Company: PENG
Filing Date: 2025-04-02
Form Type: 10-Q
Source: 0001628280-25-016182
Chunk: 98

Company: Penguin Solutions, Inc.
Filing Date: 2025-04-02
Form: 10-Q
Item: Part II, Item 8
Chunk 98
---
 patents, trademarks or other proprietary rights. We believe our internal development processes and other policies and practices limit our exposure related to such indemnities. Maximum potential future payments cannot be estimated because many of these agreements do not have a maximum stated liability. However, to date, we have not had to reimburse any of our customers or suppliers for any significant losses related to these indemnities. We have not recorded any liability for such indemnities.ContingenciesFrom time to time, we may be involved in legal matters that arise in the normal course of business. Litigation in general, and intellectual property, employment and shareholder litigation in particular, can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to 

19

predict. We regularly review contingencies to determine whether the likelihood of loss has changed and to assess whether a reasonable estimate of the loss or range of loss can be made.

EquityPenguin Solutions Shareholders’ EquityPreferred SharesOn December 13, 2024, we closed the SKT Investment. Pursuant to the terms of the SKT Purchase Agreement, we sold to Astra AI Infra, a special purpose vehicle formed by SKT to consummate the SKT Investment (the “SPV”), 200,000 convertible preferred shares, par value $0.03 per share, of Penguin Solutions at a price of $1,000 per share or an aggregate price of $200.0 million. ConversionA holder of the CPS may convert such holder’s CPS into ordinary shares at any time, provided that the CPS may, at our option, automatically be converted into ordinary shares on any date following the second anniversary of the closing of the SKT Investment upon which the volume-weighted average price of the ordinary shares for any fifteen consecutive trading day period equals or exceeds 150% of the then-applicable conversion price. The CPS are convertible into ordinary shares at an initial conversion price of $32.81, subject to customary adjustment upon the occurrence of certain events (including share subdivision and consolidation, certain dividends and distributions, and any reclassification or share exchange) and a share issuance limitation.DividendsThe CPS entitle the holder to receive dividends of six percent per annum, cumulative, and payable quarterly in-kind or in cash at the Company’s option, subject to certain conditions. We declared and paid preferred cash dividends of $2.2 million in the second quarter and first six months of 2025. As of February 28, 2025, we accrued preferred dividends of $0