NexPoint Real Estate Finance, Inc S-3/A, filed Mar 26, 2021

NexPoint Real Estate Finance, Inc. (NREF)

S-3/A 2021-03-26

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Added on October 27, 2026

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Title of Each Class of Securities to be Registered (1)	Amount to be Registered (2)(3)		Amount of Registration Fee (2)
Common Stock, par value $0.01 per share
Preferred Stock, par value $0.01 per share
Warrants
Debt Securities
Total	$	250,000,000	$	27,275 (4)

(1)	Securities registered hereunder may be sold separately or together with other securities registered hereunder.
(2)	Not specified as to each class of securities to be registered pursuant to General Instruction II.D of Form S-3.
(3)	We are registering an indeterminate aggregate principal amount and number of securities of each identified class of securities up to a proposed aggregate offering price of $250,000,000, which may be offered from time to time in unspecified numbers and at indeterminate prices, and as may be issued upon conversion, redemption, repurchase, exchange or exercise of any securities registered hereunder, including under any applicable anti-dilution provisions. Separate consideration may or may not be received for any shares of common stock or preferred stock so issued upon conversion, redemption, repurchase or exchange. Pursuant to Rule 416(a) promulgated under the Securities Act, this registration statement also covers an indeterminate number of securities that may become issuable as a result of stock splits, stock dividends or similar transactions relating to the securities registered hereunder.
(4)	The registrant previously paid $16,365 at the time of the initial filing of the Form S-11. Pursuant to Rule 457(o) under the Securities Act, an additional filing fee of $10,910 is being paid in connection herewith.

ABOUT THIS PROSPECTUS	ii
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS	ii
NEXPOINT REAL ESTATE FINANCE, INC.	1
RISK FACTORS	2
USE OF PROCEEDS	3
DESCRIPTION OF CAPITAL STOCK	4
DESCRIPTION OF WARRANTS	12
DESCRIPTION OF DEBT SECURITIES	13
CERTAIN PROVISIONS OF MARYLAND LAW AND OUR CHARTER AND BYLAWS	16
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS	22
PLAN OF DISTRIBUTION	44
WHERE YOU CAN FIND MORE INFORMATION	46
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE	47
LEGAL MATTERS	48
EXPERTS	48

	•	the title, designation, number of shares and stated value of the preferred stock;

	•	the price at which the preferred stock will be issued;

	•	the dividend rates, if any (or method of calculation), whether that rate is fixed or variable or both, and the dates on which dividends will be payable, whether those dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends will begin to cumulate;

	•	the dates on which the preferred stock will be subject to redemption and the applicable redemption prices;

	•	any redemption or sinking fund provisions;

	•	the convertibility or exchangeability of the preferred stock;

	•	if other than United States dollars, the currency or currencies (including composite currencies) in which the preferred stock is denominated and/or in which payments will or may be payable;

	•	the method by which amounts in respect of the preferred stock may be calculated and any commodities, currencies or indices, or the value, rate or price relevant to that calculation;

	•	the place where dividends and other payments on the preferred stock are payable and the identity of the transfer agent, registrar and dividend disbursement agent for the preferred stock;

	•	any listing of the preferred stock on any securities exchange; and

	•	any additional dividend, liquidation, redemption, preemption, sinking fund, voting and other rights, preferences, privileges, limitations and restrictions.

	●	no individual’s beneficial or constructive ownership of our stock will result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise result in our failing to qualify as a REIT; and

	●	such stockholder does not and will not own, actually or constructively, an interest in a tenant of ours (or a tenant of any entity owned or controlled by us) that would cause us to own, actually or constructively, more than a 9.9% interest (as set forth in Section 856(d)(2)(B) of the Code) in such tenant (or our Board determines that revenue derived from such tenant will not affect our ability to qualify as a REIT).

	●	any person from beneficially or constructively owning, applying certain attribution rules of the Code, shares of our stock that would result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year) or otherwise cause us to fail to qualify as a REIT;

	●	any person from transferring shares of our stock if the transfer would result in shares of our stock being beneficially owned by fewer than 100 persons (determined under the principles of Section 856(a)(5) of the Code); and

	●	any person from beneficially or constructively owning shares of our stock to the extent such ownership would result in our failing to qualify as a “domestically controlled qualified investment entity” within the meaning of Section 897(h) of the Code.

	•	the title of the warrants;

	•	the price or prices at which the warrants will be issued;

	•	the designation, amount and terms of the securities for which the warrants are exercisable;

	•	the designation and terms of the other securities, if any, with which the warrants are to be issued and the number of warrants issued with each other security;

	•	the aggregate number of warrants offered;

	•	any provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of the warrants;

	•	the price or prices at which the securities purchasable upon exercise of the warrants may be purchased;

	•	any provisions providing for changes to or adjustments in the exercise price;

	•	if applicable, the date on and after which the warrants and the securities purchasable upon exercise of the warrants will be separately transferable;

	•	a discussion of any material U.S. federal income tax considerations applicable to the holding and/or exercise of the warrants;

	•	the date on which the right to exercise the warrants will commence, and the date on which the right will expire;

	•	the maximum or minimum number of warrants that may be exercised at any time;

	•	if the warrants are subject to redemption or call, the material terms thereof;

	•	information with respect to book-entry procedures, if any; and

	•	any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.

	●	one-tenth or more but less than one-third;

	●	one-third or more but less than a majority; or

	●	a majority or more of all voting power.

	●	a classified board of directors;

	●	a two-thirds vote requirement for removing a director;

	●	a requirement that the number of directors be fixed only by vote of the board of directors;

	●	a requirement that a vacancy on the board of directors be filled only by the remaining directors in office and (if the board of directors is classified) for the remainder of the full term of the class of directors in which the vacancy occurred; and

	●	a majority requirement for the calling of a stockholder-requested special meeting of stockholders.

	●	the act or omission of the director or officer was material to the matter giving rise to the proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty;
	●	the director or officer actually received an improper personal benefit in money, property or services; or
	●	in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.

	●	a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by us; and
	●	a written undertaking by or on behalf of the director or officer to repay the amount paid or reimbursed by us if it is ultimately determined that the director or officer did not meet the standard of conduct.

	●	any present or former director or officer who is made or threatened to be made a party to, or witness in, a proceeding by reason of his or her service in that capacity; or
	●	any individual who, while a director or officer of our Company and at our request, serves or has served as a director, officer, partner, trustee, member or manager of another corporation, real estate investment trust, limited liability company, partnership, joint venture, trust, employee benefit plan or any other enterprise and who is made or threatened to be made a party to, or witness in, the proceeding by reason of his or her service in that capacity.


	●	If we have net income from prohibited transactions, which are, in general, sales or other dispositions of inventory or property held primarily for sale to customers in the ordinary course of business, other than foreclosure property, such income will be subject to a 100% tax. See “-Prohibited Transactions” and “-Foreclosure Property” below.

	●	If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or certain leasehold terminations as “foreclosure property,” we may thereby avoid the 100% tax on gain from a resale of that property (if the sale would otherwise constitute a prohibited transaction), but the income from the sale or operation of the property may be subject to U.S. federal corporate income tax at the U.S. federal corporate tax rate.

	●	If we violate the asset tests (other than certain de minimis violations) or other requirements applicable to REITs, as described below under “-Asset Tests”, and yet maintain our qualification as a REIT because there is reasonable cause for the failure and other applicable requirements are met, we may be subject to an excise tax. In that case, the amount of the excise tax will be at least $50,000 per failure, and, in the case of certain asset test failures, will be determined as the amount of net income generated by the assets in question multiplied by the U.S. federal corporate tax rate if that amount exceeds $50,000 per failure.


	●	We may be required to pay monetary penalties to the IRS in certain circumstances, including if we fail to meet record keeping requirements intended to monitor our compliance with rules relating to the composition of a REIT’s stockholders, as described below in “-Requirements for Qualification-General.”

	●	A 100% tax may be imposed on transactions between us and a taxable REIT subsidiary (“TRS”) (as described below) that do not reflect arm’s-length terms.

	●	If we acquire any asset from a C corporation, or a corporation that generally is subject to full corporate-level tax, in a merger or other transaction in which we acquire a basis in the asset that is determined by reference either to the C corporation’s basis in the asset or to another asset, we will pay tax at the corporate tax rate if we recognize gain on the sale or disposition of the asset during the five-year period after we acquire the asset provided no election is made for the transaction to be taxable on a current basis. The amount of gain on which we will pay tax is the lesser of:

	●	The amount of gain that we recognize at the time of the sale or disposition, and

	●	The amount of gain that we would have recognized if we had sold the asset at the time we acquired it.

	(1)	that is managed by one or more trustees or directors;

	(2)	the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;

	(3)	that would be taxable as a domestic corporation but for its election to be subject to tax as a REIT;

	(4)	that is neither a financial institution nor an insurance company subject to specific provisions of the Code;

	(5)	the beneficial ownership of which is held by 100 or more persons;

	(6)	in which, during the last half of each taxable year, not more than 50% in value of the outstanding stock is owned, directly or indirectly, by five or fewer “individuals” (as defined in the Code to include specified tax-exempt entities);

	(7)	that elects to be taxed as a REIT, or has made such election for a previous taxable year, and satisfies all relevant filing and other administrative requirements that must be met to elect and maintain REIT qualification; and

	(8)	that meets other tests described below, including with respect to the nature of its income and assets.

	●	substantially all of its assets consist of debt obligations or interests in debt obligations;

	●	more than 50% of those debt obligations are real estate mortgage loans or interests in real estate mortgage loans as of specified testing dates;

	●	the entity has issued debt obligations that have two or more maturities; and

	●	the payments required to be made by the entity on its debt obligations “bear a relationship” to the payments to be received by the entity on the debt obligations that it holds as assets.

	(a)	90% of our “REIT taxable income,” computed without regard to our net capital gains and the dividends paid deduction; and

	(b)	90% of our net income, if any, (after tax) from foreclosure property (as described below), minus

	●	is an individual who is a citizen or resident of the United States;

	●	is a corporation (or other entity classified as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

	●	is an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

	●	any trust if (1) a court is able to exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in place to be treated as a U.S. person.

	●	dividends received by us from non-REIT corporations, such as a TRS; and

	●	income upon which we have paid U.S. federal corporate income tax (for example, if we distribute taxable income that we retained and paid tax on in the prior taxable year).

	●	include its proportionate share of our undistributed long-term capital gains in computing its long-term capital gains in its U.S. federal income tax return for its taxable year in which the last day of our taxable year falls (subject to certain limitations as to the amount that is includable);

	●	be deemed to have paid the capital gains tax imposed on us on the designated amounts included in the U.S. Holder’s long-term capital gains;

	●	receive a credit or refund for the amount of tax deemed paid by it;

	●	increase the adjusted tax basis of its shares of our stock by the difference between the amount of includable gains and the tax deemed to have been paid by it; and

	●	a lower treaty rate applies and you provide us with an IRS Form W-8BEN or IRS Form W-8BEN-E or other appropriate form, as applicable, evidencing eligibility for an exemption from withholding or a reduced treaty rate;

	●	you provide to us an IRS Form W-8ECI claiming that the distribution is income effectively connected with your U.S. trade or business; or

	●	the distribution is treated as attributable to a sale or exchange of a “U.S. real property interest” (as discussed below).

	•	directly to investors, including through a specific bidding, auction or other process;

	•	to investors through agents;

	•	directly to agents;

	•	to or through underwriters, brokers or dealers;

	•	to the public through underwriting syndicates led by one or more managing underwriters;

	•	to one or more underwriters acting alone for resale to investors or to the public;

	•	through a combination of any such methods of sale; or

	•	any other method permitted pursuant to applicable law.

	•	the name or names of any underwriters, dealers or agents;

	•	the purchase price of the securities and the proceeds to us from the sale;

	•	any over-allotment options under which the underwriters may purchase additional securities from us;

	•	any underwriting discounts and other items constituting compensation to underwriters, dealers or agents;

	•	any public offering price;

	•	any discounts or concessions allowed or reallowed or paid to dealers; or

	•	any securities exchange or market on which the securities offered in the prospectus supplement may be listed.

	•	our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 25, 2021;

	•	the description of our common stock, par value $0.01 per share, contained in our Registration Statement on Form 8-A filed with the SEC on February 5, 2020 (File No. 001-39210), including any amendments or reports filed for the purpose of updating such description; and

	•	the description of the Series A Preferred Stock, par value $0.01 per share, contained in our Registration Statement on Form 8-A filed with the SEC on July 20, 2020 (File No. 001-39210), including any amendments or reports filed for the purpose of updating such description.

SEC registration fee	$	27,275
FINRA filing fee		23,000
Legal fees and expenses		(1	)
Accounting fees and expenses		(1	)
Transfer agent fees and expenses		(1	)
Printing fees and expenses		(1	)
Miscellaneous expenses		(1	)
Total		(1	)

	●	an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty;

	●	the director or officer actually received an improper personal benefit in money, property or services; or

	●	with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act or omission was unlawful.

Exhibit Number		Description

1.1**		Form of Underwriting Agreement.

2.1		Contribution and Assignment of Interests Agreement, by and among NexPoint Real Estate Finance, Inc. and the Contribution Group (incorporated by reference to Exhibit 2.1 to the Quarterly Report on Form 10-Q, filed by the Company on May 8, 2020).

4.1		Articles of Amendment and Restatement of NexPoint Real Estate Finance, Inc. (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q, filed by the Company on May 8, 2020).

4.2		Articles Supplementary to the Articles of Amendment and Restatement of NexPoint Real Estate Finance, Inc., designating the Company’s 8.50% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by the Company on July 20, 2020, File No. 001-39210).

4.3		Amended and Restated Bylaws of NexPoint Real Estate Finance, Inc. (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q, filed by the Company on May 8, 2020).

4.4		Form of Specimen Certificate Representing the 8.50% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form 8-A filed by the Company on July 20, 2020).

4.5**		Form of Preferred Stock Certificate.

4.6**		Form of Articles Supplementary for Preferred Stock.

4.7**		Form of Warrant Agreement.

4.8*		Form of Indenture.

5.1		Opinion of Ballard Spahr LLP.

5.2		Opinion of Winston & Strawn LLP.

8.1		Opinion of Winston & Strawn LLP with respect to tax matters.

23.1		Consent of KPMG LLP.

23.2		Consent of Ballard Spahr LLP (included in Exhibit 5.1).

23.3		Consent of Winston & Strawn LLP (included in Exhibit 5.2).

23.4		Consent of Winston & Strawn LLP (included in Exhibit 8.1).

24.1*		Power of Attorney (included on signature page to the Registration Statement on Form S-11 filed by the Company on December 31, 2020).

25.1***		Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939 of the Trustee under any indenture constituting Exhibit 4.8 hereto.

*	Previously filed.
**	To be filed, if necessary, after effectiveness of this registration statement by an amendment to the registration statement or incorporated by reference from documents filed or to be filed with the SEC under the Exchange Act.
***	To be filed in accordance with the requirements of Section 305(b)(2) of the Trust Indenture Act.

	(i)	to include any prospectus required by Section 10(a)(3) of the Securities Act;

	(ii)	to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

	(iii)	to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;