Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 273

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 273
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, 2024, NHT’s convertible notes due to affiliates of Nexpoint Real Estate Advisors VI, L.P. had a face value of $62.6 million and are held at fair value on the consolidated statement of financial position at $44.1 million. |

| 9.16 | Convertible notes comprise those that are a) convertible at fixed conversion prices to Class B units, b) convertible to Class B units based on the market price of the REIT’s units at the time of conversion and c) not convertible. The convertible related party notes that have a fixed conversion price are currently out of the money as the conversion price is in excess of the spot price of NHT units of $0.015 per unit and the offer price. As a result, we have classified these notes as a liability in arriving at the fair market value of NHT and deducted them from the fair market value of the Trust’s assets. The notes convertible at the market price would dilute our assessment of the price per unit, which forms the basis of our opinion, contributing to the fairness of the Proposed Transaction. Notes that are not convertible have been classified as a liability and deducted from the net asset value of NHT in arriving at the fair market value. |

| 9.17 | Our assessment on the fairness of the Proposed Transaction is not impacted by the valuation of the convertible notes at fair value versus face value. While the notes are recorded at fair value for financial reporting purposes, adjusting the notes to face value would result in a lower price per unit as the face value is in excess of fair value. |

Profit sharing liability

| 9.18 | The profit-sharing liability comprises the omnibus equity incentive plan that allows for the grant of deferred units (“DUs”) and profit interest incentive units (“PIUs”). As at September 30, 2024, the Trust had 549,687 DUs and 2,355,000 PIUs granted under the omnibus plan. Additionally, the Trust also has a deferred unit plan created on September 11, 2023, of which 1,295,668 DUs to certain independent trustees of NHT were issued. In aggregate, 2,355,000 PIU units and 1,845,355 DUs were issued as at September 30, 2023. |

<div align='center'>E-12</div>

| 9.19 | As per the Merger Agreement, each DU under the omnibus equity incentive plan and deferred unit