Strategy 8-K Report, Material Agreement (Mar 19, 2024)

MicroStrategy Incorporated completed its previously announced private offering of 0.875%^a convertible senior notes due 2031 on March 18, 2024.

The aggregate principal amount sold was $603.75 million^b, including $78.75 million issued under an option granted to the initial purchasers, which was exercised in full on March 15, 2024. Net proceeds were approximately $592.3 million after discounts, commissions and estimated offering expenses, and the company used them to acquire additional bitcoin. The notes are senior unsecured obligations that pay interest semiannually and mature on March 15, 2031, unless earlier converted, redeemed or repurchased.

The notes are convertible into cash, class A common stock, or a combination at the company's election, at an initial conversion rate of 0.4297 shares per $1,000^c principal amount, equivalent to an initial conversion price of approximately $2,327.21 per share. That price is a premium of approximately 40% over the $1,662.1999 U.S. composite VWAP on March 14, 2024. Prior to September 15, 2030, conversion is permitted only upon certain events.

The company may not redeem the notes before March 22, 2028, and thereafter may redeem for cash if the stock trades at least 130%^d of the conversion price under specified conditions. Holders may require repurchase at par plus accrued interest on September 15, 2028, or upon a fundamental change.

The filing also incorporates the indenture with U.S. Bank Trust Company, National Association, as trustee, as Exhibit 4.1, and a March 19, 2024 press release announcing the closing as Exhibit 99.1. The notes were sold in reliance on Section 4(a)(2) and Rule 144A, and the company does not intend to file a shelf registration statement for their resale or the underlying shares.