Attached files
| file | filename |
|---|---|
| EX-10.4 - EMPLOYMENT AGREEMENT OF KATHLEEN EISBRENNER, DATED MAY 20, 2015 - NextDecade Corp. | f8k072417ex10iv_nextdecade.htm |
| EX-10.6 - LETTER AGREEMENT WITH KATHLEEN EISBRENNER, DATED NOVEMBER 13, 2015 - NextDecade Corp. | f8k072417ex10vi_nextdecade.htm |
| EX-10.5 - LETTER AGREEMENT WITH KATHLEEN EISBRENNER, DATED APRIL 17, 2017 - NextDecade Corp. | f8k072417ex10v_nextdecade.htm |
| EX-10.3 - FORM OF LOCK-UP AGREEMENT - NextDecade Corp. | f8k072417ex10iii_nextdecade.htm |
| EX-10.2 - REGISTRATION RIGHTS AGREEMENT - NextDecade Corp. | f8k072417ex10ii_nextdecade.htm |
| EX-10.1 - INDEMNITY ESCROW AGREEMENT - NextDecade Corp. | f8k072417ex10i_nextdecade.htm |
| EX-3.2 - AMENDED AND RESTATED BYLAWS OF NEXTDECADE CORPORATION - NextDecade Corp. | f8k072417ex3ii_nextdecade.htm |
| EX-3.1 - SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF NEXTDECADE CORPORATI - NextDecade Corp. | f8k072417ex3i_nextdecade.htm |
| 8-K - CURRENT REPORT - NextDecade Corp. | f8k072417_nextdecadecorp.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINED
FINANCIAL STATEMENTS OF NEXTDECADE CORPORATION
Introduction
On April 17, 2017, Harmony Merger Corp. (“Harmony”), Harmony Merger Sub, LLC (“Merger Sub”), NextDecade, LLC (“NextDecade”) and certain members of NextDecade and entities affiliated with such members entered into an Agreement and Plan of Merger (“Merger Agreement”). On July 24, 2017, the transactions contemplated by the Merger Agreement were consummated and Harmony was renamed NextDecade Corporation (the “Company”).
Pursuant to the Merger Agreement, entities affiliated with certain of the members of NextDecade (the “Blocker Companies”) merged with and into Harmony (each a “Blocker Merger” and together, the “Blocker Mergers”), with Harmony being the surviving entity of the Blocker Mergers and, immediately thereafter Merger Sub merged with and into NextDecade (the “Merger”) with NextDecade being the surviving entity of the Merger and becoming a wholly-owned subsidiary of the Company. Immediately following the Merger, the pre-Merger shareholders of NextDecade held approximately 94% of the outstanding common stock.
The Merger will be accounted for as a “reverse merger” and recapitalization based on: (i) NextDecade owners’ preponderance of voting rights (approximately 94%) in the Company, (ii) the preponderance of representation of NextDecade board members on the Company’s board (7 of 9 total board members), (iii) the replacement of Harmony’s management team with NextDecade’s management team, and (iv) NextDecade’s preponderance in relative size as evaluated by investment and valuation. Accordingly, the assets and liabilities and the historical operations that will be reflected in the Company’s financial statements after the Merger will be those of NextDecade and will be recorded at the historical cost basis of NextDecade. Harmony’s assets, liabilities and results of operations will be consolidated with those of NextDecade upon the consummation of Merger.
The unaudited pro forma condensed consolidated combined statements of operations for the three months ended March 31, 2017, and for the year ended December 31, 2016, combine the historical consolidated statements of operations of Harmony and the historical consolidated statements of operations of NextDecade, giving effect to the Merger as if it had been consummated on January 1, 2016, the beginning of the earliest period presented, and the unaudited pro forma condensed consolidated combined balance sheet as of March 31, 2017, combines the historical consolidated condensed balance sheet of Harmony and the historical condensed consolidated balance sheet of NextDecade, giving effect to the Merger as if it had been consummated on March 31, 2017.
The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed consolidated combined financial statements to give pro forma effect to events that are: (1) directly attributable to the business combination; (2) factually supportable; and (3) with respect to the statement of operations, expected to have a continuing impact on the Company’s results following the completion of the business combination.
The unaudited pro forma condensed consolidated combined financial statements have been developed from and should be read in conjunction with:
| ● | the accompanying notes to the unaudited pro forma condensed consolidated combined financial statements; | |
| ● | the historical audited financial statements of Harmony as of December 31, 2016, included in the proxy statement (the “Proxy Statement”) filed with the Securities and Exchange Commission on June 29, 2017; | |
| ● | the historical unaudited financial statements of Harmony as of and for the three months ended March 31, 2017, included in the Proxy Statement; |
| ● | the historical consolidated audited financial statements of NextDecade as of and for the year ended December 31, 2016, included in the Proxy Statement; | |
| ● | the historical condensed consolidated unaudited financial statements of NextDecade as of and for the three months ended March 31, 2017, included in the Proxy Statement; and | |
| ● | other information relating to Harmony and NextDecade contained in the Proxy Statement. |
Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma condensed consolidated combined financial statements are described in the accompanying notes. The unaudited pro forma condensed consolidated combined financial statements have been presented for illustrative purposes only and are not necessarily indicative of the operating results and financial position that would have been achieved had the business combination and the other related transactions occurred on the dates indicated. Further, the unaudited pro forma condensed consolidated combined financial statements do not purport to project the future operating results or financial position of Harmony following the completion of the business combination and the other related transactions. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed consolidated combined financial statements and are subject to change as additional information becomes available and analyses are performed.
| 2 |
Unaudited Pro Forma Condensed Consolidated Combined Statement of Operations
Year Ended December 31, 2016
(in thousands, except for shares and per share data)
| (a) Harmony | (b) NextDecade | Adjustments for Merger | Pro Forma Unaudited Combined | |||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | $ | 540 | $ | 7,300 | $ | — | $ | 7,840 | ||||||||
| General and administrative – related party | 150 | — | — | 150 | ||||||||||||
| Land option expenses | — | 596 | — | 596 | ||||||||||||
| Depreciation and amortization | — | 100 | — | 100 | ||||||||||||
| Impairment loss on capital projects | — | 506 | — | 506 | ||||||||||||
| Total operating expenses | 690 | 8,502 | — | 9,192 | ||||||||||||
| Total operating loss | (690 | ) | (8,502 | ) | — | (9,192 | ) | |||||||||
| Other income (expense) | ||||||||||||||||
| Foreign exchange loss | — | (19 | ) | — | (19 | ) | ||||||||||
| Interest income (expense) | 255 | 82 | (194 | )(c) | 143 | |||||||||||
| Total other income (expense) | 255 | 63 | (194 | ) | 124 | |||||||||||
| Net income (loss) | $ | (435 | ) | $ | (8,439 | ) | $ | (194 | ) | $ | (9,068 | ) | ||||
| Basic Share Count | 4,499,001 | 105,225,828 | ||||||||||||||
| Fully Diluted Share Count | 4,499,001 | 105,225,828 | ||||||||||||||
| Basic Earnings (Loss) per Share | $ | (0.10 | ) | $ | (0.09 | ) | ||||||||||
| Fully Diluted Earnings (Loss) per Share | $ | (0.10 | ) | $ | (0.09 | ) | ||||||||||
The
accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.
| 3 |
Unaudited Pro Forma Condensed Consolidated Combined Statement of Operations
Three Months Ended March 31, 2017
(in thousands, except for shares and per share data)
| (a) Harmony | (b) NextDecade | Adjustments for Merger | Pro forma Unaudited, Combined | |||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | $ | 267 | $ | 2,155 | $ | — | $ | 2,422 | ||||||||
| General and administrative – related party | 50 | — | — | 50 | ||||||||||||
| Land option expenses | — | 236 | — | 236 | ||||||||||||
| Depreciation and amortization | — | 26 | — | 26 | ||||||||||||
| Total operating expenses | 317 | 2,417 | — | 2,734 | ||||||||||||
| Total operating loss | (317 | ) | (2,417 | ) | — | (2,734 | ) | |||||||||
| Other income (expense) | ||||||||||||||||
| Foreign exchange loss | — | (8 | ) | — | (8 | ) | ||||||||||
| Interest income (expense) | 135 | 37 | (27 | )(c) | 145 | |||||||||||
| Total other income (expense) | 135 | 29 | (27 | ) | 137 | |||||||||||
| Net income (loss) | $ | (182 | ) | $ | (2,388 | ) | $ | (27 | ) | $ | (2,597 | ) | ||||
| Basic Share Count | 4,454,370 | 105,225,828 | ||||||||||||||
| Fully Diluted Share Count | 4,454,370 | 105,225,828 | ||||||||||||||
| Basic Earnings (Loss) per Share | $ | (0.04 | ) | $ | (0.02 | ) | ||||||||||
| Fully Diluted Earnings (Loss) per Share | $ | (0.04 | ) | $ | (0.02 | ) | ||||||||||
The accompanying notes are an integral part of these unaudited proforma condensed consolidated combined financial statements.
| 4 |
Unaudited Pro Forma Condensed Consolidated Combined Balance Sheet
As of March 31, 2017
(in thousands, except for shares and per share data)
(a) Harmony | (b) NextDecade | Adjustments for Merger | Unaudited Combined | |||||||||||||
| ASSETS | ||||||||||||||||
| Current assets | ||||||||||||||||
| Cash and equivalents | $ | 197 | $ | 5,794 | $ | 30,743 | (c) | $ | 36,734 | |||||||
| Investments | — | 5,018 | — | 5,018 | ||||||||||||
| Prepaid expenses and other current assets | 59 | 3,140 | (1,873 | )(d) | 1,326 | |||||||||||
| Investment held in Trust Account | 112,865 | — | (112,865 | )(e) | — | |||||||||||
| Total current assets | 113,121 | 13,952 | (83,995 | ) | 43,078 | |||||||||||
| Noncurrent assets | ||||||||||||||||
| Property, plant and equipment, net | — | 59,367 | — | 59,367 | ||||||||||||
| Other assets | — | 349 | — | 349 | ||||||||||||
| Total assets | $ | 113,121 | $ | 73,668 | $ | (83,995 | ) | $ | 102,794 | |||||||
| LIABILITY AND EQUITY | ||||||||||||||||
| Current liabilities | ||||||||||||||||
| Accounts payable | $ | 373 | $ | 952 | $ | (373 | )(f) | $ | 952 | |||||||
| Accrued liabilities and other current liabilities | — | 3,885 | — | 3,885 | ||||||||||||
| Total current liabilities | 373 | 4,837 | (373 | ) | 4,837 | |||||||||||
| Noncurrent liabilities | ||||||||||||||||
| Deferred underwriters fee | 4,325 | — | (4,325 | )(g) | — | |||||||||||
| Notes payable | 633 | — | (633 | )(c) | — | |||||||||||
| Compensation liabilities | — | 3,015 | — | 3,015 | ||||||||||||
| Total liabilities | 5,331 | 7,852 | (5,331 | ) | 7,852 | |||||||||||
| Common Stock, subject to possible conversion; 10,022,361 shares at conversion value (at redemption value approximately $10.256/share | 102,790 | — | (102,790 | )(h) | — | |||||||||||
| MEMBERS’ EQUITY/STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Owners’ equity | — | 88,517 | (88,517 | )(i) | — | |||||||||||
| Preferred stock, $.0001 par value, 1,000,000 authorized, 0 outstanding | — | — | — | — | ||||||||||||
| Common stock, $.0001 par value; Authorized 480,000,000 shares, 105,225,828 issued and outstanding | — | — | — | (g) | — | |||||||||||
| 11 | (i) | 11 | ||||||||||||||
| Additional paid-in capital | 5,881 | — | 23,245 | (h) | 29,126 | |||||||||||
| 88,506 | (i) | 88,506 | ||||||||||||||
| Accumulated deficit | (881 | ) | (22,679 | ) | 881 | (h) | (22,679 | ) | ||||||||
| Accumulated other comprehensive loss | — | (22 | ) | — | (22 | ) | ||||||||||
| Total Equity | 5,000 | 65,816 | 24,126 | 94,942 | ||||||||||||
| Total Liabilities and Equity | $ | 113,121 | $ | 73,668 | $ | (83,995 | ) | $ | 102,794 | |||||||
The
accompanying notes are an integral part of these unaudited pro forma condensed consolidated combined financial statements.
| 5 |
1. Basis of Pro Forma Presentation
Overview
The unaudited pro forma condensed consolidated combined financial statements have been prepared assuming a reverse merger with a recapitalization. The pro forma adjustments for the unaudited pro forma condensed consolidated combined financial statements have been prepared as if the Merger had taken place on March 31, 2017, in the case of the unaudited pro forma condensed consolidated combined balance sheet and on January 1, 2016, in the case of the unaudited pro forma condensed consolidated combined statements of operations.
The unaudited pro forma condensed consolidated combined financial statements should be read in conjunction with (i) Harmony’s historical financial statements and related notes for the year ended December 31, 2016 and for the three months ended March 31, 2017, as well as “Other Information Related to Harmony — Harmony’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Proxy Statement, (ii) NextDecade’s historical consolidated financial statements and related notes for the year ended December 31, 2016 and for the three months ended March 31, 2017, as well as “NextDecade’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Proxy Statement.
The unaudited pro forma condensed consolidated combined financial statements do not reflect possible adjustments related to restructuring or integration activities that have yet to be determined or transaction or other costs following the business combination that are not expected to have a continuing impact. Further, one-time transaction-related expenses anticipated to be incurred prior to, or concurrent with, closing the business combination and the other related Transactions are not included in the unaudited pro forma condensed consolidated combined statements of operations. However, the impact of such transaction expenses is reflected in the unaudited pro forma condensed consolidated combined balance sheet as a decrease to retained earnings and a decrease to cash.
Merger consideration
The merger consideration was valued at approximately $1 billion based on 98,490,409 shares transferred at $10.26 per share.
2. Pro Forma Adjustments and Assumptions
(in thousands, except for shares)
The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed consolidated combined financial statements to give pro forma effect to events that are: (1) directly attributable to the business combination; (2) factually supportable; and (3) with respect to the statement of operations, expected to have a continuing impact on the Company’s results following the completion of the Merger.
Pro Forma Adjustments to the Statement of Operations:
| a. | Represents the Harmony historical statement of operations for the three months ended March 31, 2017 and for the year ended December 31, 2016. | |
| b. | Represents the NextDecade historical statement of operations for the three months ended March 31, 2017 and for the year ended December 31, 2016. | |
| c. | Represents the adjustment to interest income as a result of the conversion of shares in Harmony’s Trust Account on the Merger date. |
Pro Forma Adjustments to the Balance Sheet:
| a. | Represents the Harmony unaudited historical balance sheet as of March 31, 2017. | |
| b. | Represents the NextDecade unaudited historical balance sheet as of March 31, 2017. | |
| c. | Represents the net adjustment to cash associated with the Merger. |
| 6 |
Pro forma net adjustment to cash associated with merger adjustments (in thousands):
| Adjustments for Merger | ||||
| Harmony cash previously held in Trust Account | $ | 113,986 | (1) | |
| Conversions | (81,352 | )(2) | ||
| Cash investment from Carve-out investors | 5,100 | (3) | ||
| Payment of transaction costs | (6,991 | )(4) | ||
| Net adjustments to cash associated with merger | $ | 30,743 | ||
| (1) | Represents the adjustment related to the reclassification of the cash equivalents held in the Trust Account at July 24, 2017 in the form of investments to cash and cash equivalents to reflect the fact that these investments are available for use by the Company, assuming no conversions. | |
| (2) | Represents conversions of 7,853,996 shares of common stock to cash at the special meeting of Harmony shareholders | |
| (3) | Represents cash received from carve-out investors. | |
| (4) | Reflects the impact of estimated transaction costs composed of (i) $3,798 of deferred underwriting compensation attributable to Harmony’s initial public offering, (ii) $1,233 of NextDecade placement fees, (iii) $1,197 of notes payable repayment ($633 outstanding at March 31, 2017 and $564 loaned to Harmony subsequent to March 31, 2017), and (iv) $763 of other transaction expenses including legal, accounting, insurance, proxy solicitation, transfer, mailing, and printing fees. The unaudited pro forma condensed consolidated combined balance sheet reflects these costs as a reduction of cash with a corresponding decrease in paid in capital. |
| d. | Represents the reduction of prepaid expenses and other current assets of NextDecade for note receivable of $110 (included in transaction costs) and the reclassification of $1,763 of deferred equity issuance costs related to the Merger. | |
| e. | Represents the adjustment related to the reclassification of the cash equivalents held in the Trust Account in the form of investments to cash and cash equivalents to reflect the fact that these investments are available for use by the Company. | |
| f. | Represents the payment of Harmony accounts payable with funds in escrow. | |
| g. | Represents the payment of deferred underwriting costs of $3,798 and the waiver of $527. | |
| h. | Represents an adjustment to reflect at the time of issuance, certain of Harmony’s common stock was subject to possible conversion and, as such, an amount of $102,790 was classified as redeemable equity in Harmony’s historical consolidated balance sheet as of March 31, 2017. A portion of the capital associated with stock conversion is reclassified as common stock par value and paid-in capital. | |
| i. | Represents the recapitalization of NextDecade’s historical owners’ equity. |
7