(1) There is no assurance that these objectives will be met. The company has no operating history or established financing sources. As a result, an investment in the company is speculative. In addition, investors in the company will not acquire an interest in Highland Capital Management.
(2) Distributions are not guaranteed and may be suspended, modified or terminated at the discretion of the board of directors. Distributions may include a return of principal or borrowed funds, which may lower overall returns to the investor and may not be sustainable.
(3) The net investment amount for shares of NexPoint Capital common stock is the public offering price, net of the maximum upfront sales load of 8%.
(4) The annualized distribution rate is expressed as a percentage equal to the projected annualized distribution amount per share (which is calculated by annualizing the regular weekly cash distribution per share as of the date indicated above without compounding), divided by the price quote per share as of the date indicated above. The annualized distribution rate shown may be rounded. As of the quarter ending June 30, 2016, 100% of distributions were paid from net investment income from operations. The distributions described herein were funded in significant part by the reimbursement of certain expenses, including through the waiver of investment advisory fees that may be subject to repayment to NexPoint Advisors, and the funds’ future distributions may be funded from such waivers or reimbursements. Significant portions of these distributions were not be based on our investment performance and such waivers and reimbursements by NexPoint Advisors may not continue in the future. If NexPoint Advisors does not agree to reimburse certain of our expenses, including through the waiver of certain of its advisory fees, significant portions of these distributions may come from offering proceeds or borrowings. The repayment of any amounts owed to NexPoint Advisors will reduce the future distributions to which you would otherwise be entitled. The determination of the tax attributes of NexPoint Capital’s distributions is made annually as of the end of NexPoint Capital’s fiscal year based upon its taxable income and distributions paid, in each case, for the full year. Therefore, a determination as to the tax attributes of the distributions made on a quarterly basis may not be representative of the actual tax attributes for a full year. The actual tax characteristics of distributions to shareholders will be reported to shareholders annually on a Form 1099-DIV. Distributions are not guaranteed and may be suspended, modified or terminated at the discretion of the board of directors. Distributions may include a return of principal or borrowed funds, which may lower overall returns to the investor and may not be sustainable.
On May 12, 2016, the board of directors of the Company declared a distribution in an amount of $0.013846 per share of the BDC’s common stock, par value $0.001 per share, payable on June 29, 2016, to stockholders of record on June 6, 2016, June 13, 2016, June 20, 2016, and June 27, 2016. Based on the Company’s current public offering price of $10.13 per share, the distribution represents an annualized rate of approximately 7.2%.