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NexPoint Provides Update on UDF IV's Proposed Merger with Ready Capital, Plans to Submit Competing Proposal

1. NexPoint defers its vote on the UDF IV merger with RC. Concerns remain high. 2. NexPoint criticizes the board's self-interested actions and poor governance. Shareholders are warned. 3. Glass Lewis report criticizes management’s inability to enhance shareholder value. Doubts about transparency persist. 4. A competing proposal is planned before the March meeting. This may disrupt the merger process.

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FAQ

Why Bearish?

The negative sentiment from a significant investor like NexPoint, combined with governance concerns and plans for a competing proposal, could jeopardize the merger's approval, leading to investor uncertainty and potential share price pressure. Historical cases where activist votes delayed or derailed mergers often resulted in immediate negative market reactions.

How important is it?

The deferral and competing proposal approach signal high risk for the merger's success, directly impacting RC's strategic plans and near-term price volatility.

Why Short Term?

The upcoming March meeting and near-term vote create immediate uncertainty, likely affecting RC's stock price over the short term, similar to other merger-related delays and activist interventions.

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NXDT
NexPoint is Deferring its Vote, Encourages Shareholders to Take No Action on Merger Voteto Compel Board to Properly Review Any Competing Proposal Calls for UDF IV Board to Postpone March 4 Special Meeting by 30 Days and Engage withNexPoint to Ensure Best Outcome for Shareholders DALLAS, Feb. 21, 2025 /PRNewswire/ -- NexPoint Real Estate Opportunities, LLC (together with its affiliates "NexPoint") today provided an update on its intentions with respect to its investment in United Development Funding IV ("UDF IV" or "the Trust") ahead of the Special Meeting of UDF IV Shareholders (the "Meeting"), scheduled for March 4, 2025, to vote on the proposed merger of UDF IV with Ready Capital (NYSE: RC) (the "Ready Merger"). NexPoint has significant and growing concerns about the Ready Merger, which was first announced days ahead of the Annual Meeting and Board of Trustees election in December 2024. Since announcement of the Ready Merger, NexPoint's ongoing assessment of the transaction has amplified those concerns, leading to the conclusion that shareholders have no reason to believe that the self-interested and entrenched Board, after years of failing to protect shareholders' interests, would suddenly change its behavior in pursuing, negotiating, approving and recommending that shareholders vote to approve the Ready Merger. NexPoint's conclusion mirrors the findings of Glass Lewis in its December 2024 report on UDF IV: "That the board claims its current members and management team are 'focused on protecting and enhancing shareholder value' is, in our view, confounding." NexPoint's Intent to Submit Competing Proposal and Impact to Special Meeting: Given NexPoint's fundamental concerns, which affect countless aspects of the Ready Merger, NexPoint intends to submit a competing proposal to the UDF IV Board of Trustees in advance of the Special Meeting. Updates on a competing proposal, when available, can be found at udfaccountability.com The Glass Lewis report further supports NexPoint's fundamental concerns: "While we understand a transaction of this nature could be viewed as something of a panacea for investors dissatisfied with the Trust's longstanding lack of liquidity and poor corporate governance, we believe shareholders have ample cause to question the timing of the transaction, the absence of key disclosures and, most fundamentally, the board's ability to credibly negotiate and secure a transformative transaction of this nature." Significant Issues in Ready Merger: For More Information: NexPoint encourages shareholders to visit udfaccountability.com for more information. Shareholders can complete the contact form on the site to receive ongoing updates about UDF IV, the Ready Merger, and any competing proposals. About NexPoint NexPoint Real Estate Opportunities, LLC is a wholly owned subsidiary of NexPoint Diversified Real Estate Trust, Inc. (NYSE: NXDT), a diversified real estate investment trust externally advised by an affiliate of NexPoint Advisors, L.P. NexPoint Advisors, L.P. is an SEC-registered adviser on the NexPoint alternative investment platform. For more information visit www.nexpoint.com IMPORTANT INFORMATION This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding NexPoint's intention to submit a competing proposal to the Ready Merger and other statements identified by words such as "expect," "intend," the negative version of these words and similar expressions that do not relate solely to historical matters. Forward-looking statements are based on NXDT's current expectations and assumptions regarding capital market conditions, NXDT's business, the economy and other future conditions. Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond NXDT's control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, and those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in NXDT's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the NXDT's Annual Report on Form 10-K and other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statement. Any forward-looking statement made in this press release speaks only as of the date on which it is made. NXDT undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. CONTACT INFORMATION For Additional Information/Updates on UDF IVWebsite: www.udfaccountability.comEmail: [email protected] Media ContactsLucy Bannon (NexPoint): [email protected]Paul Caminiti/Pamela Greene (Reevemark): [email protected] NexPoint Investor RelationsKristen Thomas: [email protected] SOURCE NexPoint Advisors, L.P.

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