Company: PENG
Filing Date: 2025-05-02
Form Type: DEF 14A
Source: 0001193125-25-110748
Chunk: 65

Company: Penguin Solutions, Inc.
Filing Date: 2025-05-02
Form: DEF 14A
Chunk 65
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 ANY STATE, LOCAL OR NON-U.S.TAX LAWS OR UNDER ANY APPLICABLE INCOME TAX TREATY. 41

Characterization of the Exchange of Penguin Solutions Cayman Ordinary Shares for Shares of Penguin Solutions Delaware Common Stock Pursuant to the Scheme of Arrangement

For U.S. federal income tax purposes, the exchange of
Penguin Solutions Cayman ordinary shares for shares of Penguin Solutions Delaware common stock pursuant to the Scheme of Arrangement is expected to qualify as a transaction described in Section 351 of the Code. However, because there is no
authority directly addressing a transaction involving the same facts as the Scheme of Arrangement, we cannot be certain that the exchange of Penguin Solutions Cayman ordinary shares for shares of Penguin Solutions Delaware common stock pursuant to
the Scheme of Arrangement will qualify for such treatment. In addition, the Transaction is not conditioned on the receipt of a tax opinion, and we do not intend to request a ruling from the IRS regarding the U.S. federal income tax treatment of the
Scheme of Arrangement. Consequently, no assurance can be given that the IRS will not challenge the qualification of the Scheme of Arrangement as a transaction described in Section 351 of the Code or that a court would not sustain such
challenge. In such case, the Scheme of Arrangement could be treated as a taxable transaction for U.S. federal income tax purposes.

Material U.S. Federal Income Tax Consequences of the Scheme of Arrangement to U.S. Holders of Penguin Solutions Cayman Ordinary Shares

Receipt of Shares of Penguin Solutions Delaware Common Stock in a Section 351 Exchange

Assuming that (i) the exchange of Penguin Solutions Cayman
ordinary shares for shares of Penguin Solutions Delaware common stock pursuant to the Scheme of Arrangement qualifies as a transaction described in Section 351 of the Code and (ii) Penguin Solutions Cayman is not and has not been a passive
foreign investment company (as discussed below under “Passive Foreign Investment Company Status”), a U.S. Holder that exchanges Penguin Solutions Cayman ordinary shares for shares of Penguin Solutions Delaware common stock pursuant to the
Scheme of Arrangement should not recognize any gain or loss with respect to such exchange. Such U.S. Holder should have an aggregate adjusted tax basis in the shares of Penguin Solutions Delaware common stock received pursuant to the Scheme of
Arrangement equal to the aggregate adjusted tax basis of the Penguin Solutions Cayman ordinary shares surrendered in exchange therefor by that U.S. Holder pursuant to the Scheme of Arrangement. The holding period for shares