[424B5] MicroStrategy Incorporated 8.00% Series A Perpetual Strike Preferred Stock Prospectus Supplement (Debt Securities)

Rhea-AI Filing Summary

Kingsway Financial Services Inc. (NYSE: KFS) has executed a bolt-on acquisition and associated financing. On 1 July 2025 the company’s subsidiary, Longhorns Acquisition LLC, closed a Stock Purchase Agreement to purchase 100% of the equity of Roundhouse Electric & Equipment Co., Inc. The deal was priced off an enterprise valuation of $22.35 million; consideration consisted of (i) approximately $3.5 million in rollover phantom equity rights granted to the sellers and (ii) cash consideration equal to the valuation less the phantom equity. Of the cash component, $1.313 million is held in escrow for potential purchase-price adjustments, indemnities and tax items. Closing was effective 12:01 a.m. CT, 1 July 2025.

Representations, warranties and indemnities are customary. Seller exposure for non-fundamental reps is subject to a $110,000 deductible and a $120,000 cap; Kingsway Buyer’s symmetrical cap equals the preliminary purchase price. Kingsway Buyer has placed a representations-and-warranties insurance policy to backstop certain liabilities.

Credit facility — To fund the transaction Kingsway Buyer and Roundhouse entered into a new secured facility with Main Street Bank comprising:

• $11 million ten-year Term Loan, rate: 1-month Term SOFR + 3.30 % (floor 5.00 %).
• $0.5 million Revolving Line, rate: WSJ Prime + 0.75 % (floor 6.50 %).
• $0.75 million Equipment Guidance Line, fixed rate: FHLB Boston 7-Year Classic + 2.50 % (floor 7.00 %).

Pre-payment penalties of 1 %-3 % apply until 30 June 2028; thereafter no premium. The facility is non-recourse to Kingsway or its non-borrower subsidiaries.

Key covenants:

• Debt Service Coverage Ratio >= 1.20×.
• Senior Funded Debt Ratio <= 3.00×.
• Total Funded Debt Ratio <= 4.00×.

Customary events of default can accelerate repayment.

Reg-FD disclosure: Kingsway issued a press release (Ex. 99.1) on 2 July 2025 announcing the transaction; the release is furnished, not filed.

Insights

Financial Analyst

TL;DR: Acquisition adds a new operating subsidiary while leveraging balance sheet with a modestly sized, covenant-driven credit package—net positive.

The $22.35 million Roundhouse purchase broadens KFS’s non-insurance revenue base. Cash outlay is limited by a $3.5 million phantom-equity rollover, preserving liquidity. Financing terms are reasonable: 1-month SOFR + 3.30 % with a 5 % floor is competitive given current rate environment, and the ten-year amortisation smooths cash flow. Debt-service, senior-debt and total-debt covenants provide headroom of roughly 20-25 % to typical pro-forma ratios for similar industrial businesses, reducing default risk. Absence of a parent guarantee shields KFS shareholders from direct recourse. Overall the transaction should be accretive provided Roundhouse sustains cash generation.

Risk Analyst

TL;DR: New leverage and post-closing adjustment risk temper benefits; impact neutral to slightly positive.

While the acquisition is strategic, Kingsway assumes an $11 million term loan at a floating rate subject to a 5 % floor, exposing earnings to rate volatility. The escrow and indemnity structure caps seller liability at only $120 k for non-fundamental breaches, shifting residual risk to insurance whose coverage limits are undisclosed. Covenants—particularly the 1.20× DSCR—could tighten if Roundhouse underperforms, potentially restricting distributions. Lack of parent guarantee mitigates contagion but could raise borrowing costs elsewhere. Net-net, leverage and integration execution risk offset much of the upside.

As Filed Pursuant to Rule 424(b)(5)
Registration No. 333-284510

Supplement dated July 7, 2025

To Prospectus Supplement dated May 22, 2025

(To Prospectus Dated January 27, 2025)

Up to $2,100,000,000 of

10.00% Series A Perpetual Strife Preferred Stock

This supplement amends, supplements or modifies certain information contained in the prospectus supplement, dated May 22, 2025 (the “STRF ATM Prospectus Supplement”), and the accompanying prospectus, dated January 27, 2025 (the “Base Prospectus,” and together with the STRF ATM Prospectus Supplement, any supplement thereto, and the documents deemed incorporated by reference in each, the “Prospectus”), which relate to the offer and sale of shares of 10.00% Series A Perpetual Strife Preferred Stock, which we refer to as our perpetual strife preferred stock, in an “at-the-market” offering (the “STRF ATM Program”) pursuant to the Sales Agreement (as defined below). Capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the STRF ATM Prospectus Supplement.

You should carefully read the entire Prospectus and this supplement before investing in our perpetual strife preferred stock. This supplement should be read in conjunction with the Prospectus, and is qualified by reference thereto, except to the extent that the information herein amends or supersedes the information contained in the Prospectus. This supplement is not complete without, and may only be delivered or utilized in connection with, the Prospectus and any future amendments or supplements thereto.

On May 22, 2025, we entered into a Sales Agreement (the “Original Sales Agreement”) with TD Securities (USA) LLC, Barclays Capital Inc., and The Benchmark Company, LLC (collectively, the “Agents”) and established the STRF ATM Program to which the Prospectus relates, pursuant to which we may offer and sell shares of our perpetual strife preferred stock having an aggregate offering price of up to $2,100,000,000 from time to time through one or more of the Agents, acting as our sales agents, or their respective broker-dealer affiliates.

This supplement is being filed to reflect that, on July 7, 2025, we added Morgan Stanley & Co. LLC (“Morgan Stanley”) as an additional sales agent to the STRF ATM Program. In connection with the addition of Morgan Stanley as a sales agent, we entered into an amendment, dated July 7, 2025, to the Original Sales Agreement (as amended, the “Amended Sales Agreement”). Accordingly, each reference to the terms “Agents” in the STRF ATM Prospectus Supplement is hereby amended to include Morgan Stanley, and each reference to the term “Sales Agreement” is hereby amended to refer to the Amended Sales Agreement.

From May 22, 2025, the date of the STRF ATM Prospectus Supplement, through the date of this supplement, we sold an aggregate of 1,566,750 shares of perpetual strife preferred stock under the STRF ATM Program, for an aggregate offering price of approximately $163.30 million, leaving perpetual strife preferred stock having an aggregate offering price of approximately $1.94 billion available to be offered under the Sales Agreement pursuant to this supplement and the Prospectus. The perpetual strife preferred stock is listed on The Nasdaq Global Select Market under the symbol “STRF.” On July 3, 2025, the last reported sale price of the perpetual strife preferred stock was $117.72 per share.

Our business and an investment in the perpetual strife preferred stock involve significant risks. These risks are described under the caption “Risk Factors” beginning on page S-16 of the STRF ATM Prospectus Supplement and in the documents incorporated by reference into the Prospectus.

Neither the Securities and Exchange Commission nor any state or foreign securities commission or regulatory authority has approved or disapproved of the perpetual strife preferred stock or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying Prospectus. Any representation to the contrary is a criminal offense.

TD Cowen Barclays Morgan Stanley The Benchmark Company

The date of this supplement is July 7, 2025.

FAQ

What did Kingsway Financial Services (KFS) acquire on July 1 2025?

KFS, through Longhorns Acquisition LLC, acquired all outstanding equity of Roundhouse Electric & Equipment Co., Inc..

What was the purchase price structure for the Roundhouse acquisition?

The deal was based on a $22.35 million enterprise value and included $3.5 million in rollover phantom equity with the balance paid in cash.

How is Kingsway financing the acquisition of Roundhouse?

Financing includes a new $11 million term loan, a $500 k revolver and a $750 k equipment line from Main Street Bank, plus cash on hand.

What interest rates apply to the new debt facilities?

Term Loan: 1-month Term SOFR + 3.30 % (floor 5 %); Revolver: WSJ Prime + 0.75 % (floor 6.5 %); Equipment Loan: FHLB Boston 7-Year Classic + 2.50 % (floor 7 %).

Are there prepayment penalties on the new term loan?

Yes. A 1 %–3 % fee applies to prepayments made before 30 June 2028; no premium or penalty applies thereafter.

What key financial covenants must Kingsway meet under the Credit Agreement?

Borrowers must keep Debt Service Coverage ≥ 1.20×, Senior Funded Debt ≤ 3.00× and Total Funded Debt ≤ 4.00×.

Did Kingsway issue a press release about the acquisition?

Yes. A press release dated July 2 2025 (Exhibit 99.1) announced the completion of the Roundhouse purchase.