Company: NXDT
Filing Date: 2025-01-30
Form Type: 424B5
Source: 0001437749-25-002263
Chunk: 40

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-30
Form: 424B5
Chunk 40
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 common shares as follows: the adjusted Applicable NAV as the result of a Share Split will be equal to the product obtained by multiplying (i) the Applicable NAV in effect immediately prior to such Share Split by (ii) a fraction, the numerator of which is the number of our common shares outstanding after giving effect to such Share Split and the denominator of which is the number of our common shares outstanding immediately prior to such Share Split.

The number of common shares to be issued upon conversion will be equal to the quotient of (i) the Stated Value of the Series B Preferred Shares, plus all accrued but unpaid cash dividends thereon, if any, to but not including the date of conversion, divided by (ii) the applicable per share conversion rate.

No conversions of Series B Preferred Shares into our common shares will be made at such time as (i) it is prohibited by Delaware law, (ii) the terms and provisions of any agreement to which we are a party prohibits such conversion or provides that such conversion would constitute a breach thereof or a default thereunder, or (iii) if such conversion would result in a Change of Control.

Prior to the receipt of the Requisite Shareholder Approval, the Series B Preferred Shares will not be convertible, in aggregate, into more than 19.99% of the number of the Common Shares or voting power outstanding prior to the initial issuance of any Series B Preferred Shares (subject to appropriate adjustment in relation to any recapitalizations, share dividends, share splits, share combinations, reclassifications or other similar events).

In addition, aggregate conversions by holders of the Series B Preferred Shares will be subject to the following conversion limits: (i) no more than 5% of the outstanding Series B Preferred Shares will be converted per calendar month; (ii) no more than 12% of the outstanding Series B Preferred Shares will be converted per fiscal quarter; and (iii) no more than 33% of the outstanding Series B Preferred Shares will be converted per fiscal year.

If, after applying these conversion limits, a holder would own less than one Series B Preferred Share, all of such holder’s Series B Preferred Shares will be converted into common shares. Otherwise, all conversion amounts will be rounded down such that after giving effect to any conversions, no holder is left owning a fractional share. For example, if after applying the conversion limits, an investor would own 2.5 shares, we will convert 0.5 fewer shares from such holder so that the holder is left owning three shares.