Dondero group lifts Highland Opportunities & Income (HFRO) stake to 8.5%

Rhea-AI Filing Summary

Highland Opportunities & Income Fund’s shareholder group led by James D. Dondero has updated its Schedule 13D, reporting an 8.5% beneficial stake in the fund’s common shares. As of March 30, 2025, related entities and a family trust collectively hold several sizable positions in HFRO.

Highland Global Allocation Fund and NexPoint Asset Management each beneficially own 2,612,465 common shares, representing about 4.7% of the class, while a trust for Nancy Marie Dondero holds about 3.6%. Drugcrafters, L.P. holds a smaller 0.1% position. Since the last amendment, Highland Global Allocation Fund purchased 548,460 shares in open‑market transactions for a total of $3,340,622 using working capital.

Key Figures

Group ownership percentage: 8.5% of common shares Highland Global Allocation Fund shares: 2,612,465 shares NexPoint Asset Management shares: 2,612,465 shares +4 more

7 metrics

Group ownership percentage 8.5% of common shares Beneficial ownership reported as of March 30, 2025

Highland Global Allocation Fund shares 2,612,465 shares Beneficially owned, representing about 4.7% of HFRO

NexPoint Asset Management shares 2,612,465 shares Beneficially owned, representing about 4.7% of HFRO

Nancy Dondero trust shares 2,016,716.03 shares Beneficially owned, representing about 3.6% of HFRO

Drugcrafters, L.P. shares 72,082 shares Beneficially owned, representing about 0.1% of HFRO

Recent shares purchased by GAF 548,460 shares Open market purchases since last amendment

Aggregate purchase price $3,340,622 Cost of 548,460 HFRO shares bought with working capital

Key Terms

beneficially own, Schedule 13D, shared voting power, dispositive power, +2 more

6 terms

beneficially own financial

"may be deemed to beneficially own 4,703,077.06 Common Shares"

Beneficially own means having the economic rights and risks of a security—such as the right to receive dividends, sell the shares, or profit from price changes—whether or not your name appears on the official share register. Think of it like renting a car: you use it and reap the benefits even if the title lists someone else. Investors care because beneficial ownership determines who truly controls value, must be disclosed under securities rules, and can signal potential influence or trading activity that affects a stock’s price.

Schedule 13D regulatory

"has previously filed a statement on Schedule 13G to report the acquisition"

A Schedule 13D is a legal document that investors file with regulators when they buy a large enough stake in a company to potentially influence its management or decisions. It provides details about the investor’s intention, ownership stake, and plans, helping other investors understand who is gaining control and what their motives might be.

shared voting power financial

"shared voting power and shared dispositive power with respect to 4,701,263.03 Common Shares"

Shared voting power occurs when two or more parties jointly have the right to vote or decide how a block of company shares is cast, like co-owners who must agree before moving a piece of furniture. Investors care because who controls voting rights affects board elections, major corporate decisions and takeover outcomes, and shared control can alter regulatory disclosures and the practical influence any holder has over a company’s direction and value.

dispositive power financial

"sole dispositive power with respect to 1,744.03 Common Shares"

Dispositive power is the authority to decide the final outcome of an asset, legal claim, contract, or corporate action — in effect the power to dispose of or resolve something. For investors it matters because whoever holds that authority can determine who gets paid, who controls an asset or vote, and how risks and returns are allocated; think of it like holding the key that lets you lock in the winner or loser in a deal.

dividend reinvestment program financial

"received by a trust for which Ms. Dondero serves as trustee pursuant to the Issuer's dividend reinvestment program"

A dividend reinvestment program lets investors automatically use cash dividends to buy more shares of the same company instead of taking the money as cash. Think of it like an automatic savings plan that turns small payouts into additional ownership, often including fractional shares, which can speed up compound growth and reduce the need for manual buying decisions — a convenience that can boost long-term returns for shareholders.

working capital financial

"open market transactions with the Reporting Person's working capital"

Working capital is the money a business has available to cover its daily expenses, like paying bills and buying supplies. It’s like the cash in your wallet that helps you handle everyday costs; having enough ensures the business can operate smoothly without running into money shortages.

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Accepted by SEC EDGAR 04/01/2026 - 06:25 PM Learn about SEC filing dates

FAQ

What stake in HFRO is reported in this Schedule 13D/A amendment?

The reporting group led by James D. Dondero reports beneficial ownership of about 8.5% of Highland Opportunities & Income Fund’s common shares, reflecting combined positions held through related entities and a family trust as of March 30, 2025.

How many HFRO shares did Highland Global Allocation Fund recently buy?

Highland Global Allocation Fund purchased 548,460 HFRO common shares in open market transactions. These buys were funded with the reporting persons’ working capital and had an aggregate purchase price of $3,340,622, increasing the group’s overall economic exposure.

What is Highland Global Allocation Fund’s ownership percentage in HFRO?

Highland Global Allocation Fund beneficially owns 2,612,465 HFRO common shares, representing approximately 4.7% of the outstanding common shares. Voting and dispositive power over these shares is shared, and the fund is managed by NexPoint Asset Management.

What HFRO position is held by the trust for Nancy Marie Dondero?

A trust for which Nancy Marie Dondero serves as trustee beneficially owns about 2,016,716.03 HFRO common shares, or roughly 3.6% of the outstanding class. The trust has shared voting and dispositive power over these shares under the disclosed arrangements.

What role does NexPoint Asset Management play in HFRO ownership?

NexPoint Asset Management, L.P. beneficially owns 2,612,465 HFRO common shares, or around 4.7% of the class, with shared voting and dispositive power. These shares are held indirectly through an advised account, and NexPoint is ultimately controlled by James D. Dondero.

How large is Drugcrafters, L.P.’s investment in HFRO?

Drugcrafters, L.P. beneficially owns 72,082 HFRO common shares, representing about 0.1% of the outstanding common shares. Drugcrafters has shared voting and dispositive power over this position, which forms a relatively small portion of the overall reported group holdings.

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 3)

HIGHLAND OPPORTUNITIES & INCOME FUND

(Name of Issuer)

Common Shares, par value $0.001 per share

(Title of Class of Securities)

43010E404

(CUSIP Number)

Stephanie Vitiello, CCO
NexPoint Asset Management, L.P., 300 Crescent Court, Suite 700
Dallas, TX, 75201
214-453-6500

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

3/30/2026

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

schemaVersion:

SCHEDULE 13D

CUSIP Number(s): 43010E404

1

Name of reporting person

DONDERO JAMES D

2

Check the appropriate box if a member of a Group (See Instructions)

(a)
(b)

3

SEC use only

4

Source of funds (See Instructions)

WC, AF

5

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)

6

Citizenship or place of organization

UNITED STATES

Number of Shares Beneficially Owned by Each Reporting Person With:

7	Sole Voting Power 1,744.03
8	Shared Voting Power 4,701,263.03
9	Sole Dispositive Power 1,744.03
10	Shared Dispositive Power 4,701,263.03

11

Aggregate amount beneficially owned by each reporting person

4,703,007.06

12

Check if the aggregate amount in Row (11) excludes certain shares (See Instructions)

13

Percent of class represented by amount in Row (11)

8.5 %

14

Type of Reporting Person (See Instructions)

HC, IN

SCHEDULE 13D

CUSIP Number(s): 43010E404

1

Name of reporting person

HIGHLAND GLOBAL ALLOCATION FUND

2

Check the appropriate box if a member of a Group (See Instructions)

(a)
(b)

3

SEC use only

4

Source of funds (See Instructions)

WC

5

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)

6

Citizenship or place of organization

MASSACHUSETTS

Number of Shares Beneficially Owned by Each Reporting Person With:

7	Sole Voting Power 0.00
8	Shared Voting Power 2,612,465.00
9	Sole Dispositive Power 0.00
10	Shared Dispositive Power 2,612,465.00

11

Aggregate amount beneficially owned by each reporting person

2,612,465.00

12

Check if the aggregate amount in Row (11) excludes certain shares (See Instructions)

13

Percent of class represented by amount in Row (11)

4.7 %

14

Type of Reporting Person (See Instructions)

IV

SCHEDULE 13D

CUSIP Number(s): 43010E404

1

Name of reporting person

Drugcrafters, L.P.

2

Check the appropriate box if a member of a Group (See Instructions)

(a)
(b)

3

SEC use only

4

Source of funds (See Instructions)

WC

5

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)

6

Citizenship or place of organization

DELAWARE

Number of Shares Beneficially Owned by Each Reporting Person With:

7	Sole Voting Power 0.00
8	Shared Voting Power 72,082.00
9	Sole Dispositive Power 0.00
10	Shared Dispositive Power 72,082.00

11

Aggregate amount beneficially owned by each reporting person

72,082.00

12

Check if the aggregate amount in Row (11) excludes certain shares (See Instructions)

13

Percent of class represented by amount in Row (11)

0.1 %

14

Type of Reporting Person (See Instructions)

PN

SCHEDULE 13D

CUSIP Number(s): 43010E404

1

Name of reporting person

NEXPOINT ASSET MANAGEMENT, L.P.

2

Check the appropriate box if a member of a Group (See Instructions)

(a)
(b)

3

SEC use only

4

Source of funds (See Instructions)

WC, AF

5

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)

6

Citizenship or place of organization

DELAWARE

Number of Shares Beneficially Owned by Each Reporting Person With:

7	Sole Voting Power 0.00
8	Shared Voting Power 2,612,465.00
9	Sole Dispositive Power 0.00
10	Shared Dispositive Power 2,612,465.00

11

Aggregate amount beneficially owned by each reporting person

2,612,465.00

12

Check if the aggregate amount in Row (11) excludes certain shares (See Instructions)

13

Percent of class represented by amount in Row (11)

4.7 %

14

Type of Reporting Person (See Instructions)

IA, PN

SCHEDULE 13D

CUSIP Number(s): 43010E404

1

Name of reporting person

DONDERO NANCY MARIE

2

Check the appropriate box if a member of a Group (See Instructions)

(a)
(b)

3

SEC use only

4

Source of funds (See Instructions)

AF

5

Check if disclosure of legal proceedings is required pursuant to Items 2(d) or 2(e)

6

Citizenship or place of organization

UNITED STATES

Number of Shares Beneficially Owned by Each Reporting Person With:

7	Sole Voting Power 0.00
8	Shared Voting Power 2,016,716.03
9	Sole Dispositive Power 0.00
10	Shared Dispositive Power 2,016,716.03

11

Aggregate amount beneficially owned by each reporting person

2,016,716.03

12

Check if the aggregate amount in Row (11) excludes certain shares (See Instructions)

13

Percent of class represented by amount in Row (11)

3.6 %

14

Type of Reporting Person (See Instructions)

IN

SCHEDULE 13D

Item 1.	Security and Issuer
(a)	Title of Class of Securities: Common Shares, par value $0.001 per share
(b)	Name of Issuer: HIGHLAND OPPORTUNITIES & INCOME FUND
(c)	Address of Issuer's Principal Executive Offices: 300 CRESCENT COURT, DALLAS, TEXAS , 75201.
Item 1 Comment: This Amendment No. 3 (this "Amendment") is being filed on behalf of James D. Dondero, Highland Global Allocation Fund, a Massachusetts business trust ("GAF"), Drugcrafters, L.P., a Delaware limited partnership ("Drugcrafters"), NexPoint Asset Management, L.P., a Delaware limited partnership ("NexPoint"), and Nancy Marie Dondero (collectively, the "Reporting Persons"), and amends the Schedule 13D filed with the United States Securities and Exchange Commission on September 22, 2025, as subsequently amended on October 7, 2025 and as subsequently amended on December 10, 2025 (the "Schedule 13D"). The Schedule 13D is supplementally amended as follows.
Item 3.	Source and Amount of Funds or Other Consideration
	Since the last transaction reported in the Schedule 13D, GAF has purchased 548,460 Common Shares in open market transactions with the Reporting Person's working capital, with an aggregate purchase price of $3,340,622.
Item 5.	Interest in Securities of the Issuer
(a)	As of March 30, 2025, (i) James D. Dondero may be deemed to beneficially own 4,703,077.06 Common Shares, which represents approximately 8.5% of the outstanding Common Shares, (ii) Drugcrafters may be deemed to beneficially own 72,082 Common Shares, which represents approximately 0.1% of the outstanding Common Shares, (iii) GAF may be deemed to beneficially own 2,612,465 shares of Common Shares, which represents approximately 4.7% of the outstanding Common Shares, (iv) NexPoint may be deemed to beneficially own 2,612,465 shares of Common Shares, which represents approximately 4.7% of the outstanding Common Shares and (v) Nancy Marie Dondero, in her capacity as trustee of a trust, may be deemed to beneficially own 2,016,716.03 shares of Common Shares, which represents approximately 3.6% of the outstanding Common Shares. James D. Dondero has the right to acquire beneficial ownership of all shares of Common Shares owned by the trust referred to in the preceding sentence.
(b)	(1) Mr. Dondero has sole voting power and sole dispositive power with respect to 1,744.03 Common Shares and shared voting power and shared dispositive power with respect to 4,701,263.03 Common Shares. These shares are held by Mr. Dondero indirectly through NexPoint and their advised accounts (as described in paragraph (4) below), Drugcrafters, a proprietary account and a 401(k) account. These also include shares that Mr. Dondero has the right to acquire beneficial ownership of that are held by the trust referred to in Item 5(a), for which he does not serve as trustee. Mr. Dondero is the sole stockholder and director of NexPoint's general partner and may be deemed to be an indirect beneficial owner of the shares held by NexPoint. Mr. Dondero disclaims beneficial ownership of such shares. (2) Drugcrafters has sole voting power and sole dispositive power with respect to 0 Common Shares and shared voting power and shared dispositive power with respect to 72,082 Common Shares. Mr. Dondero owns 75% of PCMG Trading Partners XXIII, L.P. ("PCMG") and PCMG owns 99% of Drugcrafters. These entities are ultimately controlled by Mr. Dondero. Mr. Dondero may be deemed to be an indirect beneficial owner of the shares held by Drugcrafters. Mr. Dondero disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. (3) GAF has sole voting power and sole dispositive power with respect to 0 Common Shares and shared voting power and shared dispositive power with respect to 2,612,465 Common Shares. GAF is managed by NexPoint, which is ultimately controlled by Mr. Dondero. Mr. Dondero may be deemed to be an indirect beneficial owner of the shares held by GAF. Mr. Dondero disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. (4) NexPoint has sole voting power and sole dispositive power with respect to 0 Common Shares and shared voting power and shared dispositive power with respect to 2,612,465 Common Shares. These shares are held by NexPoint indirectly through an advised account. Mr. Dondero is the sole stockholder and director of NexPoint's general partner and may be deemed to be an indirect beneficial owner of the shares held by NexPoint. (5) A trust for which Ms. Dondero serves as trustee has sole voting power and sole dispositive power with respect to 0 Common Shares and shared voting power and shared dispositive power with respect to 2,016,716.03 Common Shares. Ms. Dondero is the sister of Mr. Dondero and disclaims beneficial ownership of such shares.
(c)	Annex A attached hereto lists all transactions in Common Shares effected in the last 60 days by the Reporting Persons or on behalf of the Reporting Persons other than 3,673.38 Common Shares received by a trust for which Ms. Dondero serves as trustee pursuant to the Issuer's dividend reinvestment program. Except as otherwise noted, the transactions in Common Shares were effected in the open market.
(d)	No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, the Common Shares.
(e)	Not applicable.
Item 7.	Material to be Filed as Exhibits.
	Exhibit 99.1 Annex A

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

DONDERO JAMES D

Signature:	/s/ James D. Dondero
Name/Title:	James D. Dondero
Date:	04/01/2026

HIGHLAND GLOBAL ALLOCATION FUND

Signature:	/s/ Stephanie Vitiello
Name/Title:	Stephanie Vitiello, Chief Compliance Officer
Date:	04/01/2026

Drugcrafters, L.P.

Signature:	/s/ James D. Dondero
Name/Title:	James D. Dondero, Managing Member of the General Partner
Date:	04/01/2026

NEXPOINT ASSET MANAGEMENT, L.P.

Signature:	/s/ James D. Dondero
Name/Title:	James D. Dondero, President
Date:	04/01/2026

DONDERO NANCY MARIE

Signature:	/s/ Nancy Marie Dondero
Name/Title:	Nancy Marie Dondero
Date:	04/01/2026