Company: PENG
Filing Date: 2025-10-21
Form Type: 10-K
Source: 0001616533-25-000061
Chunk: 22

Company: Penguin Solutions, Inc.
Filing Date: 2025-10-21
Form: 10-K
Item: Item 1A
Chunk 22
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 brand and our reputation, our business and results of operations may be adversely affected.

•We rely on third parties to sell a portion of our products and services.

•We may be unable to protect our intellectual property.

•Legal proceedings and claims could have a material adverse effect on our business, results of operations or financial condition.

•We may be required to pay royalties or obtain licenses to sell certain products.

•The anticipated benefits of the U.S. Domestication may not be realized.

•Changes in tax laws or potential adjustments by tax authorities could materially increase our tax expense, and our ability to use our tax attributes is limited.

•We reversed the valuation allowance for a significant portion of our deferred tax assets in the fourth quarter of 2023, and we may not be able to realize these assets in the future. Our deferred tax assets may also be subject to additional valuation allowances, which could have a material adverse effect on our business, results of operations and financial condition.

•The U.S. Domestication may adversely impact our effective tax rate.

•We could incur substantial costs or liabilities as a result of violations of environmental laws.

•We may be unable to successfully manage environmental or social sustainability initiatives, in whole or in part, which could lead to less opportunity for us to have sustainability investors and partners and could negatively impact our reputation or options for capital acquisition.

•Our worldwide operations, and those of our suppliers, business partners and customers, may be disrupted by events outside of our control, including the effects of climate change, natural disasters, man-made disasters or other events, as well as societal and governmental responses to such events.

Risks Related to Our International Operations

•Our business is subject to the risks generally associated with international business operations.

•We are subject to the taxation requirements of the jurisdictions in which we operate, and if we fail to qualify for certain tax incentives or to comply with local tax regulations, we may suffer financial losses.

•Changes in foreign currency exchange rates could materially adversely affect our business, results of operations or financial condition.

•If enacted, exchange controls may limit our ability to receive dividends and other distributions from our foreign subsidiaries.

•High rates of inflation could have a material adverse effect on our business, results of operations and financial condition.

•We may have limited legal recourse under the laws of China if disputes arise under our agreements with third parties.

Risks Related to Our Debt

•Our indebtedness, and the terms of our debt instruments, including our credit agreement and the agreements governing our Convertible Senior Notes (as defined