Company: MSTR
Filing Date: 2025-01-03
Form Type: DEF 14A
Source: 0001140361-25-000231
Chunk: 93

Company: Strategy Inc
Filing Date: 2025-01-03
Form: DEF 14A
Chunk 93
---
2 million increase in the estimated minimum loss with respect to the Brazilian matters noted in Note 9, Commitments and Contingencies, to the Consolidated Financial Statements, (iii) a $0.7 million increase in severance costs associated with streamlining our organization, and (iv) a $0.5 million increase in directors and officers liability insurance expense,

E-10

TABLE OF CONTENTS

partially offset by (v) a $2.3 million decrease in costs related to the maintenance and operations of our corporate aircraft, (vi) a $0.9 million decrease in recruiting costs, (vii) a $0.6 million decrease in legal, consulting, advisory, and other third-party costs, and (viii) a $0.5 million decrease in variable compensation. Digital asset impairment losses, (gains on sale), net. Digital asset impairment losses are recognized when the carrying value of our digital assets exceeds their lowest fair value at any time since their acquisition. Impaired digital assets are written down to fair value at the time of impairment, and such impairment loss cannot be recovered for any subsequent increases in fair value. Gains (if any) are not recorded until realized upon sale. The following table sets forth digital asset impairment losses (gains on sale), net (in thousands) and related percentage changes for the periods indicated:

|                                                      |     | Years Ended December 31, |     |            |     | % Change |
|                                                      |     |                     2023 |     |       2022 |     |          |
| Digital asset impairment losses                      |     |                 $115,851 |     | $1,287,213 |     | -91.0%   |
| Gains on sale of digital assets                      |     |                        0 |     |        927 |     | -100.0%  |
| Digital asset impairment losses (gains on sale), net |     |                 $115,851 |     | $1,286,286 |     | -91.0%   |

We may continue to incur significant digital asset impairment losses in the future. For example, we have incurred at least $28.9 million in digital asset impairment losses during the first quarter of 2024 on bitcoin we held as of December 31, 2023. Interest Expense, Net In 2023, interest expense, net, was comprised primarily of contractual interest expense and amortization of issuance costs related to our long-term debt arrangements and contractual