Company: MSTR
Filing Date: 2025-05-22
Form Type: 424B5
Source: 0001193125-25-124554
Chunk: 24

Company: Strategy Inc
Filing Date: 2025-05-22
Form: 424B5
Chunk 24
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 eligible for the dividends-received deduction and
distributions paid to non-corporate U.S. holders may be subject to tax at the preferential tax rates applicable to “qualified dividend income” if we have current or accumulated earnings and profits,
as determined for U.S. federal income tax purposes and certain holding period and other requirements are met. We may not have sufficient current or accumulated earnings and profits during any fiscal year for the distributions on the perpetual strife
preferred stock to qualify as dividends for U.S. federal income tax purposes. If any distributions on the perpetual strife preferred stock with respect to any fiscal year are not eligible for the dividends-received deduction or for the preferential
tax rates applicable to “qualified dividend income” because of insufficient current or accumulated earnings and profits, the trading price of the perpetual strife preferred stock may decline.

The tax rules applicable to “fast-paystock” could result in adverse consequences to holders of perpetual strife preferred stock.

Under Treasury Regulations promulgated under Section 7701(l) of the Code (the “Fast-Pay Stock Regulations”), if stock of a corporation is structured such that dividends paid with respect to the stock are economically (in whole or in part) a return of the stockholder’s
investment (rather than a return on the stockholder’s investment), then the stock is characterized as “fast-pay stock” and is subject to adverse tax reporting requirements and potentially
penalties, as described below. In addition, under the Fast-Pay Stock Regulations, unless clearly demonstrated otherwise, stock is presumed to be fast-pay stock if it is
structured to have a dividend that is reasonably expected to decline (as opposed to a dividend rate that is reasonably expected to fluctuate or remain constant) (for such purpose, the dividend rate may be viewed as reasonably expected to decline if
we are reasonably expected to stop paying regular dividends on the perpetual strife preferred stock or if the maximum compounded dividend rate is in effect) or is issued for an amount that exceeds (by more than a de minimis amount, as determined
under applicable Treasury Regulations) the amount at which the stockholder can be compelled to dispose of the stock. It is not clear what amount would constitute “de minimis” in the case of stock with a perpetual term.

The determination of whether stock is fast-pay stock is based on all the facts and circumstances. To determine if it
is fast-pay stock, stock is examined when issued, and, for stock that is not fast-pay stock when issued, when there is a significant modification in the