Company: NXDT
Filing Date: 2025-01-30
Form Type: 424B5
Source: 0001437749-25-002263
Chunk: 39

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-30
Form: 424B5
Chunk 39
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 (as defined in Section 857 of the Code) any portion (the “Capital Gains Amount”) of the dividends (as determined for U.S. federal income tax purposes) paid or made available for the year to holders of all classes and series of shares (the “Total Dividends”), then the portion of the Capital Gains Amount that will be allocable to the holders of Series B Preferred Shares will be the amount that the total dividends (as determined for U.S. federal income tax purposes) paid or made available to the holders of the Series B Preferred Shares for the year bears to the Total Dividends. The Company may elect to retain and pay income tax on its net long-term capital gains. In such a case, the holders of Series B Preferred Shares would include in income their appropriate share of the Company’s undistributed long-term capital gains, as designated by the Company.

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Holders of shares of our Series B Preferred Shares are not eligible to participate in any future distribution reinvestment plan for the Company’s common shares solely by virtue of their status as holders of Series B Preferred Shares.

Conversion at Option of Holders

The Series B Preferred Shares will be convertible at the option of the holder thereof into our common shares beginning on the first day of the month following the third anniversary of the date of original issuance of the shares to be converted if the 5-day VWAP of our common shares on the NYSE ending on the trading day immediately preceding the date the holder delivers a duly completed conversion notice to the Company represents a 15.0% premium to the Applicable NAV, which we refer to as the Minimum Market Price Trigger.

The Company intends to determine NAV on a quarterly basis. The Company’s determination of the Applicable NAV is final and binding.

The per share conversion rate will be as follows:

| ● | Beginning on the first day of the month following the third anniversary of the date of original issuance of the shares to be converted: 94% of the Market Price |

| ● | Beginning on the first day of the month following the fourth anniversary of the date of original issuance of the shares to be converted: 90% of the Market Price |

| ● | Beginning on the first day of the month following the fifth anniversary of the date of original issuance of the shares to be converted: 88% of the Market Price |

Applicable NAV, which the Minimum Market Price Trigger is based on, is subject to adjustments for any Share Split with respect to our