Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 1840

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 1840
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 that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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I-1440

PART II—OTHER INFORMATION</div>

Item 1. Legal Proceedings

From time to time, we are party to legal proceedings that arise in the ordinary course of our business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by government agencies.

Item 1A. Risk Factors

Other than as set forth below, there have been no material changes to the risk factors previously disclosed under Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 14, 2024.

NHT is not a wholly owned subsidiary of the Company and NHT can change its financing strategy or leverage policies without consent of its unitholders, including the Company.

As a result of the NHT Acquisition, as of April 19, 2024, the Company owned 53.65% of the outstanding NHT Units and was determined to hold the controlling financial interest in NHT and consolidates NHT under applicable accounting rules.

Currently, NHT is governed by a board of trustees that is separate from the Company’s Board of Trustees and the day-to-day operations of NHT are conducted by Aimbridge Hospitality Holdings, LLC (the “Manager”), subject to oversight of the NHT board of trustees and the NHT Adviser. None of the foregoing are required to consult or receive consent of the NHT unitholders, including the Company, before changing NHT’s financing strategy or leverage policies with respect to originations, growth, operation, capitalization and distributions, which could result in an investment portfolio with a different risk profile than that of the Company’s existing investment portfolio or