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Item 1. Legal Proceedings

2025-08-05 compared with 2025-05-05 · 356 added, 234 removed, 591 unchanged (50% of the section changed)

Legal Proceedings

For information regarding material pending legal proceedings in which we are involved, see “Commitments and Contingencies – Shareholder and Derivative Actions” in Note 6 of the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

We are involved in various legal proceedings arising in the normal course of business.

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If any of the following risks occur, our business, financial condition, or results of operations could be materially adversely affected.

In such case, the market price of our class A common stock, Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, which we refer to as our “listed securities,” could decline, and you may lose all or part of your investment.

In such case, the market price of our class A common stock and our Preferred Stock, which we refer to collectively as our “listed securities,” could decline, and you may lose all or part of your investment.

Risks Related to Our Business in General

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• any sales by us of our bitcoin at prices above or below their carrying value, which would result in our recording gains or losses upon sale of our bitcoin;

• the incurrence of tax liabilities on future unrealized gains on our bitcoin or as result of the cumulative-effect net increase of $12.75 billion to the opening balance of our retained earnings as of January 1, 2025 in connection with the adoption of ASU 2023-08;

• the incurrence of tax liabilities on future unrealized gains on our bitcoin or as result of the net increase of $12.75 billion to the opening balance of our retained earnings as of January 1, 2025 in connection with the adoption of ASU 2023-08;

• regulatory, commercial, and technical developments related to bitcoin or the Bitcoin blockchain, or digital assets more generally;

• the incurrence of additional fixed interest charges or dividend obligations on preferred stock;

• the incurrence of additional fixed interest charges or dividend obligations on our outstanding or newly issued Preferred Stock;

• the impact of war, terrorism, infectious diseases, natural disasters and other global events, and government responses to such events, on the global economy and the market for and price of bitcoin;

• significant changes to our software business, including significant changes in our software sales or operating expenses, or the timing of announcements of new offerings or research and development projects by us or our competitors;

• our profitability and expectations for future profitability and their effect on our deferred tax balances and net income for the period in which any adjustment to our net deferred tax asset valuation allowance may be made;

• increases or decreases in our unrecognized tax benefits.

Limited Ability to Adjust Expenses.

We base our operating expense budgets on expected revenue trends and strategic objectives.

Many of our expenses, such as interest expense on our debt, dividend obligations on our preferred stock, tax liabilities, office leases and certain personnel costs, are relatively fixed.

We may be unable to adjust spending quickly enough to offset any unexpected shortfall in our cash flow.

Accordingly, we may be required to take actions to pay expenses, such as selling bitcoin or using proceeds from equity or debt financings, some of which could cause significant variation in operating results in any quarter.

Many of our expenses, such as interest expense on our debt, dividend obligations on our outstanding Preferred Stock, tax liabilities, office leases and certain personnel costs, are relatively fixed.

We do not expect the cash generated by our software operations to be sufficient to cover such expenses, and we expect to use proceeds from equity or debt financings to pay our expenses and satisfy our liquidity needs that are in excess of our operating cash flows.

If we are unable to secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell bitcoin to satisfy our financial obligations.

Such actions could cause significant variation in our operating results in any quarter.

Based on the above factors, we believe quarter-to-quarter comparisons of our operating results are not a good indication of our future performance.

It is possible that in one or more future quarters, our operating results may be below the expectations of public market analysts and investors.

For example, a decline in the price of bitcoin at March 31, 2025 from the price at January 1, 2025 resulted in our experiencing

a $5.91 billion unrealized loss on digital assets for the quarter ended March 31, 2025, while an increase in the price of bitcoin at June 30, 2025 from the price at March 31, 2025 resulted in our experiencing a $14.05 billion unrealized gain on digital assets for the quarter ended June 30, 2025.

Additionally, due to the above factors, it is possible that in one or more future quarters, our operating results may be below the expectations of public market analysts and investors.

In that event, the market price of our listed securities may fall.

We may not be able to regain profitability in future periods

We generated a loss for the three months ended March 31, 2025 of $4.22 billion, primarily due to a $5.91 billion unrealized loss on digital assets, and we may not be able to regain profitability in future periods, particularly if we incur significant fair value losses related to our digital assets.

We may not be able to remain profitable in future periods

As of January 1, 2025, we have adopted ASU 2023-08, pursuant to which we are required to recognize increases or decreases in fair value of our digital assets as incurred in our Consolidated Statements of Operations.

We generated net income of $10.02 billion for the three months ended June 30, 2025 and $5.80 billion for the six months ended June 30, 2025, primarily due to a $14.05 billion and $8.14 billion, respectively, unrealized gain on digital assets for the respective periods, partially offset by $4.04 billion and $2.34 billion respectively, in deferred tax expenses during the respective periods.

We may not be able to remain profitable in future periods, particularly if we incur significant unrealized losses related to our digital assets, which will depend on the price of bitcoin at the end of the applicable period.

As a result, our results of operations and financial condition may be materially adversely affected.

Additionally, as of March 31, 2025, we had deferred tax liabilities with respect to the unrealized gain on our bitcoin holdings of approximately $2.28 billion.

Additionally, even during periods when we experience significant unrealized gains on digital assets (such as the three- and six-month periods ended June 30, 2025), we may nevertheless continue to experience significant cashflow shortfalls unless we sell our bitcoin or otherwise generate cashflow using our bitcoin.

As of June 30, 2025, we had deferred tax liabilities with respect to the unrealized gain on our bitcoin holdings of approximately $6.31 billion.

Our deferred tax liabilities are partially offset by deferred tax assets, such as net operating losses and capitalized research and development costs.

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Such increases in valuation allowances could materially and adversely affect net income in periods in which such charges are incurred.

A significant decrease in the market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations

As of March 31, 2025, our outstanding indebtedness was $8.22 billion, and our annual contractual interest expense was $35.1 million.

Additionally, as of March 31, 2025, we had outstanding $1.615 billion aggregate notional value of our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, with respect to which we are required to pay aggregate annual dividends of $146.2 million.

A significant decrease in the market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations or liquidity needs

As of July 31, 2025, our outstanding indebtedness was $8.24 billion, and our annual contractual interest expense was $36.5 million.

Additionally, as of July 31, 2025, we had outstanding $6.3 billion aggregate notional value of our outstanding Preferred Stock, with respect to which the aggregate annual regular dividends payable (including in the case of STRD Stock, as and if declared, and in the case of STRC Stock, assuming the initial dividend rate of 9.00% remains unchanged) were $568.03 million.

As part of our bitcoin strategy, we expect to incur or continue to incur additional indebtedness and fixed charges, and we expect to issue additional preferred stock.

For the quarter ended March 31, 2025, our enterprise analytics software business did not generate positive cash flow from operations, and we do not expect our enterprise analytics software business to generate sufficient cash flow to satisfy our obligations over the next twelve months.

If our enterprise analytics software business does not generate cash flows in future periods sufficient to satisfy our financial obligations, including our debt and cash dividend obligations, we intend to fund our obligations using cash proceeds from equity or debt financings.

For the quarter ended June 30, 2025, our enterprise analytics software business did not generate positive cash flow from operations, and we do not expect our enterprise analytics software business to generate sufficient cash flow from operations to satisfy our financial obligations or liquidity needs over the next twelve months.

If our enterprise analytics software business does not generate cash flows in future periods sufficient to satisfy our financial obligations and liquidity needs, including repayment of principal and payment of interest on our debt and cash dividends on our Preferred Stock, we intend to fund such payments using cash proceeds from equity or debt financings.

Our ability to obtain equity or debt financing may in turn depend on, among other factors, the value of our bitcoin holdings, investor sentiment and the general public perception of bitcoin, our strategy and our value proposition.

Accordingly, a significant decline in the market value of our bitcoin holdings or a negative shift in these other factors may create liquidity and credit risks, as such a decline or such shifts may adversely impact our ability to secure sufficient equity or debt financing to satisfy our financial obligations, including our debt and cash dividend obligations.

These risks could materialize at times when bitcoin is trading below its carrying value on our most recent balance sheet or our cost basis.

As bitcoin constitutes the vast bulk of assets on our balance sheet, if we are unable to secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell bitcoin to satisfy our financial obligations, and we may be required to make such sales at prices below our cost basis or that are otherwise unfavorable.

As bitcoin constitutes the vast bulk of assets on our balance sheet, if we are unable to secure equity or debt financing in a timely manner, on favorable terms, or at all, we may be required to sell bitcoin to satisfy our financial obligations or liquidity needs, and we may be required to make such sales at prices below our cost basis or on terms that are otherwise unfavorable.

Any such sale of bitcoin may have a material adverse effect on our operating results and financial condition, and could impair our ability to secure additional equity or debt financing in the future.

Our inability to secure additional equity or debt financing in a timely manner, on favorable terms or at all, or to sell our bitcoin in amounts and at prices sufficient to satisfy our financial obligations, including our debt service and cash dividend obligations, could cause us to default under such obligations.

Any default on our current or future indebtedness or preferred stock may have a material adverse effect on our financial condition.

Our inability to secure additional equity or debt financing in a timely manner, on favorable terms or at all, or to sell our bitcoin in amounts and at prices sufficient to satisfy our financial obligations or liquidity needs, including our debt service and cash dividend payments on our Preferred Stock, could cause us to default under such obligations.

Any default on our current or future indebtedness or any of our outstanding or newly issued preferred stock could have a material adverse effect on our financial condition.

See “Risks Related to Our Outstanding and Potential Future Indebtedness” and “Risks Related to Our Preferred Stock” for additional details about the risks which may impact us if we are unable to satisfy our debt service and cash dividend obligations.

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enacted the IRA in August 2022.

Unless an exemption applies, the IRA imposes a 15% CAMT on a corporation with respect to an initial tax year and subsequent tax years, if the average annual adjusted financial statement income for any consecutive three-tax-year period preceding the initial tax year exceeds $1 billion.

On September 12, 2024, the Department of Treasury and the Internal Revenue Service issued proposed regulations with respect to the application of the CAMT.

Unless an exemption applies, the IRA imposes a 15% CAMT on a corporation with respect to an initial tax year and subsequent tax years, if the average annual AFSI for any consecutive three-tax-year period preceding the initial tax year exceeds $1 billion.

On September 12, 2024, the Department of the Treasury and the IRS issued proposed regulations with respect to

the application of the CAMT.

On June 2, 2025, the IRS published Notice 2025-27, which signaled that the IRS plans to issue additional interim guidance on how unrealized gains and losses on certain investment assets reported for financial statement purposes should be taken into account for purposes of determining AFSI.

On July 30, 2025, a White House working group established by President Trump in January 2025 published a report on strengthening American leadership in digital financial technology, which called for the Department of the Treasury and the IRS to publish guidance addressing the determination of AFSI with respect to financial accounting for unrealized gains and losses on investment assets other than stock and partnership interests.

On January 1, 2025, we adopted ASU 2023-08.

ASU 2023-08 requires us to measure our bitcoin holdings at fair value in our statement of financial position, with gains and losses from changes in the fair value of our bitcoin recognized in net income each reporting period.

As a result of our adoption of ASU 2023-08, as of January 1, 2025, we applied a cumulative-effect net increase to the opening balance of our retained earnings of $12.75 billion.

For purposes of calculating the adjusted financial statement income, we will be required to ratably allocate this increase to our retained earnings over a four year period, from 2025 through 2028.

When determining whether we are subject to CAMT and when calculating any related tax liability for an applicable tax year, the proposed regulations provide that, among other adjustments, our adjusted financial statement income must include this ratable amount in addition to any unrealized gains or losses reported in the applicable tax year.

Accordingly, as a result of the enactment of the IRA and our adoption of ASU 2023-08 on January 1, 2025, unless the IRA is amended or the proposed regulations with respect to CAMT, when finalized, are revised to provide relief (or other interim relief is granted), we could become subject to the CAMT in the 2026 tax year and beyond.

If we become subject to the CAMT, it could result in a material tax obligation that we would need to satisfy in cash, which could materially affect our financial results, including our earnings and cash flow, and our financial condition.

As a result of our adoption of ASU 2023-08, as of January 1, 2025, we applied a net increase to the opening balance of our retained earnings of $12.75 billion.

For purposes of calculating the AFSI, we will be required to ratably allocate this increase to our retained earnings over a four year period, from 2025 through 2028.

When determining whether we are subject to CAMT and when calculating any related tax liability for an applicable tax year, the currently proposed regulations issued in September 2024 provide that, among other adjustments, our AFSI must include this ratable amount in addition to any unrealized gains or losses reported in the applicable tax year.

Accordingly, as a result of the enactment of the IRA and our adoption of ASU 2023-08 on January 1, 2025, unless the IRA is amended or the proposed regulations with respect to CAMT, when finalized, are revised to provide relief (or other interim relief is granted), we expect, given the magnitude of our unrealized gain on digital assets as of June 30, 2025, that we would become subject to the CAMT beginning in the 2026 tax year.

Whether we do become subject to the CAMT will depend on numerous factors outside of our control, including the publication of any interim or final guidance with respect to the CAMT or the calculation of AFSI, as well as the magnitude of our unrealized gains or losses on our bitcoin holdings for the year ending December 31, 2025, which in turn will depend on our bitcoin holdings and the market value of bitcoin as of that date.

If we become subject to the CAMT, this could result in a significant increase in our total tax obligations, which we would need to satisfy in cash, which in turn could materially affect our financial results, including our financial condition, cash flow and results of operations.

Additionally, because unrealized gain on our digital assets does not increase our cash flow, if we become subject to CAMT, we may need to liquidate some of our bitcoin holdings or issue additional debt or equity securities to raise cash sufficient to satisfy our tax obligations.

We may have exposure to greater than anticipated tax liabilities

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In addition, if we sold any of our bitcoin at prices greater than the cost basis of the bitcoin sold, we would incur a tax liability with respect to any gain recognized, and such tax liability could be material.

Changes in the tax laws of foreign jurisdictions could arise, including as a result of the project undertaken by the Organisation for Economic Co-operation and Development (“OECD”) to combat base erosion and profit shifting (“BEPS”).

The OECD, which represents a coalition of member countries, has issued recommendations that, in some cases, make substantial changes to numerous long-standing tax positions and principles.

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Tax Cuts and Jobs Act, most of our income is taxable in the U.S.

with a significant portion taxable under the Global Intangible Low-Taxed Income (“GILTI”) regime.

Beginning in fiscal year 2026, the deduction allowable under the GILTI regime will decrease from 50% to 37.5%, which will increase the effective tax rate imposed on our income.

with a significant portion taxable under the Global Intangible Low-Taxed Income (“GILTI”) regime (or the Net CFC Tested Income regime after enactment of the One Big Beautiful Bill Act of 2025).

Beginning in fiscal year 2026, the deduction allowable under the GILTI regime (or the Net CFC Tested Income regime) will decrease from 50% to 40%, which will increase the effective tax rate imposed on our income.

also enacted the IRA in August 2022.

On September 12, 2024, the Department of Treasury and the Internal Revenue Service issued proposed regulations with respect to the application of the CAMT.

On September 12, 2024, the Department of the Treasury and the IRS issued proposed regulations with respect to the application of the CAMT.

Unless an exemption applies, the IRA imposes (i) a 1% excise tax on certain stock repurchases made by publicly traded U.S.

corporations, and (ii) a 15% corporate alternative minimum tax on a corporation with respect to an initial tax year and subsequent tax years, if the average annual adjusted financial statement income for any consecutive three-tax-year period preceding the initial tax year exceeds $1 billion.

As discussed in greater detail under the risk factor heading “Risks Related to Our Business in General-Unrealized gains on our bitcoin holdings could cause us to become subject to the corporate alternative minimum tax under the Inflation Reduction Act of 2022,” as a result of the enactment of the IRA and our adoption of ASU 2023-08 on January 1, 2025, unless the IRA is amended or the proposed regulations with respect to CAMT are, when finalized, revised to provide relief (or other interim relief is granted), we could become subject to the CAMT in the 2026 tax year and beyond.

If we become subject to these new taxes under the IRA for these or any other reasons, it could result in a material tax obligation that we would need to satisfy in cash, which could materially affect our financial results, including our earnings and cash flow, and our financial condition.

Further, other existing U.S.

tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied in a manner that negatively impacts us.

corporations, and (ii) a 15% CAMT on a corporation with respect to an initial tax year and subsequent tax years, if the average annual AFSI for any consecutive three-tax-year period preceding the initial tax year exceeds $1 billion.

As discussed in greater detail under the risk factor heading “Risks Related to Our Business in General-Unrealized gains on our bitcoin holdings could cause us to become subject to the corporate alternative minimum tax under the Inflation Reduction Act of 2022,” as a result of the enactment of the IRA and our adoption of ASU 2023-08 on January 1, 2025, unless the IRA is amended or the proposed regulations with respect to CAMT, when finalized, are revised to provide relief (or other interim relief is granted), we expect, given the magnitude of our unrealized gain on digital assets as of June 30, 2025, that we would become subject to the CAMT in the 2026 tax year.

If we become subject to these new taxes under the IRA, for these or any other reasons, it could result in a material tax obligation, which we would need to satisfy in cash, which in turn could materially affect our financial condition, cash flow and results of operations.

Further, other existing

domestic or foreign tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied in a manner that negatively impacts us.

Our determination of our tax liability is subject to review by applicable domestic and foreign tax authorities.

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Our bitcoin holdings have significantly affected our financial results and if we continue to increase our overall holdings of bitcoin in the future, they will have an even greater impact on our financial results and the market price of our listed securities.

See “Risks Related to Our Bitcoin Strategy and Holdings - Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our bitcoin holding s .”

For further details, see “Risks Related to Our Bitcoin Strategy and Holdings - Our historical financial statements prior to March 31, 2025 do not reflect the potential variability in earnings that we have experienced to date and may experience in the future relating to our bitcoin holding s .”

Our assets are concentrated in bitcoin.

The vast majority of our assets are concentrated in our bitcoin holdings.

The concentration of our assets in bitcoin limits our ability to mitigate risk that could otherwise be achieved by holding a more diversified portfolio of treasury assets.

We purchase bitcoin using primarily proceeds from equity and debt financings.

The vast bulk of our assets are concentrated in our bitcoin holdings.

The concentration of our assets in bitcoin limits our ability to mitigate risk that could otherwise be achieved by holding a more diversified portfolio of assets.

Our bitcoin strategy relies substantially on our ability to complete equity and debt financings.

Substantially all of our bitcoin purchases have been made using proceeds from equity and debt financings.

Our ability to achieve the objectives of our bitcoin strategy depends in significant part on our ability to obtain equity and debt financing.

If we are unable to obtain equity or debt financing on favorable terms or at all, we may not be able to successfully execute on our bitcoin strategy.

Our bitcoin strategy has not been tested over an extended period of time or under different market conditions.

Our bitcoin strategy has not been tested over an extended period of time or under all market conditions.

We are continually examining the risks and rewards of our strategy to acquire and hold bitcoin.

This strategy has not been tested over an extended period of time or under different market conditions.

This strategy has not been tested over an extended period of time or under all market conditions.

For example, although we believe bitcoin, due to its limited supply, has the potential to serve as a hedge against inflation in the long term, the short-term price of bitcoin declined in recent periods during which the inflation rate increased.

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Due in particular to the volatility in the price of bitcoin, we expect the adoption of ASU 2023-08 to have a material impact on our financial results, increase the volatility of our financial results, and affect the carrying value of our bitcoin on our balance sheet.

For example, we incurred an unrealized loss on digital assets of $5.91 billion for the quarter ended March 31, 2025, and an unrealized gain on digital assets of $14.05 billion for the quarter ended June 30, 2025, and significant variances in gains and losses could occur in future quarters.

As described in greater detail under the risk factor heading “Risks Related to Our Business in General-Unrealized gains on our bitcoin holdings could cause us to become subject to the corporate alternative minimum tax under the Inflation Reduction Act of 2022,” ASU 2023-08 could also have adverse tax consequences.

These impacts could in turn have a material adverse effect on our financial results and the market price of our listed securities.

Additionally, as a result of ASU 2023-08 requiring a cumulative-effect adjustment to our opening balance of retained earnings as of January 1, 2025 and not permitting retrospective restatement of our historical financial statements, our results for the quarter ended March 31, 2025, and for future periods, will not be comparable to results from periods prior to our adoption of the guidance.

Additionally, as a result of ASU 2023-08 requiring a cumulative-effect adjustment to our opening balance of retained earnings as of January 1, 2025 and not permitting retrospective restatement of our historical financial statements, our results for the quarter ended June 30, 2025, and for future periods, will not be comparable to results from periods prior to our adoption of the guidance.

The broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of, and use cases for, digital assets, market perception of digital assets, and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing, and there may be additional risks in the future that are not possible to predict.

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• decreased user and investor confidence in bitcoin, including due to the various factors described herein;

• investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, miners and investors;

• investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, other companies executing a similar bitcoin strategy to ours, miners and investors;

(ii) actual or expected significant dispositions of bitcoin by large holders, including the expected liquidation of digital assets seized by governments or associated with entities that have filed for bankruptcy protection, such as the (a) transfers of bitcoin to creditors of the hacked cryptocurrency exchange Mt.

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and (iii) actual or perceived manipulation of the spot or derivative markets for bitcoin or spot bitcoin exchange-traded products (“ETPs”);

• negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, bitcoin or the broader digital assets industry, for example, (i) public perception that bitcoin can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023;

• negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, bitcoin or the broader digital assets industry, including, for example, (i) public perception that bitcoin can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023;

(ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major participants in the bitcoin ecosystem, including the SEC’s enforcement action against Binance Holdings Ltd.;

(iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates;

and (iv) the actual or perceived environmental impact of bitcoin and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the bitcoin mining process;

(iv) the actual or perceived environmental impact of bitcoin and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the bitcoin mining process and (v) activities relating to other cryptocurrencies, including “meme coins”;

• changes in consumer preferences and the perceived value or prospects of bitcoin;

• developments affecting other companies pursuing a bitcoin strategy similar to ours, such as the abandonment of the strategy by such other companies, the failure by such other companies to satisfy their debt or other financial obligations, market concerns as to the viability or creditworthiness of such other companies, the loss or disposition of substantial bitcoin by such other companies, regulatory or legal judgments or actions against such other companies due to their adoption of a bitcoin strategy, or any other similar actions or negative outcomes impacting such other companies, whether due to any of the various risk factors described herein or for any other reason;

• competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S.

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• the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed bitcoin, or the transfer of substantial amounts of bitcoin from bitcoin wallets attributed to Mr.

• developments relating to the Bitcoin protocol, including (i) changes to the Bitcoin protocol that impact its security, speed, scalability, usability, or value, such as changes to the cryptographic security protocol underpinning the Bitcoin blockchain, changes to the maximum number of bitcoin outstanding, changes to the mutability of transactions, changes relating to the size of blockchain blocks, and similar changes, (ii) failures to make upgrades to the Bitcoin protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the Bitcoin protocol that introduce software bugs, security risks or other elements that adversely affect bitcoin;

• disruptions, failures, unavailability, or interruptions in services of trading venues for bitcoin, such as, for example, the announcement by the digital asset exchange FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy protection and the SEC enforcement action brought against Binance Holdings Ltd., which initially sought to freeze all of its assets during the pendency of the enforcement action and has since resulted in Binance discontinuing all fiat deposits and withdrawals in the U.S.;

• developments relating to the Bitcoin protocol, including (i) changes to the Bitcoin protocol that impact its security, speed, scalability, usability, or value, such as changes to the cryptographic security protocol underpinning the Bitcoin blockchain, changes to the maximum number of bitcoin outstanding, changes to the mutability of transactions, changes relating to the size of blockchain blocks, changes to the amount of data that may be embedded into the bitcoin blockchain, and similar changes, (ii) failures to make upgrades to the Bitcoin protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the Bitcoin protocol that introduce software bugs, security risks or other elements that adversely affect bitcoin;

and others, which initially sought to freeze all assets on the Binance.US platform during the pendency of the enforcement action and has since resulted in Binance discontinuing all fiat deposits and withdrawals in the U.S.;

• the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, trading venues, lending platforms, investment funds, or other digital asset industry participants, such as the filing for bankruptcy protection by digital asset trading venues FTX Trading and BlockFi and digital asset lending platforms Celsius Network and Voyager Digital Holdings in 2022, the ordered liquidation of the digital asset investment fund Three Arrows Capital in 2022, the announced liquidation of Silvergate Bank in 2023, the government-mandated closure and sale of Signature Bank in 2023, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by the Nevada Department of Business and Industry in 2023, and the exit of Binance from the U.S.

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• regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of bitcoin, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;

• further reductions in mining rewards of bitcoin, including due to block reward halving events, which are events that occur after a specific period of time (the most recent of which occurred in April 2024) that reduce the block reward earned by “miners” who validate bitcoin transactions, or increases in the costs associated with bitcoin mining, including increases in electricity costs and hardware and software used in mining, or new or enhanced regulation or taxation of bitcoin mining, which could further increase the costs associated with bitcoin mining, any of which may cause a decline in support for the Bitcoin network;

• further reductions in mining rewards of bitcoin, including due to block reward halving events, which are programmed events that occur approximately every four years (the most recent of which occurred in April 2024) that reduce the block reward earned by “miners” who validate bitcoin transactions, or increases in the costs associated with bitcoin mining, including increases in electricity costs and hardware and software used in mining, or new or enhanced regulation or taxation of bitcoin mining, which could further increase the costs associated with bitcoin mining, any of which may cause a decline in support for the Bitcoin network;

• transaction congestion and fees associated with processing transactions on the Bitcoin network;

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The application of state and federal securities laws and other laws and regulations to digital assets is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.

federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.

federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could impose material additional regulatory burdens and costs for us and /or materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or transfer bitcoin.

For example, within the past several years:

• President Trump signed an executive order instructing a working group comprised of representatives from key federal agencies to evaluate measures that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries;

• in July 2025, President Trump signed into law the Guiding and Establishing National Innovation for US Stablecoins Act (“GENIUS Act”), establishing a legislative framework for the regulation of payment stablecoins and marking the first federal legislation for the regulation of digital assets in the U.S.;

• in July 2025, the U.S.

House of Representatives passed the Digital Asset Market Clarity Act of 2025 (“CLARITY Act”), a comprehensive digital asset market structure and regulation bill.

The CLARITY Act, and other digital asset market structure and regulation bills, remain under consideration and continue to evolve in the U.S.

• in January 2025, President Trump signed an executive order instructing a working group comprised of representatives from key federal agencies to evaluate measures that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries and on July 30, 2025, such working group published a report on strengthening American leadership in digital financial technology, which recommended several regulatory and legislative proposals to advance President Trump’s January 2025 executive order;

• in January 2025, the SEC announced the formation of a “Crypto Task Force,” which will seek to provide clarity on the application of the federal securities laws to the crypto asset market and to recommend policy measures with respect to digital asset security status, registration and listing of digital asset-based investment vehicles, and digital asset custody, lending and staking;

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and its then chief executive officer reached a settlement with the U.S.

Department of Justice, CFTC, the U.S.

Department of Treasury’s Office of Foreign Asset Control, and the Financial Crimes Enforcement Network to resolve a multi-year investigation by the agencies and a civil suit brought by the CFTC, pursuant to which Binance Holdings Ltd.

Department of Justice, U.S.

Commodity Futures Trading Commission (“CFTC”), the Treasury’s Office of Foreign Asset Control, and the Financial Crimes Enforcement Network to resolve a multi-year investigation by the agencies and a civil suit brought by the CFTC, pursuant to which Binance Holdings Ltd.

agreed to, among other things, pay $4.3 billion in penalties across the four agencies and to discontinue its operations in the United States;

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was dismissed with prejudice in March 2025, and the complaint against Binance Holdings Ltd.

was subject to a 60-day stay as of March 2025, the SEC or other regulatory agencies may initiate similar actions in the future, which could materially impact the price of bitcoin and our ability to own or transfer bitcoin.

It is not possible to predict whether or when new laws will be enacted that change the legal framework governing digital assets or provide additional authorities to the SEC or other regulators, or whether or when any other federal, state or foreign legislative bodies will take any similar actions.

was dismissed in May 2025, the SEC or other regulatory agencies may initiate similar actions in the future, which could materially impact the price of bitcoin and our ability to own or transfer bitcoin.

It is not possible to predict whether or when new laws and regulations will be enacted or adopted that change the legal framework governing digital assets or provide additional authorities to the SEC, the CFTC, or other regulators, or whether or when any other federal, state or foreign legislative or regulatory bodies will take any similar actions.

For example, the proposed CLARITY Act discussed above could, if it became law, grant the CFTC additional regulatory and supervisory powers with respect to spot digital assets, including bitcoin, as “digital commodities” and potentially result in the imposition of additional regulatory obligations and burdens to us, which could potentially include registration, disclosure, reporting, and business conduct requirements.

It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact the value of digital assets generally and bitcoin specifically.

The consequences of any new law or regulation relating to digital assets and digital asset activities could adversely affect the market price of bitcoin, as well as our ability to hold or transact in bitcoin, and in turn adversely affect the market price of our listed securities.

Furthermore, other companies have begun to adopt strategies similar to ours with respect to bitcoin and other digital assets, and this could result in new laws or regulations, or new interpretations of existing laws or regulations, impacting our bitcoin strategy, particularly if the adoption of digital asset strategies by other companies continues or accelerates.

Moreover, the risks of engaging in a bitcoin strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

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Actions by U.S.

banking regulators, such as the issuance in February 2023 by Federal banking agencies of the “Interagency Liquidity Risk Statement,” which cautioned banks on contagion risks posed by providing services to digital assets customers, and similar actions, have in the past resulted in or contributed to reductions in access to banking services for bitcoin-related customers and service providers, or the willingness of traditional financial institution to participate in markets for digital assets.

banking regulators, such as the issuance in February 2023 by federal banking agencies of the “Interagency Liquidity Risk Statement,” which cautioned banks on contagion risks posed by providing services to digital assets customers, and similar actions, have in the past resulted in or contributed to reductions in access to banking services for bitcoin-related customers and service providers, or the willingness of traditional financial institutions to participate in markets for digital assets.

The liquidity of bitcoin may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for bitcoin and other digital assets.

Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our bitcoin holdings

Our historical financial statements do not fully reflect the potential variability in earnings that we may experience in the future from holding or selling significant amounts of bitcoin.

Our historical financial statements prior to March 31, 2025 do not reflect the potential variability in earnings that we have experienced to date and may experience in the future relating to our bitcoin holdings

Our historical financial statements prior to March 31, 2025 do not fully reflect the potential variability in earnings that we have experienced to date and may experience in the future from holding or selling significant amounts of bitcoin.

The price of bitcoin has historically been subject to dramatic price fluctuations and is highly volatile.

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Prior to our adoption of ASU 2023-08 on January 1, 2025, we performed an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted (unadjusted) prices on the active exchange, indicated that it was more likely than not that any of our bitcoin assets were impaired.

In determining if an impairment had occurred, we considered the lowest

price of one bitcoin quoted on the active exchange at any time since acquiring the specific bitcoin held.

In determining if an impairment had occurred, we considered the lowest price of one bitcoin quoted on the active exchange at any time since acquiring the specific bitcoin held.

If the carrying value of a bitcoin exceeded that lowest price at any time during the quarter, an impairment loss was deemed to have occurred with respect to that bitcoin in the amount equal to the difference between its carrying value and such lowest price, and subsequent increases in the price of bitcoin did not affect the carrying value of our bitcoin.

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ASU 2023-08 does not permit retrospective restatement of prior periods.

For the three months ended March 31, 2025, we incurred an unrealized loss on digital assets of $5.91 billion.

Due to the application of a different accounting standard for the three months ended March 31, 2025 relative to the corresponding prior period, and due to ASU 2023-08 not permitting retrospective restatement of prior periods, our results for the three months ended March 31, 2025 are not comparable to our results for the corresponding prior period, and our future results will similarly not be comparable to results from periods prior to our adoption of the guidance.

For the three and six months ended June 30, 2025, we incurred an unrealized gain on digital assets of $14.05 billion and $8.14 billion, respectively.

Due to the application of a different accounting standard for the three and six months ended June 30, 2025 relative to the corresponding periods ended June 30, 2024, and due to ASU 2023-08 not permitting retrospective restatement of prior periods, our results for the three and six months ended June 30, 2025 are not comparable to our results for the corresponding prior periods, and our future results will similarly not be comparable to results from periods prior to our adoption of the guidance.

Additionally, any unrealized gain on digital assets reflected in our financial results for a given quarter does not reflect cash actually earned by us during that quarter, and a significant increase in our assets included on our balance sheet is not associated with an actual increase in our liquidity.

As a result of our adoption of ASU 2023-08, we may incur greater losses during periods when we previously would have incurred smaller losses or no losses because we had already impaired the carrying value of our bitcoin to a low price observed during a prior period, and we may also incur gains during periods when the market value of bitcoin rises, as compared to periods prior to January 1, 2025, when we would not have incurred any gains under similar circumstances.

Accordingly, due in particular to the volatility in the price of bitcoin, we expect the adoption of ASU 2023-08 to increase the volatility of our financial results.

Because we intend to purchase additional bitcoin in future periods and increase our overall holdings of bitcoin, we expect that the proportion of our total assets represented by our bitcoin holdings will increase in the future, and we expect ASU 2023-08 to significantly affect the carrying value of our bitcoin on our balance sheet.

As a result, and in particular due to our adoption of ASU 2023-08, volatility in our earnings may be significantly more than what we experienced in prior periods.

Accordingly, due in particular to the volatility in the price of bitcoin, the adoption of ASU 2023-08 has to date increased, and we expect will continue to impact, the volatility of our financial results.

For further details see “Risks Related to Our Bitcoin Strategy and Holdings - Our bitcoin strategy exposes us to various risks, including risks associated with bitcoin.” Because we intend to purchase additional bitcoin in future periods and increase our overall holdings of bitcoin, we expect that the proportion of our total assets represented by our bitcoin holdings will increase in the future, and we expect ASU 2023-08 to significantly affect the carrying value of our bitcoin on our balance sheet.

As a result, volatility in our earnings may be even greater in future periods than what we have experienced to date.

The availability of spot ETPs for bitcoin and other digital assets may adversely affect the market price of our listed securities

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The approved spot ETPs commenced trading directly to the public on July 23, 2024.

The listing and trading of spot ETPs for ether offers investors another alternative to gain exposure to digital assets, which could result in a decline in the trading price of bitcoin as well as a decline in the value of our class A common stock relative to the value of our bitcoin, as well as our Perpetual Strike Preferred Stock.

Although we are an operating company, and we believe we offer a different value proposition than a bitcoin investment vehicle such as a spot bitcoin ETP, investors may nevertheless view our class A common stock as an alternative to an investment in an ETP, and choose to purchase shares of a spot bitcoin ETP instead of our class A common stock.

They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to bitcoin that is generally not subject to federal income tax at the entity level as we are, or the other risk factors applicable to an operating business, such as ours.

Additionally, unlike spot bitcoin ETPs, we (i) do not seek for

our shares of class A common stock to track the value of the underlying bitcoin we hold before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the Securities Exchange Act of 1934, as amended (“the Exchange Act”), including Regulation M, and other securities laws, which enable ETPs to continuously align the value of their shares to the price of the underlying assets they hold through share creation and redemption, (iii) are a Delaware corporation rather than a statutory trust, and do not operate pursuant to a trust agreement that would require us to pursue one or more stated investment objectives, and (iv) are not required to provide daily transparency as to our bitcoin holdings or our daily net asset value.

Furthermore, recommendations by broker-dealers to buy, hold, or sell complex products and non-traditional ETPs, or an investment strategy involving such products, may be subject to additional or heightened scrutiny that would not be applicable to broker-dealers making recommendations with respect to our securities.

Based on how we are viewed in the market relative to ETPs, and other vehicles which offer economic exposure to bitcoin, such as bitcoin futures exchange-traded funds (“ETFs”), leveraged bitcoin futures ETFs, and similar vehicles offered on international exchanges, any premium or discount in our class A common stock relative to the value of our bitcoin holdings may increase or decrease in different market conditions.

As a result of the foregoing factors, availability of spot ETPs for bitcoin and other digital assets could have a material adverse effect on the market price of our listed securities.

Additionally, unlike spot bitcoin ETPs, we (i) do not seek for our shares of class A common stock to track the value of the underlying bitcoin we hold before payment of expenses and liabilities, (ii) do not benefit from various exemptions and relief under the Securities Exchange Act of 1934, as amended (“the Exchange Act”), including Regulation M, and other securities laws, which enable ETPs to continuously align the value of their shares to the price of the underlying assets they hold through share creation and redemption, (iii) are a Delaware corporation rather than a statutory trust, and do not operate pursuant to a trust agreement that would require us to pursue one or more stated investment objectives, and (iv) are not required to provide daily transparency as to our bitcoin holdings or our daily net asset value.

Furthermore, recommendations by

broker-dealers to buy, hold, or sell complex products and non-traditional ETPs, or an investment strategy involving such products, may be subject to additional or heightened scrutiny that would not be applicable to broker-dealers making recommendations with respect to our securities.

Based on how we are viewed in the market relative to ETPs, and other vehicles which offer economic exposure to bitcoin, such as bitcoin futures exchange-traded funds (“ETFs”), leveraged bitcoin futures ETFs, companies that pursue a strategy similar to ours of acquiring digital assets, and similar vehicles offered on international exchanges, any premium or discount in our class A common stock relative to the value of our bitcoin holdings may increase or decrease in different market conditions.

Additionally, to the extent that investors are seeking an investment with a dollar-denominated yield return, investors may choose to allocate to certain funds that pursue yield-based strategies based on trading derivatives of our class A common stock rather than purchasing our Preferred Stock, as the former may, from time to time, produce higher yields than our Preferred Stock.

As a result of the foregoing factors, availability of spot ETPs for bitcoin and other digital assets, as well as funds that pursue yield-based strategies based on trading derivatives of our class A common stock, could have a material adverse effect on the market price of our listed securities.

Our bitcoin strategy subjects us to enhanced regulatory oversight

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While we have implemented and maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and take care to only acquire our bitcoin through entities subject to anti-money laundering regulation and related compliance rules in the United States, if we are found to have purchased any of our bitcoin from bad actors that have used bitcoin to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in bitcoin by us may be restricted or prohibited.

Although our bitcoin holdings do not currently serve as collateral securing any of our outstanding indebtedness as of March 31, 2025, we may incur indebtedness or enter into other financial instruments in the future that may be collateralized by our bitcoin holdings.

Although our bitcoin holdings did not serve as collateral securing any of our outstanding indebtedness as of June 30, 2025, we may incur indebtedness or enter into other financial instruments in the future that may be collateralized by our bitcoin holdings.

We may also consider pursuing strategies to create income streams or otherwise generate funds using our bitcoin holdings.

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Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of our bitcoin

Bitcoin trading venues are relatively new and, in many cases, unregulated.

Bitcoin trading venues are relatively new (compared to stock exchanges) and, in many cases, unregulated.

Furthermore, there are many bitcoin trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance.

cease or pause for a prolonged period the trading of bitcoin or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

As a result, the marketplace may lose confidence in bitcoin trading venues, including prominent exchanges that handle a significant volume of bitcoin trading and/or are subject to regulatory oversight, in the event one or more bitcoin trading venues cease or pause for a prolonged period the trading of bitcoin or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

In 2019 there were reports claiming that 80-95% of bitcoin trading volume on trading venues was false or non-economic in nature, with specific focus on unregulated exchanges located outside of the United States.

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was dismissed with prejudice in March 2025, and the complaint against Binance Holdings Ltd.

was subject to a 60-day stay as of March 2025, the SEC or other regulatory agencies may initiate similar actions in the future.

was dismissed in May 2025, the SEC or other regulatory agencies may initiate similar actions in the future.

As the price of our listed securities is affected by the value of our bitcoin holdings, the failure of a major participant in the bitcoin ecosystem could have a material adverse effect on the market price of our listed securities.

The concentration of our bitcoin holdings enhances the risks inherent in our bitcoin strategy

As of May 2, 2025, we held approximately 555,450 bitcoins that were acquired at an aggregate purchase price of $38.08 billion and we intend to purchase additional bitcoin and increase our overall holdings of bitcoin in the future.

The concentration of our bitcoin holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our bitcoin strategy.

As of July 31, 2025, we held approximately 628,791 bitcoins that were acquired at an aggregate purchase price of $46.076 billion and we intend to purchase additional bitcoin and increase our overall holdings of bitcoin in the future.

The concentration of our bitcoin holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of assets, and the absence of diversification enhances the risks inherent in our bitcoin strategy.

Any future significant declines in the price of bitcoin would have a more pronounced impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.

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Accordingly, the emergence or growth of digital assets other than bitcoin may have a material adverse effect on our financial condition.

As of March 31, 2025, bitcoin was the largest digital asset by market capitalization.

As of June 30, 2025, bitcoin was the largest digital asset by market capitalization.

However, there are numerous alternative digital assets and many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain platforms or digital assets that do not use proof-of-work mining like the Bitcoin network.

For example, in late 2022, the Ethereum network transitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly less computing power than proof-of-work mining.

The Ethereum network has completed another major upgrade since then and may undertake additional upgrades in the future.

The Ethereum network has completed another major update since then and may undertake additional updates in the future.

If the mechanisms for validating transactions in Ethereum and other alternative digital assets are perceived as superior to proof-of-work mining, those digital assets could gain market share relative to bitcoin.

Other alternative digital assets that compete with bitcoin in certain ways include “stablecoins,” which are designed to maintain a constant price because of, for instance, their issuers’ promise to hold high-quality liquid assets (such as U.S.

Other alternative digital assets that compete with bitcoin in certain ways include “stablecoins,” which are designed to maintain a constant price related to or based on some other asset or traditional currency because of, for instance, their issuers’ promise to hold high-quality liquid assets (such as U.S.

dollar deposits and short-term U.S.

treasury securities) equal to the total value of stablecoins in circulation.

Stablecoins have grown rapidly as an alternative to bitcoin and other digital assets as a medium of exchange and store of value, particularly on digital asset trading platforms.

As of March 31, 2025, two of the seven largest digital assets by market capitalization were U.S.

In July 2025, the GENIUS Act was enacted, which establishes a federal framework for “payment stablecoins,” treating them as payment systems, not securities, and mandating fiat-backed reserves, monthly disclosures, anti-money laundering safeguards, and similar measures.

Stablecoins have grown rapidly as an alternative to bitcoin and other digital assets as a medium of exchange and store of value, particularly on digital asset trading platforms, and their use as an alternative to bitcoin could expand further as a result of the GENIUS Act being enacted.

As of June 30, 2025, two of the seven largest digital assets by market capitalization were U.S.

dollar-pegged stablecoins.

Additionally, central banks in some countries have started to introduce digital forms of legal tender.

For example, China’s CBDC project was made available to consumers in January 2022, and governments including the United States, the United Kingdom, the European Union, and Israel have been discussing the potential creation of new CBDCs.

Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete with, or replace, bitcoin and other digital assets as a

medium of exchange or store of value.

As a result, the emergence or growth of these or other digital assets could cause the market price of bitcoin to decrease, which could have a material adverse effect on our business, prospects, financial condition, and operating results.

For example, China’s central bank digital currency (“CBDC”) project was made available to consumers in January 2022, and governments including the United States, the United Kingdom, the European Union, and Israel have been discussing the potential creation of new CBDCs.

Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing jurisdiction, could also compete with, or replace, bitcoin and other digital assets as a medium of exchange or store of value.

As a result, the emergence or growth of these or other digital

assets could cause the market price of bitcoin to decrease, which could have a material adverse effect on our business, prospects, financial condition, and operating results.

Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents

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As a result, our bitcoin holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Further, bitcoin we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Further, the bitcoin that we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.

Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered bitcoin or otherwise generate funds using our bitcoin holdings, including in particular during times of market instability or when the price of bitcoin has declined significantly.

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Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly stole over $400 million in digital assets from customers.

In 2025, Coinbase reported that criminals bribed certain of its non-U.S.

employees to steal customer data to use in social engineering attacks.

A successful security breach or cyberattack could result in:

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In the past, hackers have successfully employed a social engineering attack against one of our service providers and misappropriated our digital assets, although, to date, such events have not been material to our financial condition or operating results.

Threats can come from a variety of sources, including

criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders.

Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders.

In addition, certain types of attacks could harm us even if our systems are left undisturbed.

For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate preventative measures.

For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods

of time, or until launched against a target and we may not be able to implement adequate preventative measures.

Further, there has been an increase in such activities due to the increase in work-from-home arrangements since the onset of the COVID-19 pandemic.

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If there is a decrease in the availability of digital asset custodians that we believe can safely custody our bitcoin, for example, due to regulatory developments or enforcement actions that cause custodians to discontinue or limit their services in the United States, we may need to enter into agreements that are less favorable than our current agreements or take other measures to custody our bitcoin, and our ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected.

As of March 31, 2025, the insurance that covers losses of our bitcoin holdings covers only a small fraction of the value of the entirety of our bitcoin holdings, and there can be no guarantee that such insurance will be maintained as part of the custodial services we have or that such coverage will cover losses with respect to our bitcoin.

As of June 30, 2025, the insurance that covers losses of our bitcoin holdings covers only a small fraction of the value of the entirety of our bitcoin holdings, and there can be no guarantee that such insurance will be maintained as part of the custodial services we have or that such coverage will cover losses with respect to our bitcoin.

Moreover, our use of custodians exposes us to the risk that the bitcoin our custodians hold on our behalf could be subject to insolvency proceedings and we could be treated as a general unsecured creditor of the custodian, inhibiting our ability to exercise ownership rights with respect to such bitcoin.

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For example, although a significant change to our Treasury Reserve Policy would require the approval of our board of directors, no shareholder or regulatory approval would be necessary.

Consequently, our Board of Directors has broad discretion over the investment, leverage and

cash management policies it authorizes, whether in respect of our bitcoin holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding bitcoin.

Consequently, our board of directors has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect of our bitcoin holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring and holding bitcoin.

Additionally, we are not a registered money market fund under the Investment Company Act of 1940, as amended, and we do not operate as a registered money market fund.

Holders of our securities, including our STRC Stock, do not benefit from the protections available to holders of securities of a registered money market

Bitcoin does not have a similar risk profile to the assets required to be held by money market funds because, among other things, it is much more volatile and involves no principal protection.

Unlike money market funds, we do not price our securities, including our STRC Stock, based on the net asset value of the pool of assets backing the securities.

We are also not subject to any regulation requiring that we maintain any particular pricing or stable value, and we are not subject to the fee restrictions or liquidity requirements applicable to registered money market funds.

Our bitcoin strategy exposes us to risk of non-performance by counterparties

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For example, our execution partners, custodians, or other counterparties might fail to perform in accordance with the terms of our agreements with them, which could result in a loss of bitcoin, a loss of the opportunity to generate funds, or other losses.

Additionally, with more companies adopting a bitcoin strategy similar to ours, our counterparties and service providers may experience increased demand for their services, which could impact the level or quality of service we receive, or the pricing of these services in the future.

Our primary counterparty risk with respect to our bitcoin is custodian performance obligations under the various custody arrangements we have entered into.

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For cloud subscriptions, customers typically make periodic payments over the subscription period and we recognize subscription services revenues ratably over the subscription period.

As a result, as our customers increasingly shift to, or new customers purchase, cloud subscriptions instead of product licenses, the resulting change in payment terms and revenue recognition may result in our recognizing less revenue in the reporting period in which the sale transactions are consummated than has been the case in prior periods, with more revenue being recognized in future periods.

less revenue in the reporting period in which the sale transactions are consummated than has been the case in prior periods, with more revenue being recognized in future periods.

Our recognition of deferred revenue and advance payments is subject to future performance obligations and may not be representative of revenues for succeeding periods

Our deferred revenue and advance payments totaled $219.7 million as of March 31, 2025.

Our deferred revenue and advance payments totaled $218.4 million as of June 30, 2025.

The timing and ultimate recognition of our deferred revenue and advance payments depend on various factors, including our performance of various service obligations.

Because of the possibility of customer changes or delays in customer development or implementation schedules or budgets, and the need for us to satisfactorily perform product support and other services, deferred revenue and advance payments at any particular date may not be representative of actual revenue for any succeeding period.

In addition, we had $223.2 million of other remaining performance obligations as of March 31, 2025, consisting of the portions of multi-year contracts that will be invoiced in the future that are not reflected on our balance sheet.

In addition, we had $252.1 million of other remaining performance obligations as of June 30, 2025, consisting of the portions of multi-year contracts that will be invoiced in the future that are not reflected on our balance sheet.

As with deferred revenue and advance payments, these other remaining performance obligations at any particular date may not be representative of actual revenue for any succeeding period.

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Additionally, while we monitor our use of third-party software, including open-source software, our processes for controlling such use in our offerings may not be effective.

license is found to infringe the intellectual property rights of others, we could become subject to infringement liability and be required to re-engineer our offerings, discontinue the sale of our offerings, or make available to certain third parties or generally available, in source code form, our proprietary code, any of which could materially adversely affect our business, operating results, and financial condition.

If we fail to comply with the terms or conditions associated with third-party software that we use, if we inadvertently embed certain types of third-party software into one or more of our offerings, or if third-party software that we license is found to infringe the intellectual property rights of others, we could become subject to infringement liability and be required to re-engineer our offerings, discontinue the sale of our offerings, or make available to certain third parties or generally available, in source code form, our proprietary code, any of which could materially adversely affect our business, operating results, and financial condition.

If a successful infringement claim is made against us and we fail to develop or license a substitute technology or brand name, as applicable, our business, results of operations, financial condition, or cash flows could be materially adversely affected.

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Certain of our customer agreements contain provisions permitting the customer to become a party to, or a beneficiary of, a source code escrow agreement under which we place the proprietary source code for our applicable services and products in escrow with a third party.

Under these escrow agreements, the source code to the applicable product may be released to the customer, typically for its use to maintain, modify, and enhance the product, upon the occurrence of specified events, such as our filing for bankruptcy, discontinuance of our support services, and/or ceasing our business operations generally.

Under these escrow agreements, the source code to the applicable product may be released to the customer, typically for its use to maintain,

modify, and enhance the product, upon the occurrence of specified events, such as our filing for bankruptcy, discontinuance of our support services, and/or ceasing our business operations generally.

Disclosing the content of our source code may limit the intellectual property protection we can obtain or maintain for that source code or the services and products containing that source code.

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Similar procurement, budgetary, contract, and audit risks also apply to these entities.

In addition, compliance with complex regulations and contracting provisions in a variety of jurisdictions can be expensive and consume significant management resources.

In addition, compliance with complex regulations and contracting provisions in a variety of jurisdictions can be

expensive and consume significant management resources.

In certain jurisdictions, our ability to win business may be constrained by political and other factors unrelated to our competitive position in the market.

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Our future success depends on our continuing ability to attract, train, assimilate, and retain highly skilled personnel.

There has historically been significant competition for qualified employees in the technology industry, and such competition may be further amplified by evolving restrictions on immigration, travel, or availability of visas for skilled technology workers.

There has historically been significant competition for qualified employees across technology and other industries, and such competition may be further amplified by evolving restrictions on immigration, travel, or availability of visas for skilled workers.

We may not be able to retain our current key employees or attract, train, assimilate, and retain other highly skilled personnel in the future, particularly at times when we undergo significant headcount reductions.

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federal and state government agencies and foreign government bodies may enact new or additional laws or regulations, or issue rulings that invalidate prior laws or regulations, concerning privacy, data storage, data protection, and cross-border transfer of data that could materially adversely impact our business.

In addition to the provisions in certain international laws restricting the transfer of personal information to the United States, a new U.S.

law also restricts the transfer of certain kinds of personal data in certain situations outside of the United States to “countries of concern,” including but not limited to China.

On April 8, 2025, the U.S.

Department of Justice’s National Security Division implemented the Data Security Program Rule under Executive Order 14117 and the International Emergency Economic Powers Act.

This rule establishes restrictions on certain data-related transactions involving U.S.

persons and entities, particularly those that may result in access to U.S.

government-related data or bulk sensitive personal data of U.S.

persons by foreign adversaries or entities under their control.

The rule effectively imposes export control-like restrictions on the transfer, sale, or sharing of sensitive data—including genomic, geolocation, biometric, health, financial, and other personal data—to or with entities in countries of concern, as well as entities and persons associated with those countries.

It also imposes additional due diligence obligations on U.S.

companies concerning personal data they collect, store, or transmit.

Failure to comply with the Data Security Program Rule could result in civil or criminal penalties, reputational harm, and restrictions on our ability to engage in certain business activities.

Compliance may require us to modify our data handling practices, implement new controls, or terminate existing relationships with certain foreign vendors, customers, or partners.

These changes could increase our operational costs, limit our market opportunities, and adversely affect our financial performance.

Additionally, the scope and interpretation of the rule may evolve, and future guidance or enforcement actions could impose further obligations or restrictions.

Any systems failure or security breach that results in the release of, or unauthorized access to, personal data, or any failure or perceived failure by us or our third-party service providers to comply with applicable privacy policies, contractual obligations, or any applicable laws or regulations relating to privacy or data protection, could result in proceedings against us by domestic or foreign government entities or others, including private plaintiffs in litigation.

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In particular, as remote working conditions have led businesses to increasingly rely on virtual environments and communication systems, there has been an increase in cyberattacks and other malicious activities.

Our having entered into an indemnification agreement with Michael J.

Saylor, our Chairman of the Board of Directors and Executive Chairman, that supplements our conventional director and officer liability insurance provided by third-party insurance carriers could negatively affect our business and the market price of our listed securities

We have entered into an indemnification agreement with Michael J.

Saylor, our Chairman of the Board of Directors and Executive Chairman, pursuant to which Mr.

Saylor has agreed to personally indemnify our directors and officers with respect to certain claims and expenses excluded from the insurance coverage provided by our commercial director and officer insurance carriers, for which we agreed to pay Mr.

Saylor an applicable annual fee.

Our having entered into this indemnification agreement with Mr.

Saylor could have adverse effects on our business, including making it more difficult to attract and retain qualified directors and officers due to the unconventional nature of the arrangement and potential concerns that the indemnification arrangement might not provide the same level of protection that might otherwise be provided by coverage obtained entirely through conventional director and officer insurance.

In addition, our indemnification arrangement with Mr.

Saylor may result in some investors perceiving that our independent directors are not sufficiently independent from Mr.

Saylor due to their entitlement to personal indemnification from him, which may have an adverse effect on the market price of our listed securities.

Risks Related to Our Listed Securities Generally

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The market price of our class A common stock has historically been volatile and this volatility has been significant in recent periods.

Since August 11, 2020, the date on which we announced our initial purchase of bitcoin, the closing price of our class A common stock

has increased from $12.36 as of August 10, 2020, the last trading day before our announcement, to $394.37 as of May 2, 2025.

Since August 11, 2020, the date on which we announced our initial purchase of bitcoin, the closing price of our class A common stock has increased from $12.36 as of August 10, 2020, the last trading day before our announcement, to $366.63 as of July 31, 2025.

The market price of our class A common stock may fluctuate widely in response to various factors, some of which are beyond our control.

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• changes to our bitcoin strategy;

• failure by us to meet our targets for our bitcoin strategy, capital plan, and financial results;

• announcement of additional capital raising transactions;

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• quarterly variations in our results of operations or those of our competitors;

• announcements about our earnings that are not in line with analyst expectations, the likelihood of which may be enhanced because it is our policy not to give guidance relating to our anticipated financial performance in future periods;

• announcements about our earnings that are not in line with analyst expectations;

• announcements by us or our competitors of acquisitions, dispositions, new offerings, significant contracts, commercial relationships, or capital commitments;

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• recommendations by securities analysts or changes in earnings estimates and our ability to meet those estimates;

• investor perception of our Company, including as compared to investment vehicles that are designed to track the price of bitcoin, such as spot bitcoin ETPs;

• investor perception of our Company, including as compared to investment vehicles that are designed to track the price of bitcoin, such as spot bitcoin ETPs, and other companies that pursue strategies similar to ours of acquiring bitcoin or other digital assets;

• announcements by our competitors of their earnings that are not in line with analyst expectations;

• the volume of shares of our class A common stock and other securities available for public sale;

• the volume of shares of our class A common stock and other listed securities available for public sale;

• failure by us to declare dividends on our Preferred Stock in expected amounts or not at all;

• adjustments of the regular dividend rate on our STRC Stock in a manner unexpected by investors and analysts;

• sales or purchases of stock by us or by our stockholders and issuances of awards under our equity incentive plan;

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In particular, recent trading prices of our class A common stock may reflect market dynamics that are not connected to traditional software and business intelligence industry fundamentals, or to valuation methods commonly associated with operating companies in these industries or with companies engaged predominantly in passive investments in bitcoin or other commodities, such as exchange-traded funds.

Our equity market capitalization as of March 31, 2025 is well in excess of our stockholders’ equity calculated in accordance with U.S.

Our equity market capitalization as of June 30, 2025 is well in excess of our stockholders’ equity calculated in accordance with U.S.

GAAP, and in excess of valuations that might traditionally be expected based on our operating performance, cash flows and net assets.

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These market and industry factors may significantly harm the market price of our listed securities, regardless of our actual operating performance.

We are currently subject to legal actions and proceedings and may be subject to additional proceedings in the future, which could distract our management and could result in substantial costs or judgments against us

We are subject to shareholder litigation, including a putative securities class action in which we are a defendant, and certain of our directors and officers are defendants, shareholder derivative lawsuits in which we are a nominal defendant and certain of our current and former directors and officers are defendants, and a class action related to the STRK Amendment in which we are a defendant and our board of directors are defendants.

See “Commitments and Contingencies – Shareholder and Derivative Actions” in Note 6 of the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

If these matters were concluded in a manner adverse to us and for which we incur substantial costs or damages not covered by our directors’ and officers’ liability insurance, such a conclusion could have a material adverse effect on our financial condition and business.

In addition, these matters could adversely impact our reputation and divert management’s attention and resources from other priorities, including the execution of our bitcoin strategy, which could have a material adverse effect on our business.

Because of the volatility in the price of bitcoin and the related significant fluctuations in the price of our listed securities, we may become subject to similar or other actions and proceedings in the future even if these matters are resolved favorably.

Because of the rights of our two classes of common stock and because Michael J.

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Holders of our class A common stock generally have the same rights as holders of our class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share.

As of May 2, 2025, there were 19,640,250 shares of class B common stock outstanding, which accounted for approximately 43.63% of the total voting power of our outstanding common stock.

As of May 2, 2025, Mr.

As of July 31, 2025, there were 19,640,250 shares of class B common stock outstanding, which accounted for approximately 42.67% of the total voting power of our outstanding common stock.

As of July 31, 2025, Mr.

Saylor, our Chairman of the Board of Directors and Executive Chairman, beneficially owned 19,616,680 shares of class B common stock, or 42.62% of the total voting power.

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Our board of directors could rely on Delaware law to prevent or delay an acquisition of us.

Future sales, or the perception of future sales, of our class A common stock, convertible debt instruments, convertible or non-convertible preferred stock, or other convertible securities could depress the price of our listed securities

We may issue and sell additional shares of class A common stock, convertible notes, convertible preferred stock, or other securities in subsequent offerings to raise capital or issue shares for other purposes, including in connection with the acquisition of additional bitcoin.

For example, between January 1, 2024 and March 31, 2025, we have issued and sold:

Future sales, or the perception of future sales, of our class A common stock, convertible debt instruments, convertible or non-convertible preferred stock, or other securities could depress the price of our listed securities

We may issue and sell additional shares of class A common stock, convertible debt instruments, convertible or non-convertible preferred stock, or other securities in subsequent offerings to raise capital or issue shares for other purposes, including in connection with the acquisition of additional bitcoin.

For example, between January 1, 2024 and July 31, 2025, we have issued and sold:

• $27.10 billion of shares of class A common stock through at-the-market equity offering programs;

• $614.4 million of shares of Perpetual Strike Preferred Stock;

• $722.5 million of shares of Perpetual Strife Preferred Stock;

• $941.4 million of shares of STRF Stock;

• $1.13 billion of shares of STRK Stock;

• $1.02 billion of shares of STRD Stock;

• $2.52 billion shares of STRC Stock;

• $800.0 million aggregate principal amount of 2030A Convertible Notes;

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• $3.00 billion in aggregate principal amount of 2029 Convertible Notes.

On October 30, 2024, we entered into the October 2024 Sales Agreement, pursuant to which we could sell class A common stock having an aggregate offering price of up to $21 billion from time to time.

On May 1, 2025, we entered into the May 2025 Sales Agreement, pursuant to which we may issue and sell shares of our class A common stock having an aggregate offering price of up to $21 billion from time to time.

As of May 2, 2025, the October 2024 Sales Agreement has been substantially depleted and further at-the-market sales of class A common stock will be made under the May 2025 Sales Agreement, under which approximately $21 billion shares of the Company’s class A common stock remained available for issuance and sale as of such date.

Additionally, on March 10, 2025, we entered into the Strike Sales Agreement, pursuant to which we may issue and sell shares of our Perpetual Strike Preferred Stock, having an aggregate offering price of up to $21 billion.

As of May 2, 2025, we may issue and sell additional shares of Perpetual Strike Preferred Stock having an aggregate offering price of up to $20.87 billion from time to time under the Strike Sales Agreement.

On March 10, 2025, we entered into the STRK Sales Agreement, pursuant to which we may issue and sell shares of our STRK Stock having an aggregate offering price of up to $21.0 billion.

As of July 31, 2025, we may issue and sell additional shares of STRK Stock having an aggregate offering price of up to $20.45 billion from time to time under the STRK Sales Agreement.

On May 1, 2025, we entered into the May 2025 Sales Agreement, pursuant to which we may issue and sell shares of our class A common stock having an aggregate offering price of up to $21.0 billion.

As of July 31, 2025, we may issue and sell additional shares of class A common stock having an aggregate offering price of up to $17.04 billion from time to time under the May 2025 Sales Agreement.

On May 22, 2025, we entered into the Original STRF Sales Agreement, pursuant to which we may issue and sell shares of our STRF Stock having an aggregate offering price of up to $2.1 billion.

On July 7, 2025, we amended the Original STRF Sales Agreement to add Morgan Stanley as a sales agent.

As of July 31, 2025, we may issue and sell additional shares of STRF Stock having an aggregate offering

price of up to $1.88 billion from time to time under the STRF Sales Agreement.

On July 7, 2025, we entered into the STRD Sales Agreement, pursuant to which we may issue and sell shares of our STRD Stock having an aggregate offering price of up to $4.2 billion.

As of July 31, 2025, we may issue and sell additional shares of STRD Stock having an aggregate offering price of up to $4.18 billion from time to time under the STRD Sales Agreement.

On July 31, 2025, we entered into the STRC Sales Agreement, pursuant to which we may issue and sell shares of our STRC Stock having an aggregate offering price of up to $4.2 billion.

As of July 31, 2025, we may issue and sell additional shares of STRC Stock having an aggregate offering price of up to $4.2 billion from time to time under the STRC Sales Agreement.

We cannot predict:

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• the effect, if any, that future issuances and sales of our securities will have on the market price of our listed securities.

Transactions involving newly issued class A common stock, convertible debt instruments, Perpetual Strike Preferred Stock, other series of convertible preferred stock, or other convertible securities could result in possibly substantial dilution to holders of our class A common stock and our Perpetual Strike Preferred Stock.

Transactions involving newly issued class A common stock, convertible debt instruments, STRK Stock and other series of convertible preferred stock, or other convertible securities could result in possibly substantial dilution to holders of our class A common stock and securities convertible into our class A common stock, such as our STRK Stock.

Our amended and restated by-laws provide that the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, then any other state court located in the State of Delaware, or if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware) is the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for such disputes with us or our directors, officers or employees

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Risks Related to Our Preferred Stock

Our Perpetual Strike Preferred Stock is senior to our class A common stock, but junior to our Perpetual Strife Preferred Stock, and our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock are junior to our existing and future indebtedness, structurally junior to the liabilities of our subsidiaries and subject to the rights and preferences of any other class or series of preferred stock that we may issue in the future

If we liquidate, dissolve or wind up, whether voluntarily or involuntarily, then our assets will be available to distribute to our equity holders, including holders of our class A common stock, Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, only if all of our then-outstanding indebtedness is first paid in full.

With respect to seniority, our listed securities rank, from highest to lowest, STRF Stock, STRC Stock, STRK Stock, STRD Stock, and class A common stock.

Further, our Preferred Stock is junior to our existing and future indebtedness, structurally junior to the liabilities of our subsidiaries and subject to the rights and preferences of any other class or series of preferred stock that we may issue in the future

If we liquidate, dissolve or wind up, whether voluntarily or involuntarily, then our assets will be available to distribute to our equity holders, including holders of our class A common stock and our Preferred Stock, only if all of our then outstanding indebtedness is first paid in full.

The remaining assets, if any, would then be allocated among the holders of our equity securities in accordance with their respective liquidation rights.

Our Perpetual Strife Preferred Stock is senior to our Perpetual Strike Preferred Stock with respect to payments upon liquidation, dissolution or winding up.

If we issue any preferred stock senior to our Perpetual Strife Preferred Stock or Perpetual Strike Preferred Stock, which we refer to as “liquidation senior stock,” in the future, then the amounts due upon that liquidation senior stock must be paid in full before any payments can be made on the Perpetual Strife Preferred Stock, Perpetual Strike Preferred Stock or common stock.

If any assets remain after any liquidation senior stock is paid in full, those assets will first be distributed pro rata to our holders of Perpetual Strife Preferred Stock and any series of preferred stock with liquidation parity with our Perpetual Strife Preferred Stock, then pro rata among holders of our Perpetual Strike Preferred Stock and any series of preferred stock with liquidation parity with our Perpetual Strike Preferred Stock, with any remaining assets distributed to holders of our common stock.

There may be insufficient remaining assets available to pay the liquidation preference and unpaid accumulated dividends on our Perpetual Strife Preferred Stock, in which case holders of our Perpetual Strike Preferred Stock and common stock would not receive any value for their shares.

If we issue any dividend senior stock in the future, such dividend senior stock could contain provisions that prohibit us from paying accumulated dividends on our Perpetual Strike Preferred Stock or Perpetual Strife Preferred Stock, or from purchasing, redeeming or acquiring our Perpetual Strike Preferred Stock or Perpetual Strife Preferred Stock until and unless we first pay accumulated dividends in full on such dividend senior stock.

As of March 31, 2025, excluding intercompany indebtedness, we had approximately $8.22 billion in aggregate principal amount of consolidated indebtedness outstanding, all of which ranks senior to our preferred stock and our common stock.

In addition, our subsidiaries have no obligation to pay any amounts on the Perpetual Strike Preferred Stock or Perpetual Strife Preferred Stock.

If any of our subsidiaries liquidates, dissolves or winds up, whether voluntarily or involuntarily, then we, as a direct or indirect common equity owner of that subsidiary, will be subject to the prior claims of that subsidiary’s creditors, including trade creditors and

preferred equity holders, if any.

We may never receive any amounts from that subsidiary, and, accordingly, the assets of that subsidiary may never be available to make payments on the Perpetual Strike Preferred Stock or Perpetual Strife Preferred Stock.

We may not have sufficient funds to pay dividends in cash on our preferred stock, or we may choose not to pay dividends on our preferred stock and regulatory and contractual restrictions may prevent us from declaring or paying dividends

We expect to fund any dividends paid in cash on our preferred stock primarily through additional capital raising activities, including, but not limited to, at-the-market offerings of our class A common stock, and in the case of our Perpetual Strife Preferred Stock, offerings of our Perpetual Strike Preferred Stock.

With respect to payments upon our liquidation, dissolution, or winding up, our series of Preferred Stock rank, from highest to lowest, as follows:

STRF Stock, STRC Stock, STRK Stock, and STRD Stock.

If we issue any other class or series of preferred stock senior to our existing series of Preferred Stock, which we refer to as “liquidation senior stock,” in the future, then the amounts due upon that liquidation senior stock must be paid in full before any payments can be made on the Preferred Stock or common stock.

If any assets remain after

any liquidation senior stock is paid in full, those assets will be distributed as follows (in each case, pro rata among holders of such series of Preferred Stock and together with any series of liquidation parity stock to such series of Preferred Stock):

first, among our holders of STRF Stock, then among holders of our STRC Stock, then among holders of our STRK Stock, and then among holders of our STRD Stock, with any remaining assets distributed to holders of our common stock.

If there are insufficient remaining assets available to pay the liquidation preference and unpaid accumulated dividends on any series of liquidation senior stock, holders of each series of stock that rank junior to that series of liquidation senior stock would not receive any value for their shares.

If we issue any dividend senior stock in the future, such dividend senior stock could contain provisions that prohibit us from paying accumulated dividends on our Preferred Stock, or from purchasing, redeeming or acquiring our Preferred Stock until and unless we first pay accumulated dividends in full on such dividend senior stock.

As of June 30, 2025, excluding intercompany indebtedness, we had approximately $8.24 billion in aggregate principal amount of consolidated indebtedness outstanding, all of which ranks senior to our Preferred Stock and our common stock.

In addition, our subsidiaries have no obligation to pay any amounts on the Preferred Stock.

We may never receive any amounts from that subsidiary, and, accordingly, the assets of that subsidiary may never be available to make payments on the Preferred Stock.

We may not have sufficient funds to pay dividends in cash on our Preferred Stock, or we may choose not to pay dividends on our Preferred Stock, and regulatory and contractual restrictions may prevent us from declaring or paying dividends on our Preferred Stock

We expect to fund any dividends paid in cash on our Preferred Stock primarily through additional capital raising activities, including, but not limited to, at-the-market offerings of our class A common stock, STRC Stock, or STRD Stock, as applicable.

However, our ability to declare and pay cash dividends on our Preferred Stock will depend on many factors, including the following:

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• the ability of our subsidiaries to distribute funds to us;

• regulatory restrictions on our ability to pay dividends, including under the Delaware General Corporation Law;

• regulatory restrictions on our ability to pay dividends, including under the DGCL;

• our ability to sell equity securities under new at-the-market offering programs;

• contractual restrictions on our ability to pay dividends.

In addition, subject to a limited exception, our board of directors may choose not to pay accumulated dividends on our preferred stock for any reason.

Accordingly, we may pay less than the full amount of accumulated dividends on our preferred stock.

In addition, if we fail to declare and pay accumulated dividends on our preferred stock in full, then the value of our preferred stock will likely decline.

In addition, subject to a limited exception for each of our STRF Stock and STRK Stock, our board of directors or any duly authorized committee thereof may choose not to pay accumulated dividends on our STRK Stock, STRF Stock or STRD Stock for any reason.

Further, our board of directors or any duly authorized committee thereof may choose not to declare or pay accrued dividends, or to declare and pay less than the full amount of dividends, on the STRD Stock for any reason, even if we have sufficient funds to declare and pay accrued dividends on the STRD Stock in full.

Accordingly, we may pay less than the full amount of dividends on our Preferred Stock.

If we fail to declare and pay dividends on any series of our Preferred Stock in full, then the value of that series or our other series of Preferred Stock, as well as our class A common stock, will likely decline.

Provisions contained in the instruments governing our future indebtedness may restrict or prohibit us from paying cash dividends on our Preferred Stock.

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However, we may be unable or may choose not to refinance the indebtedness or obtain a waiver.

Under the Delaware General Corporation Law, we may declare dividends on our preferred stock only out of our “surplus” (which generally means our total assets less total liabilities, each measured at their fair market values, less statutory capital), or, if there is no surplus, out of our net profits for the current or the immediately preceding fiscal year.

Under the DGCL, we may declare dividends on our Preferred Stock only out of our “surplus” (which generally means our total assets less total liabilities, each measured at their fair market values, less statutory capital), or, if there is no surplus, out of our net profits for the current or the immediately preceding fiscal year.

We may not have sufficient surplus or net profits to declare and pay dividends on our Preferred Stock in cash.

If we are unable or, if permitted, decide not to pay accumulated dividends on our Perpetual Strike Preferred Stock in cash, then we may, but are not obligated, subject to a limited exception, to elect to pay dividends on our Perpetual Strike Preferred Stock in shares of our class A common stock.

However, the payment of dividends in shares of our class A common stock will cause dilution to holders of our class A common stock and exposes holders of our Perpetual Strike Preferred Stock to dilution and the risk of fluctuations in the price of our class A common stock.

Additionally, even if we choose to pay dividends on our Perpetual Strike Preferred Stock in shares of class A common stock, the number of shares of class A common stock that we are permitted to deliver may be limited.

If we are unable or, if permitted, decide not to pay accumulated dividends on our STRK Stock in cash, then we may, but are not obligated, subject to a limited exception, to elect to pay dividends on our STRK Stock in shares of our class A common stock.

However, the payment of dividends in shares of our class A common stock will cause dilution to holders of our class A common stock and exposes holders of

our STRK Stock to dilution and the risk of fluctuations in the price of our class A common stock.

Additionally, even if we choose to pay dividends on our STRK Stock in shares of class A common stock, the number of shares of class A common stock that we are permitted to deliver may be limited.

If we fail to declare and pay full dividends on our Preferred Stock, then we will be prohibited from paying dividends on our class A common stock and any other junior securities, subject to limited exceptions.

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Our Preferred Stock has only limited voting rights

Our preferred stock confers no voting rights except with respect to certain dividend arrearages, certain amendments to the terms of our preferred stock, and certain other limited circumstances, and except as required by the Delaware General Corporation Law.

For example, holders of preferred stock, as such, do not have the right to vote in the general election of our directors, although holders of our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, as applicable, will have a limited right, voting together with holders of any voting parity stock, if any, with similar voting rights regarding the election of directors upon a failure to pay dividends on each of our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, as applicable, which similar voting rights are then exercisable, to elect one director upon the occurrence of each of the following events:

(i) if less than the full amount of accumulated and unpaid regular dividends on the outstanding Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, as applicable, have been declared and paid in respect of each of four or more consecutive regular dividend payment dates;

and (ii) if less than the full amount of

accumulated and unpaid regular dividends on the outstanding Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, as applicable, have been declared and paid in respect of eight or more consecutive regular dividend payment dates.

Our Preferred Stock confers no voting rights except with respect to certain dividend arrearages, certain amendments to the terms of our Preferred Stock, and certain other limited circumstances, and except as required by the DGCL.

For example, holders of our Preferred Stock, as such, do not have the right to vote in the general election of our directors, although holders of our STRK Stock and STRF Stock, as applicable, will have a limited right, voting together with holders of any voting parity stock, if any, with similar voting rights regarding the election of directors upon a failure to pay dividends on each of our STRK Stock and STRF Stock, as applicable, which similar voting rights are then exercisable, to elect one director upon the occurrence of each of the following events:

(i) if less than the full amount of accumulated and unpaid regular dividends on the outstanding STRK Stock and STRF Stock, as applicable, have been declared and paid in respect of each of four or more consecutive regular dividend payment dates;

and (ii) if less than the full amount of accumulated and unpaid regular dividends on the outstanding STRK Stock and STRF Stock, as applicable, have been declared and paid in respect of eight or more consecutive regular dividend payment dates.

Our STRD Stock and STRC Stock do not have any additional voting rights upon non-payment of dividends, such as the right to elect any directors.

Accordingly, the voting provisions of our Preferred Stock may not afford meaningful protections.

Additionally, holding Perpetual Strike Preferred Stock does not confer the right to vote on an as-converted basis with holders of our class A common stock on matters on which our class A common stockholders are entitled to vote.

Without the consent of any holder of our preferred stock or class A common stock, we may issue preferred stock in the future that ranks equally with our Perpetual Strife Preferred Stock and equally with or senior to our Perpetual Strike Preferred Stock with respect to dividends and liquidation rights, which may adversely affect the rights of holders of our Perpetual Strike Preferred Stock, Perpetual Strife Preferred Stock and our class A common stock

Without the consent of any holder of preferred stock or class A common stock, we may authorize and issue preferred stock (including additional Perpetual Strife Preferred Stock) that ranks equally with the Perpetual Strife Preferred Stock with respect to the payment of dividends or the distribution of assets upon our liquidation, dissolution or winding up.

In addition, without the consent of any holder of our Perpetual Strike Preferred Stock or class A common stock, we may authorize and issue preferred stock (including additional Perpetual Strike Preferred Stock or Perpetual Strife Preferred Stock) that ranks equally with or senior to our Perpetual Strike Preferred Stock with respect to the payment of dividends or the distribution of assets upon our liquidation, dissolution or winding up.

If we issue any such preferred stock in the future, the rights of holders of our Perpetual Strike Preferred Stock, Perpetual Strife Preferred Stock and our class A common stock will be diluted and the value of our Perpetual Strike Preferred Stock, Perpetual Strife Preferred Stock and class A common stock may decline.

For example, if we issue any preferred stock that is senior to Perpetual Strike Preferred Stock in the future, such preferred stock could contain provisions that prohibit us from paying accumulated dividends on our Perpetual Strike Preferred Stock or purchasing, redeeming or acquiring our Perpetual Strike Preferred Stock until and unless we first pay accumulated dividends in full on such preferred stock.

Additionally, holding STRK Stock does not confer the right to vote on an as-converted basis with holders of our class A common stock on matters on which our class A common stockholders are entitled to vote.

Without the consent of any holder of our Preferred Stock or class A common stock, we may issue preferred stock in the future that ranks equally with our STRF Stock and equally with or senior to our STRC Stock, STRK Stock or STRD Stock with respect to dividends and liquidation rights, which may adversely affect the rights of holders of our existing series of Preferred Stock and our class A common stock

Without the consent of any holder of Preferred Stock or class A common stock, we may authorize and issue preferred stock (including additional STRF Stock) that ranks equally with the STRF Stock with respect to the payment of dividends or the distribution of assets upon our liquidation, dissolution or winding up.

In addition, without the consent of any holder of our STRC Stock, STRK Stock, STRD Stock or class A common stock, we may authorize and issue preferred stock (including additional shares of our existing Preferred Stock) that ranks equally with or senior to our STRC Stock, STRK Stock and STRD Stock with respect to the payment of dividends or the distribution of assets upon our liquidation, dissolution or winding up.

If we issue any such preferred stock in the future, the rights of holders of our Preferred Stock and our class A common stock will be diluted and the value of our Preferred Stock and class A common stock may decline.

For example, if we issue any preferred stock that is senior to STRC Stock, STRK Stock or STRD Stock in the future, such preferred stock could contain provisions that prohibit us from paying dividends on our STRC Stock, STRK Stock or STRD Stock or purchasing, redeeming or acquiring our STRC Stock, STRK Stock or STRD Stock until and unless we first pay accumulated dividends in full on such preferred stock.

The issuance of any preferred stock in the future would also have the effect of further subordinating our class A common stock.

Holders of our preferred stock may be treated as receiving deemed distributions and holders of Perpetual Strike Preferred Stock may receive distributions paid in class A common stock, and consequently may be subject to tax with respect to our preferred stock under certain circumstances even though no corresponding distribution of cash has been made

Under Section 305 of the Internal Revenue Code of 1986, as amended (the “Code”), holders of our preferred stock may be treated as receiving a deemed distribution on our preferred stock under certain circumstances, including (i) an increase in the liquidation preference of our preferred stock or (ii) if our preferred stock is issued at a discount.

The liquidation preference of the Perpetual Strife Preferred Stock is subject to adjustment in the manner described in the Strife Certificate of Designations, which adjustments may result in an increase in the liquidation preference.

In addition, if our board of directors does not declare a dividend on our preferred stock in respect of any dividend period before the related dividend payment date, the deferred dividend may be treated as an increase in the liquidation preference of our preferred stock.

In either case, any increase in the liquidation preference could give rise to a deemed dividend to holders of our preferred stock.

Although the matter is not entirely clear, we believe any deferred dividend or discount on our preferred stock should not be treated as giving rise to a deemed distribution on our preferred stock, and any adjustment of the liquidation preference of the Perpetual Strife Preferred Stock in accordance with its terms should not be treated as giving rise to a deemed distribution on our Perpetual Strife Preferred Stock.

Holders of our Preferred Stock may be treated as receiving deemed distributions and holders of STRK Stock may receive distributions paid in class A common stock, and consequently may be subject to tax with respect to our Preferred Stock under certain circumstances even though no corresponding distribution of cash has been made

Under Section 305 of the Internal Revenue Code of 1986, as amended (the “Code”), holders of our Preferred Stock may be treated as receiving a deemed distribution on our Preferred Stock under certain circumstances, including (i) an increase in the liquidation preference of our Preferred Stock, (ii) if our Preferred Stock is issued at a discount or (iii) in the case of STRC Stock, if we can call STRC Stock at a price above its issue price.

The liquidation preference of the Preferred Stock is subject to adjustment in the manner described in the applicable certificate of designations, which adjustments may give rise to a deemed distribution to holders of Preferred Stock.

See “Commitments and Contingencies—Shareholder and Derivative Actions” in Note 6, and “Subsequent Events—Amendment to STRK Stock” in Note 14, of the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

In addition, if our board of directors does not declare a dividend on our STRF Stock, STRC Stock or STRK Stock in respect of any dividend period before the related dividend payment date, the deferred dividend may be treated as an increase in the liquidation preference of our STRF Stock, STRC Stock or STRK Stock that could give rise to a deemed dividend to holders of our STRF Stock, STRC Stock or STRK Stock.

Although the matter is not entirely clear, we believe any deferred dividend on our STRK Stock, STRF Stock or STRC Stock, any discount on our Preferred Stock, any adjustment of the liquidation preference of the Preferred Stock in accordance with their applicable terms and, in the case of STRC Stock, any call premium, should not be treated as giving rise to a deemed distribution on our Preferred Stock.

However, there is no assurance that the IRS or an applicable withholding agent will not take a contrary position.

In addition, the conversion rate of our Perpetual Strike Preferred Stock is subject to adjustment in certain circumstances.

If and to the extent that certain adjustments in the conversion rate (or failures to adjust the conversion rate) increase the proportionate interest of a holder of our Perpetual Strike Preferred Stock in our assets or earnings and profits, the holder of our Perpetual Strike Preferred Stock may be deemed to have received for U.S.

In addition, the conversion rate of our STRK Stock is subject to adjustment in certain circumstances.

If and to the extent that certain adjustments in the conversion rate (or failures to adjust the conversion rate) increase the proportionate interest of a holder of our STRK Stock in our assets or earnings and profits, the holder of our STRK Stock may be deemed to have received for U.S.

federal income tax purposes a deemed distribution without the receipt of any cash or property.

Furthermore, upon a conversion of our Perpetual Strike Preferred Stock into shares of our class A common stock, depending on the circumstances, any class A common stock received in respect of any deferred and unpaid dividend (and any dividend that has been declared and not yet paid as well as any accrued but unpaid dividend in the then-current dividend period) could be treated as a deemed distribution for U.S.

Furthermore, upon a conversion of our STRK Stock into shares of our class A common stock, depending on the circumstances, any class A common stock received in respect of any deferred and unpaid dividend (and any dividend that has been declared and not yet paid as well as any accrued but unpaid dividend in the then-current dividend period) could be treated as a deemed distribution for U.S.

federal income tax purposes.

Any deemed distribution on our preferred stock or any distribution to holders of our Perpetual Strike Preferred Stock that is paid in shares of our class A common stock will generally be taxable to the same extent as a cash distribution.

Any deemed distribution on our Preferred Stock or any distribution to holders of our STRK Stock that is paid in shares of our class A common stock will generally be taxable to the same extent as a cash distribution.

In addition, for any holder of our Preferred Stock that is a non-U.S.

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federal withholding tax at a 30% rate, or such lower rate as may be specified by an applicable treaty.

Because deemed distributions or non-cash distributions received by a holder of our preferred stock would not give rise to any cash from which any applicable withholding tax could be satisfied, if we (or an applicable withholding agent) pay withholding (including backup withholding) on behalf of a holder of our preferred stock, we (or an applicable withholding agent) may set off any such payment against, or withhold such taxes from, payments of cash or, in the case of our Perpetual Strike Preferred Stock, delivery of shares of our class A common stock to such holder of our preferred stock (or, in some circumstances, any payments on our class A common stock) or sales proceeds received by, or other funds or assets of, such

holder of our preferred stock, or require alternative arrangements with respect to such withholding taxes (e.g., in the case of our Perpetual Strike Preferred Stock, deposit for taxes prior to delivery of any dividend in the form of class A common stock or of conversion consideration).

Because deemed distributions or non-cash distributions received by a holder of our Preferred Stock would not give rise to any cash from which any applicable withholding tax could be satisfied, if we (or an applicable withholding agent) pay withholding (including backup withholding) on behalf of a holder of our Preferred Stock, we (or an applicable withholding agent) may set off any such payment against, or withhold such taxes from, payments of cash or, in the case of our STRK Stock, delivery of shares of our class A common stock to such holder of our Preferred Stock (or, in some circumstances, any payments on our class A common stock) or sales proceeds received by, or other funds or assets of, such holder of our Preferred Stock, or require alternative arrangements with respect to such withholding taxes (e.g., in the case of our STRK Stock, deposit for taxes prior to delivery of any dividend in the form of class A common stock or of conversion consideration).

The application of the rules under Section 305 of the Code to our Preferred Stock is uncertain, and holders of our Preferred Stock should consult their tax advisors about the impact of these rules in their particular situations.

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federal income tax purposes.

If any distributions on our preferred stock with respect to any fiscal year are not eligible for the dividends-received deduction or for the preferential tax rates applicable to “qualified dividend income” because of insufficient current or accumulated earnings and profits, the market value of our preferred stock may decline.

If any distributions on our Preferred Stock with respect to any fiscal year are not eligible for the dividends-received deduction or for the preferential tax rates applicable to “qualified dividend income” because of insufficient current or accumulated earnings and profits, the trading price of our Preferred Stock may decline.

The tax rules applicable to “fast-pay stock” could result in adverse consequences to holders of our Preferred Stock

Under Treasury Regulations promulgated under Section 7701(l) of the Code (the “Fast-Pay Stock Regulations”), if stock of a corporation is structured such that dividends paid with respect to the stock are economically (in whole or in part) a return of the stockholder’s investment (rather than a return on the stockholder’s investment), then the stock is characterized as “fast-pay stock” and is subject to adverse tax reporting requirements and potentially penalties, as described below.

In addition, under the Fast-Pay Stock Regulations, unless clearly demonstrated otherwise, stock is presumed to be fast-pay stock if it is structured to have a dividend that is reasonably expected to decline (as opposed to a dividend rate that is reasonably expected to fluctuate or remain constant) (for such purpose, the dividend rate may be viewed as reasonably expected to decline if we are reasonably expected to stop paying regular dividends on our preferred stock or if the maximum Compounded Strife Dividend Rate is in effect with respect to the Perpetual Strife Preferred Stock) or is issued for an amount that exceeds (by more than a de minimis amount, as determined under applicable Treasury Regulations) the amount at which the stockholder can be compelled to dispose of the stock.

In addition, under the Fast-Pay Stock Regulations, unless clearly demonstrated otherwise, stock is presumed to be fast-pay stock if it is structured to have a dividend that is reasonably expected to decline (as opposed to a dividend rate that is reasonably expected to fluctuate or remain constant) (for such purpose, the dividend rate may be viewed as reasonably expected to decline if we are reasonably expected to stop paying regular dividends on our Preferred Stock or if the maximum Compounded STRF Dividend Rate (as defined in the certificate of designations for the STRF Stock) is in effect with respect to the STRF Stock or if we are reasonably expected to reduce the monthly regular dividend rate over a meaningful time period with respect to the STRC Stock) or is issued for an amount that exceeds (by more than a de minimis amount, as determined under applicable Treasury Regulations) the amount at which the stockholder can be compelled to dispose of the stock.

It is not clear what amount would constitute “de minimis” in the case of stock with a perpetual term.

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To determine if it is fast-pay stock, stock is examined when issued, and, for stock that is not fast-pay stock when issued, when there is a significant modification in the terms of the stock or the related agreements or a significant change in the relevant facts and circumstances.

The relevant tax regulations do not indicate the types of significant changes in facts and circumstances that are intended to give rise to such a determination, and therefore it is possible that such a change could arise when, for example, a Compounded Strife Dividend Rate becomes in effect with respect to the Perpetual Strife Preferred Stock.

The relevant tax regulations do not indicate the types of significant changes in facts and circumstances that are intended to give rise to such a determination, and therefore it is possible that such a change could arise when, for example, a Compounded STRF Dividend Rate becomes in effect with respect to the STRF Stock or there is a change to the terms of our optional redemption right with respect to the STRC Stock.

We do not believe that our previously issued Preferred Stock is fast-pay stock.

We may issue additional shares of our Preferred Stock (or resell any shares that we or any of our subsidiaries have purchased or otherwise acquired) (such additional or resold shares, the “Additional Shares”).

We do not intend to issue any Additional Shares that would be treated as fast-pay stock.

We do not intend to issue any Additional Shares that would be

treated as fast-pay stock.

Moreover, we intend to obtain advice of counsel in connection with future offerings of Additional Shares for the purpose of analyzing the consequences of issuing such Additional Shares in light of any legal developments regarding the definition of fast-pay stock.

As the liquidation preference of the Perpetual Strife Preferred Stock will be subject to adjustment in the manner described in the Strife Certificate of Designations, it is generally not expected that the Additional Shares of Perpetual Strife Preferred Stock would be issued at such a level of premium above their liquidation preference at the time of sale of such Additional Shares of Perpetual Strife Preferred Stock so as to implicate the fast-pay stock rules.

It is possible, however, that Additional Shares of Perpetual Strike Preferred Stock may be issued at a premium above their liquidation preference.

Based on the expected overall circumstances of an offering of Additional Shares of Perpetual Strike Preferred Stock (such as our general expectation that the value of the conversion option for Perpetual Strike Preferred Stock would, at issuance, exceed the amount of any such premium and certain other factors), we do not believe that such premium would be attributable to dividends that are economically a return of a stockholder’s investment.

It is possible, however, that Additional Shares may be issued at a premium above their liquidation preference.

As the liquidation preference of the Preferred Stock is subject to adjustment in the manner described in the applicable certificate of designations, and based on the expected overall circumstances of an offering of Additional Shares of STRK Stock, it is generally not expected that the Additional Shares of Preferred Stock would be issued at such a level of premium above their liquidation preference at the time of sale of such Additional Shares so as to implicate the fast-pay stock rules.

See “Subsequent Events—Amendment to STRK Stock” in Note 14, and “Commitments and Contingencies – Shareholder and Derivative Actions” in Note 6 of the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

In addition, with respect to the STRC Stock, we do not intend to adjust its regular dividend rate in a manner that would cause the STRC Stock to be treated as fast-pay stock.

Any adjustment to STRC Stock’s regular dividend rate is expected to be consistent with our current intention to maintain the STRC Stock’s trading price at or close to its stated amount of $100 per share, and therefore the STRC Stock’s dividend rate is generally expected to fluctuate over time.

Nonetheless, there may be increased risk that the IRS could assert that such Additional Shares constitute fast-pay stock.

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If we issue Additional Shares that have a different, and potentially adverse, tax profile or treatment for U.S.

federal income tax purposes from our previously issued preferred stock, since such Additional Shares would trade under the same CUSIP or other identifying number as that of our previously issued Perpetual Strike Preferred Stock or Perpetual Strife Preferred Stock, as applicable, our previously issued preferred stock may be treated by subsequent purchasers, withholding agents and potentially the IRS as having the same profile or treatment as such Additional Shares if our previously issued preferred stock is not otherwise distinguishable from the Additional Shares.

For example, notwithstanding our intent not to issue any Additional Shares that are fast-pay stock, the IRS could assert that such Additional Shares constitute fast-pay stock, particularly, with respect to Additional Shares of Perpetual Strike Preferred Stock, if they are issued at a premium to their liquidation preference.

federal income tax purposes from our previously issued Preferred Stock, since such Additional Shares would trade under the same CUSIP or other identifying number as that of our previously issued STRF Stock, STRC Stock, STRK Stock or STRD Stock, as applicable, our previously issued Preferred Stock may be treated by subsequent purchasers, withholding agents and potentially the IRS as having the same profile or treatment as such Additional Shares if our previously issued Preferred Stock is not otherwise distinguishable from the Additional Shares.

For example, notwithstanding our intent not to issue any Additional Shares that are fast-pay stock, the IRS could assert that such Additional Shares constitute fast-pay stock, particularly, with respect to Additional Shares of STRK Stock, if they are issued at a premium to their liquidation preference.

See “—The tax rules applicable to “fast-pay stock” could result in adverse consequences to holders of our Preferred Stock” above.

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holder generally will be required to reduce its tax basis (but not below zero) in our Preferred Stock by the amount of any dividends-received deduction it receives.

The liquidation preference of the Perpetual Strife Preferred Stock will be subject to adjustment in the manner described in the Strife Certificate of Designations, which adjustment may be taken into account for purposes of disqualified preferred stock determination.

The liquidation preference of our Preferred Stock is subject to adjustment in the manner described in the applicable certificate of designations, which adjustment may be taken into account for purposes of disqualified preferred stock determination.

See “Subsequent Events—Amendment to STRK Stock” in Note 14, and “Commitments and Contingencies – Shareholder and Derivative Actions” in Note 6, of the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.

If Additional Shares issued are considered disqualified preferred stock, our previously issued Preferred Stock could also be subject to the same treatment as a practical matter due to fungible trading.

If any Additional Shares are sold at a discount (or at a discount that exceeds the discount that applies to our previously issued Preferred Stock), such Additional Shares may be subject to U.S.

tax rules (which are similar to the rules governing original issue discount for debt instruments) that require the accrual of such discount (or such greater discount) over the deemed term of the Additional Shares.

tax rules (which are similar to the rules governing original issue discount for debt

instruments) that require the accrual of such discount (or such greater discount) over the deemed term of the Additional Shares.

In that event, the IRS or a withholding agent may treat any such discount as resulting in deemed distributions, which may be taxable before receipt of any cash payments attributable to such discount with respect to our previously issued Preferred Stock and such Additional Shares.

Because the IRS or other parties (such as withholding agents) may not be able to distinguish our previously issued preferred stock offered or resold from time to time, a holder of our preferred stock might be subject to adverse tax consequences or might be required to demonstrate to the IRS (or such other parties) that the holder purchased our preferred stock in a specific offering to which those adverse tax consequences did not apply.

Moreover, any adverse tax consequences as described above in connection with the future issuance of Additional Shares may adversely affect the market value of our preferred stock.

Because the IRS or other parties (such as withholding agents) may not be able to distinguish our Preferred Stock offered or resold from time to time, a holder of our Preferred Stock might be subject to adverse tax consequences or might be required to demonstrate to the IRS (or such other parties) that the holder purchased our Preferred Stock in a specific offering to which those adverse tax consequences did not apply.

Moreover, any adverse tax consequences as described above in connection with the future issuance of Additional Shares may adversely affect the trading price of our Preferred Stock.

Provisions of our Preferred Stock could delay or prevent an otherwise beneficial takeover of us

Certain provisions in our Preferred Stock could make a third-party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then, subject to certain exceptions, preferred stockholders will have the right to require us to repurchase their preferred stock for cash.

These fundamental change provisions could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that preferred stockholders or holders of our class A common stock may view as favorable.

For example, if a takeover constitutes a fundamental change, then, subject to certain exceptions, holders of our Preferred Stock will have the right to require us to repurchase their Preferred Stock for cash.

These fundamental change provisions could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that holders of our Preferred Stock or holders of our class A common stock may view as favorable.

The accounting method for our Preferred Stock may result in lower reported net earnings attributable to common stockholders and lower reported diluted earnings per share

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Applicable accounting standards require us to separately account for certain redemption features associated with our Preferred Stock as embedded derivatives.

Under this treatment, any embedded derivatives are measured at their fair value and accounted for separately as liabilities that are marked-to-market at the end of each reporting period.

Under this treatment, any embedded derivatives are measured at its fair value and accounted for separately as liabilities that are marked to market at the end of each reporting period.

For each financial statement period after the issuance of the preferred stock, a gain or loss would be reported in our statement of operations to the extent the valuation of any of the embedded derivatives 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 our 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 our Perpetual Strike Preferred Stock is converted at the beginning of the reporting period (or, if later, the time our Perpetual Strike Preferred Stock is issued).

However, this calculation will not be made if reflecting our Perpetual Strike Preferred Stock in diluted earnings per share in this manner is anti-dilutive.

Accordingly, the application of the if-converted method to our Perpetual Strike Preferred Stock may result in lower reported diluted earnings per share.

In addition, the if-converted method applies to reflect our STRK Stock in the calculation of our diluted earnings per share.

Under this method, diluted earnings per share is calculated assuming that our STRK Stock is converted at the beginning of the reporting period (or, if later, the time our STRK Stock is issued).

However, this calculation is not made if reflecting our STRK Stock in diluted earnings per share in this manner is anti-dilutive.

Accordingly, the application of the if-converted method to our STRK Stock may result in lower reported diluted earnings per share.

In addition, accounting standards may change in the future.

Accordingly, we may account for our preferred stock in future periods in a manner that is significantly different than described above.

Future sales or other dilution of our class A common stock, including other equity-related securities, could dilute our existing stockholders or otherwise depress the market price of our class A common stock and the value of our Perpetual Strike Preferred Stock

Future sales of our class A common stock in the public market, or the perception that such sales could occur, or the issuance of class A common stock upon the conversion of our Perpetual Strike Preferred Stock could negatively impact the market price of our class A common stock, and, accordingly, the value of our Perpetual Strike Preferred Stock.

The terms of our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock do not restrict our ability to issue additional Perpetual Strike Preferred Stock, class A common stock or other equity-related securities in the future.

Future sales or issuances of class A common stock, Perpetual Strike Preferred Stock or other equity-related securities could be dilutive to holders of our class A common stock and Perpetual Strike Preferred Stock and could adversely affect their voting and other rights and economic interests.

If we issue additional shares of our Perpetual Strike Preferred Stock, shares of class A common stock (including as payment for regular dividends on our Perpetual Strike Preferred Stock), or other equity-related securities, the price of our class A common stock and the value of our Perpetual Strike Preferred Stock may decline.

We cannot predict the size of future issuances of our class A common stock or other securities or the effect, if any, that the issuance of our Perpetual Strike Preferred Stock, and future sales and issuances of our class A common stock and other securities would have on the market price of our class A common stock and the value of our Perpetual Strike Preferred Stock.

In addition, the existence of our Perpetual Strike Preferred Stock may encourage short selling by market participants because the conversion of our Perpetual Strike Preferred Stock could be used to satisfy short positions, or anticipated conversion of our Perpetual Strike Preferred Stock into shares of class A common stock could depress the price of our class A common stock.

Accordingly, we may account for our Preferred Stock in a manner that is

significantly different than described above

Our right to unilaterally reduce the regular dividend rate of the STRC Stock could cause the STRC Stock to accumulate dividends at rates that are below those of otherwise comparable instruments, could cause the trading price or value of the STRC Stock to decrease, and could otherwise significantly harm investors

The STRC Stock will accumulate cumulative regular dividends on the stated amount thereof at a variable rate per annum equal to the monthly regular dividend rate per annum.

The monthly regular dividend rate per annum has been initially set at 9.00%.

However, we will have the right, in our sole and absolute discretion, to adjust the monthly regular dividend rate per annum that applies to each regular dividend period that begins after the first regular dividend period.

Our right to adjust the monthly regular dividend rate per annum will be subject to certain restrictions.

For example, we will not be permitted to reduce the monthly regular dividend rate per annum that will apply to any regular dividend period (i) by more than the following amount from the monthly regular dividend rate per annum applicable to the prior regular dividend period:

the sum of (1) 25 basis points;

and (2) the excess, if any, of (x) the monthly SOFR per annum on the first business day of such prior regular dividend period, over (y) the minimum of the monthly SOFR per annum rates that occur on the business days during the period from, and including, the first business day of such prior regular dividend period to, and including, the last business day of such prior regular dividend period;

or (ii) to a rate per annum that is less than the monthly SOFR per annum in effect on the business day before we provide notice of the next regular dividend rate.

In addition, we will not be entitled to reduce the monthly regular dividend rate per annum of the STRC Stock unless, at the time we provide the related notice of the adjustment, all accumulated regular dividends, if any, on the STRC Stock then outstanding for all prior completed regular dividend periods, if any, have been paid in full (or have been declared in full and consideration in kind and amount that is sufficient, in accordance with the certificate of designations, to pay such accumulated regular dividends, is set aside for the benefit of the preferred stockholders entitled thereto).

Our current intention, which is subject to change in our sole and absolute discretion, is to adjust the monthly regular dividend rate per annum in such a manner as we believe will maintain STRC Stock’s trading price at or close to its stated amount of $100 per share.

We may, at any time in our sole and absolute discretion, and without the consent of any holder of STRC Stock, choose to reduce the monthly regular dividend rate per annum to the maximum extent permitted by the terms of the STRC Stock, without regard to the impact that

reduction may have on the trading price or value of the STRC Stock.

If we reduce the monthly regular dividend rate per annum, then the trading price or value of the STRC Stock could decrease significantly.

If you hold STRC Stock at the time of such a decrease, the value of your investment could materially depreciate, and you may not be able to resell your STRC Stock at favorable prices, if at all.

Moreover, the mere existence of our right to unilaterally reduce the monthly regular dividend rate per annum could, in itself and without any actual reduction in the monthly regular dividend rate per annum, cause the STRC Stock to trade at prices below those that may otherwise be expected.

Notwithstanding the limitations on our ability to reduce the monthly regular dividend rate per annum, the trading price of STRC Stock could decline significantly if, for example, we reduce the dividend rate in successive regular dividend periods, or there is a market expectation that we do so.

Further, consecutive monthly reductions of the regular dividends rate on the STRC Stock may cause the regular dividend rate on STRC Stock to be viewed as reasonably expected to decline, which could result in adverse consequences to holders of STRC Stock.

See “—The tax rules applicable to “fast-pay stock” could result in adverse consequences to holders of our Preferred Stock” above.

If we reduce the monthly regular dividend rate per annum to the minimum dividend rate of the monthly SOFR per annum, and the monthly SOFR per annum thereafter increases, we will have no obligation to increase the monthly regular dividend rate per annum to the new monthly SOFR per annum.

Moreover, SOFR has a limited history, and its future performance cannot be predicted.

Despite our current intention, which is to adjust the monthly regular dividend rate per annum in such a manner as we believe will maintain STRC Stock’s trading price at or close to its stated amount of $100 per share, since we are permitted to exercise our right to adjust the monthly regular dividend rate per annum for any reason, the trading price of the STRC Stock could be significantly volatile.

For example, we could choose to adjust the monthly regular dividend rate per annum for reasons not directly related to the market value of our bitcoin holdings, the credit spreads on our other debt and preferred stock instruments, or the interest rate environment.

Accordingly, the trading profile of our STRC Stock could be significantly different than that of our other securities.

Increased volatility could harm investors by, for example, causing wide fluctuations in the implied yield of the STRC Stock and otherwise increasing the uncertainty regarding the price at which investors may resell their STRC Stock, if at all.

Certain provisions of the STRC Stock are intended to protect investors in the event we fail to declare and pay regular dividends on the STRC Stock.

These provisions include restrictions on our ability to make payments on, or engage in certain other transactions relating to, other classes of our capital stock that rank junior to, or on parity with, the STRC Stock.

Our ability to reduce the monthly regular dividend rate per annum could cause these provisions to be inadequate to protect investors.

For example, we could reduce the monthly regular dividend rate per annum to a sufficiently low rate that permits us to pay all accumulated regular dividends and avoid invoking the protective measures of these provisions.

We may be unsuccessful in achieving, or may abandon, our current intention of adjusting the regular dividend rate on our STRC Stock in such a manner as we believe (in our sole and absolute judgment) would be designed to cause the STRC Stock to trade at prices, or otherwise have a value, near its stated amount of $100 per share

Our current intention, which is subject to change in our sole and absolute discretion, is to adjust the monthly regular dividend rate per annum on our STRC Stock in such a manner as we believe will maintain STRC Stock’s trading price at or close to its stated amount of $100 per share.

However, we have no obligation to do so, and even if we attempt to achieve our current stated intent, any adjustments we make to the monthly regular dividend rate per annum, or any other actions we take, may fail to achieve or maintain the trading price or value of the STRC Stock near $100 per share.

For example, if the STRC Stock is trading at a price per share above $100 and we reduce the monthly regular dividend rate per annum with the goal of decreasing the trading price per share of the STRC Stock to $100, such reduction may cause the trading price of the STRC Stock to decrease by a greater amount than we anticipate, such that the trading price per share of STRC Stock may decrease below $100.

Similarity, if the STRC Stock is trading at a price per share below $100 and we increase the monthly regular dividend rate per annum with the goal of increasing the trading price per share of the STRC Stock to $100, such increase may cause the trading price of the STRC Stock to increase by a lesser amount than we anticipate, such that the trading price per share of STRC Stock may remain below $100.

Further, for any additional shares of STRC Stock that we issue (whether in an “at-the-market” or similar offering or otherwise following the listing of STRC Stock on The Nasdaq Global Select Market), our current intention (which is subject to change in our sole and absolute discretion) is to issue any such shares of STRC Stock at a price per share not less than $99 or more than $101.

However, we may issue any additional shares of STRC Stock (whether in an “at-the-market” or similar offering or otherwise following the listing of STRC Stock on The Nasdaq Global Select Market) at any price we choose.

Like any other security, the trading price or value of the STRC Stock will depend on a wide range of factors, including those described elsewhere in this “Risk Factors” section, many of which are beyond our control.

While we expect that the dividend rate on the STRC Stock will directly impact its trading price or value, there are many other factors that could have equal or more significant impacts.

Any adjustment we make to the monthly regular dividend rate per annum of the STRC Stock that is designed to achieve a specified trading price or value will, necessarily, be based on assumptions regarding those other factors.

These assumptions will always be inaccurate or incomplete to some degree, and potentially to a material extent.

Moreover, even if such an adjustment initially achieves a specified trading price or value, the trading price or value may fluctuate significantly throughout the relevant regular dividend period before we have an opportunity to adjust the monthly regular dividend rate per annum for the next regular dividend period.

Importantly, the mere existence of our right to unilaterally adjust the monthly regular dividend rate per annum will impact the trading price and value of the STRC Stock.

Specifically, we expect the trading price of the STRC Stock at any time to reflect the market’s expectations at that time regarding how we will exercise this right in the foreseeable future.

Comments we make regarding our intentions regarding the adjustment of the monthly regular dividend rate per annum could also impact the trading price and value of the STRC Stock.

Modeling the impact of market expectations on the trading price of the STRC Stock may be impossible.

For example, if we increase, or announce an intention to increase, the monthly regular dividend rate per annum, then the trading price of the STRC Stock may in fact decrease if the market expected us to make a larger increase.

From time to time, we may publicly disclose our expected policies regarding adjustments to the monthly regular dividend rate per annum of the STRC Stock.

These disclosures may include specific numerical frameworks setting forth the amount of any change to the monthly regular dividend rate per annum that we intend to make based on the trading price of the STRC Stock or other metrics.

In all cases, these disclosures refer only to our current intent as of the time of the applicable disclosure;

they are neither a guarantee that the STRC Stock will trade at a specified price in response to any changes to the monthly regular dividend rate per annum, nor a guarantee that we will make any specific adjustment to the monthly regular dividend rate per annum.

Moreover, we are free to abandon our stated intent, as described above, or any policies or frameworks that we may subsequently disclose publicly, at any time in our sole and, at any time in our sole and absolute discretion and without the consent of any preferred stockholder.

See “—Our right to unilaterally reduce the regular dividend rate of the STRC Stock could cause the STRC Stock to accumulate dividends at rates that are below those of otherwise comparable instruments, could cause the trading price or value of the STRC Stock to decrease, and could otherwise significantly harm investors” above.

Future sales of our class A common stock in the public market, or the perception that such sales could occur, or the issuance of class A common stock upon the conversion of our STRK Stock could negatively impact the market price of our class A common stock, and, accordingly, the value of our STRK Stock.

The terms of our STRK Stock, STRF Stock, and STRD Stock do not restrict our ability to issue additional STRK Stock, class A common stock or other equity-related securities in the future.

Future sales or issuances of class A common stock, STRK Stock or other equity-related securities could be dilutive to holders of our class A common stock and STRK Stock and could adversely affect their voting and other rights and economic interests.

If we issue additional shares of our STRK Stock, shares of class A common stock (including as payment for regular dividends on our STRK Stock), or other equity-related securities, the price of our class A common stock and the value of our STRK Stock may decline.

We cannot predict the size of future issuances of our class A common stock or other securities or the effect, if any, that the issuance of our STRK Stock, and future sales and issuances of our class A common stock and other securities would have on the market price of our class A common stock and the value of our STRK Stock.

In addition, the existence of our STRK Stock may encourage short selling by market participants because the conversion of our STRK Stock could be used to satisfy short positions, or anticipated conversion of our STRK Stock into shares of class A common stock could depress the price of our class A common stock.

The sale or the availability for sale of a large number of shares of class A common stock in the public market could cause the market price of our class A common stock to decline.

Not all events that may adversely affect the value of our Perpetual Strike Preferred Stock and our class A common stock will result in an adjustment to the conversion rate of our Perpetual Strike Preferred Stock

The conversion rate of our Perpetual Strike Preferred Stock is subject to adjustment for certain events, including:

Not all events that may adversely affect the value of our STRK Stock and our class A common stock will result in an adjustment to the conversion rate of our STRK Stock

The conversion rate of our STRK Stock is subject to adjustment for certain events, including:

• certain stock dividends, splits and combinations;

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• certain tender or exchange offers.

We are not required to adjust the conversion rate for other events, such as third-party tender offers or an issuance of class A common stock (or securities exercisable for, or convertible into, class A common stock) for cash, that may adversely affect the value of our Perpetual Strike Preferred Stock and the trading price of our class A common stock.

An event may occur that adversely affects the value of our Perpetual Strike Preferred Stock and the trading price of the underlying shares of our class A common stock but that does not result in an adjustment to the conversion rate.

Certain events that can significantly reduce, or eliminate entirely, the option value of the conversion right of our Perpetual Strike Preferred Stock will not require an adjustment to the conversion rate.

For example, if we are party to a business combination transaction pursuant to which our class A common stock is acquired solely for cash, then, our Perpetual Strike Preferred Stock will become convertible solely into cash, which will eliminate the time value, and may harm the option value, of the conversion right of our Perpetual Strike Preferred Stock.

Similarly, a de-listing of our class A common stock will likely severely reduce the liquidity of the market for our class A common stock and the volatility of the trading price of our class A common stock, which, in turn, will likely reduce the option value of the conversion right of our Perpetual Strike Preferred Stock significantly.

None of these, or certain other, events will, in themselves, require an adjustment to the conversion rate to compensate preferred stockholders for their lost option value.

We are not required to adjust the conversion rate for other events, such as third-party tender offers or an issuance of class A common stock (or securities exercisable for, or convertible into, class A common stock) for cash, that may adversely affect the value of our STRK Stock and the trading price of our class A common stock.

An event may occur that adversely affects the value of our STRK Stock and the trading price of the underlying shares of our class A common stock but that does not result in an adjustment to the conversion rate.

Certain events that can significantly reduce, or eliminate entirely, the option value of the conversion right of our STRK Stock will not require an adjustment to the conversion rate.

For example, if we are party to a business combination transaction pursuant to which our class A common stock is acquired solely for cash, then, our STRK Stock will become convertible solely into cash, which will eliminate the time value, and may harm the option value, of the conversion right of our STRK Stock.

Similarly, a de-listing of our class A common stock will likely severely reduce the liquidity of the market for our class A common stock and the volatility of the trading price of our

class A common stock, which, in turn, will likely reduce the option value of the conversion right of our STRK Stock significantly.

None of these, or certain other, events will, in themselves, require an adjustment to the conversion rate to compensate holders of STRK Stock for their lost option value.

Many convertible instruments contain “make-whole” provisions that adjust the conversion rate in a manner that is designed to compensate investors for lost option value upon the occurrence of specified events.

Our Perpetual Strike Preferred Stock does not contain such a provision.

Accordingly, we may engage in transactions that significantly reduce the option value of the conversion right of our Perpetual Strike Preferred Stock without a corresponding adjustment to the conversion rate.

Recent and future regulatory actions, changes in market conditions and other events may adversely affect the trading price and liquidity of our Perpetual Strike Preferred Stock and the ability of investors to implement a convertible arbitrage trading strategy

We expect that holders of our Perpetual Strike Preferred Stock may seek to employ a convertible arbitrage strategy.

Under this strategy, investors typically sell short a certain number of shares of our class A common stock and adjust their short position over time while they continue to hold our Perpetual Strike Preferred Stock.

Our STRK Stock does not contain such a provision.

Accordingly, we may engage in transactions that significantly reduce the option value of the conversion right of our STRK Stock without a corresponding adjustment to the conversion rate.

Recent and future regulatory actions, changes in market conditions and other events may adversely affect the trading price and liquidity of our STRK Stock and the ability of investors to implement a convertible arbitrage trading strategy

We expect that holders of our STRK Stock may seek to employ a convertible arbitrage strategy.

Under this strategy, investors typically sell short a certain number of shares of our class A common stock and adjust their short position over time while they continue to hold our STRK Stock.

Investors may also implement this type of strategy by entering into swaps on our class A common stock in lieu of, or in addition to, short selling shares of our class A common stock.

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These rules and actions include Rule 201 of SEC Regulation SHO, the adoption by the Financial Industry Regulatory Authority, Inc., and the national securities exchanges of a “limit up-limit down” program, the imposition of market-wide circuit breakers that halt trading of securities for certain periods following specific market declines, and the implementation of certain regulatory reforms required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Any governmental or regulatory action that restricts investors’ ability to effect short sales of our class A common stock or enter into equity swaps on our class A common stock could depress the trading price of, and the liquidity of the market for, our Perpetual Strike Preferred Stock.

In addition, the liquidity of the market for our class A common stock and other market conditions could deteriorate, which could reduce, or eliminate entirely, the number of shares available for lending in connection with short sale transactions and the number of counterparties willing to enter into an equity swap on our class A common stock with an investor of our Perpetual Strike Preferred Stock.

These and other market events could make implementing a convertible arbitrage strategy prohibitively expensive or infeasible.

If investors seeking to employ a convertible arbitrage strategy are unable to do so on commercial terms, or at all, then the trading price of, and the liquidity of the market for, our Perpetual Strike Preferred Stock may significantly decline.

Holding Perpetual Strike Preferred Stock does not, in itself, confer any rights with respect to our class A common stock

Holding Perpetual Strike Preferred Stock does not confer any rights with respect to our class A common stock (including the voting rights of, and rights to receive any dividends or other distributions on, our class A common stock).

However, holders of our Perpetual Strike Preferred Stock are subject to all changes affecting our class A common stock to the extent the value of our Perpetual Strike Preferred Stock depends on the market price of our class A common stock and to the extent they receive shares of our class A common stock upon conversion of our Perpetual Strike Preferred Stock.

For example, if we propose an amendment to our charter documents that requires the approval of our class A common stockholders but not the approval of the preferred stockholders, then holders of any Perpetual Strike Preferred Stock will not, as such, be entitled to vote on the amendment, although those holders will be subject to any changes implemented by that amendment in the powers, preferences or special rights of our class A common stock.

Holding STRK Stock does not, in itself, confer any rights with respect to our class A common stock

Holding STRK Stock does not confer any rights with respect to our class A common stock (including the voting rights of, and rights to receive any dividends or other distributions on, our class A common stock).

However, holders of our STRK Stock are subject to all changes affecting our class A common stock to the extent the value of our STRK Stock depends on the market price of our class A common stock and to the extent they receive shares of our class A common stock upon conversion of our STRK Stock.

For example, if we propose an amendment to our charter documents that requires the approval of our class A common stockholders but not the approval of the holders of our Preferred Stock, then holders of any STRK Stock will not, as such, be entitled to vote on the amendment, although those holders will be subject to any changes implemented by that amendment in the powers, preferences or special rights of our class A common stock.

Holders of STRD Stock may not receive dividends on the STRD Stock, which are discretionary and non-cumulative

Dividends on the STRD Stock are discretionary and not cumulative.

If our board of directors or any duly authorized committee thereof does not declare a dividend on the STRD Stock in respect of a dividend period, then no dividend will be deemed to have accrued for such dividend period, be payable on the applicable dividend payment date or be cumulative, and we will have no obligation to pay any dividend for that dividend period, whether or not our board of directors or any duly authorized committee thereof declares a dividend on the STRD Stock, any other series of our Preferred Stock or our common stock for any future dividend period.

Accordingly, holders of STRD Stock may not receive dividends on the STRD Stock.

Risks Related to Our Outstanding and Potential Future Indebtedness

Our level and terms of indebtedness could adversely affect our ability to raise additional capital to further execute on our bitcoin strategy, fund our enterprise analytics software operations, and take advantage of new business opportunities

As of March 31, 2025, we had $8.223 billion aggregate indebtedness, consisting of $1.010 billion in aggregate principal amount of 2028 Convertible Notes, $3.0 billion in aggregate principal amount of 2029 Convertible Notes, $800.0 million aggregate principal amount of 2030A Convertible Notes, $2.000 billion aggregate principal amount of 2030B Convertible Notes, $603.8 million aggregate principal amount of 2031 Convertible Notes, $800.0 million aggregate principal amount of 2032 Convertible Notes, and $9.7 million of other long-term indebtedness.

We refer in these risk factors to the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes, collectively, as the “Outstanding Convertible Notes.” As of March 31, 2025, our annual contractual interest expense relating to our Outstanding Convertible Notes was $35.1 million.

Our substantial indebtedness and contractual interest expense could have important consequences to us, including:

As of June 30, 2025, we had $8.24 billion aggregate indebtedness, consisting of $1.01 billion aggregate principal amount of 2028 Convertible Notes, $3.00 billion in aggregate principal amount of 2029 Convertible Notes, $800.0 million aggregate principal amount of 2030A Convertible Notes, $2.00 billion aggregate principal amount of 2030B Convertible Notes, $603.7 million aggregate principal amount of 2031 Convertible Notes, $800.0 million aggregate principal amount of 2032 Convertible Notes, and $25.6 million of other long-term indebtedness.

We refer in these risk factors to the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes,

2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes, collectively, as the “Outstanding Convertible Notes.” As of June 30, 2025, our annual contractual interest expense relating to our Outstanding Convertible Notes was $36.5 million.

Our substantial indebtedness and interest expense could have important consequences to us, including:

• limiting our ability to use a substantial portion of our cash flow from operations in other areas of our business, including for acquisition of additional bitcoin, working capital, research and development, expanding our infrastructure, capital expenditures, and other general business activities and investment opportunities in our company, because we must dedicate a substantial portion of these funds to pay interest on and/or service our debt;

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Upon a fundamental change as defined in the indentures governing the Outstanding Convertible Notes, the holders of such notes will have the right to require us to offer to purchase all of the applicable notes then outstanding at a price equal to 100% of the principal amount of the Outstanding Convertible Notes, plus, in each case, accrued and unpaid interest, if any, to, but excluding, the repurchase date.

Moreover, the exercise by holders of the Outstanding Convertible Notes of their right to require us to repurchase such Outstanding Convertible Notes could cause a default under future debt agreements, even if the change of control or fundamental change itself does

not, due to the financial effect of such repurchase on us.

Moreover, the exercise by holders of the Outstanding Convertible Notes of their right to require us to repurchase such Outstanding Convertible Notes

could cause a default under future debt agreements, even if the change of control or fundamental change itself does not, due to the financial effect of such repurchase on us.

In order to obtain sufficient funds to pay the purchase price of such notes, we expect that we would have to refinance the Outstanding Convertible Notes or obtain a waiver from the applicable holders of Outstanding Convertible Notes and we may not be able to refinance the Outstanding Convertible Notes on reasonable terms, if at all.

Absent a waiver from the applicable holders of Outstanding Convertible Notes, our failure to offer to purchase all applicable Outstanding Convertible Notes or to purchase all validly tendered Outstanding Convertible Notes would be an event of default under the indentures governing the Outstanding Convertible Notes.

In addition, holders of (i) the 2028 Convertible Notes have the right to require us to repurchase all or a portion of their notes on September 15, 2027, (ii) the 2029 Convertible Notes have the right to require us to repurchase all or a portion of their notes on June 1, 2028, (iii) the 2030A Convertible Notes and the 2031 Convertible Notes have the right to require us to repurchase all or a portion of their notes on September 15, 2028, (iv) the 2030B Convertible Notes have the right to require us to repurchase all or a portion of their notes on March 1, 2028, and (v) the 2032 Convertible Notes have the right to require us to repurchase all or a portion of their notes on June 15, 2029, in each case, at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.

In addition, holders of Outstanding Convertible Notes have the right to require us to repurchase all or a portion of their notes on the following dates with respect to the following Outstanding Convertible Notes:

September 15, 2027 (2028 Convertible Notes), June 1, 2028 (2029 Convertible Notes), September 15, 2028 (2030A Convertible Notes and 2031 Convertible Notes), March 1, 2028 (2030B Convertible Notes), and June 15, 2029 (2032 Convertible Notes), in each case, at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.

The conditional conversion feature of the Outstanding Convertible Notes, if triggered, may adversely affect our financial condition and operating results

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Despite our current level of indebtedness, we may incur substantially more indebtedness and enter into other transactions in the future which could further exacerbate the risks related to our indebtedness

Our bitcoin strategy includes acquiring bitcoin using proceeds from equity and debt financings and cash flows from operations.

Our bitcoin strategy includes acquiring bitcoin using proceeds from equity and debt financings, if available and cash flows from operations.

As such, despite our current level of indebtedness, we may incur substantially more indebtedness, and we may enter into other transactions in the future.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings