How does the amendment change the STRK liquidation preference?

The liquidation preference was initially $100 per share. Beginning July 7, 2025, it adjusts each business day to the greatest of the $100 stated amount, the last reported sale price of STRK after any sale settled in STRK stock, or the arithmetic average of the last reported sale prices over the ten preceding trading days. The result is that the liquidation preference generally tracks the trading price, with $100 as a floor.

What is the size and structure of the new STRD ATM program?

Strategy entered into a Sales Agreement with TD Securities (USA) LLC, Barclays Capital Inc., The Benchmark Company, Clear Street LLC and Morgan Stanley & Co. LLC to sell up to $4.2 billion of STRD Stock. Sales may be made through at-the-market offerings or negotiated transactions or block trades, and the company has no obligation to sell any shares. The company will sell through only one agent on any single day and pays commissions of up to 2.0% of gross proceeds.

What will Strategy do with the money raised from these offerings?

The accompanying press release states that net proceeds are intended for general corporate purposes, including the acquisition of bitcoin and working capital. The company may also use proceeds to pay dividends on its STRF and STRK preferred stock.

What tax risks does the filing disclose for preferred holders?

The updated tax disclosures state that holders may be treated as receiving deemed distributions, for example from an increase in liquidation preference, from unpaid dividends, or from certain conversion rate adjustments, even without a cash payment. The filing also warns that the IRS could treat the stock as fast-pay stock, which is a listed transaction with reporting requirements. Because all shares trade under the same identifier, adverse treatment of some shares could affect all holders.

Strategy 8-K: Corporate Changes

01—Abstract

Summary

Summary of the 8-K filed July 7, 2025. Cited figures are marked; the original filing is the authoritative source.

Strategy Inc (formerly MicroStrategy Incorporated, Nasdaq: MSTR) filed this Form 8-K on July 7, 2025 to report three capital-raising and securities-related developments.

First, the company filed a Certificate of Amendment to the certificate of designations for its 8.00% Series A Perpetual Strike Preferred Stock (STRK). The amendment sets the liquidation preference at $100^a per share as a floor, but adjusts it to the greatest of the $100 stated amount, the last reported sale price after any sale settled in STRK stock, or the ten-day average of last reported sale prices, so that it generally tracks the trading price. STRK continues to pay 8.00% cumulative dividends on the stated amount, quarterly, when declared.

Second, Strategy entered into a Sales Agreement for an at-the-market (ATM) program to sell up to $4.2 billion^b of its 10.00% Series A Perpetual Stride Preferred Stock (STRD), with TD Securities, Barclays, The Benchmark Company, Clear Street and Morgan Stanley as sales agents. Commissions are up to 2.0% of gross proceeds, and the company has no obligation to sell any shares. The accompanying press release states that proceeds are intended for general corporate purposes, including bitcoin acquisitions and working capital, and may also fund preferred dividend payments.

Third, Strategy amended its existing 10.00% Series A Perpetual Stretch Preferred (STRF) sales agreement, dated May 22, 2025, to add Morgan Stanley as an agent, and it filed updated risk factors and U.S. federal income tax disclosures for the STRK ATM program, which had been authorized for up to $21.0 billion^c. For investors, the filing focuses on the terms that determine how STRK and STRD behave and how the company funds itself through preferred equity issuance. The STRK amendment links the preferred's liquidation value to market price, and the updated tax disclosures flag possible deemed-distribution and fast-pay stock treatment risks for holders.

02—Key points

Key Highlights

STRK amendment: liquidation preference set at $100 stated amount as a floor, adjusted to the greatest of $100, the last reported sale price after sales, or the ten-day average sale price, so it generally approximates trading price.
STRK dividends: 8.00% cumulative on the stated amount, payable quarterly (March 31, June 30, September 30, December 31) when declared by the board.
STRD ATM program: sales agreement for up to $4.2 billion of 10.00% Series A Perpetual Stride Preferred Stock, with commissions of up to 2.0% of gross proceeds.
Stated use of proceeds: general corporate purposes, including bitcoin acquisitions and working capital, and possibly payment of dividends on STRF and STRK.
STRF ATM amended: Morgan Stanley added as an additional sales agent to the $2.1 billion STRF sales agreement originally dated May 22, 2025.
STRK ATM: updated risk factors and U.S. federal income tax considerations filed, covering deemed distributions, fast-pay stock rules and disqualified preferred stock treatment; the program has an aggregate offering price of up to $21.0 billion.
Redemption rights: Strategy may redeem all STRK shares for cash if total outstanding Stated Amount falls below $182.5 million (25% of the February 2025 issuance), or upon a Tax Event; holders have a put on a Fundamental Change at Stated Amount plus accrued dividends.

03—Questions

Frequently Asked Questions

How does the amendment change the STRK liquidation preference?
The liquidation preference was initially $100 per share. Beginning July 7, 2025, it adjusts each business day to the greatest of the $100 stated amount, the last reported sale price of STRK after any sale settled in STRK stock, or the arithmetic average of the last reported sale prices over the ten preceding trading days. The result is that the liquidation preference generally tracks the trading price, with $100 as a floor.
What is the size and structure of the new STRD ATM program?
Strategy entered into a Sales Agreement with TD Securities (USA) LLC, Barclays Capital Inc., The Benchmark Company, Clear Street LLC and Morgan Stanley & Co. LLC to sell up to $4.2 billion of STRD Stock. Sales may be made through at-the-market offerings or negotiated transactions or block trades, and the company has no obligation to sell any shares. The company will sell through only one agent on any single day and pays commissions of up to 2.0% of gross proceeds.
What will Strategy do with the money raised from these offerings?
The accompanying press release states that net proceeds are intended for general corporate purposes, including the acquisition of bitcoin and working capital. The company may also use proceeds to pay dividends on its STRF and STRK preferred stock.
What tax risks does the filing disclose for preferred holders?
The updated tax disclosures state that holders may be treated as receiving deemed distributions, for example from an increase in liquidation preference, from unpaid dividends, or from certain conversion rate adjustments, even without a cash payment. The filing also warns that the IRS could treat the stock as fast-pay stock, which is a listed transaction with reporting requirements. Because all shares trade under the same identifier, adverse treatment of some shares could affect all holders.

04—Continue

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