Company: MSTR
Filing Date: 2025-07-07
Form Type: 8-K
Source: 0000950170-25-094137
Chunk: 19

Company: Strategy Inc
Filing Date: 2025-07-07
Form: 8-K
Item: Item 8.01
Chunk 19
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’s bitcoin is reflected within the Consolidated Balance Sheets each reporting period-end. Our unrealized gain on digital assets for the quarter ended June 30, 2025 was $14.05 billion, which will result in a net gain for the quarter ended June 30, 2025, partially offset by a related deferred tax expense of $4.04 billion.

Upon adopting ASU 2023-08 on January 1, 2025, the Company is no longer required to account for its bitcoin under a cost-less-impairment accounting model and it no longer establishes a deferred tax asset related to bitcoin impairment losses. Instead, the Company establishes a deferred tax liability if the market value of bitcoin at the reporting date is greater than the average cost basis of its bitcoin holdings at such reporting date, and any subsequent increases or decreases in the market value of bitcoin increase or decrease the deferred tax liability.

The following table presents a roll-forward of the Company’s bitcoin holdings, including additional information related to the Company’s bitcoin purchases and the change in digital asset carrying value, during the quarter ended June 30, 2025.

                                         Source of         Digital Asset                       Digital Asset                                            
                                         Capital Used      Original                            Carrying Value                                           
                                         to Purchase       Cost Basis                          (in thousands)                                           
                                         Bitcoin           (in thousands)                                                                               
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Balance at March 31, 2025                                $                   35,629,911      $                   43,546,079      528,185      67,458  
  Digital asset purchases                (a)                                    6,769,205                           6,769,205       69,140      97,906  
  Unrealized gain on digital assets                                                                                14,047,514                           
  Balance at June 30, 2025                                 $                   42,399,116      $                   64,362,798      597,325      70,982  

(a)

In the second quarter of 2025, the Company purchased bitcoin using $5.2 billion of the net proceeds from the 2024 Common ATM and 2025 Common ATM, $979.7 million of the net proceeds from the STRD Offering, $438.0 million of the net proceeds from the STRK ATM, and $163.0 million of the net proceeds from the STRF ATM.

The following table shows the approximate