STRC: Strategy's Variable-Rate Preferred Stock

Important Disclosures

This profile has been prepared by True North Research, a media and research subsidiary of Strive, Inc. (“Strive”). It summarizes certain publicly available information and internal analysis relating to Strategy’s variable-rate preferred stock (“STRC”) and its capital structure. It is part of a broader “Digital Credit” educational initiative and is provided for informational and educational purposes only.

This content is non-independent and should not be relied upon as a complete or current description of STRC, Strategy, or any offering. It does not constitute an offer to sell or a solicitation of an offer to buy any security, nor does it constitute investment, legal, accounting, or tax advice. It does not take into account the objectives, financial situation, or needs of any particular investor. Investors should make their own independent evaluation and consult their own advisers.

Any offer or sale of securities will be made only through the applicable offering documents and SEC filings, including those available on SEC EDGAR.

Because True North is a Strive subsidiary, Strive and its personnel may have economic interests in Digital Credit instruments discussed. This creates actual and potential conflicts of interest that readers should carefully consider.

Instrument Overview

STRC is Strategy’s (Nasdaq: MSTR) variable-rate perpetual preferred stock.

It is the largest instrument within the Digital Credit category by notional outstanding and is often referenced as a core instrument within Strategy’s preferred capital structure.

Strategy priced the original 28-million-share offering on July 24, 2025 at $90 per share and subsequently launched a $4.2 billion at-the-market (“ATM”) program.

As of March 2026, STRC pays a stated rate of 11.50%, up from 9.00% at issuance. Dividends are monthly and cumulative.

As of April 20, 2026, STRC traded at $99.39 — approximately at its $100 stated value — with an effective yield of 11.59% based on current inputs. Notional outstanding is approximately $8.5 billion across ~85.37 million shares.

In simple terms, STRC is a variable-income preferred instrument where the dividend rate adjusts over time, and price behavior has historically been observed near stated value.

(Sources: Strategy pricing release, July 25, 2025; Strategy 8-K, March 16, 2026; Strategy.com STRC page.)

---

Key Terms

(Sources: Strategy 424B5 prospectus supplement; Strategy 8-K, March 2, 2026.)

---

Rate History

From September 2025 through March 2026, STRC experienced multiple rate increases, coinciding with a period of declining Bitcoin prices.

Strategy has indicated that the dividend rate may be adjusted over time, and that current rates are not indicative of future rates. The rate-setting process is influenced by market conditions and trading behavior, and may result in both increases and decreases over time.

(Sources: Strategy Q4 2025 earnings; Strategy 8-K, March 2, 2026.)

---

How It Works in Practice

STRC can be understood as a variable-rate preferred instrument where dividend levels may adjust in response to market conditions.

Rate-setting framework. Strategy has described a framework under which dividend rate adjustments may be considered based on trading levels relative to stated value. For example:

• Lower trading levels may be associated with upward rate adjustments
• Trading near stated value may correspond with limited or no change
• Higher trading levels may be associated with rate reductions

These guidelines reflect management’s stated approach and may change over time. They are not contractual obligations.

Cumulative protection. STRC is cumulative. If dividends are not paid, unpaid amounts accrue and compound until satisfied. A dividend stopper prevents payments to junior securities until STRC obligations are current.

Tax treatment. Strategy reported that 100% of 2025 distributions qualified as nontaxable return of capital. Tax treatment is determined annually and may differ from expectations. Preliminary classifications should not be treated as guarantees.

---

Capital Structure Position

Strategy’s capital structure ranks:

Debt → STRF → STRC → STRE → STRK → STRD → Common (MSTR)

STRC sits near the top of the preferred hierarchy, directly below STRF.

Certain offering documents for junior securities indicate that dividends on those instruments may not be paid unless STRC (and STRF) dividends are current. This supports STRC’s relative seniority within the preferred stack.

However, preferred securities represent claims on residual assets and are not secured by specific Bitcoin holdings. STRC’s position is therefore relative within the capital structure rather than asset-backed in a legal sense.

(Sources: Strategy filings; Strategy.com STRC page.)

---

Who This Instrument May Suit

STRC has characteristics that may be relevant to investors who:

• Seek regular income with a variable rate structure
• Are comfortable with income levels that may change over time
• Value relatively higher liquidity compared to other preferred instruments in the category
• Prefer exposure to a large, actively traded instrument within the Digital Credit space

STRC may be less aligned with the objectives of investors who:

• Require fixed or highly predictable income streams
• Prefer contractual rate stability
• Prioritize the highest level of seniority within the preferred stack
• Seek equity-linked upside through conversion features

These observations are general and do not constitute a recommendation. Each investor must determine suitability based on their own circumstances.

---

Key Risks Specific to STRC

Rate reset risk. The current dividend rate reflects prevailing market conditions and may change over time. Rate reductions may occur if market conditions shift, including periods where trading levels exceed stated value.

Income variability. Because rates may adjust periodically, the income generated by STRC is not fixed. This may introduce variability relative to fixed-rate instruments.

Supply dynamics. Strategy’s ATM program allows for ongoing issuance of STRC shares. Increased supply may affect trading dynamics, liquidity, and pricing depending on market demand.

Market behavior around stated value. STRC has historically traded near its stated value, but this behavior is influenced by market conditions and issuer actions. There is no guarantee that price will remain near par under all conditions.

Balance sheet exposure. STRC’s value is influenced by Strategy’s financial position, which is significantly linked to Bitcoin. Changes in Bitcoin prices and broader market conditions may affect perceived risk and valuation.

---

Current Data Snapshot

(Refresh on publication day)

STRC’s pricing near stated value reflects market dynamics that may incorporate its variable-rate structure, relative seniority, and liquidity characteristics.

The dividend rate may change over time, and investors should evaluate outcomes under different rate and market scenarios.

→ Full instrument comparison: Markets & Instruments → Scenario analysis and stress testing: Risk Analysis → How we analyze: Methodology

This content is provided for informational and educational purposes only. It does not constitute an offer to sell or a solicitation to buy any security. Investors should review all relevant offering documents and SEC filings before making any investment decision.

True North is affiliated with Strive and is not an independent research provider. This creates potential conflicts of interest that should be considered when evaluating this content.