| Item 1.02. |
Termination of a Material Definitive Agreement.
|
The information set forth below in Item 8.01 of this Current Report
on Form 8-K under
the caption “Voluntary Prepayment
of Silvergate Loan” is incorporated herein by reference.
Voluntary Prepayment of Silvergate
Loan
As previously disclosed, on March 23, 2022, MacroStrategy LLC
(“MacroStrategy”), a wholly-owned subsidiary of MicroStrategy
Incorporated (the “Company” or “MicroStrategy”), entered into a
Credit and Security Agreement (the “Credit Agreement”) with
Silvergate Bank (“Silvergate”) pursuant to which Silvergate issued
a $205.0 million term loan (the “Loan”) to MacroStrategy. The
Loan had a scheduled maturity date of March 23, 2025, and bore
interest at a floating rate equal to the SOFR 30 Day Average as
published by the Federal Reserve Bank of New York’s website plus
3.70%, with a floor of 3.75%. As of March 24, 2023, the
floating rate equaled 8.27%. The Loan was collateralized by certain
bitcoin owned by MacroStrategy and a $5.0 million cash reserve
account held by MacroStrategy at Silvergate. Under the terms of the
Credit Agreement, MacroStrategy was required to maintain a Loan to
collateral value ratio of less than 50%. As of March 24, 2023,
approximately 34,619 bitcoins were held in a collateral account
established under the Loan. Additional material terms of the Credit
Agreement are described in the Company’s Form 8-K filed with the Securities and
Exchange Commission on March 29, 2022.
On March 24, 2023, MacroStrategy and Silvergate entered into a
Prepayment, Waiver and Payoff to Credit and Security Agreement,
pursuant to which MacroStrategy voluntarily prepaid Silvergate
approximately $161.0 million (the “Payoff Amount”), in full
repayment, satisfaction, and discharge of the Loan and all other
obligations under the Credit Agreement. Upon Silvergate’s receipt
of the Payoff Amount, the Credit Agreement was terminated, and
Silvergate released its security interest in all of MacroStrategy’s
assets collateralizing the Loan, including the bitcoin that was
serving as collateral.
Bitcoin Activity
On March 27, 2023, MicroStrategy announced that, during the
period between February 16, 2023 and March 23, 2023,
MicroStrategy, together with its subsidiaries, acquired
approximately 6,455 bitcoins for approximately $150.0 million
in cash, at an average price of approximately $23,238 per bitcoin,
inclusive of fees and expenses. As of March 23, 2023,
MicroStrategy, together with its subsidiaries, held an aggregate of
approximately 138,955 bitcoins, which were acquired at an aggregate
purchase price of approximately $4.14 billion and an average
purchase price of approximately $29,817 per bitcoin, inclusive of
fees and expenses.
ATM Activity
As previously disclosed, on September 9, 2022, MicroStrategy
entered into a Sales Agreement (the “Sales Agreement”) with Cowen
and Company, LLC and BTIG, LLC, as sales agents (the “Agents”),
pursuant to which MicroStrategy may issue and sell shares of its
class A common stock, par value $0.001 per share (“Shares”), having
an aggregate offering price of up to $500.0 million from time
to time through the Agents. On March 27, 2023,
MicroStrategy also announced that during the period between
January 1, 2023 and March 24, 2023, MicroStrategy had
issued and sold an aggregate of 1,348,855 Shares under the Sales
Agreement for aggregate net proceeds to MicroStrategy (less sales
commissions and expenses) of approximately $339.4 million.
MacroStrategy’s prepayment of the Silvergate loan as described
above was fully funded using proceeds from the sale of Shares under
the Sales Agreement and the $5.0 million in the cash reserve
account held by MacroStrategy at Silvergate.