NexPoint Real Estate Finance, Inc.

Previous wording

We are externally managed by our Manager, a subsidiary of our Sponsor, an SEC-registered investment advisor, which has extensive real estate experience, having completed as of June 30, 2025 approximately $21.3 billion of gross real estate transactions since the beginning of 2012. In addition, our Sponsor, together with its affiliates and NexBank, is one of the most experienced global alternative credit managers managing approximately $15.6 billion of loans and debt or credit related investments as of June 30, 2025 and has managed credit investments for over 25 years. We believe our relationship with our Sponsor benefits us by providing access to resources including research capabilities, an extensive relationship network, other proprietary information, scalability, and a vast wealth of knowledge of information on real estate in our target assets and sectors.

Current wording

We are externally managed by our Manager, a subsidiary of our Sponsor, an SEC-registered investment advisor, which has extensive real estate experience, having completed as of September 30, 2025 approximately $21.7 billion of gross real estate transactions since the beginning of 2012. In addition, our Sponsor, together with its affiliates and NexBank, is one of the most experienced global alternative credit managers managing approximately $14.4 billion of loans and debt or credit related investments as of September 30, 2025 and has managed credit investments for over 25 years. We believe our relationship with our Sponsor benefits us by providing access to resources including research capabilities, an extensive relationship network, other proprietary information, scalability, and a vast wealth of knowledge of information on real estate in our target assets and sectors.

Previous wording

The U.S. government announced a comprehensive set of tariffs in the second quarter of 2025. Since then, the U.S. government has paused implementation for some of these tariffs. Although certain tariffs have gone into effect, the timing and scope of other tariffs is still currently uncertain. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. The impact of such tariffs is subject to uncertainties regarding the timing of their implementation, the magnitude of such tariffs and possible exemption for certain goods, among other unknowns.

Current wording

The U.S. government announced a comprehensive set of tariffs in the second quarter of 2025. Following the pause of certain of these tariffs, the majority of the previously announced tariffs have been implemented. The U.S. government has indicated that it could impose additional tariffs on particular countries and impose global tariffs on certain goods. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. Management is actively engaged with vendors and business partners to reduce financial risks of tariffs; however, the impact of such tariffs is subject to uncertainties regarding the timing of their implementation, the magnitude of such tariffs and possible exemption for certain goods, among other unknowns.

Previous wording

On October 15, 2021, a lawsuit (the “Bankruptcy Trust Lawsuit”) was filed by a litigation subtrust formed in connection with Highland’s bankruptcy against various persons and entities, including our Sponsor and James Dondero. On March 24, 2023, the litigation trustee filed a motion for leave to stay the Bankruptcy Trust Lawsuit, which was granted by the bankruptcy court on April 4, 2023. Per the court’s order, the Bankruptcy Trust Lawsuit is stayed until any party provides 30 days’ notice of the intent to resume the adversary proceeding, with all pending deadlines extended for a period of time commensurate with the length of the stay. As of the date of this filing, the Bankruptcy Trust Lawsuit continues to be stayed. On February 8, 2023, UBS Securities LLC and UBS AG London (collectively, “UBS”) filed a lawsuit in the Supreme Court of the State of New York, County of New York related to a default that occurred in 2009 on a warehouse facility between UBS and funds affiliated with Highland. The lawsuit makes claims against several persons and entities, including Mr. Dondero, the President of our Sponsor, seeking to collect on $1.3 billion in judgments UBS obtained against entities that were managed indirectly by Highland (the “UBS Lawsuit”). On March 7, 2023, the matter was removed to the United States District Court for the Southern District of New York. On April 6, 2023, UBS moved to have the case remanded to New York state court. The federal court remanded the state-law causes of action and retained and stayed the federal cause of action. On February 26, 2024, several of the respondents, including Mr. Dondero, filed motions in state court to dismiss the UBS Lawsuit on various grounds. A hearing was held on July 8, 2024. The court dismissed the claims against one respondent, CLO HoldCo, Ltd., for lack of personal jurisdiction in a July 12, 2024 order. On March 26, 2025, the court entered an order denying the remaining motions to dismiss and directed the respondents to file an answer to the UBS Lawsuit within 20 days, which they did. Mr. Dondero is appealing the denial of the motion to dismiss to the Appellate Division of the Supreme Court of the State of New York. Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets or operations. Our Sponsor and Mr. Dondero have informed us they believe the Bankruptcy Trust Lawsuit has no merit, and Mr. Dondero has informed us he believes the UBS Lawsuit has no merit; we have been advised that the defendants named in each of the lawsuits intend to vigorously defend against the claims. We do not expect the Bankruptcy Trust Lawsuit or the UBS Lawsuit will have a material effect on our business, results of operations or financial condition.

Current wording

On October 15, 2021, a lawsuit (the “Bankruptcy Trust Lawsuit”) was filed by a litigation subtrust formed in connection with Highland’s bankruptcy against various persons and entities, including our Sponsor and James Dondero. On March 24, 2023, the litigation trustee filed a motion for leave to stay the Bankruptcy Trust Lawsuit, which was granted by the bankruptcy court on April 4, 2023. On June 30, 2025, the bankruptcy court approved a settlement agreement between Highland and Hunter Mountain Investment Trust (“HMIT”) pursuant to which the claims asserted in the Bankruptcy Trust Lawsuit were assigned to HMIT. HMIT subsequently filed a motion to lift the stay of the Bankruptcy Trust Lawsuit, which was granted and became effective on October 3, 2025. As of the date of this filing, the bankruptcy court has requested briefing from the parties regarding whether the court continues to have jurisdiction over the Bankruptcy Trust Lawsuit given the assignment of claims from Highland to HMIT. Briefs on this matter are due on November 18, 2025. On February 8, 2023, UBS Securities LLC and UBS AG London (collectively, “UBS”) filed a lawsuit in the Supreme Court of the State of New York, County of New York related to a default that occurred in 2009 on a warehouse facility between UBS and funds affiliated with Highland. The lawsuit makes claims against several persons and entities, including Mr. Dondero, the President of our Sponsor, seeking to collect on $1.3 billion in judgments UBS obtained against entities that were managed indirectly by Highland (the “UBS Lawsuit”). On March 7, 2023, the matter was removed to the United States District Court for the Southern District of New York. On April 6, 2023, UBS moved to have the case remanded to New York state court. The federal court remanded the state-law causes of action and retained and stayed the federal cause of action. On

Previous wording

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

The change in our net income (loss) for the three months ended June 30, 2025 as compared to the net income (loss) for the three months ended June 30, 2024 primarily relates to an increase in interest income due to higher yielding assets and a decrease in interest expense related to the repayment of one of our senior loans. Our net income (loss) attributable to common stockholders for the three months ended June 30, 2025 was approximately $12.3 million. We had approximately $12.1 million in net interest income, generated $19.5 million in other income, incurred operating expenses of $9.3 million, allocated $0.9 million of income to Series A Preferred stockholders, allocated $5.7 million of income to Series B Preferred stockholders, and allocated $3.4 million of income to redeemable noncontrolling interests for the three months ended June 30, 2025.

Current wording

The change in our net income for the three months ended September 30, 2025 as compared to the net income for the three months ended September 30, 2024 primarily relates to an increase in interest income due to higher yielding assets, as well as an increase in other income. Our net income attributable to common stockholders for the three months ended September 30, 2025 was approximately $35.0 million. We had approximately $12.5 million in net interest income, generated $46.7 million in other income, incurred operating expenses of $8.4 million, allocated $0.9 million of income to Series A Preferred stockholders, allocated $7.2 million of income to Series B Preferred stockholders, and allocated $7.8 million of income to redeemable noncontrolling interests for the three months ended September 30, 2025.

Previous wording

Other income. Other income was $19.5 million for the three months ended June 30, 2025 compared to $14.2 million for the three months ended June 30, 2024, which was an increase of approximately $5.3 million. This was primarily due to an increase in unrealized gain related to preferred stock and warrants, a increase in our provision for credit losses as a result due to an increase in specific reserves related to a preferred investment and an increase in income of equity method investments between the periods.

Current wording

Other income. Other income was $46.7 million for the three months ended September 30, 2025 compared to $18.7 million for the three months ended September 30, 2024, which was an increase of approximately $28.1 million. This was primarily due to an increase in unrealized gain related to preferred stock and warrants, an increase in our provision for credit losses as a result due to an increase in specific reserves related to a preferred investment, gain on sale of real estate assets, dividend income and an increase in income of equity method investments between the periods.

Previous wording

G&A expenses. G&A expenses were $3.8 million for the three months ended June 30, 2025 compared to $3.2 million for the three months ended June 30, 2024, which was an increase of approximately $0.6 million. The increase between the periods was primarily due to a $0.5 million increase in payroll expense compared to the prior period.

Current wording

G&A expenses. G&A expenses were $3.4 million for the three months ended September 30, 2025 compared to $2.2 million for the three months ended September 30, 2024, which was an increase of approximately $1.2 million. The increase between the periods was primarily due to a $0.5 million increase in other expenses compared to the prior period as well as a $0.5 million increase in audit fees.

Previous wording

Loan servicing fees. Loan servicing fees were $0.4 million for the three months ended June 30, 2025 compared to $0.4 million for the three months ended June 30, 2024, which was consistent quarter over quarter.

Current wording

Loan servicing fees. Loan servicing fees were $0.4 million for the three months ended September 30, 2025 compared to $0.3 million for the three months ended September 30, 2024, which was an increase of approximately $0.1 million and primarily the result of increases in loan servicing rates.

Previous wording

Management fees. Management fees were $1.6 million for the three months ended June 30, 2025 compared to $0.9 million for the three months ended June 30, 2024, which was an increase of approximately $0.7 million. The increase between the periods was primarily due to an increase in Equity as defined by the Management Agreement.

Current wording

Management fees. Management fees were $1.8 million for the three months ended September 30, 2025 compared to $1.0 million for the three months ended September 30, 2024, which was an increase of approximately $0.8 million. The increase between the periods was primarily due to an increase in Equity as defined by the Management Agreement.

Previous wording

Expenses from consolidated real estate owned. Expenses from consolidated real estate owned were $3.6 million for the three months ended June 30, 2025, compared to $4.4 million for the three months ended June 30, 2024, which was a decrease of approximately $0.8 million. The decrease between the periods is due to a decrease in depreciation and amortization of Montford as it was classified as Held for sale as of April 1, 2025.

Current wording

Expenses from consolidated real estate owned. Expenses from consolidated real estate owned were $2.8 million for the three months ended September 30, 2025, compared to $4.3 million for the three months ended September 30, 2024, which was a decrease of approximately $1.5 million. The decrease between the periods is due to the Company selling Hudson Montford on July 22, 2025.

Previous wording

The following tables set forth a summary of our operating results for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

The following tables set forth a summary of our operating results for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

The change in our net income (loss) for the six months ended June 30, 2025 as compared to the net income (loss) for the six months ended June 30, 2024 primarily relates to an increase in interest income due to higher yielding assets and a decrease in interest expense related to the repayment of one of our senior loans. Our net income attributable to common stockholders for the six months ended June 30, 2025 was approximately $28.8 million. We had approximately $23.6 million in net interest income, and generated income of $42.2 million in other income, incurred operating expenses of $17.6 million, allocated $1.7 million of income to Series A Preferred stockholders, allocated $10.1 million of income to Series B Preferred stockholders, and allocated $7.6 million of income to redeemable noncontrolling interests for the six months ended June 30, 2025.

Current wording

The change in our net income for the nine months ended September 30, 2025 as compared to the net income (loss) for the nine months ended September 30, 2024 primarily relates to an increase in interest income due to higher yielding assets and a decrease in interest expense related to the repayment of one of our senior and mezzanine loans. Our net income attributable to common stockholders for the nine months ended September 30, 2025 was approximately $63.8 million. We had approximately $36.1 million in net interest income, and generated income of $88.9 million in other income, incurred operating expenses of $25.9 million, allocated $2.6 million of income to Series A Preferred stockholders, allocated $17.3 million of income to Series B Preferred stockholders, and allocated $15.4 million of income to redeemable noncontrolling interests for the nine months ended September 30, 2025.

Previous wording

Net interest income (loss). Net interest income was $12.1 million for the three months ended June 30, 2025 compared to net interest income of $6.7 million for the three months ended June 30, 2024 which was an increase of approximately $5.3 million. The increase between the periods is primarily due to increased income from investments in preferred equity loans and on the revolving credit facility.

Current wording

Net interest income. Net interest income was $36.1 million for the nine months ended September 30, 2025 compared to net interest income of $6.4 million for the nine months ended September 30, 2024, which was an increase of approximately $29.6 million. The increase between the periods is primarily due to increased income from investments in preferred equity loans and on the revolving credit facility.

Previous wording

Other income. Other income was $42.2 million for the six months ended June 30, 2025 compared to $23.4 million for the six months ended June 30, 2024, which was an increase of approximately $18.8 million. This was primarily due to an increase in unrealized gain related to consolidated preferred stock and warrants, and an increase in income of equity method investments between the periods.

Current wording

Other income. Other income was $88.9 million for the nine months ended September 30, 2025 compared to $42.0 million for the nine months ended September 30, 2024, which was an increase of approximately $46.9 million. This was primarily due to an increase in unrealized gain related to preferred stock and warrants, an increase in our provision for credit losses due to an increase in specific reserves related to a preferred investment and an increase in dividend income, with an offset against the provision for expected credit losses.

Previous wording

G&A expenses. G&A expenses were $6.3 million for the six months ended June 30, 2025 compared to $7.4 million for the six months ended June 30, 2024, which was a decrease of approximately $1.1 million. The decrease between the periods was primarily due to a $0.9 million decrease in legal expense and a $0.1 million decrease in audit expense as compared to the prior period.

Current wording

G&A expenses. G&A expenses were $9.7 million for the nine months ended September 30, 2025 compared to $9.5 million for the nine months ended September 30, 2024, which was an increase of approximately $0.1 million. The increase between the periods was primarily due to a $0.1 million increase in audit expense as compared to the prior period.

Previous wording

Loan servicing fees. Loan servicing fees were $0.7 million for the six months ended June 30, 2025 compared to $0.9 million for the six months ended June 30, 2024, which was a decrease of approximately $0.2 million. The decrease between the periods was primarily due to a decrease in SFR Loans in the portfolio compared to the prior period.

Current wording

Loan servicing fees. Loan servicing fees were $1.1 million for the nine months ended September 30, 2025 compared to $1.3 million for the nine months ended September 30, 2024, which was a decrease of approximately $0.2 million. The decrease between the periods was primarily due to a decrease in SFR Loans in the portfolio compared to the prior period.

Previous wording

Management fees. Management fees were $3.0 million for the six months ended June 30, 2025 compared to $1.7 million for the six months ended June 30, 2024. The increase between the periods was primarily due to an increase in Equity as defined by the Management Agreement.

Current wording

Management fees. Management fees were $4.8 million for the nine months ended September 30, 2025 compared to $2.8 million for the nine months ended September 30, 2024. The increase between the periods was primarily due to an increase in Equity as defined by the Management Agreement.

Previous wording

Expenses from consolidated real estate owned. Expenses from consolidated real estate owned were $7.6 million for the six months ended June 30, 2025, compared to $9.8 million for the six months ended June 30, 2024, which was a decrease of approximately $2.2 million. The decrease between the periods is due to a decrease in depreciation and amortization of Montford as it was classified as Held for sale as of April 1, 2025.

Current wording

Expenses from consolidated real estate owned. Expenses from consolidated real estate owned were $10.4 million for the nine months ended September 30, 2025, compared to $14.1 million for the nine months ended September 30, 2024, which was a decrease of approximately $3.7 million. The decrease between the periods is due to the Company selling Hudson Montford on July 22, 2025.

Previous wording

The following table provides a reconciliation of EAD and CAD to GAAP net income including the dilutive effect of noncontrolling interests and adjusted weighted average common shares outstanding - diluted to weighted average common shares outstanding - diluted for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share amounts):

Current wording

The following table provides a reconciliation of EAD and CAD to GAAP net income including the dilutive effect of noncontrolling interests and adjusted weighted average common shares outstanding - diluted to weighted average common shares outstanding - diluted for the three and nine months ended September 30, 2025 and 2024 (in thousands, except per share amounts):

Previous wording

(6)The CMBS B-Pieces are shown on an unconsolidated basis reflecting the value of our investments.

Current wording

(5)The CMBS B-Pieces are shown on an unconsolidated basis reflecting the value of our investments.

Previous wording

(7)The number shown represents the notional value on which interest is calculated for the CMBS I/O Strips. CMBS I/O Strips receive no principal payments and the notional value decreases as the underlying loans are paid off.

Current wording

(6)The number shown represents the notional value on which interest is calculated for the CMBS I/O Strips. CMBS I/O Strips receive no principal payments and the notional value decreases as the underlying loans are paid off.

Previous wording

(8)The mezzanine loan term was extended effective April 9, 2025 to May 16, 2025, and extended further to July 30, 2025. The Company intends to extend the maturity to facilitate the sale of the property.

Current wording

(7)The mezzanine loan term was extended effective April 9, 2025 to May 16, 2025, and extended further to November 10, 2025. The Company intends to extend the maturity to facilitate the sale of the property.

Previous wording

(5)The Company reclassified this investment from a mezzanine loan to senior loan effective April 1, 2024 because there was and as of June 30, 2025 there is, no senior mortgage on the property collateralized by the loan.

Current wording

(8)Effective April 1, 2024, the Company reclassified this investment from a mezzanine loan to senior loan because there was no senior mortgage on the property collateralized by the loan. Effective September 30, 2025, the Company reclassified this investment back to a mezzanine loan because as of September 30, 2025 there is a senior mortgage on the property collateralized by the loan.

Previous wording

(11)Real Estate is a 280-unit multifamily property. As of June 30, 2025, the property was 100.0% occupied with effective rent per occupied unit of $1,609 per month.

Current wording

(11)Real Estate is a 280-unit multifamily property. As of September 30, 2025, the property was 94.6% occupied with effective rent per occupied unit of $1,617 per month.

Previous wording

Prior to the Formation Transaction, two of our subsidiaries entered into the Credit Facility. Under the Credit Facility, these entities borrowed approximately $788.8 million in connection with their acquisition of the Underlying Loans. No additional borrowings can be made under the Credit Facility, and our obligations will be secured by the Underlying Loans. The Credit Facility was assumed by the Company as part of the Formation Transaction. As such, the remaining outstanding balance of $788.8 million was contributed to the Company on February 11, 2020. Our borrowings under the Credit Facility will mature on July 12, 2029; however, if an Underlying Loan matures prior to July 12, 2029, we will be required to repay the portion of the Credit Facility that is allocated to that loan. As of June 30, 2025, the outstanding balance on the Credit Facility was $109.3 million.

Current wording

Prior to the Formation Transaction, two of our subsidiaries entered into the Credit Facility. Under the Credit Facility, these entities borrowed approximately $788.8 million in connection with their acquisition of the Underlying Loans. No additional borrowings can be made under the Credit Facility, and our obligations will be secured by the Underlying Loans. The Credit Facility was assumed by the Company as part of the Formation Transaction. As such, the remaining outstanding balance of $788.8 million was contributed to the Company on February 11, 2020. Our borrowings under the Credit Facility will mature on July 12, 2029; however, if an Underlying Loan matures prior to July 12, 2029, we will be required to repay the portion of the Credit Facility that is allocated to that loan. As of September 30, 2025, the outstanding balance on the Credit Facility was $108.8 million.

Previous wording

As discussed in Note 9 to our consolidated financial statements, we, through the OP and the Subsidiary OPs, have borrowed approximately $260.9 million under our repurchase agreements and posted approximately $745.8 million par value of our CMBS B-Piece and CMBS I/O Strip investments as collateral. The CMBS B-Pieces and CMBS I/O Strips held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender.

Current wording

As discussed in Note 9 to our consolidated financial statements, we, through the OP and the Subsidiary OPs, have borrowed approximately $257.6 million under our repurchase agreements and posted approximately $740.6 million par value of our CMBS B-Piece and CMBS I/O Strip investments as collateral. The CMBS B-Pieces and CMBS I/O Strips held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender.

Previous wording

On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its Series B Preferred Stock at a price to the public of $25.00 per share, for gross proceeds of $400.0 million. Beginning on the first day of the calendar month following the date of original issuance, the Series B Preferred Stock are redeemable at the option of the holder at a redemption price per share equal to the liquidation preference of $25.00 per share, plus all accrued but unpaid cash dividends and less certain redemption fees. After the first day of the calendar month following the second anniversary of the original issue date, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company's charter and the articles supplementary setting forth the terms of the Series B Preferred Stock, at a redemption price per share equal to the liquidation preference of $25.00 per share, plus any accrued but unpaid cash dividends. In all optional redemptions, the Company has the right, in its sole discretion, to pay the redemption in cash or in equal value of shares of the Company’s common stock for so long as the common stock is listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system. The Dealer Manager serves as the Company’s dealer manager in connection with the offering. The Dealer Manager uses its reasonable best efforts to sell the shares of Series B Preferred Stock offered in the offering, and the Company pays the Dealer Manager, subject to the discounts and other special circumstances described or referenced therein, (i) Selling Commissions of 7.0% of the aggregate gross proceeds from sales of Series B Preferred Stock in the offering and (ii) a Dealer Manager Fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the offering. The Dealer Manager, subject to federal and state securities laws, will reallow all or any portion of the Selling Commissions and may reallow a portion of the Dealer Manager Fee to other securities dealers that the Dealer Manager may retain who sold the shares of Series B Preferred Stock as is described more fully in the agreements between such dealers and the Dealer Manager. The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 shares of the Series B Preferred Stock in the offering or December 29, 2026 (which is the third anniversary of the effective date of the Company’s registration statement), which may be extended by the Board in its sole discretion. The Board may elect to terminate this offering at any time. As of June 30, 2025, the Company has sold 11,012,369 shares of Series B Preferred Stock for total gross proceeds of $269.4 million.

Current wording

On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its Series B Preferred Stock at a price to the public of $25.00 per share, for gross proceeds of $400.0 million. On October 1, 2025, the Company increased the size of the Series B Preferred Stock offering to 17,200,000 shares for gross proceeds of $430.0 million. Beginning on the first day of the calendar month following the date of original issuance, the Series B Preferred Stock are redeemable at the option of the holder at a redemption price per share equal to the liquidation preference of $25.00 per share, plus all accrued but unpaid cash dividends and less certain redemption fees. After the first day of the calendar month following the second anniversary of the original issue date, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company's charter and the articles supplementary setting forth the terms of the Series B Preferred Stock, at a redemption price per share equal to the liquidation preference of $25.00 per share, plus any accrued but unpaid cash dividends. In all optional redemptions, the Company has the right, in its sole discretion, to pay the redemption in cash or in equal value of shares of the Company’s common stock for so long as the common stock is listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system. The Dealer Manager serves as the Company’s dealer manager in connection with the offering. The Dealer Manager uses its reasonable best efforts to sell the shares of Series B Preferred Stock offered in the offering, and the Company pays the Dealer Manager, subject to the discounts and other special circumstances described or referenced therein, (i) Selling Commissions of 7.0% of the aggregate gross proceeds from sales of Series B Preferred Stock in the offering and (ii) a Dealer Manager Fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the offering. The Dealer

Previous wording

We may seek additional sources of liquidity from further repurchase facilities, other borrowings and future offerings of common and preferred equity and debt securities and contributions from existing holders of the OP or Subsidiary OPs. In addition, we may apply our existing cash and cash equivalents and cash flows from operations to any liquidity needs. As of June 30, 2025, our cash and cash equivalents were $9.1 million.

Current wording

We may seek additional sources of liquidity from further repurchase facilities, other borrowings and future offerings of common and preferred equity and debt securities and contributions from existing holders of the OP or Subsidiary OPs. In addition, we may apply our existing cash and cash equivalents and cash flows from operations to any liquidity needs. As of September 30, 2025, our cash and cash equivalents were $17.9 million.

Previous wording

The following table presents selected data from our Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and June 30, 2024 (in thousands):

Current wording

The following table presents selected data from our Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and September 30, 2024 (in thousands):

Previous wording

Cash flows from operating activities. During the six months ended June 30, 2025, net cash provided by operating activities was $19.4 million compared to net cash provided by operating activities of $10.2 million for the six months ended June 30, 2024. This increase primarily relates to the change in unrealized gains on investments held at fair value.

Current wording

Cash flows from operating activities. During the nine months ended September 30, 2025, net cash provided by operating activities was $27.5 million compared to net cash provided by operating activities of $24.9 million for the nine months ended September 30, 2024. This increase primarily relates to the change in unrealized gains on investments held at fair value.

Previous wording

Cash flows from investing activities. During the six months ended June 30, 2025, net cash provided by investing activities was $89.6 million compared to net cash provided by investing activities of $597.0 million for the six months ended June 30, 2024. This decrease was primarily due to a decrease in proceeds from payments received on mortgage loans held for investment.

Current wording

Cash flows from investing activities. During the nine months ended September 30, 2025, net cash provided by investing activities was $279.7 million compared to net cash provided by investing activities of $735.9 million for the nine months ended September 30, 2024. This decrease was primarily due to a decrease in proceeds from payments received on mortgage loans held for investment.

Previous wording

Cash flows from financing activities. During the six months ended June 30, 2025, net cash used in financing activities was $102.3 million compared to net cash used in financing activities of $616.5 million for the six months ended June 30, 2024. The increase primarily relates to a decrease of principal repayments on borrowings under secured financing agreements.

Current wording

Cash flows from financing activities. During the nine months ended September 30, 2025, net cash used in financing activities was $292.6 million compared to net cash used in financing activities of $738.8 million for the nine months ended

Previous wording

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. We may elect to comply with public company effective dates at any time, and such election would be irrevocable pursuant to Section 107(b) of the JOBS Act.

Current wording

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. We may elect to comply with public company effective dates at any time, and such election would be irrevocable pursuant to Section 107(b) of the JOBS Act. The Company expects to lose its emerging growth company status at December 31, 2025.

Previous wording

On December 8, 2022, the Co-Guarantors, as guarantors, entered into the NSP Sponsor Guaranty Agreement in favor of Extra Space pursuant to which REIT Sub and the Co-Guarantors guaranteed obligations of NSP with respect to accrued dividends on NSP’s newly created Series D preferred stock and two promissory notes in an aggregate principal amount of approximately $64.2 million issued to Extra Space. The guaranties by REIT Sub and the Co-Guarantors are capped at $97.6 million, and each of REIT Sub and the Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP’s common stock. On February 15, 2023, NSP paid down approximately $15.0 million of these promissory notes, resulting in an aggregate principal amount of approximately $49.2 million. On December 8, 2023, NSP paid down the remaining principal balance of $49.2 million. The NSP Series D preferred stock remains outstanding as of June 30, 2025. As of June 30, 2025, the outstanding NSP Series D Preferred Stock accrued dividends was $13.3 million and the Company and NexPoint Diversified Real Estate Trust are jointly and severally liable for 85.90% of the guaranteed amount equal to $11.4 million.

Current wording

On December 8, 2022, the Co-Guarantors, as guarantors, entered into the NSP Sponsor Guaranty Agreement in favor of Extra Space pursuant to which REIT Sub and the Co-Guarantors guaranteed obligations of NSP with respect to accrued dividends on NSP’s newly created Series D preferred stock and two promissory notes in an aggregate principal amount of approximately $64.2 million issued to Extra Space. The guaranties by REIT Sub and the Co-Guarantors are capped at $97.6 million, and each of REIT Sub and the Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP’s common stock. On February 15, 2023, NSP paid down approximately $15.0 million of these promissory notes, resulting in an aggregate principal amount of approximately $49.2 million. On December 8, 2023, NSP paid down the remaining principal balance of $49.2 million. The NSP Series D preferred stock remains outstanding as of September 30, 2025. As of September 30, 2025, the outstanding NSP Series D Preferred Stock accrued dividends was $14.1 million and the Company and NexPoint Diversified Real Estate Trust are jointly and severally liable for 85.90% of the guaranteed amount equal to $12.2 million.

Previous wording

On March 14, 2023, the Company, through one of the Subsidiary OPs, committed to fund $24.0 million of preferred equity with respect to a ground up construction horizontal single-family property located in Phoenix, Arizona, of which $6.5 million was unfunded as of June 30, 2025. The preferred equity investment provides a floating annual return that is the greater of prime rate plus 5.0% or 11.25%, compounded monthly with a MOIC of 1.30x and 1.0% placement fee. The Company was also issued a common interest at the time of its first funding of preferred equity on May 16, 2023. The common interest allows the Company to receive a 10% profit share once aggregate distributions exceed the 20% internal rate of return IRR hurdle as shown below. There was no value ascribed to the common interest as of June 30, 2025. Further, once the Company's preferred equity and accrued interest has been repaid, any additional cash flow and net sale proceeds shall be distributed as follows:

Current wording

On March 14, 2023, the Company, through one of the Subsidiary OPs, committed to fund $24.0 million of preferred equity with respect to a ground up construction horizontal single-family property located in Phoenix, Arizona, of which $3.1 million was unfunded as of September 30, 2025. The preferred equity investment provides a floating annual return that is the greater of prime rate plus 5.0% or 11.25%, compounded monthly with a MOIC of 1.30x and 1.0% placement fee. The Company was also issued a common interest at the time of its first funding of preferred equity on May 16, 2023. The common interest allows the Company to receive a 10% profit share once aggregate distributions exceed the 20% internal rate of return IRR hurdle as shown below. There was no value ascribed to the common interest as of September 30, 2025. Further, once the Company's preferred equity and accrued interest has been repaid, any additional cash flow and net sale proceeds shall be distributed as follows:

Previous wording

SFR OP issued the SFR OP Note II to the Company on July 10, 2024. The SFR OP Note II bears interest at 15%, which is payable in kind, is interest only during the term of the SFR OP Note II and initially matured on July 10, 2025. Subsequent to June 30, 2025, the Company extended the maturity date to July 10, 2026. The Company funded $0.5 million, $2.0 million and $1.0 million on October 31, 2024, November 7, 2024 and November 30, 2024, respectively. SFR OP paid down $1.9 million of principal on April 29, 2025. The Company's maximum commitment under the loan is $5.0 million, of which $1.5 million was unfunded as of June 30, 2025.

Current wording

SFR OP issued the SFR OP Note II to the Company on July 10, 2024. The SFR OP Note II bears interest at 15%, which is payable in kind, is interest only during the term of the SFR OP Note II and initially matured on July 10, 2025. On August 25, 2025, the Company, through REIT Sub. extended the maturity date to July 10, 2026 and increased the maximum amount available under the SFR OP Note II to $15.0 million. The Company funded $3.5 million through December 31, 2024. SFR OP paid down $1.9 million of principal on April 29, 2025. The Company funded $3.4 million, $5.0 million, $2.5 million on July 31, 2025, August 24, 2025 and September 24, 2025, respectively. The Company's maximum commitment under the loan is $15.0 million, of which $2.5 million was unfunded as of September 30, 2025.

Previous wording

On January 26, 2024, the Company, through OP IV, along with OSL, entered into the Alewife Loan whereby it made a loan in the maximum principal amount of up to $218.0 million to Alewife Holdings, which is solely owned by IQHQ, L.P. The Company has an ownership interest in the preferred stock in IQHQ, who is the limited partner in IQHQ, L.P.; however, the Company has no controlling financial interest nor significant influence in IQHQ, L.P. The loan is secured by a first mortgage with a first lien position and other security interests.

Current wording

On January 26, 2024, the Company, through OP IV, along with OSL, entered into the Alewife Loan whereby it made a loan in the maximum principal amount of up to $218.0 million to Alewife Holdings, which is solely owned by IQHQ, L.P. The Company has an ownership interest in the preferred stock in IQHQ, who is the limited partner in IQHQ, L.P.; however, the Company has no controlling financial interest nor significant influence in IQHQ, L.P.

Previous wording

On May 10, 2024, OP IV, NXDT OP and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned the right to fund up to 9% of the Alewife Loan to NXDT OP and allocated the right to fund up to 9% of the Alewife Loan to OSL. Effective January 2, 2025, OP IV and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned $7.5 million interest in the Alewife Loan to OSL for cash and increased OSL's allocation of the right to fund up to 10.32% of the Alewife Loan. In addition, under the Assignment Agreement, at any time and from time to time, NREF may purchase up to all of the amounts funded by OSL in the Alewife Loan from OSL. Upon receipt of a draw request, NXDT OP and OSL have the right to elect to fund an amount equal or greater than zero and up to (i) 9% or 10.32%, respectively, of the total amount of all advances previously made under the Alewife Loan plus the amount of the then current borrowing, (ii) less the total amount of advances previously made by NXDT OP and OSL, respectively. OP IV is required to fund any amounts not funded by OSL and NXDT OP. At any time that NXDT OP and OSL have funded less than their respective percentages of all advances made under the Alewife Loan, NXDT OP and OSL have the option upon notice to OP IV to pay to OP IV any amount of such unfunded amount. Upon such payment, NXDT OP or OSL would become entitled to all interest and fees accrued on the amount paid to OP IV on and after the date of such payment. The Company's expected maximum commitment under the Alewife Loan is $195.5 million, of which $37.5 million was unfunded as of June 30, 2025.

Current wording

On May 10, 2024, OP IV, NXDT OP and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned the right to fund up to 9% of the Alewife Loan to NXDT OP and allocated the right to fund up to 9% of the Alewife Loan to OSL. Effective January 2, 2025, OP IV and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned $7.5 million interest in the Alewife Loan to OSL for cash and increased OSL's allocation of the right to fund up to 10.32% of the Alewife Loan. In addition, under the Assignment Agreement, at any time and from time to time, NREF may purchase up to all of the amounts funded by OSL in the Alewife Loan from OSL. Upon receipt of a draw request, NXDT OP and OSL have the right to elect to fund an amount equal or greater than zero and up to (i) 9% or 10.32%, respectively, of the total amount of all advances previously made under the Alewife Loan plus the amount of the then current borrowing, (ii) less the total amount of advances previously made by NXDT OP and OSL, respectively. OP IV is required to fund any amounts not funded by OSL and NXDT OP. At any time that NXDT OP and OSL have funded less than their respective percentages of all advances made under the Alewife Loan, NXDT OP and OSL have the option upon notice to OP IV to pay to OP IV any amount of such unfunded amount. Upon such payment, NXDT OP or OSL would become entitled to all interest and fees accrued on the amount paid to OP IV on and after the date of such payment. The Company's expected maximum commitment under the Alewife Mezzanine Loan is $133.0 million, of which $31.0 million was unfunded as of September 30, 2025.

Previous wording

On December 31, 2024, the Company, through OP IV and the OP, along with the IQHQ Participating Purchasers that funded the IQHQ Promissory Note and Bluerock entered into the IQHQ Revolving Loan whereby it made a loan in the maximum principal amount of up to $300.0 million to IQHQ, L.P. In connection with the IQHQ Revolving Loan, the full $150 million of the principal amount of the IQHQ Promissory Note and the full $150 million of the principal amount of a promissory note held by Bluerock was substituted and exchanged for deemed borrowings under the IQHQ Revolving Loan, and the IQHQ Revolving Loan was fully funded on December 31, 2024. The IQHQ Revolving Loan accrues interest at a rate per annum equal to 13.5% per annum, payable in kind. The revolving period during which IQHQ, L.P. is permitted to borrow, repay and re-borrow loans, subject to satisfaction of certain conditions and payment of certain fees, will terminate on December 31, 2027, the maturity date of the IQHQ Revolving Loan. The Company holds 49.533% of the revolving commitment under the IQHQ Revolving Loan.

Current wording

On December 31, 2024, the Company, through OP IV and the OP, along with the IQHQ Participating Purchasers that funded the IQHQ Promissory Note and Bluerock Total Income+ Real Estate Fund (“Bluerock”) entered into a Revolving Credit Agreement (the “IQHQ Revolving Loan”) whereby it made a loan in the maximum principal amount of up to $300.0 million to IQHQ, L.P. In connection with the IQHQ Revolving Loan, the full $150 million of the principal amount of the IQHQ Promissory Note and the full $150 million of the principal amount of a promissory note held by Bluerock was substituted and exchanged for deemed borrowings under the IQHQ Revolving Loan, and the IQHQ Revolving Loan was fully funded on December 31, 2024. On September 30, 2025, the IQHQ Revolving Loan was amended and restated to, among other things, add a new lender and increase the aggregate amount of the loan to $440.0 million, with the new lender funding $100.0 million at closing and each of the Company and Bluerock committing to fund an additional $20.0 million during the commitment period subject to certain terms and conditions. The IQHQ Revolving Loan accrues interest at a rate per annum equal to 13.5% per annum, which, prior to September 30, 2025, was fully payable in kind and, on and after September 30, 2025 is payable 1.5% per annum in kind and 12% per annum in cash. The revolving period during which IQHQ, L.P. is permitted to borrow, repay and re-borrow loans, subject to satisfaction of certain conditions and payment of certain fees, will terminate on September 30, 2028, the maturity date of the IQHQ Revolving Loan. As of September 30, 2025, the Company holds 38.32% of the revolving commitment under the IQHQ Revolving Loan, with an unfunded commitment balance of $20.0 million.

Previous wording

As of June 30, 2025, the Company has funded $94.5 million of IQHQ Subscription Agreement, with an unfunded commitment balance of $65.5 million.

Current wording

As of September 30, 2025, the Company has funded $137.0 million of IQHQ Subscription Agreement, with an unfunded commitment balance of $23.0 million.