Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 274

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 274
---
 plan shall be cancelled and holders of such cancelled DUs shall thereafter be entitled to receive US$0.36 in cash per DU at closing. In this regard, we deducted the total number of DUs outstanding multiplied by US$0.36 per unit in arriving at the fair market value of the Trust. |

| 9.20 | As per Section 3.5 of the Merger Agreement, the acquirer is expected to assume the PIU liability as of the date of this Fairness Opinion. We have been advised by Management that PIU’s are considered to be economically equivalent to NHT units and are valued at the NHT spot price on the balance sheet. For the purpose of our analysis, we determined that the fair market value of the PIU liability is equivalent to the total number of PIU’s outstanding multiplied by US$0.36 per unit.  We deducted the fair market value of the PIU liability in arriving at the fair market value of the Trust. |

Corporate general and administrative costs

| 9.21 | We deducted from the net assets of NHT, capitalized corporate overhead that would be incurred at a top level. This includes miscellaneous corporate G&A costs, insurance, and advisory fees, partially offset by provisions of management services to a third party. Advisory fees are paid to the Trust’s Advisor to manage the operations of the Trust, including: providing daily management for the Trust, selecting and working with third party service providers, overseeing the third party manager, formulating an investment strategy for the Trust and selecting suitable properties and investments, managing the Trust’s outstanding debt and its interest rate exposure, determining when to sell assets and managing the renovation program or overseeing a third party vendor that implements the renovation program. Management has advised that the advisory fees are required to continue to operate the Trust. |

| 9.22 | We then applied a weighted average capitalization rate to the corporate overhead costs to arrive at the value of the capitalized corporate G&A. We deducted the capitalized costs from the net assets of the Trust in arriving at the fair market value of NHT. |

| 9.23 | In determining the inclusion of corporate general and administrative costs, we considered whether any distinctive material benefit may accrue to NXDT, or another party through operational synergies, as a result of the Proposed Transaction. Refer to section 10. |

Present value of net operating loss carryforwards

| 9.24 | We assumed that the Hotels’ existing net operating loss carryforwards could be utilized by a