unanimous matters” are reserved to the approval of the members of the Joint Venture (the "Member Reserved Matters") holding a requisite percentage of the applicable classes of limited liability company interests in such Joint Venture, and (ii) related party transactions will be subject to approval in accordance with the procedures specified in the applicable company agreement of the Joint Venture (the "JV Agreements").

Pursuant to the JV Agreement for Phase 1 Holdings, we will be entitled to receive up to approximately 20.8% of distributions of available cash of Phase 1 Holdings to its members during operations;

provided, that a majority of the Phase 1 Holdings distributions to which we are otherwise entitled will be paid for any distribution period only after the financial equity partners receive an agreed distribution threshold in respect of such distribution period and certain other deficit payments from prior distribution periods, if any, are made.

Any such shortfall in distributions that we would otherwise have been entitled to will accrue as an arrearage to be paid out in future periods in which Phase 1 Holdings meets the applicable target distribution threshold for the financial equity partners.

Pursuant to the JV Agreement for Train 4 Holdings, we will receive 40% of distributions of available cash generated from Train 4 operations, which will increase to 60% when the equity partners receive a certain return on their investments in Train 4 LLC.

Pursuant to the JV Agreement for Train 5 Holdings, we will receive 50% of distributions of available cash generated from Train 5 operations, which will increase to 70% when the equity partners receive a certain return on their investments in Train 5 LLC.

Challenges and risks presented by joint venture structures not otherwise present with respect to our wholly owned subsidiaries and direct operations, include:

• our joint ventures may fail to generate the expected financial results, and the return may be insufficient to justify our investment of effort and/or funds;

• the Joint Ventures may fail to generate the expected financial results, and the return may be insufficient to justify our investment of effort and/or funds;

• we may not control the Joint Ventures or our venture partners may hold veto rights over certain actions;

• the level of oversight, control and access to management information we are able to exercise with respect to these operations may be lower compared to our wholly-owned businesses, which may increase uncertainty relating to the financial condition of these operations, including the credit risk profile;

• we may experience impasses or disputes with our joint venture partners on certain decisions, which could require us to expend additional resources to resolve such impasses or disputes, including litigation or arbitration;

• we may not have control over the timing or amount of distributions from the Joint Ventures;

• our joint venture partners may have business or economic interests that are inconsistent with ours and may take actions contrary to our interests;

• our joint venture partners may fail to fund capital contributions or fail to fulfill their obligations as partners;

• the arrangements governing our joint ventures may contain restrictions on the conduct of our business and may contain certain conditions or milestone events that may never be satisfied or achieved;

• we may suffer losses as a result of actions taken by our venture partners with respect to our joint ventures;

• it may be difficult for us to exit joint ventures if an impasse arises or if we desire to sell our interest for any reason.

• our venture partners may have business or economic interests that are inconsistent with ours and may take actions contrary to our interests;

• our venture partners may fail to fund capital contributions or fail to fulfill their obligations as partners;

• the arrangements governing the Joint Ventures may contain restrictions on the conduct of our business and may contain certain conditions or milestone events that may never be satisfied or achieved;

• we may suffer losses as a result of actions taken by our venture partners with respect to the Joint Ventures;

• it may be difficult for us to exit the Joint Ventures if an impasse arises or if we desire to sell our interest for any reason.

We believe an important element in the success of any joint venture is a solid relationship between the members of that venture.

If there is a change in ownership, a change of control, a change in management or management philosophy, a change in business strategy or another event with respect to a member of our joint venture that adversely impacts the relationship between the venture partners, it could adversely impact such venture.

If our partners are unable or unwilling to invest in our joint venture in the manner that is anticipated or otherwise fail to meet their contractual obligations, the joint venture may be unable to adequately perform and conduct its respective operations, or may require us to provide, or make other arrangements for additional financing for the joint venture.

If there is a change in ownership, a change of control, a change in management or management philosophy, a change in business strategy or another event with respect to a member of the Joint Ventures that adversely impacts the relationship between the venture partners, it could adversely impact such venture.

If our partners are unable or unwilling to invest in one or more of the Joint Ventures in the manner that is anticipated or otherwise fail to meet their contractual obligations, such Joint Venture may be unable to adequately perform and conduct its respective operations, or may require us to provide, or make other arrangements for additional financing for the Joint Venture.

Such financing may not be available on favorable terms, or at all.

Joint venture partners, controlling shareholders, management or other persons or entities who control them may have economic or business interests, strategies or goals that are inconsistent with ours.

Business decisions or other actions or omissions of the joint venture partners, controlling shareholders, management or other persons or entities who control them may adversely affect the value of our investment, result in litigation or regulatory action against us and otherwise damage our reputation.

Venture partners, controlling shareholders, management or other persons or entities who control them may have economic or business interests, strategies or goals that are inconsistent with ours.

Business decisions or other actions or omissions of the venture partners, controlling shareholders, management or other persons or entities who control them may adversely affect the value of our investment, result in litigation or regulatory action against us and otherwise damage our reputation.

Any such circumstance could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

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.

We are not expected to generate cash flow, or even obtain revenues, from our LNG liquefaction and export activities unless and until the Rio Grande LNG Facility is operational.

Additionally, we do not expect to generate cash flow from our CCS projects until such projects are installed and operational.

Additionally, we do not expect to generate cash flow from any CCS projects until such projects are installed and operational.

Accordingly, distributions to investors may be limited, delayed, or non-existent.

Our cash flow and consequently our ability to distribute earnings will be dependent upon our ability to complete Phase 1 of the Rio Grande LNG Facility and future phases of development and implement CCS systems and thereafter generate cash and net operating income from operations.

Rio Grande’s ability to complete the Rio Grande LNG Facility, as discussed further below, is dependent upon, among other things, performance of third-party contractors and customers under their agreements with Rio Grande.

NEXT Carbon Solutions’ ability to install CCS systems at third-party industrial facilities, as discussed further below, is dependent on the development of front-end engineering and design (“FEED”) offerings and contracting with third parties to install CCS systems in their industrial facilities.

We do not expect Rio Grande to generate any revenue until the completion of construction of Phase 1 of the Rio Grande LNG Facility or NEXT Carbon Solutions to generate any revenue until successful installation of CCS systems at third-party facilities.

After Phase 1 of the Rio Grande LNG Facility is completed or our CCS systems are installed in third-party industrial facilities, financing and numerous other factors may reduce our cash flow.

Our cash flow and consequently our ability to distribute earnings will be dependent upon our ability to complete Phase 1, Train 4 and Train 5 of the Rio Grande LNG Facility and future phases of development, and implement CCS systems and thereafter generate cash and net operating income from operations.

The ability to complete the initial phases of development of the Rio Grande LNG Facility, as discussed further below, is dependent upon, among other things, performance of third-party contractors and customers under their agreements with the applicable Rio Grande Project Entity.

Our ability to install any CCS systems, as discussed further below, is dependent on the development of front-end engineering and design (“FEED”), commercialization of the CCS systems, and contracting with third parties to install the CCS systems.

We do not expect the Rio Grande Project Entities to generate any revenue until the completion of construction of the applicable phase of development of the Rio Grande LNG Facility or to generate any revenue from CCS systems until successful installation, and even after completion of construction or installation, financing and numerous other factors may reduce our cash flow.

As a result, we may not make distributions of any amount or any distributions may be delayed.

We 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 CCS projects and may not be able to secure such financing on acceptable terms, or at all.

Since we will be unable to generate any revenue while we are in the development and construction stages, which will be for multiple years with respect to Phase 1 of the Rio Grande LNG Facility, we will need additional financing to provide the capital required to execute our business plan.

We will need significant additional funding to develop and construct future phases of the Rio Grande LNG Facility and CCS projects as well as for working capital requirements and other operating and general corporate purposes.

We 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.

Since we will be unable to generate any revenue while we are in the development and construction stages, which will be for multiple years with respect to each phase of construction of the Rio Grande LNG Facility, we will need additional financing to provide the capital required to execute our business plan.

We will need significant additional funding to develop and construct future phases of the Rio Grande LNG Facility and any CCS projects as well as for working capital requirements and other operating and general corporate purposes.

Our ability to obtain the capital necessary to fund development and construction of future projects will depend on the condition of the credit and capital markets, which could become constrained due to factors outside our control.

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• the implementation of tariffs by the U.S.

or foreign countries in which we do business;

or foreign countries in which we, our customers or our vendors do business;

• duplicative taxation by different governments;

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or transactions denominated in foreign currencies would face additional risks of fluctuating currency values and exchange rates, hard currency shortages and controls on currency exchange.

In addition, we would be subject to the impact of foreign currency fluctuations and exchange rate changes on our financial reports when translating our assets, liabilities, revenues and expenses from operations or transactions outside of the U.S.

dollars at the then-applicable exchange rates.

In addition, we would be subject to the impact of foreign currency fluctuations and exchange rate changes on our financial reports.

These translations could result in changes to our results of operations from period to period.

Tariffs issued by the United States government could have an adverse effect on our future operations.

The United States government recently has announced or imposed broad-ranging tariffs.

Other countries have announced or imposed counter-tariffs on U.S.-produced items.

If these tariffs or counter-tariffs were to take effect and we were unable to pass through the additional costs to us, we could experience materially lower margins, lost sales, and an overall adverse effect on our future results of operations.

Costs for the Rio Grande LNG Facility and CCS projects are subject to various factors.

Construction costs for the Rio Grande LNG Facility and CCS projects will be subject to various factors such as economic and market conditions, government policy, claims and litigation risk, competition, the final terms of any definitive agreement for services with EPC service providers, change orders, delays in construction, legal and regulatory requirements, unanticipated regulatory delays, site issues, increased component and material costs, escalation of labor costs, labor disputes, increased spending to maintain construction schedules and other factors.

We face risks related to the uncertainty regarding the future of international trade agreements and the potential for retaliatory tariffs on LNG.

The current uncertainty involving international trade measures has created volatility in the LNG markets and may result in higher costs and delays for major industrial projects under development and construction, such as the Rio Grande LNG Facility.

We face potential exposure to evolving U.S.

tariffs, and potential retaliatory actions that may be imposed by other countries in response to U.S.

tariffs, primarily on LNG exports.

Any future changes to the United States’ trade relationship with major LNG importing nations, including through the imposition of further tariffs, could have an adverse impact on any LNG SPAs entered into with customers based in such countries.

If any of our LNG SPAs is terminated for any reason or expires in accordance with its terms, such tariffs could have an adverse impact on our ability to market the available capacity of the Rio Grande Project Entities, by reducing demand from customers for U.S.

Costs for the Rio Grande LNG Facility and any CCS projects are subject to various factors.

Construction costs for the Rio Grande LNG Facility and any CCS projects will be subject to various factors such as economic and market conditions, government policy, claims and litigation risk, competition, the final terms of any definitive agreement for services with EPC service providers, change orders, delays in construction, legal and regulatory requirements, unanticipated regulatory delays, site issues, increased component and material costs, escalation of labor costs, labor disputes, increased spending to maintain construction schedules and other factors.

In particular, costs are expected to be substantially affected by:

• global prices of nickel, steel, concrete, pipe, aluminum and other component parts of the Rio Grande LNG Facility or CCS projects and the contractual terms upon which our contractors are able to source and procure required materials;

import tariffs or quotas on steel, aluminum, pipe or other component parts of the Rio Grande LNG Facility or CCS projects, which may raise the prices of certain materials used in the Rio Grande LNG Facility;

• global prices of nickel, steel, concrete, pipe, aluminum and other component parts of the Rio Grande LNG Facility or any CCS projects and the contractual terms upon which our contractors are able to source and procure required materials;

import tariffs or quotas on steel, aluminum, pipe or other component parts of the Rio Grande LNG Facility or any CCS projects, which may raise the prices of certain materials used in the Rio Grande LNG Facility;

• commodity and consumer prices (principally, natural gas, crude oil and fuels that compete with them in our target markets) on which our economic assumptions are based;

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• interest rates;

• synergy benefits associated with the development of multiple phases of the Rio Grande LNG Facility using identical design and construction philosophies.

Our EPC agreements for Phase 1 allocate certain cost risks to Bechtel;

however, events related to the above activities may cause actual costs of the Rio Grande LNG Facility to vary from the range, combination and timing of assumptions used for projected costs of the Rio Grande LNG Facility, in addition to affecting our willingness to make a positive FID on future phases of development at the Rio Grande LNG Facility or on CCS projects.

• the risks referred to below under the caption " Our construction and operations activities will be subject to a number of development risks, operational hazards, regulatory approvals and other risks which may not be fully covered by

insurance, and which could cause cost overruns and delays that could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects ."

Our EPC agreements for Phase 1, Train 4 and Train 5 allocate certain cost risks to Bechtel;

Such variations may be material and adverse, and an investor may lose all or a portion of its investment.

We will be dependent on third-party contractors for the successful completion of the Rio Grande LNG Facility, CCS projects and related infrastructure, and any failure by our contractors to perform their contractual obligations could have a material adverse impact on our projects.

We will be dependent on third-party contractors for the successful completion of the Rio Grande LNG Facility, any CCS projects and related infrastructure, and any failure by our contractors to perform their contractual obligations could have a material adverse impact on our projects.

The 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.

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The ability of our third-party contractors to perform successfully under any agreements to be entered into is dependent on a number of factors, including force majeure events and such contractors’ ability to:

• design, engineer and receive critical components and equipment necessary for the Rio Grande LNG Facility and CCS projects to operate in accordance with specifications and address any start-up and operational issues that may arise in connection with the commencement of commercial operations;

• design, engineer and receive critical components and equipment necessary for the Rio Grande LNG Facility and any CCS projects to operate in accordance with specifications and address any start-up and operational issues that may arise in connection with the commencement of commercial operations;

• attract, develop and retain skilled personnel and engage and retain third-party subcontractors, and address any labor issues that may arise;

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We may also face difficulties in commissioning a newly constructed facility at the Rio Grande LNG Facility.

Any of the foregoing issues or significant project delays in the development or construction of the Rio Grande LNG Facility and, to the extent applicable, CCS projects could materially and adversely affect our business, results of operations, financial condition and prospects.

Any of the foregoing issues or significant project delays in the development or construction of the Rio Grande LNG Facility and, to the extent applicable, any CCS projects could materially and adversely affect our business, results of operations, financial condition and prospects.

Commissioning and operation of the Rio Grande LNG Facility will also require the ability to deliver natural gas to the Rio Grande LNG Facility via pipelines, certain of which are under development and construction and will require securing rights-of-way along the proposed route.

Negotiation to secure these rights-of-way could give rise to recalcitrant

landowners or competitive projects, which could result in additional time needed to secure the route and, consequently, delays in, or abandonment of, construction.

Pipeline construction could also be delayed or abandoned for any of many other reasons, such as it becoming economically disadvantageous to the owner, a failure to obtain or maintain all necessary permits, approvals and licenses for the construction and operation, mechanical or structural failures, inadvertent damages during construction, natural disasters, or any terrorist attack, including cyberterrorism.

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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.

We have entered into nine commercial arrangements with customers for products and services from the Rio Grande LNG Facility, each of which is subject to preconditions including the Rio Grande LNG Facility becoming operational.

We have entered into long-term commercial arrangements with customers for products from the Rio Grande LNG Facility, each of which is subject to preconditions, including the Rio Grande LNG Facility becoming operational.

We are dependent on each customer’s continued willingness and ability to perform its obligations under its sale and purchase agreement.

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If any customer fails to perform its obligations under its sale and purchase agreement, our business, contracts, financial condition, operating results, cash flow, liquidity and prospects could be materially and adversely affected, even if we were ultimately successful in seeking damages from that customer or its guarantor for a breach of the sale and purchase agreement.

We have not yet entered into any definitive commercial arrangements with third parties desiring to install our CCS systems in their industrial facilities.

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.

Our business strategy regarding how and when the Rio Grande LNG Facility’s export capacity or, LNG produced by the Rio Grande LNG Facility, or CCS systems are marketed may change based on market factors.

Our business strategy regarding how and when the Rio Grande LNG Facility’s export capacity or, LNG produced by the Rio Grande LNG Facility, or any CCS systems are marketed may change based on market factors.

Without limitation, our business strategy may change due to inability to enter into agreements with customers or based on our or market participants’ views regarding future supply and demand of LNG, prices, available worldwide natural gas liquefaction capacity or regasification capacity, the availability and efficiency of a market for carbon capture credits or other factors.

If efforts to market LNG produced by the Rio Grande LNG Facility, the Rio Grande LNG Facility’s expansion export capacity, or our CCS systems are not successful, our business, results of operations, financial condition and prospects may be materially and adversely affected.

If efforts to market LNG produced by the Rio Grande LNG Facility, the Rio Grande LNG Facility’s expansion export capacity, or any CCS systems are not successful, our business, results of operations, financial condition and prospects may be materially and adversely affected.

Our exposure to the performance and credit risks of counterparties may adversely affect our operating results, liquidity and access to financing.

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In some cases, we will be dependent on a single counterparty or a small group of counterparties, all of whom may be similarly affected by changes in economic and other conditions.

These risks include, but are not limited to, risks related to the construction discussed above in “ We will be dependent on third-party contractors for the successful completion of the Rio Grande LNG Facility and CCS projects, and these contractors may be unable to complete the Rio Grande LNG Facility or CCS projects or may build a non-conforming Rio Grande LNG Facility or CCS projects.

These risks include, but are not limited to, risks related to the construction discussed above in “ We will be dependent on third-party contractors for the successful completion of the Rio Grande LNG Facility and any CCS projects, and these contractors may be unable to complete the Rio Grande LNG Facility or any CCS projects or may build a non-conforming Rio Grande LNG Facility or any CCS projects.

” Defaults by suppliers, customers and other counterparties may adversely affect our operating results, liquidity and access to additional financing.

Our construction and operations activities will be subject to a number of development risks, operational hazards, regulatory approvals and other risks which may not be fully covered by insurance, and which could cause cost overruns and delays that could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

Development and construction of the Rio Grande LNG Facility and CCS projects will be subject to the risks of delay or cost overruns inherent in any construction project resulting from numerous factors, including, but not limited to, the following:

Development and construction of the Rio Grande LNG Facility and any CCS projects will be subject to the risks of delay or cost overruns inherent in any construction project resulting from numerous factors, including, but not limited to, the following:

• difficulties or delays in obtaining, or failure to obtain, sufficient debt or equity financing on reasonable terms;

• failure to obtain or maintain all necessary government and third-party permits, approvals and licenses, or to comply with all the terms and conditions of those authorizations, for the construction and operation of the Rio Grande LNG Facility and CCS projects, or litigation concerning such permits, approvals and licenses;

• failure to obtain or maintain commercial agreements that generate sufficient revenue to support the financing and construction of the Rio Grande LNG Facility or CCS projects;

• difficulties in engaging qualified contractors necessary to the construction of the contemplated Rio Grande LNG Facility or CCS projects;

• failure to obtain or maintain all necessary government and third-party permits, approvals and licenses, or to comply with all the terms and conditions of those authorizations, for the construction and operation of the Rio Grande LNG Facility and any CCS projects, or litigation concerning such permits, approvals and licenses;

• failure to obtain or maintain commercial agreements that generate sufficient revenue to support the financing and construction of the Rio Grande LNG Facility or any CCS projects;

• difficulties in engaging qualified contractors necessary to the construction of the contemplated Rio Grande LNG Facility, in the event our main EPC contractor needs to be replaced for any reason, or for future phases of development at the Rio Grande LNG Facility or any CCS projects;

• shortages of equipment, materials or skilled labor;

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• work stoppages and labor disputes;

• opposition from environmental and social groups, landowners, tribal groups, local groups and other advocates could result in organized protests, attempts to block or sabotage our construction activities or operations, intervention in regulatory or administrative proceedings involving our assets, or lawsuits or other actions designed to prevent, disrupt or delay the construction or operation of the Rio Grande LNG Facility or CCS projects;

• competition with other domestic and international LNG export facilities;

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• unexpected or unanticipated additional improvements;

• adverse general economic conditions.

• adverse general political or economic conditions.

Delays beyond the estimated development periods, as well as cost overruns, could increase the cost of completion beyond the amounts that are currently estimated, which could require us to obtain additional sources of financing to fund the activities until the Rio Grande LNG Facility is constructed and operational, which could cause further delays.

The need for additional financing may also make the Rio Grande LNG Facility uneconomic.

Any delay in completion of the Rio Grande LNG Facility may also cause a delay in the receipt of revenues projected from the Rio Grande LNG Facility or cause a loss of one or more customers.

As a result, any significant construction delay, whatever the cause, could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

Any delay in completion of the trains of the Rio Grande LNG Facility may also cause a delay in the receipt of revenues projected from the Rio Grande LNG Facility or cause a loss of one or more customers.

As a result, any

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 will be subject to all of the hazards inherent in the receipt and processing of natural gas to LNG, and associated short-term storage including:

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Due to the scale of the Rio Grande LNG Facility, we may encounter capacity limits in insurance markets, thereby limiting our ability to economically obtain insurance with our desired level of coverage limits and terms.

With respect to the Rio Grande LNG Facility or CCS projects, we may elect not to obtain insurance for any or all of these risks if we believe that the cost of available insurance is excessive relative to the risks presented.

With respect to the Rio Grande LNG Facility or any CCS projects, we may elect not to obtain insurance for any or all of these risks if we believe that the cost of available insurance is excessive relative to the risks presented.

In addition, contractual liabilities and pollution and environmental risks generally are not fully insurable.

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In addition, the LNG technology we are using in the Rio Grande LNG Facility may face competition due to the technological advances of other companies or solutions, including more efficient and cost-effective processes or entirely different approaches developed by one or more of our competitors or others.

Although we have applied for and obtained patents relating to our CCS processes and rely on other procedures to protect our intellectual property, we may be unable to prevent third parties from utilizing our intellectual property;

see “— 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.

Continuing technological changes in the market for carbon capture solutions could make our CCS projects less competitive or obsolete, either generally or for particular applications.

Our future success will depend upon our ability to develop and introduce a variety of new capabilities and enhancements to our CCS offerings to address the changing needs of the carbon capture markets.

Although we have applied for and obtained patents relating to CCS processes and rely on other procedures to protect our intellectual property, we may be unable to prevent third parties from utilizing our intellectual property;

see “— We depend on our intellectual property for CCS projects, and our failure to protect that intellectual property could adversely affect the future growth and success of our CCS business.

Continuing technological changes in the market for carbon capture solutions could make any CCS projects less competitive or obsolete, either generally or for particular applications.

Our future success will depend upon our ability to develop and introduce a variety of new capabilities and enhancements to any CCS offerings to address the changing needs of the carbon capture markets.

Delays in introducing enhancements, the failure to choose correctly among technical alternatives or the failure to offer innovative products or enhancements at competitive prices may cause existing and potential customers to utilize competing projects or solutions.

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.

We depend on our intellectual property for CCS projects, and our failure to protect that intellectual property could adversely affect the future growth and success of our CCS business.

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.

For example, we frequently explore and evaluate potential relationships and projects with other parties, which often require that we provide the potential partner with confidential technical information.

While confidentiality agreements are typically put in place, there is a risk the potential partner could violate the confidentiality agreement and use our technical information for its own benefit or the benefit of others or compromise the confidentiality.

While confidentiality agreements are typically put in place before sharing confidential technical information, there is a risk the potential partner could violate the confidentiality agreement and use our technical information for its own benefit or the benefit of others or compromise the confidentiality.

We have applied for and obtained some U.S.

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A failure to obtain registrations in the United States or elsewhere could limit our ability to protect our proprietary processes and could impede our business.

Further, the protection of our intellectual property may require expensive investment in protracted litigation

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.

Further, the protection of our intellectual property may require expensive investment in protracted litigation 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.

In addition, we may be unable to prevent third parties from using our intellectual property rights and know-how without our authorization or from independently developing intellectual property that is the same as or similar to ours.

The unauthorized use of our know-how by third parties could reduce or eliminate any competitive advantage we have developed, cause us to lose sales or otherwise harm our CCS business or increase our expenses as we attempt to enforce our rights.

Failure of exported LNG 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.

Failure 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.

Operations of the Rio Grande LNG Facility will be dependent upon our ability to deliver LNG supplies from the U.S., which is primarily dependent upon LNG being a competitive source of energy internationally.

The success of the Rio Grande LNG Facility is dependent, in part, on the extent to which LNG can, for significant periods and in significant volumes, be supplied from North America and delivered to international markets at a lower cost than the cost of alternative energy sources.

The success of the Rio Grande LNG Facility is dependent, in part, on the extent to which LNG can, for significant periods and in significant volumes, be supplied from the U.S.

Gulf Coast and delivered to international markets at a lower cost than the cost of alternative energy sources.

Through the use of improved exploration technologies, additional sources of natural gas may be discovered outside the U.S., which could increase the available supply of natural gas outside the U.S.

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Additionally, the Rio Grande LNG Facility will be subject to the risk of LNG price competition at times when we need to replace any existing LNG sale and purchase contract, whether due to natural expiration, default or otherwise, or enter into new LNG sale and purchase contracts.

Periods of commodity price volatility, supply-demand imbalances, higher US feedgas costs, or lower international marker prices could reduce the competitiveness of U.S.

LNG, particularly when replacing expiring customer agreements or contracting incremental capacity.

Factors relating to competition may prevent us from entering into a new or replacement LNG sale and purchase contract on economically comparable terms as prior LNG sale and purchase contracts, or at all.

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The reduction or elimination of government incentives could adversely affect our business, financial condition, future results and cash flows.

We expect our CCS projects, following successful construction and deployment, to generate revenue from a combination of sources, including fees from source facilities, government incentives and carbon credits.

We expect any CCS projects, following successful construction and deployment, to generate revenue from a combination of sources, including fees from source facilities, government incentives and carbon credits.

Government incentives include federal income tax credits under Section 45Q of the Internal Revenue Code of 1986, as amended (the "Code"), which currently provides a federal income tax credit per metric ton of carbon captured and permanently stored.

The availability of these government incentives have a significant effect on the economics and viability of our CCS projects, and any reduction or elimination of such incentives could adversely affect the growth of our CCS business, our financial condition and our future results.

The availability of these government incentives have a significant effect on the economics and viability of any CCS projects, and any reduction or elimination of such incentives could adversely affect the growth of our CCS business, our financial condition and our future results.

Competition in the industries in which we operate is intense, and some of our competitors have greater financial, technological and other resources.

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Some of these competitors have longer operating histories, more development experience, greater name recognition, superior tax incentives, more employees and substantially greater financial, technical and marketing resources than we currently possess.

NEXT Carbon Solutions will compete with other providers of CCS services, traditional original equipment manufacturers, EPC firms and midstream transportation and storage companies in offering CCS solutions.

Our competitors in the CCS space may have greater financial, technical and marketing resources than we currently possess.

The superior resources that some of these competitors have available for deployment could allow them to compete successfully against us, which could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

The superior resources that some of these competitors have available for deployment could allow them to

compete successfully against us, which could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

There 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.

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• shortages of or delays in the receipt of necessary construction materials.

We will rely on third-party engineers to estimate the future capacity ratings and performance capabilities of the Rio Grande LNG Facility and CCS projects, and these estimates may prove to be inaccurate.

We will rely on third parties for the design and engineering services underlying our estimates of the future capacity ratings and performance capabilities of the Rio Grande LNG Facility and CCS projects.

We 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.

Any of such facilities, when constructed, may not have the capacity ratings and performance capabilities that we intend or estimate.

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Carbon credit markets may not develop as quickly or efficiently as we anticipate or at all.

The continued development of global carbon credit marketplaces will be crucial for the successful deployment of our CCS processes, as we expect carbon credits to be a significant source of future revenue.

The continued development of global carbon credit marketplaces will be crucial for the successful deployment of any CCS projects, as we expect carbon credits to be a significant source of future revenue.

The efficiency of the voluntary carbon credit market is currently affected by several concerns, including insufficiency of demand, the risk that reduction credits could be counted multiple times and a lack of standardization of credit verification.

Delayed development of a global carbon credit market could negatively impact the commercial viability of our CCS projects and could limit the growth of the business and adversely impact our financial condition and future results.

Delayed development of a global carbon credit market could negatively impact the commercial viability of any CCS projects and could limit the growth of the business and adversely impact our financial condition and future results.

The operation of the Rio Grande LNG Facility and any CCS project may be subject to significant operating hazards and uninsured risks, one or more of which may create significant liabilities and losses that could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects.

The plan of operations for the Rio Grande LNG Facility is subject to the inherent risks associated with LNG operations, including explosions, pollution, release of toxic substances, fires, hurricanes and other adverse weather conditions, and other hazards, each of which could result in significant delays in commencement or interruptions of operations and/or result in damage to or destruction of the Rio Grande LNG Facility and assets or damage to persons and property.

These risks may similarly affect CCS projects and their host facilities.

These risks may similarly affect any CCS projects.

We do not, nor do we intend to, maintain insurance against all these risks and losses.

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In certain instances, customers may require credit enhancement measures in order to satisfy project-financing requirements.

Objections from local communities or environmental groups can delay the Rio Grande LNG Facility.

Opposition from local communities or environmental groups can impede or delay the construction and operation of the Rio Grande LNG Facility.

Some local communities and/or environmental groups have voiced opposition to the proposed construction and operation of the Rio Grande LNG Facility as negatively impacting the environment, wildlife, cultural heritage sites or the public health of residents.

Objections from local communities or environmental groups could cause delays, limit access to or increase the cost of construction capital, cause reputational damage and impede us in obtaining or renewing permits.

For instance, environmental activists have attempted to intervene in the permitting process of the Rio Grande LNG Facility and persuade regulators to deny necessary permits or seek to overturn permits that have been issued.

Objections and administrative and judicial challenges from local communities or environmental groups could cause delays, limit access to or increase the cost of construction capital, cause reputational damage and impede us in obtaining or renewing necessary regulatory approvals.

For instance, environmental activists have been active in the permitting process of the Rio Grande LNG Facility and have challenged necessary permits.

These third-party actions can materially increase the costs and cause delays in the permitting process and could cause us to not proceed with the development of the Rio Grande LNG Facility.

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Nonetheless, disruptions in upstream supply sources or increased market demand could impact the availability of gas supply to the header system, which would result in curtailments at the Rio Grande LNG Facility.

Each liquefaction train for the Rio Grande LNG Facility is expected to involve the transportation for liquefaction of approximately 0.9 Bcf/day of natural gas, for a total of 4.5 Bcf/day for five liquefaction trains at full build-out.

Gas sales agreements for the supply of these volumes could entail negotiations with multiple parties for firm and interruptible gas supply and transportation services to the pipeline header system, as well as pipeline interconnects and ancillary operational agreements.

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Litigation could expose us to significant costs and adversely affect our business, financial condition, and results of operations.

We are, or may become, party to various lawsuits, arbitrations, mediations, regulatory proceedings and claims, which may include lawsuits, arbitrations, mediations, regulatory proceedings or claims relating to commercial liability, product recalls, product liability, product claims, employment matters, environmental matters, breach of contract, intellectual property, indemnification, stockholder suits, derivative actions or other aspects of our business.

We are, or may become, party to various lawsuits, arbitrations, mediations, regulatory proceedings and claims, which may include lawsuits, arbitrations, mediations, regulatory proceedings or claims relating to commercial liability, product recalls, product liability, product claims, employment matters, health, safety or environmental matters, breach of contract, intellectual property, indemnification, stockholder suits, derivative actions or other aspects of our business.

Litigation (including the other types of proceedings identified above) is inherently unpredictable, and although we may believe we have meaningful defenses in these matters, we may incur judgments or enter into settlements of claims that could have a material adverse effect on our business, financial condition, and results of operations.

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Risks Related to Governmental Regulation

The decision by the D.C.

Circuit Court of Appeals could impact Rio Grande’s ability to complete Phase 1, the cost to complete Phase 1, the timing of the completion of Phase 1, our ability to take a final investment decision on Trains 4 and 5, our ability to develop additional expansion trains at the Rio Grande LNG Facility, and our ability to achieve expected investment returns.

We are required to obtain and maintain governmental approvals and authorizations to implement our proposed business strategy, which includes the design, construction and operation of the Rio Grande LNG Facility and the export of LNG from the U.S.

to foreign countries.

As described in more detail in “Management’s Discussion and Analysis of

Financial Condition and Results of Operations—Overview of Business and Significant Developments—Significant Recent Events—Regulatory,” on August 6, 2024, the D.C.

Circuit Court of Appeals vacated the FERC reauthorization for the siting, construction and operation of the Rio Grande LNG Facility.

We intend to pursue available legal remedies against judicial challenges and are engaged in active resolution of the requisite issues to ensure that the affected permit remains in effect;

however, there is no guarantee as to how long any agency proceedings and judicial challenges will take to resolve, whether there will be any delays in construction activities or whether Rio Grande will ultimately succeed in maintaining the permit in its issued form or in a suitable replacement form.

These uncertainties could cause Phase 1 at the Rio Grande LNG Facility to be subject to increased costs, adverse impacts to completion timing, or adverse impacts to the ability to complete construction of Phase 1.

This could adversely affect the ability for Rio Grande and its owners, including us, to successfully implement our business strategy or achieve expected returns.

Similarly, these uncertainties could impact the timing of, and our ability to develop and take a final investment decision on, any expansion trains at the Rio Grande LNG Facility.

In addition, the bank credit facilities obtained by Rio Grande to finance a substantial portion of Phase 1 costs require maintenance of material governmental approvals.

To the extent Rio Grande becomes unable to satisfy such requirement as set forth in the credit agreements or reach other accommodations with its lenders, its ability to continue borrowing under such credit facilities could be negatively impacted, which in turn could adversely affect our business, financial condition, results of operations and liquidity.

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.

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to foreign countries.

As described above under “Business—Governmental Permits, Approvals and Authorizations,” the design, construction and operation of LNG export facilities is a highly regulated activity in the U.S., subject to a number of permitting requirements, regulatory approvals and ongoing safety and operational compliance programs, and certain of our authorizations have been challenged by project opponents and remain subject to ongoing regulatory proceedings.

There is no guarantee that we will obtain or, once obtained, maintain these governmental authorizations, approvals and permits.

While the FERC has authorized the construction and operation of the Rio Grande LNG Facility, it is conducting a supplemental EIS in response to action by the D.C.

Furthermore, additional approvals from FERC Staff will be required as we proceed with its construction and commissioning.

Failure to obtain, or failure to obtain on a timely basis, or failure to maintain any of these governmental authorizations, approvals and permits (including potentially as a result of the D.C.

Circuit's decision regarding the Remand Order or FERC's actions in response to that decision) could have a material adverse effect on our business, results of operations, financial condition and prospects.

Authorizations obtained from the FERC, the DOE and other federal and state regulatory agencies also contain ongoing conditions and compliance requirements, and additional approval and permit requirements may be imposed.

While the FERC has authorized the siting, construction and operation of the Rio Grande LNG Facility, that authorization has been challenged in an appeal brought by opponents of the project that is pending in the U.S.

Court of Appeals for the D.C.

Circuit (the “D.C.

The project opponents have once again petitioned the D.C.

Circuit for review of FERC’s orders, and that appeal is pending.

Furthermore, additional approvals from FERC Staff will be required as we proceed with construction and commissioning of the facility consistent with FERC’s authorization.

Failure to obtain, or failure to obtain on a timely basis, or failure to maintain any of these governmental authorizations, approvals and permits (including potentially as a result of the latest appeal to the D.C.

Circuit) could have a material adverse effect on our business, results of operations, financial condition and prospects.

Our LNG marketing strategy depends on the continued effectiveness of Department of Energy authorizations for exports to

FTA and non-FTA countries.

Changes in U.S.

policy, delays in processing, or successful legal challenges to export or related approvals

could reduce our ability to contract volumes at acceptable terms or at all.

Any adverse determination, modification, or revocation of

existing export authorizations could have a material adverse effect on our business, contracts, financial condition, operating results, cash

flow, liquidity and prospects.

In addition, the authorizations obtained from the FERC, the DOE and other federal and state regulatory agencies for the Rio Grande LNG Facility also contain ongoing conditions and compliance requirements, and additional approval and permit requirements

may be imposed.

We do not know whether or when any such approvals or permits can be obtained, or whether any existing or potential interventions or other actions by third parties will interfere with our ability to obtain and maintain such permits or approvals.

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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.

Our business will be subject to extensive federal, state and local regulations and laws, including regulations and restrictions on discharges and releases to the air, land and water and the handling, storage and disposal of hazardous materials and wastes in connection with the development, construction and operation of the Rio Grande LNG Facility.

Failure to comply with these regulations and laws could result in the imposition of administrative, civil and criminal sanctions.

These regulations and laws, which include the federal Clean Air Act, the Oil Pollution Act, the National Environmental Policy Act, the Clean Water Act, the Safe Drinking Water Act, the Endangered Species Act, the Natural Gas Pipeline Safety Act and the Resource Conservation and Recovery Act, and analogous state and local laws and regulations, will restrict, prohibit or otherwise regulate the types, quantities and concentration of substances that can be released into the environment in connection with the construction and operation of our facilities.

Our business is and will be subject to extensive federal, state and local regulations and laws, including regulations and restrictions on discharges and releases to the air, land and water and the handling, storage and disposal of hazardous materials and wastes in connection with the development, construction and operation of the Rio Grande LNG Facility.

Failure to comply with these regulations and laws could result in the imposition of administrative, civil and criminal sanctions, compliance orders, liabilities, operational or construction restrictions, difficulty obtaining permits from regulatory agencies, or capital expenditures and operational costs related to compliance or remediation .

These regulations and laws, which include the federal Clean Air Act, the Oil Pollution Act, the National Environmental Policy Act, the Clean Water Act, the Endangered Species Act, the Natural Gas Pipeline Safety Act and the Resource Conservation and Recovery Act, and analogous state and local laws and regulations, restrict, prohibit or otherwise regulate the types, quantities and concentration of substances that can be released into the environment in connection with the construction and operation of our facilities.

In addition, we may become subject to enhanced sustainability and climate-related disclosure requirements at the federal, state, or international level, including mandatory greenhouse gas emissions reporting and climate risk assessments.

Compliance with evolving disclosure regimes could increase administrative costs.

Additionally, these regulations and laws will require and have required us to obtain and maintain permits, with respect to our facilities, prepare environmental impact assessments, provide governmental authorities with access to our facilities for inspection and provide reports related to compliance.

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Unethical conduct and non-compliance with applicable laws could have a significant adverse effect on our business.

Incidents of unethical behavior, fraudulent activity, corruption or non-compliance with applicable laws and regulations could be damaging to our operations and reputation and may subject us to criminal and civil penalties or loss of operating licenses.

Due to the global nature of the LNG business and the diversity of jurisdictions in which our customers operate, it is possible that a prospective counterparty could be accused of behavior that falls short of our expectations in this regard, leading to reputational damage and potential legal liabilities, notwithstanding our best efforts to prevent such behaviors.

Changes in legislation and regulations or interpretations thereof, such as those relating to the importation and exportation of LNG and incentives for reduction of emissions, could have a material adverse effect on our business, results of operations, financial condition, liquidity and prospects and could cause additional expenditures and delays in connection with the Rio Grande LNG Facility and CCS projects and their construction.

The laws, rules and regulations applicable to our business, including federal agencies’ interpretations of and policies under such laws rules and regulations, are subject to change, either through new or modified regulations enacted on the federal, state or local level or by a change in policy of the agencies charged with enforcing such regulations.

For example, the provisions of the Energy Policy Act of 2005 that codified the FERC’s policy of not regulating the terms and conditions of service for LNG import or export facilities expired in 2015.

For example, the provisions of the Energy Policy

Act of 2005 that codified the FERC’s policy of not regulating the terms and conditions of service for LNG import or export facilities expired in 2015.

Although the FERC has not indicated that it intends to depart from this policy, there can be no assurance it will not do so in the future.

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While the extent of the Trump Administration's changes to the environmental regulatory landscape in the United States is unknown at this time, it is possible that additional changes in the future could impact our operations.

In addition, our CCS systems may benefit from federal, state and local governmental incentives, mandates or other programs promoting the reduction of emissions.

Any changes to or termination of these programs could reduce demand for our CCS systems, impair our ability to obtain financing, and adversely impact our business, financial condition and results of operations.

We may not be able to utilize any future federal income tax credits.

Our LNG and CCS activities are in the construction stage and development stage, respectively, and have not historically generated any revenue;

consequently, as of December 31, 2024, we had significant deferred tax assets primarily resulting from net operating losses for federal income tax purposes.

See Note 12 — Income Taxes in Notes to Consolidated Financial Statements.

To the extent we are not able to monetize federal income tax credits that we generate under Section 45Q or a successor provision, either by transferring such credit or electing to receive a direct payment equal to such credit, we would have to take such federal income tax credits against our taxable income.

There is no assurance that we will be able to transfer these federal income tax credits or generate taxable income or otherwise be able to monetize the value represented by these federal income tax credits.

In addition, any CCS projects may benefit from federal, state and local governmental incentives, mandates or other programs promoting the reduction of emissions.

Any changes to or termination of these programs could reduce demand for CCS projects, impair our ability to obtain financing, and adversely impact our business, financial condition and results of operations.

Our ability to utilize our net operating loss carryforwards ( “ NOLs ” ) may be limited as a result of ownership changes under Section 382 of the Code.

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The securities markets in general and our common stock have experienced significant price and volume volatility.

The market price and trading volume of our common stock may continue to experience significant fluctuations due not only to general stock market conditions but also to a change in sentiment in the market regarding our operations, business

prospects or those of companies in our industry.

In addition to the other risk factors discussed in this section, the price and volume volatility of our common stock may be affected by:

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The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights appurtenant to shares of our common stock.

Our largest stockholders will substantially influence our Company for the foreseeable future, including the outcome of matters requiring shareholder approval, and such control may prevent you and other stockholders from influencing significant corporate decisions and may result in conflicts of interest that could cause our stock price to decline.

As of February 20, 2025, affiliates of TotalEnergies SE, HGC NEXT INV LLC and Ninteenth Investment Company (collectively, the “Large Stockholders”) beneficially own, in the aggregate, approximately 45% of the combined voting power of our outstanding shares of common stock.

Our largest stockholders will substantially influence our Company for the foreseeable future, including the outcome of matters requiring shareholder approval, and such control may prevent other stockholders from influencing significant corporate decisions and may result in conflicts of interest that could cause our stock price to decline.

As of February 20, 2026, affiliates of HGC NEXT INV LLC, TotalEnergies SE and Ninteenth Investment Company (collectively, the “Large Stockholders”) beneficially own, in the aggregate, approximately 47% of the combined voting power of our outstanding shares of common stock.

As a result, the Large Stockholders have the ability to influence the election of our directors and the outcome of corporate actions requiring stockholder approval, such as:

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In addition, the significant concentration of stock ownership may adversely affect the market value of the Company’s common stock due to investors’ perception that conflicts of interest may exist or arise.

The exercise of outstanding warrants may have a dilutive effect on our common stock.

We issued warrants together with the issuances of our Convertible Preferred Stock (the “2022 Warrants”) and the entry into the Corporate Credit Agreement (the “2024 Warrants” and together with the 2022 Warrants, the “Common Stock Warrants”).

As of December 31, 2024, the outstanding 2022 Warrants represented the right to acquire in the aggregate a number of shares of our common stock equal to approximately 15 basis points (0.15%) of all outstanding shares of Company common stock, measured on a fully diluted basis, on the applicable exercise date with a strike price of $0.01 per share.

The 2022 Warrants have a fixed three-year term that commenced on the closings of the issuances of the associated Convertible Preferred Stock.

The 2022 Warrants may only be exercised by holders thereof at the expiration of such three-year term.

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.

To the extent the Common Stock Warrants are exercised, additional shares of our common stock will be issued, which will result in dilution to the holders of our common stock and increase the number of shares eligible for resale in the public market.

Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our common stock.

The exercise of outstanding warrants and exchangeable loans may have a dilutive effect on our common stock.

We issued warrants together with the entry into the Corporate Credit Agreement in December 2024 (the “2024 Warrants”) and the upsize of the Corporate Credit Agreement in May 2025 (the “2025 Warrants” and together with the 2024 Warrants, the “Warrants”).

The 2024 Warrants were issued on December 31, 2024 in two equal tranches 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.

2025 Warrants were issued on May 14, 2025 for approximately 2.0 million shares of Company common stock exercisable at $9.30 per share.

On November 17, 2025, the Corporate Credit Agreement was amended to, in part, upsize the loan by $50 million and recharacterize $50 million of the principal outstanding thereunder as a Series A term loan, the principal of which, including any interest in kind, can be exchanged (the “Exchange Right”) into Company common stock at a price of $9.50 per share.

To the extent the Warrants or the Exchange Right are exercised, additional shares of our common stock will be issued, which will result in dilution to the holders of our common stock and increase the number of shares eligible for resale in the public market.

Sales of substantial numbers of such shares in the public market or the fact that the Warrants or the Exchange Right may be exercised could adversely affect the market price of our common stock.

Provisions 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.

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We could also incur additional costs and require additional resources to monitor, report, and comply with various ESG practices and current or emerging regulatory requirements, including with respect to climate change and sustainability.

Further, we are currently assessing the potential impacts of the adopted or proposed laws, as well as other sustainability and climate-related disclosure obligations and evolving legal and regulatory requirements, to which we may be subject.

Further, we are currently assessing the potential impacts of the adopted or proposed laws, as well as other sustainability and climate-related disclosure

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.

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Among other directives, such executive orders:

federal agencies to identify and exercise emergency authorities to facilitate conventional energy production, transportation, and refining, and call for the use of emergency regulations to expedite energy infrastructure projects;

(i) direct federal agencies to identify and exercise emergency authorities to facilitate conventional energy production, transportation, and refining, and call for the use of emergency regulations to expedite energy infrastructure projects;

(ii) promote energy exploration and production on federal lands and waters;

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This macro-economic disruption may disrupt our ability to raise additional capital to finance our operations in the future, which could materially and adversely affect our business, financial condition and prospects, and could ultimately cause our business to fail.

The Russia-Ukraine conflict may also have the effect of heightening many of the other risks described in this Annual Report on Form 10-K, such as risks related to the development of the CCS projects and the Rio Grande LNG Facility, including postponement in making a positive FID on the Rio Grande LNG Facility, doing business in foreign countries, obtaining governmental approvals, and exported LNG remaining a competitive source of energy for international markets, global demand for and price of natural gas, and fluctuation in the price of our common stock.

The Russia-Ukraine conflict may also have the effect of heightening many of the other risks described in this Annual Report on Form 10-K, such as risks related to the development of any CCS projects and the Rio Grande LNG Facility, including postponement in making a positive FID on expansion capacity at the Rio Grande LNG Facility, doing business in foreign countries, obtaining governmental approvals, and exported LNG remaining a competitive source of energy for international markets, global demand for and price of natural gas, and fluctuation in the price of our common stock.

The ultimate outcome of Russia’s invasion of Ukraine, including resulting tensions among the United States, North Atlantic Treaty Organization and Russia, disruption to the production and supply of natural gas throughout Europe, cyberwarfare and economic instability, could impact our operations or disrupt our ability to access the capital markets.

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A successful cyberattack on us or a vendor or other counterparty could have a variety of adverse consequences, including theft of proprietary or commercially sensitive information, data corruption, interruption in communications, disruptions to our existing or planned activities or transactions, and damage to third parties, any of which could have a material adverse impact on us.

Further, as cyberattacks continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerabilities to cyberattacks.

Further, as cyberattacks continue to evolve, including use of artificial intelligence, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerabilities to cyberattacks.

Since the techniques used to obtain unauthorized access to or to sabotage systems change frequently and are not often recognized until after they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.

Terrorist 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.

A terrorist or military incident involving the Rio Grande LNG Facility or any industrial facility that hosts a CCS project may result in delays in, or cancellation of, construction of the Rio Grande LNG Facility or the relevant CCS project, which would increase our costs and prevent us from obtaining expected cash flows.

A terrorist or military incident involving the Rio Grande LNG Facility or any CCS project may result in delays in, or cancellation of, construction of the Rio Grande LNG Facility or the relevant CCS project, which would increase our costs and prevent us from obtaining expected cash flows.

A terrorist incident could also result in temporary or permanent closure of the Rio Grande LNG Facility or such host industrial facility, which could increase costs and decrease cash flows, depending on the duration of the closure.

Operations at the Rio Grande LNG Facility and CCS

projects could also become subject to increased governmental scrutiny that may result in additional security measures at a significant incremental cost.

Operations at the Rio Grande LNG Facility and any CCS projects could also become subject to increased governmental scrutiny that may result in additional security measures at a significant incremental cost.

In addition, the threat of terrorism and the impact of military campaigns may lead to continued volatility in prices for natural gas that could adversely affect our business and customers, including the ability of our suppliers or customers to satisfy their respective obligations under our commercial agreements.

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What changed 10-K

Item 1A. Risk Factors