Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 50

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 50
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. In connection with the broadening of the REIT’s business and investment focus outside of the hospitality industry, the REIT acquired $2.5 million worth of beneficial interests in NexPoint Life Sciences II DST (“Life Sciences DST”) a Delaware statutory trust on September 11, 2023. Subsequently, on January 4, 2024, the REIT acquired an additional $2.5 million worth of beneficial interests in Life Sciences DST.

Beginning in April 2024, without viable recapitalization alternatives, Management began assessing the feasibility of a merger transaction between the REIT and an affiliate of NXDT, including the related structuring, financing and tax considerations for a potential transaction (the “Proposed Transaction”). Management was of the view that the Proposed Transaction presented a sensible and attractive option for the REIT given NXDT’s indirect control and direction over 53.65% of the Units (through its wholly-owned subsidiary, NexPoint Real Estate Opportunities, LLC). From April to June 2024, Management, together with the REIT’s legal counsel, Goodmans LLP (“Goodmans”) and NXDT’s legal counsel, Winston & Strawn LLP (“Winston”) met on various occasions to discuss structuring for the Proposed Transaction, including tax consequences for Unitholders and certain Canadian securities law considerations. On June 15, 2024, Winston provided to the REIT and Goodmans initial draft structure slides in connection with the Proposed Transaction. Over the course of the next month, Goodmans’ and Winston’s tax specialists held additional discussions, which resulted in certain revisions and refinements to the structure for the Proposed Transaction.

On August 1, 2024, a meeting of the Board and Audit Committee was called to consider and approve the REIT’s quarterly financial statements. During the Board meeting, Management provided an update on the REIT’s strategic outlook, noting that Management was currently exploring the Proposed Transaction. Goodmans discussed the legal considerations and procedures that would be relevant in connection with the Proposed Transaction, including the formation of a special committee and engagement of an independent financial advisor. Goodmans also explained that the Proposed Transaction would constitute a “business combination” under MI 61-101 and, as a result, would require minority approval of Unitholders at a special meeting of the REIT. Management further noted that Goodmans and Winston, counsel for NXDT, were currently in the process of finalizing a structure for the Proposed Transaction.

On August 2, 2024, Winston circulated to Goodmans an