Company: NXDT
Filing Date: 2025-04-25
Form Type: 424B3
Source: 0001437749-25-013177
Chunk: 45

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-04-25
Form: 424B3
Chunk 45
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| Expected Duration and Impact on Dilution (as measured through burn rate and overhang) |     | Old NXDT recognizes the impact of dilution on our shareholders and has evaluated the request for Old Common Shares under the A&R 2023 Plan very carefully in the context of the need to motivate, retain and ensure our leadership team is focused on our strategic and long-term growth priorities. Equity is an important component of a compensation program that aligns with our strategy of achieving long-term, sustainable growth.                                                                                                                                                                                                                                                                                              |
|                                                                                       |     | Based on current expectations for possible future awards, Old NXDT is recommending that an additional 943,000 Old Common Shares be made available for issuance under the A&R 2023 Plan. Based on the closing price on the NYSE for the Old Common Shares on April 9, 2025 of $4.15 per share, the aggregate market value as of April 9, 2025 of the Old Common Shares requested under the A&R 2023 Plan was $3,913,450. Old NXDT anticipates these Old Common Shares will be sufficient to cover equity awards for the next several years. Despite this estimate, the duration of the Overall Share Limit may be shorter or longer depending on various factors such as share price, aggregate equity needs and equity award type mix. |

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| Common measures for the use of share incentive plans include the burn rate and the overhang rate. The burn rate measures the annual dilution from equity awards granted during a particular year. We have previously issued awards under the 2023 Plan. The three-year average burn rate from fiscal year 2022 to 2024 is 1.39%. The following table provides information regarding our annual burn rate over the past three completed fiscal years. The amounts shown in the table reflect awards granted and Old Common Shares outstanding. |

| Year | Time-Based RSUs 
     Granted (#) |   Weighted Avg. 
          Shares 
 Outstanding (#) | Burn Rate (%) |
| 2022 |               0 |      37,171,807 | 0.0%          |
| 2023 |         603,486 |      37,333,522 | 1.62%         |
| 2024 |       1,033,787 |      40,228,781 | 2.55%         |

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