Company: NXDT
Filing Date: 2025-05-09
Form Type: 425
Source: 0001437749-25-015784
Chunk: 2

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-05-09
Form: 425
Chunk 2
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 Definitive Proxy Statement/Prospectus disclosure under the heading“Proposal 4–Approval of the Amended and Restated NexPoint Diversified Real Estate Trust 2023 Long Term Incentive Plan—Executive Summary and Selected Plan Information—Expected Duration and Impact on Dilution (as measured through burn rate and overhang)”:

The overhang rate is a measure of potential dilution to holders of Old Common Shares. As of April 9, 2025, there were 44,626,539.24 of our Old Common Shares outstanding, 1,934,707 Old Common Shares subject to outstanding full value equity awards, zero Old Common Shares subject to outstanding options or SARs, 30 Old Common Shares remaining under the 2023 Plan and 2,000 common limited partnership units of the Operating Partnership (defined below) (the “OP Units”) that were redeemable, subject to certain requirements, for cash or, at the election of Old NXDT, Old Common Shares on a one-for-one basis. If Old NXDT’s overhang rate is calculated including the potential impact of the redemption of the OP Units, then (a) if Old NXDT excludes the impact of the new share request, Old NXDT’s overhang rate as of April 9, 2025 is 4.2% on a fully diluted basis, and (b) if Old NXDT includes the new share request of 943,000 Old Common Shares, Old NXDT’s overhang rate with respect to Old Common Shares will be approximately 6.1% on a fully diluted basis. If Old NXDT’s overhang rate is calculated excluding the potential impact of the redemption of the OP Units, then (a) if we exclude the impact of the new share request, Old NXDT’s overhang rate as of April 9, 2025 is 4.2% on a fully diluted basis, and (b) if Old NXDT includes the new share request of 943,000Old Common Shares, Old NXDT’s overhang rate with respect to Old Common Shares will be approximately 6.1% on a fully diluted basis. Old NXDT believes this is a reasonable level of dilution and provides Old NXDT with the appropriate flexibility to ensure meaningful equity awards in future years to executives and other key service providers to better align their interests with the interests of shareholders.

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Additional Information and Where to Find It

In connection with the Company’s Annual Meeting