Company: MSTR
Filing Date: 2025-01-03
Form Type: DEF 14A
Source: 0001140361-25-000231
Chunk: 148

Company: Strategy Inc
Filing Date: 2025-01-03
Form: DEF 14A
Chunk 148
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 which were unencumbered. The 2028 Secured Notes Indenture contains certain covenants with which the Company must comply, including covenants with respect to limitations on (i) additional indebtedness, (ii) liens, (iii) certain payments and investments, (iv) the ability to merge or consolidate with another person, or sell or otherwise dispose of substantially all the Company’s assets, and (v) certain transactions with affiliates. The Company was in compliance with its debt covenants as of December 31, 2023. The Company incurred approximately $12.8 million in customary offering expenses associated with the 2028 Secured Notes. The Company accounts for these issuance costs as a reduction to the principal amount of the 2028 Secured Notes and amortizes the issuance costs to interest expense over the contractual term of the 2028 Secured Notes at an effective interest rate of 6.58%. As of December 31, 2023 and 2022, the net carrying value of the 2028 Secured Notes was classified as a long-term liability in the “Long-term debt, net” line item in the Company’s Consolidated Balance Sheets. The following is a summary of the 2028 Secured Notes as of December 31, 2023 (in thousands):

|                    |     | December 31, 2023 |     |                |     |              |     |            |     |         |
|:-------------------|:----|------------------:|:----|:---------------|:----|-------------:|:----|-----------:|:----|:--------|
|                    |     |       Outstanding 
  Principal Amount |     | Unamortized    
 Issuance Costs |     | Net Carrying 
        Value |     | Fair Value |     |         |
|                    |     |            Amount |     | Leveling       |     |              |     |            |     |         |
| 2028 Secured Notes |     |          $500,000 |     | $(8,807)       |     |     $491,193 |     |   $485,070 |     | Level 2 |

The following is a summary of the 2028 Secured Notes as of December 31, 2022 (in thousands):

|                    |     | December 31, 2022 |     |                |     |              |     |            |     |         |
|:-------------------|: