Company: MSTR
Filing Date: 2025-01-03
Form Type: DEF 14A
Source: 0001140361-25-000231
Chunk: 143

Company: Strategy Inc
Filing Date: 2025-01-03
Form: DEF 14A
Chunk 143
---
 reduction to the principal amount of the 2025 Convertible Notes and 2027 Convertible Notes, respectively, and amortizes the issuance costs to interest expense over the contractual term of the 2025 Convertible Notes and 2027 Convertible Notes, respectively, at an effective interest rate of 1.23% and 0.39%, respectively. Although the Convertible Notes each contain embedded conversion features, the Company accounts for each of the Convertible Notes in its entirety as a liability because the conversion features are indexed to the Company’s class A common stock and meet the criteria for classification in stockholders’ equity and therefore do not qualify for separate derivative accounting. As of December 31, 2023 and 2022, the net carrying value of the Convertible 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 Company’s convertible debt instruments as of December 31, 2023 (in thousands):

|                        |     | December 31, 2023 |     |                |     |              |     |            |     |         |
|:-----------------------|:----|------------------:|:----|---------------:|:----|-------------:|:----|-----------:|:----|:--------|
|                        |     |       Outstanding 
  Principal Amount |     |    Unamortized 
 Issuance Costs |     | Net Carrying 
        Value |     | Fair Value |     |         |
|                        |     |            Amount |     |       Leveling |     |              |     |            |     |         |
| 2025 Convertible Notes |     |          $650,000 |     |       $(6,069) |     |     $643,931 |     | $1,074,713 |     | Level 2 |
| 2027 Convertible Notes |     |         1,050,000 |     |        -12,694 |     |    1,037,306 |     |    913,808 |     | Level 2 |
| Total                  |     |        $1,700,000 |     |      $(18,763) |     |   $1,681,237 |     | $1,988,521 |     |         |

The following is a summary of the Company’s convertible debt instruments as of December 31, 2022 (in thousands