Company: PENG
Filing Date: 2025-10-21
Form Type: 10-K
Source: 0001616533-25-000061
Chunk: 56

Company: Penguin Solutions, Inc.
Filing Date: 2025-10-21
Form: 10-K
Item: Item 1A
Chunk 56
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.S. Domestication may not be realized.

On June 30, 2025, we consummated the U.S. Domestication. We may not realize the anticipated benefits of the U.S. Domestication. The achievement of such benefits is, in many significant respects, subject to factors beyond our control, including the responses of third parties with whom we conduct business, the terms of future contractual relationships, and the reactions of investors. Additionally, the anticipated benefits from the U.S. Domestication may not outweigh the direct and indirect costs and expenses incurred in connection with the transaction. Failure to realize those benefits could have a material and adverse effect on our business, results of operations, or financial condition.

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

Although we do not currently expect the U.S. Domestication to increase our effective tax rate, there is a risk that our effective tax rate may nonetheless increase following the U.S. Domestication. Our effective tax rate could change materially after the U.S. Domestication, which may adversely affect our financial results, including our earnings and cash flow in future periods, and may fluctuate significantly from period to period. Our effective tax rate is based upon the application of currently applicable income tax laws, regulations and treaties, as well as current judicial and administrative interpretations of those rules in various jurisdictions, including jurisdictions outside the United States.

In light of these factors, there can be no assurance that our effective tax rate will not increase in future periods, including as a result of and following the U.S. Domestication. Moreover, U.S. tax laws significantly limit the ability of U.S. corporations to redomicile outside of the United States. Accordingly, if our effective tax rate were to increase as a result of the U.S. Domestication, our business and financial performance could be adversely affected.

Changes in tax laws or potential adjustments by tax authorities could materially increase our tax expense.

We are a multinational company subject to taxation in multiple jurisdictions. Our future effective tax rates could be adversely affected by various factors, including the resolution of tax audits with tax authorities in the United States and abroad; adjustments to income taxes upon finalization of various tax returns; increases in non-deductible 

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expenses for tax purposes, such as write-offs of acquired in-process research and development or impairments of goodwill related to acquisitions; changes in available tax credits; changes in tax laws, regulations, or tax rates; changes in the interpretation or application of tax laws; fluctuations in the proportion of net sales or