Company: MSTR
Filing Date: 2025-03-10
Form Type: 424B5
Source: 0001193125-25-050408
Chunk: 38

Company: Strategy Inc
Filing Date: 2025-03-10
Form: 424B5
Chunk 38
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 for such share. The conversion rate will not be increased in connection with a fundamental change to compensate you for the lost option value, or the
loss of potentially receiving future dividends, as a result of converting your perpetual strike preferred stock upon a fundamental change.

The accounting method for the perpetual strike preferred stock may result in lower reported net earnings attributable to common stockholders and lower reported diluted earnings per share.

The accounting method for reflecting the conversion and other provisions of the
perpetual strike preferred stock in our financial statements may adversely affect our reported earnings. Because dividends on the perpetual strike preferred stock are cumulative, we expect that dividends that accumulate on the perpetual strike
preferred stock during the applicable reporting period, regardless of whether they are declared or paid, will be deducted from reported net earnings (or added to reported net loss) for that reporting period to arrive at reported earnings (or loss)
attributable to our class A common stock. Accordingly, we expect this accounting treatment to reduce the amount of reported earnings (or increase the amount of reported loss) attributable to our class A common stock. Similarly, we expect that
accumulated dividends on the perpetual strike preferred stock will also reduce our reported basic earnings per share (or increase our reported basic loss per share) of class A common stock. Furthermore, we expect that applicable accounting standards
will require us to separately account for the tax redemption feature associated with the perpetual strike preferred stock as an embedded derivative. Under this treatment, the embedded derivative will be measured at its fair value and accounted for
separately as a liability that is marked-to-market at the end of each reporting period. For each financial statement period after the issuance of the perpetual strike
preferred stock, a gain or loss will be reported in our statement of operations to the extent the valuation of the embedded derivative changes from the previous period. This accounting treatment may subject our reported net income (loss) to
significant non-cash volatility. In addition, we expect that the if-converted method will apply to reflect the perpetual strike preferred stock in the calculation of our
diluted earnings per share. Under this method, we expect that diluted earnings per share will be calculated assuming that the perpetual strike preferred stock is converted at the beginning of the reporting period (or, if later, the time the
perpetual strike preferred stock is issued). However, this calculation will not be made if reflecting the perpetual strike preferred stock in diluted earnings per share in this manner is anti-dilutive. Accordingly, the application of the if-converted method to the