Company: NXDT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001356115-25-000003
Chunk: 474

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 474
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emnification of trustees and officers. The defense or settlement of any lawsuit or claim that remains unresolved at the time the NHT Merger is completed may adversely affect the Company’s business and results of operations.

Following the consummation of the NHT Merger, the Company may be unable to integrate the operations of the Company and NHT successfully and realize the anticipated synergies and other benefits of the NHT Merger or do so within the anticipated time frame.

The NHT Merger involves the acquisition of a company that currently operates as a public company in Canada. The Company is expected to benefit from the elimination of duplicative costs associated with supporting a public company platform and from the greater efficiency of having a single management team and investment adviser. However, the Company will be required to devote management attention and resources to integrating the operations of NHT and the Company. Potential difficulties the Company may encounter in the integration process include the following:

•the inability to successfully combine the operations of the Company and NHT, including the integration of personnel, customer records and maintaining cybersecurity protections, in a manner that permits the Company to achieve the cost savings anticipated to result from the NHT Merger;

•the inability to dispose of assets or operations that the Company desires to dispose of;

•the complexity of integrating personnel;

•potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the NHT Merger; and

•the diversion of management’s attention caused by completing the NHT Merger and integrating NHT’s operations.

For all these reasons, it is possible that the integration process could result in the distraction of the Company’s management, the disruption of the Company’s ongoing business, or inconsistencies in the Company’s operations, services, standards, controls, procedures, and policies, any of which could adversely affect the ability of the Company to achieve the anticipated benefits of the NHT Merger, or could otherwise adversely affect the business and financial results of the Company.

Risks Related to Our REIT Status and Other Tax Items

We have elected to be treated as a REIT commencing with our taxable year ended December 31, 2021. Our failure to qualify or maintain our qualification as a REIT for U.S. federal income tax purposes would reduce the amount of funds we have available for distribution and limit our ability to make distributions to our shareholders. 

We have elected to be treated as a REIT under the Code commencing with our taxable year ended December 31, 2021. However, we cannot assure you that