Company: NREF
Filing Date: 2025-03-14
Form Type: 424B5
Source: 0001437749-25-007771
Chunk: 22

Company: NexPoint Real Estate Finance, Inc.
Filing Date: 2025-03-14
Form: 424B5
Chunk 22
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 to the extent of any excess over the stockholder’s adjusted tax basis in the stockholder’s Series B Preferred Stock, as capital gain. Any distribution that is treated as a return of capital will reduce the stockholder’s adjusted tax basis in the stockholder’s Series B Preferred Stock, and subsequent sales (including cash redemptions) of such stockholder’s Series B Preferred Stock will result in recognition of an increased taxable gain or reduced taxable loss due to the reduction in such adjusted tax basis.

Holders may recognize dividend income on constructive dividends without a corresponding cash payment.

If the redemption price of a share of our Series B Preferred Stock exceeds its issue price by more than a de minimis amount, the amount of such excess may be deemed to be a constructive distribution (treated as a dividend to the extent of our current and accumulated earnings and profits and otherwise subject to the treatment of actual distributions) taken into account ratably on an economic accrual basis. Such amount will be taxable as a dividend to the extent of our current and accumulated earnings and profits and will otherwise be subject to the treatment of distributions. In addition, to the extent there are accrued and unpaid dividends as of the date of redemption of our shares, the Internal Revenue Service may take the position that the amount thereof should be treated as an additional redemption premium for purposes of this analysis. Our determination of whether there is a constructive distribution for purposes of Section 305(c) of the Code is binding on our stockholders unless the stockholder discloses it on its tax return.

Shares of Series B Preferred Stock may be redeemed for shares of our common stock, which rank junior to the Series B Preferred Stock with respect to dividends and upon liquidation.

Beginning on the first day of the month following the original issuance of any share of Series B Preferred Stock, the holders of shares of Series B Preferred Stock may require us to redeem such shares and, beginning on the first day of the month following the second anniversary of the original issuance date the Company at its option may redeem all or some portion of the outstanding Series B Preferred Stock, with the redemption price payable, in our sole discretion, in cash or in equal value of shares of our common stock, based on the closing price per share of our common stock for the single trading day prior to the date of redemption. We may opt to pay the redemption price in shares of our common stock. The rights of the holders of shares of Series B Preferred Stock rank senior to the rights of the holders of shares of our common stock as to dividends and payments upon