Company: NXDT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001356115-25-000003
Chunk: 11

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 11
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 and financial rights, free and clear of all liens and encumbrances (the “NHT Acquisition”). As a result, the Company owned 53.65% of the outstanding NHT Units and was determined to hold the controlling financial interest in NHT and as a result consolidated NHT. The NHT Acquisition was accounted for as an asset acquisition under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, Business Combinations.Because the Company did not wholly own NHT following the NHT Acquisition, the Company recognized a noncontrolling interest (“NCI”) of $6.9 million, which was recorded at fair value when the controlling financial interest was acquired. The Company also recorded an unrealized gain on its previously held interest in NHT of $3.9 million.On November 22, 2024, the Company announced that it had entered into an Agreement and Plan of Merger pursuant to which it would acquire the remaining outstanding NHT Units in a merger transaction (the “NHT Merger”) for 

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approximately $5.7 million, to be paid principally in common shares of the Company, with limited partnership interests of the OP paid for the equity interests of NHT Operating Partnership, LLC (“NHT OP”). On February 21, 2025, NHT’s unitholders voted to approve the NHT Merger. The NHT Merger is expected to close in the second quarter of 2025. The accumulated cost of the acquisition was allocated to the acquired assets and liabilities based on their relative fair values as follows (in thousands): DescriptionLand$22,673 Buildings and improvements128,616 Construction in progress3,613 Furniture, fixtures, and equipment12,722 Investments, at fair value5,000 Cash and cash equivalents38,467 Restricted cash5,065 Prepaid and other assets4,001 Right-of-use asset1,465 Interest-rate cap1,064 Mortgages payable(114,640)Notes payable(70,529)Accounts payable and other accrued liabilities(21,826)Accrued real estate taxes(1,233)Identifiable Net Assets Acquired$14,458 

3. Summary of Significant Accounting Policies

Basis of AccountingThe accompanying consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles (“GAAP”). GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and