Shareholders' Equity

6 Months Ended

Jun. 30, 2025

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Shares

During the six months ended June 30, 2025 and 2024, the Company issued 4,742,360 and 2,260,518 common shares, respectively.

During the six months ended June 30, 2025, the Company paid two distributions on its common shares in the amount of $0.15 per share each, which were paid on March 31, 2025 to shareholders of record on February 28, 2025, and on June 30, 2025 to shareholders of record on May 9, 2025. During the six months ended June 30, 2024, the Company paid a distribution of $0.15 per share on its common shares on March 28, 2024 to shareholders of record on February 16, 2024 and June 28, 2024 to shareholders of record on May 15, 2024. The distributions paid on June 30, 2025, March 31, 2025, June 28, 2024 and March 28, 2024 consisted of a combination of cash and shares, with the cash component of each distribution (other than cash paid in lieu of fractional shares) comprising 20% of the distribution, with the balance being paid in the Company’s common shares.

As of June 30, 2025, and December 31, 2024, the Company had 47,421,929 and 42,679,569 common shares, issued and outstanding, respectively.

Series A Preferred Shares

On January 8, 2021, the Company issued 3,359,593 5.50% Series A Cumulative Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share ("Series A Preferred Shares") with an aggregate liquidation preference of approximately $84.0 million. The Series A Preferred Shares were issued as part of the consideration for an exchange offer for a portion of the Company’s common shares. The Series A Preferred Shares are callable beginning on December 15, 2023 at a price of $25 per share. The Company may exercise its call option at the Company's discretion. As a result, these are included in permanent equity.

During the six months ended June 30, 2025, the Company declared two distributions on its Series A Preferred Shares, in the amount of $0.34375 per share each, which were paid on March 31, 2025, to shareholders of record on March 24, 2025 and June 30, 2025 to shareholders of record on June 23, 2025.

During the six months ended June 30, 2024, the Company declared distributions on its Series A Preferred Shares, in the amount of $0.34375 per share each, which were paid on April 1, 2024 to shareholders of record on March 25, 2024 and

July 1, 2024, to shareholders of record on June 24, 2024. The Company sent funding to the transfer agent for the dividend paid on July 1, 2024 prior to June 30, 2024, which was then paid to shareholders on July 1, 2024.

Distributions on the Series A Preferred Shares are cumulative from their original issue date at the annual rate of 5.5% of the $25 per share liquidation preference and are payable quarterly on March 31, June 30, September 30, and December 31 of each year, or in each case on the next succeeding business day.

Series B Preferred Shares

On January 30, 2025, the Company announced the launch of a continuous public offering (the “Series B Preferred Offering”) of up to 16,000,000 shares of its newly designated 9.00% Series B Cumulative Redeemable Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share (“Series B Preferred Shares”) at a price to the public of $25.00 per share, for gross proceeds of $400.0 million. As of June 30, 2025, the Company has issued 145,554 Series B Preferred Shares for gross proceeds of $3.6 million before deducting selling commissions and dealer manager fees of approximately $0.2 million, and organization and offering costs of approximately $0.3 million. The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 Series B Preferred Shares in the offering or August 1, 2027 (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 the Series B Preferred Offering at any time.

During the six months ended June 30, 2025, the Company declared eight distributions on the Series B Preferred Shares, each in the amount of $0.1875 per share, two of which will be paid to holders of Series B Preferred Shares on October 6, 2025 and September 5, 2025 to holders of record on September 25, 2025 and August 25, 2025, respectively, and the remaining which were paid to holders of Series B Preferred Shares on August 5, 2025, July 7, 2025, June 5, 2025, May 5, 2025, April 7, 2025 and March 5, 2025 to holders of record of Series B Preferred Shares on July 25, 2025, June 25, 2025, May 23, 2025, April 25, 2025, March 25, 2025 and February 25, 2025, respectively.

Distributions on the Series B Preferred Shares are cumulative from their original issue date at the annual rate of 9% of the $25 per share initial stated value and are payable monthly on the fifth day of each calendar month or, if such date is not a business day, on the next succeeding business day.

Long Term Incentive Plan, NXDT

On January 30, 2023, the Company’s shareholders approved a long-term incentive plan (the “2023 LTIP” as amended by the A&R 2023 LTIP (as defined below), the “LTIP”) and the Company subsequently filed a registration statement on Form S-8 registering 2,545,000 common shares, which the Company may issue pursuant to the 2023 LTIP. On June 10, 2025, the Company’s shareholders approved an amendment and restatement of the 2023 LTIP (the “A&R” 2023 LTIP”) and the Company subsequently filed a registration statement on Form S-8 registering an additional 1,007,258 common shares, which the Company may issue pursuant to the A&R 2023 LTIP. The LTIP authorizes the compensation committee of the Board to provide equity-based compensation in the form of share options, appreciation rights, restricted shares, restricted share units, performance shares, performance units and certain other awards denominated or payable in, or otherwise based on, the Company’s common shares or factors that may influence the value of the Company’s common shares, plus cash incentive awards, for the purpose of providing the Company’s trustees, officers and other key employees (and those of the Adviser and the Company’s subsidiaries), and potentially certain nonemployees who perform employee-type functions, incentives and rewards for performance (the "participants").

Restricted Share Units. Under the LTIP, restricted share units may be granted to the participants and typically vest over a three to five-year period for officers, employees and certain key employees of the Adviser and annually for trustees. The most recent grant of restricted share units to officers, employees and certain key employees of the Adviser will vest over a four-year period. Beginning on the date of grant, restricted share units earn distributions that are payable in cash on the vesting date. Compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. Forfeitures are recognized as they occur. The following table includes the number of restricted share units granted to its trustees, officers, employees and certain key employees of the Adviser under the LTIP:

	Summary of Grants
	March	April	June	Total
2023	—	603,482	—	603,482
2024	1,033,787	—	—	1,033,787
2025	—	937,643	572,592	1,510,235
Total	1,033,787	1,541,125	572,592	3,147,504

As of June 30, 2025 and December 31, 2024, the Company had 2,483,801 and 1,438,049 unvested units under the LTIP, respectively.

The following table includes the number of restricted share units granted, vested, forfeited and outstanding as of and for the six months ended June 30, 2025:

	2025
	Number of Units		Weighted Average Grant Date Fair Value
Outstanding January 1, 2025	1,438,049		$	7.35
Granted	1,510,235		3.73
Vested	(449,024)	(1)	3.76
Forfeited	(15,459)		7.99
Outstanding June 30, 2025	2,483,801		$	5.79

(1)Certain key employees of the Adviser elected to net the taxes owed upon the vesting against the shares issued resulting in 358,173 shares being issued as shown on the Consolidated Statement of Equity.

The following table contains information regarding the vesting of restricted share units under the LTIP as of June 30, 2025:

	Shares Vesting
	February	March	April	June	Total
2025	—	—	—	—	—
2026	—	234,527	400,535	172,893	807,955
2027	358,606	234,527	130,974	—	724,107
2028	358,606	234,527	—	—	593,133
2029	358,606	—	—	—	358,606
Total	1,075,818	703,581	531,509	172,893	2,483,801

For the three months ended June 30, 2025 and 2024, the company recognized approximately $1.0 million and $0.9 million, respectively of equity-based compensation expense related to grants of restricted share units. For the six months ended June 30, 2025 and 2024, the Company recognized approximately $1.8 million and $1.4 million, respectively, of equity-based compensation expense related to grants of restricted share units. As of June 30, 2025, the Company had recognized a liability of approximately $1.0 million related to distributions earned on restricted share units that are payable in cash upon vesting. As of June 30, 2025, total unrecognized compensation expense on restricted share units was approximately $11.7 million, and the expense is expected to be recognized over a weighted average vesting period of 1.9 years. As of December 31, 2024, total unrecognized compensation expense on restricted share units was approximately $8.0 million, and the expense is expected to be recognized over a weighted average vesting period of 1.5 years.