Company: NXDT
Filing Date: 2025-01-30
Form Type: 424B5
Source: 0001437749-25-002263
Chunk: 15

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-30
Form: 424B5
Chunk 15
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 will be no selling commissions with respect to any such sales and the dealer manager may in consultation with the Company waive or reduce the dealer manager fee. As a result, the public offering price per share of Series B Preferred Shares sold in our “friends and family” program will be decreased by an amount equal to the discount. The dealer manager in consultation with the Company will make all final determinations regarding whether an individual or entity falls within the friends and family category and whether the dealer manager fee will be waived or reduced, including the extent of any reduction. |

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Covered Security.The term “covered security” applies to securities exempt from state registration because of their oversight by federal authorities and national-level regulatory bodies pursuant to Section 18 of the Securities Act of 1933, as amended (the “Securities Act”). Generally, securities listed on national exchanges are the most common type of covered security exempt from state registration. A non-traded security also can be a covered security if it has a seniority greater than or equal to other securities from the same issuer that are listed on a national exchange, such as the NYSE. Our Series B Preferred Shares are covered securities because they are senior to our common shares and equal in seniority to the Series A Preferred Shares which are listed on the NYSE and therefore are exempt from state registration. There are several advantages to both issuers and investors of a security being deemed a covered security. These include:

| ● | More Investors — Covered securities can be purchased by a broader range of investors than can non-covered securities. Non-covered securities are subject to suitability requirements that vary from state to state. These so-called “Blue Sky” regulations often prohibit the sale of securities to certain investors and may prohibit the sale of securities altogether until a specific volume of sales have been achieved in other states. |

| ● | Issuance Costs — Covered securities may have lower issuance costs since they avoid the expense of dealing with the various regulations of each of the 50 states and Washington, D.C. This could save time and money and allows issuers of covered securities the flexibility to enter the real estate markets at a time of their choosing. All of our investors would benefit from any lower issuance costs that may be achieved. |

There are several disadvantages to investors of a security being deemed a covered security. These include:

| ● | Lack of Quantitative Suitability Standards — There are no state-imposed quantitative investor suitability