# EDGAR Filing Document

**Accession Number:** 0001616533
**File Stem:** 0001628280-25-034541
**Filing Date:** 2025-7
**Character Count:** 326698
**Document Hash:** dce1f8a454e4dbfe8698c76879ee57b9
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-25-034541.hdr.sgml**: 20250708

**ACCESSION NUMBER**: 0001628280-25-034541

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 113

**CONFORMED PERIOD OF REPORT**: 20250530

**FILED AS OF DATE**: 20250708

**DATE AS OF CHANGE**: 20250708

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Penguin Solutions, Inc.
- **CENTRAL INDEX KEY:** 0001616533
- **STANDARD INDUSTRIAL CLASSIFICATION:** SEMICONDUCTORS & RELATED DEVICES [3674]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 365142687
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0830

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38102
- **FILM NUMBER:** 251111718

**BUSINESS ADDRESS:**
- **STREET 1:** 1390 MCCARTHY BLVD
- **CITY:** MILPITAS
- **STATE:** CA
- **ZIP:** 95035
- **BUSINESS PHONE:** (510) 623-1231

**MAIL ADDRESS:**
- **STREET 1:** 1390 MCCARTHY BLVD
- **CITY:** MILPITAS
- **STATE:** CA
- **ZIP:** 95035

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SMART Global Holdings, Inc.
- **DATE OF NAME CHANGE:** 20140813

?xml version='1.0' encoding='ASCII'? sgh-20250530

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**FORM 10-Q**

**(Mark One)**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended May 30, 2025

OR

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from to

Commission File Number 001-38102

![logo.jpg](sgh-20250530_g1.jpg)

**PENGUIN SOLUTIONS, INC.**

(Exact name of registrant as specified in its charter)

Delaware 36-5142687 <br> (State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.)

---

| | |
|:---|:---|
| 1390 McCarthy Boulevard | |
| Milpitas, CA | 95035 |
| (Address of Principal Executive Offices) | (Zip Code) |

---

Registrant's telephone number, including area code: (510) 623-1231

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common stock, $0.03 par value per share | PENG | Nasdaq Global Select Market |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company <br> ☒ ☐ ☐ ☐ ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 3, 2025, the registrant had 52,401,114 shares of common stock outstanding.

------

**Table of Contents**

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| | | |
|:---|:---|:---|
| | | **Page** |
| **[PART I. Financial Information](#ic82e622894714a6dbe0cd0cc4638475d_13)** | **[PART I. Financial Information](#ic82e622894714a6dbe0cd0cc4638475d_13)** | |
| &nbsp;&nbsp;&nbsp;[Item 1](#ic82e622894714a6dbe0cd0cc4638475d_16) | [Financial Statements](#ic82e622894714a6dbe0cd0cc4638475d_16) | [5](#ic82e622894714a6dbe0cd0cc4638475d_16) |
| &nbsp;&nbsp;&nbsp;[Item 2](#ic82e622894714a6dbe0cd0cc4638475d_109) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#ic82e622894714a6dbe0cd0cc4638475d_109) | [35](#ic82e622894714a6dbe0cd0cc4638475d_109) |
| &nbsp;&nbsp;&nbsp;[Item 3](#ic82e622894714a6dbe0cd0cc4638475d_142) | [Quantitative and Qualitative Disclosures About Market Risk](#ic82e622894714a6dbe0cd0cc4638475d_142) | [44](#ic82e622894714a6dbe0cd0cc4638475d_142) |
| &nbsp;&nbsp;&nbsp;[Item 4](#ic82e622894714a6dbe0cd0cc4638475d_145) | [Controls and Procedures](#ic82e622894714a6dbe0cd0cc4638475d_145) | [45](#ic82e622894714a6dbe0cd0cc4638475d_145) |
| **[PART II. Other Information](#ic82e622894714a6dbe0cd0cc4638475d_148)** | **[PART II. Other Information](#ic82e622894714a6dbe0cd0cc4638475d_148)** |  |
| &nbsp;&nbsp;&nbsp;[Item 1](#ic82e622894714a6dbe0cd0cc4638475d_151) | [Legal Proceedings](#ic82e622894714a6dbe0cd0cc4638475d_151) | [46](#ic82e622894714a6dbe0cd0cc4638475d_151) |
| &nbsp;&nbsp;&nbsp;[Item 1A](#ic82e622894714a6dbe0cd0cc4638475d_154) | [Risk Factors](#ic82e622894714a6dbe0cd0cc4638475d_154) | [46](#ic82e622894714a6dbe0cd0cc4638475d_154) |
| &nbsp;&nbsp;&nbsp;[Item 2](#ic82e622894714a6dbe0cd0cc4638475d_157) | [Unregistered Sales of Equity Securities and Use of Proceeds](#ic82e622894714a6dbe0cd0cc4638475d_157) | [50](#ic82e622894714a6dbe0cd0cc4638475d_157) |
| &nbsp;&nbsp;&nbsp;[Item 3](#ic82e622894714a6dbe0cd0cc4638475d_160) | [Defaults Upon Senior Securities](#ic82e622894714a6dbe0cd0cc4638475d_160) | [50](#ic82e622894714a6dbe0cd0cc4638475d_160) |
| &nbsp;&nbsp;&nbsp;[Item 4](#ic82e622894714a6dbe0cd0cc4638475d_163) | [Mine Safety Disclosures](#ic82e622894714a6dbe0cd0cc4638475d_163) | [50](#ic82e622894714a6dbe0cd0cc4638475d_163) |
| &nbsp;&nbsp;&nbsp;[Item 5](#ic82e622894714a6dbe0cd0cc4638475d_166) | [Other Information](#ic82e622894714a6dbe0cd0cc4638475d_166) | [50](#ic82e622894714a6dbe0cd0cc4638475d_166) |
| &nbsp;&nbsp;&nbsp;[Item 6](#ic82e622894714a6dbe0cd0cc4638475d_172) | [Exhibits](#ic82e622894714a6dbe0cd0cc4638475d_172) | [51](#ic82e622894714a6dbe0cd0cc4638475d_172) |
| **[Signatures](#ic82e622894714a6dbe0cd0cc4638475d_175)** | **[Signatures](#ic82e622894714a6dbe0cd0cc4638475d_175)** | [54](#ic82e622894714a6dbe0cd0cc4638475d_175) |

---

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|:---|:---|
| 2 | ![logo.jpg](sgh-20250530_g1.jpg) |

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------

**Explanatory Note**

On June 30, 2025, we completed the redomiciliation of the parent company of our corporate group, Penguin Solutions, Inc., a Cayman Islands exempted company ("Penguin Solutions Cayman"), from the Cayman Islands to the State of Delaware in the United States, resulting in Penguin Solutions, Inc., a Delaware corporation ("Penguin Solutions Delaware"), becoming our publicly traded parent company (the "U.S. Domestication"). Penguin Solutions Delaware is the successor issuer to Penguin Solutions Cayman. The U.S. Domestication was approved by the shareholders of Penguin Solutions Cayman and effected via a court-sanctioned scheme of arrangement under Cayman Islands law, pursuant to which each ordinary share of Penguin Solutions Cayman was exchanged for one share of common stock of Penguin Solutions Delaware, and each convertible preferred share of Penguin Solutions Cayman was exchanged for one share of convertible preferred stock of Penguin Solutions Delaware. Additional information about the U.S. Domestication was included in Penguin Solutions Cayman's definitive proxy statement on Schedule 14A, filed with the Securities and Exchange Commission (the "SEC") on April 2, 2025.

**Cautionary Note Regarding Forward-Looking Statements**

This Quarterly Report on Form 10-Q ("Quarterly Report") contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 that are not historical in nature, that are predictive or that depend upon or refer to future events or conditions. These statements may include, but are not limited to, statements regarding future events or our future financial or operating performance, the extent and timing of, and expectations regarding, our future revenues and expenses and customer demand, statements regarding our objectives and development of our services and capabilities, statements regarding the deployment of our products and services, statements regarding our reliance on third parties, statements regarding our rebranding initiatives and strategy, and statements using words such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "plan," "potential," "should" and similar words and the negatives thereof. These forward-looking statements are based on our current expectations or forecasts of future events, circumstances, results or aspirations and are subject to a number of significant risks, uncertainties and other factors, many of which are outside of our control, including but not limited to, global business and economic conditions, including the impact on the financial condition of our customers, particularly in challenging macroeconomic environments, growth trends in technology industries (including trends and markets related to artificial intelligence ("AI")), our customer markets and various geographic regions; uncertainties in the geopolitical environment; our ability to manage our cost structure; disruptions in our operations or supply chain as a result of global pandemics or otherwise; changes in trade regulations and tariffs or adverse developments in international trade relations and agreements; changes in currency exchange rates; overall information technology spending, including changes in customer spending on our products and services; appropriations for government spending; the success of our strategic initiatives including our U.S. Domestication and our ability to realize the anticipated benefits thereof, our rebranding and related strategy, any existing or potential collaborations, and additional investments in new products and additional capacity; acquisitions of companies or technologies and the failure to successfully integrate and operate them or customers' negative reactions to them; issues, delays or complications in integrating the operations of Storm Private Holdings I Ltd. (together with its subsidiaries, "Stratus Technologies"); the failure to achieve the intended benefits of the sale of SMART Brazil (as defined below) and its business; the impact of and expected timing of winding down the manufacturing and discontinuing the sale of products offered through our Penguin Edge business; limitations on or changes in the availability of supply of materials and components; fluctuations in material costs; the temporary or volatile nature of pricing trends in memory or elsewhere; deterioration in customer relationships; our dependence on a select number of customers, and the timing and volume of customer orders and renewals; the impact of customer churn rates, including discounting and churn of significant customers from whom we derive a significant percent of our revenue; production or manufacturing difficulties; competitive factors; technological changes; difficulties with, or delays in, the introduction of new products; slowing or contraction of growth in the memory market, LED market or other markets in which we participate; changes to applicable tax regimes or rates; changes to the valuation allowance for our deferred tax assets, including any potential inability to realize these assets in the future; prices for the end products of our customers; strikes or labor disputes; deterioration in or loss of relations with any of our limited number of key vendors; the inability to maintain or expand government business; and the continuing availability of borrowings under revolving lines of credit or other debt arrangements and our ability to raise capital through debt or equity financings. These and other risks, uncertainties and factors are described in greater detail under the sections titled "Risk Factors," "Critical Accounting Estimates," "Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and "Liquidity and Capital Resources" contained in the Annual Report on Form

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|:---|:---|
| 3 | ![logo.jpg](sgh-20250530_g1.jpg) |

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------

10-K for the fiscal year ended August 30, 2024 filed by our predecessor Penguin Solutions Cayman (the "2024 Annual Report"), this Quarterly Report and the risks discussed in our other SEC filings. Such risks, uncertainties and factors as outlined above and in such filings could cause actual results of Penguin Solutions to be materially different from such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on any forward-looking statements.

The forward-looking statements included in this Quarterly Report are made only as of the date of this Quarterly Report. We do not intend, and have no obligation, to update or revise any forward-looking statements in order to reflect events or circumstances that may arise after the date of this Quarterly Report, except as required by law.

**About This Quarterly Report**

As used herein, unless stated otherwise or the context requires otherwise, the terms "Penguin Solutions," "Company," "Registrant," "we," "our," "us" or similar terms (i) for periods prior to the consummation of the U.S. Domestication, refer to Penguin Solutions Cayman and its consolidated subsidiaries and (ii) for periods at or after the consummation of the U.S. Domestication, refer to Penguin Solutions Delaware and its consolidated subsidiaries. Throughout this Quarterly Report, we refer to our equity securities (i) for periods prior to the consummation of the U.S. Domestication, as ordinary shares and/or convertible preferred shares and (ii) for periods at or after the consummation of the U.S. Domestication, as shares of common stock and/or shares of convertible preferred stock. For a description of our equity securities following the U.S. Domestication, see information under the heading "Description of Penguin Solutions Delaware Capital Stock" contained in our Current Report on Form 8-K12B filed with the SEC on June 30, 2025.

The common stock of Penguin Solutions Delaware began trading on The Nasdaq Global Select Market on July 1, 2025 (the first trading day following the U.S. Domestication) under the symbol "PENG", which is the same symbol under which Penguin Solutions Cayman ordinary shares previously traded.

Our fiscal year is the 52- or 53-week period ending on the last Friday in August. Fiscal years 2025 and 2024 contain 52 weeks and 53 weeks, respectively. All period references are to our fiscal periods unless otherwise indicated.

Penguin Solutions, Penguin Computing, Penguin Edge, the Penguin Solutions logo, SMART Modular Technologies, SMART, Cree LED, Stratus, Stratus Technologies and our other trademarks or service marks appearing in this Quarterly Report are our trademarks or registered trademarks. Trade names, trademarks and service marks of other companies appearing in this Quarterly Report are the property of their respective holders.

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| | |
|:---|:---|
| 4 | ![logo.jpg](sgh-20250530_g1.jpg) |

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------

**PART I. Financial Information**

**Item 1. Financial Statements**

**INDEX TO FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| | **Page** |
| [Consolidated Balance Sheets](#ic82e622894714a6dbe0cd0cc4638475d_19) | [6](#ic82e622894714a6dbe0cd0cc4638475d_19) |
| [Consolidated Statements of Operations](#ic82e622894714a6dbe0cd0cc4638475d_22) | [7](#ic82e622894714a6dbe0cd0cc4638475d_22) |
| [Consolidated Statements of Comprehensive Income (Loss)](#ic82e622894714a6dbe0cd0cc4638475d_25) | [8](#ic82e622894714a6dbe0cd0cc4638475d_25) |
| [Consolidated Statements of Shareholders' Equity](#ic82e622894714a6dbe0cd0cc4638475d_28) | [9](#ic82e622894714a6dbe0cd0cc4638475d_28) |
| [Consolidated Statements of Cash Flows](#ic82e622894714a6dbe0cd0cc4638475d_31) | [11](#ic82e622894714a6dbe0cd0cc4638475d_31) |
| [Notes to Consolidated Financial Statements](#ic82e622894714a6dbe0cd0cc4638475d_34) | [12](#ic82e622894714a6dbe0cd0cc4638475d_34) |

---

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|:---|:---|
| 5 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Balance Sheets**

(In thousands, except par value amounts)

(Unaudited)

---

| | | |
|:---|:---|:---|
| **As of** | **May 30,<br>2025** | **August 30,<br>2024** |
| **Assets** | | |
| Cash and cash equivalents | $709871 | $383147 |
| Short-term investments | 25676 | 6337 |
| Accounts receivable, net | 292504 | 251743 |
| Inventories | 184348 | 151213 |
| Other current assets | 37497 | 75264 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 1249896 | 867704 |
| Property and equipment, net | 93882 | 106548 |
| Operating lease right-of-use assets | 61850 | 60349 |
| Intangible assets, net | 95130 | 121454 |
| Goodwill | 150585 | 161958 |
| Deferred tax assets | 83872 | 85078 |
| Other noncurrent assets | 67567 | 71415 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1802782 | $1474506 |
| **Liabilities and Equity** |  |  |
| Accounts payable and accrued expenses | $310572 | $219090 |
| Current debt | 19916 |  |
| Deferred revenue | 101374 | 63954 |
| Other current liabilities | 44882 | 44552 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 476744 | 327596 |
| Long-term debt | 639562 | 657347 |
| Noncurrent operating lease liabilities | 63650 | 60542 |
| Other noncurrent liabilities | 27903 | 29813 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 1207859 | 1075298 |
| Commitments and contingencies |  |  |
| Penguin Solutions shareholders' equity: |  |  |
| Ordinary shares, $0.03 par value; authorized 200,000 shares; 62,306 shares issued and 52,417 outstanding as of May 30, 2025; 60,226 shares issued and 53,277 outstanding as of August 30, 2024 | 1869 | 1807 |
| Preferred shares, $0.03 par value; authorized 30,000 shares; 200 shares issued and outstanding as of May 30, 2025; no shares issued or outstanding as of August 30, 2024 | 6 |  |
| Additional paid-in capital | 745557 | 513335 |
| Retained earnings | 40312 | 29985 |
| &nbsp;&nbsp;Treasury shares, 9,889 and 6,949 shares held as of May 30, 2025 and August 30, 2024, respectively | (202996) | (153756) |
| &nbsp;&nbsp;Accumulated other comprehensive income | 23 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Penguin Solutions shareholders' equity | 584771 | 391381 |
| Noncontrolling interest in subsidiary | 10152 | 7827 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total equity | 594923 | 399208 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and equity | $1802782 | $1474506 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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|:---|:---|
| 6 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Statements of Operations**

(In thousands, except per share amounts)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Net sales: |  |  |  |  |
| &nbsp;&nbsp;Products | $258735 | $233105 | $830474 | $674992 |
| &nbsp;&nbsp;Services | 65516 | 67475 | 200398 | 184656 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | 324251 | 300580 | 1030872 | 859648 |
| Cost of sales: |  |  |  |  |
| &nbsp;&nbsp;Products | 200081 | 182517 | 648828 | 525819 |
| &nbsp;&nbsp;Services | 29087 | 29157 | 84501 | 80139 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total cost of sales | 229168 | 211674 | 733329 | 605958 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 95083 | 88906 | 297543 | 253690 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;Research and development | 20222 | 19681 | 59940 | 61596 |
| &nbsp;&nbsp;Selling, general and administrative | 59724 | 57249 | 179575 | 175851 |
| &nbsp;&nbsp;Impairment of goodwill | 5294 |  | 11373 |  |
| &nbsp;&nbsp;Other operating expense |  | 465 | 968 | 6739 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 85240 | 77395 | 251856 | 244186 |
| Operating income (loss) | 9843 | 11511 | 45687 | 9504 |
| Non-operating (income) expense: |  |  |  |  |
| &nbsp;&nbsp;Interest expense, net | 573 | 6167 | 7152 | 22975 |
| &nbsp;&nbsp;Other non-operating (income) expense | (1439) | 441 | (1012) | 113 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-operating (income) expense | (866) | 6608 | 6140 | 23088 |
| Income (loss) before taxes | 10709 | 4903 | 39547 | (13584) |
| Income tax provision (benefit) | 7259 | (1323) | 21262 | 4409 |
| Net income (loss) from continuing operations | 3450 | 6226 | 18285 | (17993) |
| Net loss from discontinued operations |  |  |  | (8148) |
| Net income (loss) | 3450 | 6226 | 18285 | (26141) |
| Net income attributable to noncontrolling interest | 789 | 610 | 2325 | 1784 |
| Net income (loss) attributable to Penguin Solutions | 2661 | 5616 | 15960 | (27925) |
| Preferred share dividends | 3033 |  | 5633 |  |
| Income available for distribution | (372) | 5616 | 10327 | (27925) |
| Income allocated to participating securities |  |  | 678 |  |
| Net income (loss) available to ordinary shareholders | $(372) | $5616 | $9649 | $(27925) |
| Basic earnings (loss) per ordinary share: |  |  |  |  |
| &nbsp;&nbsp;Continuing operations | $(0.01) | $0.11 | $0.18 | $(0.38) |
| &nbsp;&nbsp;Discontinued operations |  |  |  | (0.15) |
|  | $(0.01) | $0.11 | $0.18 | $(0.53) |
| Diluted earnings (loss) per ordinary share: |  |  |  |  |
| &nbsp;&nbsp;Continuing operations | $(0.01) | $0.10 | $0.18 | $(0.38) |
| &nbsp;&nbsp;Discontinued operations |  |  |  | (0.15) |
|  | $(0.01) | $0.10 | $0.18 | $(0.53) |
| Ordinary shares used in per share calculations: |  |  |  |  |
| &nbsp;&nbsp;Basic | 53130 | 52570 | 53355 | 52219 |
| &nbsp;&nbsp;Diluted | 53738 | 54283 | 54336 | 52219 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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|:---|:---|
| 7 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Statements of Comprehensive Income (Loss)**

(In thousands)

(Unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Net income (loss) | $3450 | $6226 | $18285 | $(26141) |
| Other comprehensive income (loss), net of tax: |  |  |  |  |
| &nbsp;&nbsp;Cumulative translation adjustment |  |  |  | (6352) |
| &nbsp;&nbsp;Cumulative translation adjustment reclassified to net income (loss) |  | (76) |  | 212321 |
| &nbsp;&nbsp;Gain (loss) on investments | 6 | (13) | 13 | 12 |
| Comprehensive income (loss) | 3456 | 6137 | 18298 | 179840 |
| Comprehensive income attributable to noncontrolling interest | 789 | 610 | 2325 | 1784 |
| Comprehensive income (loss) attributable to Penguin Solutions | $2667 | $5527 | $15973 | $178056 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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|:---|:---|
| 8 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Statements of Shareholders' Equity**

(In thousands)

(Unaudited)

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Ordinary** | **Ordinary** | **Preferred** | **Preferred** | **Additional<br>Paid-in-capital** | | | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total Penguin Solutions<br>Shareholders'<br>Equity** | **Non-<br>controlling<br>Interest in<br>Subsidiary** | |
| | **Shares<br>Issued** | **Amount** | **Shares<br>Issued** | **Amount** | **Additional<br>Paid-in-capital** |<br>**Retained<br>Earnings** |<br>**Treasury<br>Shares** | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total Penguin Solutions<br>Shareholders'<br>Equity** | **Non-<br>controlling<br>Interest in<br>Subsidiary** |<br>**Total<br>Equity** |
| **As of August 30, 2024** | 60226 | $1807 | $— | $— | $513335 | $29985 | $(153756) | $10 | $391381 | $7827 | $399208 |
| Net income |  |  |  |  |  | 5217 |  |  | 5217 | 747 | 5964 |
| Other comprehensive income (loss) |  |  |  |  |  |  |  | 9 | 9 |  | 9 |
| Shares issued under equity plans | 841 | 25 |  |  | 3335 |  |  |  | 3360 |  | 3360 |
| Repurchase of shares |  |  |  |  |  |  | (11123) |  | (11123) |  | (11123) |
| Share-based compensation expense |  |  |  |  | 11531 |  |  |  | 11531 |  | 11531 |
| **As of November 29, 2024** | 61067 | 1832 |  |  | 528201 | 35202 | (164879) | 19 | 400375 | 8574 | 408949 |
| Net income |  |  |  |  |  | 8082 |  |  | 8082 | 789 | 8871 |
| Other comprehensive income (loss) |  |  |  |  |  |  |  | (2) | (2) |  | (2) |
| Shares issued under equity plans | 553 | 17 |  |  | 365 |  |  |  | 382 |  | 382 |
| Repurchase of shares |  |  |  |  |  |  | (6472) |  | (6472) |  | (6472) |
| Share-based compensation expense |  |  |  |  | 11580 |  |  |  | 11580 |  | 11580 |
| Issuance of preferred shares |  |  | 200 | 6 | 191177 |  |  |  | 191183 |  | 191183 |
| Preferred share dividends |  |  |  |  |  | (2600) |  |  | (2600) |  | (2600) |
| **As of February 28, 2025** | 61620 | $1849 | 200 | $6 | $731323 | $40684 | $(171351) | $17 | $602528 | $9363 | $611891 |
| Net income |  |  |  |  |  | 2661 |  |  | 2661 | 789 | 3450 |
| Other comprehensive income (loss) |  |  |  |  |  |  |  | 6 | 6 |  | 6 |
| Shares issued under equity plans | 686 | 20 |  |  | 3983 |  |  |  | 4003 |  | 4003 |
| Repurchase of shares |  |  |  |  |  |  | (31645) |  | (31645) |  | (31645) |
| Share-based compensation expense |  |  |  |  | 10251 |  |  |  | 10251 |  | 10251 |
| Preferred share dividends |  |  |  |  |  | (3033) |  |  | (3033) |  | (3033) |
| **As of May 30, 2025** | 62306 | $1869 | 200 | $6 | $745557 | $40312 | $(202996) | $23 | $584771 | $10152 | $594923 |

---

The accompanying notes are an integral part of these consolidated financial statements.

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|:---|:---|
| 9 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Statements of Shareholders' Equity**

(In thousands)

(Unaudited)

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Ordinary** | **Ordinary** | **Preferred** | **Preferred** | **Additional<br>Paid-in-capital** | | | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total Penguin Solutions<br>Shareholders'<br>Equity** | **Non-<br>controlling<br>Interest in<br>Subsidiary** | |
| | **Shares<br>Issued** | **Amount** | **Shares<br>Issued** | **Amount** | **Additional<br>Paid-in-capital** |<br>**Retained<br>Earnings** |<br>**Treasury<br>Shares** | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total Penguin Solutions<br>Shareholders'<br>Equity** | **Non-<br>controlling<br>Interest in<br>Subsidiary** |<br>**Total<br>Equity** |
| **As of August 25, 2023** | 57542 | $1726 |  | $— | $476703 | $82457 | $(132447) | $(205964) | $222475 | $6758 | $229233 |
| Net income (loss) |  |  |  |  |  | (19921) |  |  | (19921) | 561 | (19360) |
| Other comprehensive income (loss) |  |  |  |  |  |  |  | 206267 | 206267 |  | 206267 |
| Shares issued under equity plans | 905 | 27 |  |  | 3428 |  |  |  | 3455 |  | 3455 |
| Repurchase of shares |  |  |  |  |  |  | (13130) |  | (13130) |  | (13130) |
| Share-based compensation expense |  |  |  |  | 11014 |  |  |  | 11014 |  | 11014 |
| Distribution to noncontrolling interest |  |  |  |  |  |  |  |  |  | (1470) | (1470) |
| **As of December 1, 2023** | 58447 | 1753 |  |  | 491145 | 62536 | (145577) | 303 | 410160 | 5849 | 416009 |
| Net income (loss) |  |  |  |  |  | (13620) |  |  | (13620) | 613 | (13007) |
| Other comprehensive income (loss) |  |  |  |  |  |  |  | (197) | (197) |  | (197) |
| Shares issued under equity plans | 525 | 16 |  |  | 776 |  |  |  | 792 |  | 792 |
| Repurchase of shares |  |  |  |  |  |  | (2732) |  | (2732) |  | (2732) |
| Share-based compensation expense |  |  |  |  | 10639 |  |  |  | 10639 |  | 10639 |
| Distribution to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |
| **As of March 1, 2024** | 58972 | $1769 |  | $— | $502560 | $48916 | $(148309) | $106 | $405042 | $6462 | $411504 |
| Net income |  |  |  |  |  | 5616 |  |  | 5616 | 610 | 6226 |
| Other comprehensive income (loss) |  |  |  |  |  |  |  | (89) | (89) |  | (89) |
| Shares issued under equity plans | 704 | 21 |  |  | 3796 |  |  |  | 3817 |  | 3817 |
| Repurchase of shares |  |  |  |  |  |  | (2129) |  | (2129) |  | (2129) |
| Share-based compensation expense |  |  |  |  | 11192 |  |  |  | 11192 |  | 11192 |
| Distribution to noncontrolling interest |  |  |  |  |  |  |  |  |  |  |  |
| **As of May 31, 2024** | 59676 | $1790 |  | $— | $517548 | $54532 | $(150438) | $17 | $423449 | $7072 | $430521 |

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The accompanying notes are an integral part of these consolidated financial statements.

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|:---|:---|
| 10 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Statements of Cash Flows**

(In thousands)

(Unaudited)

---

| | | |
|:---|:---|:---|
| **Nine Months Ended** | **May 30,<br>2025** | **May 31,<br>2024** |
| **Cash flows from operating activities** | | |
| Net income (loss) | $18285 | $(26141) |
| Net loss from discontinued operations |  | (8148) |
| Net income (loss) from continuing operations | 18285 | (17993) |
| Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;Depreciation expense and amortization of intangible assets | 43010 | 50335 |
| &nbsp;&nbsp;Amortization of debt issuance costs | 2820 | 2827 |
| &nbsp;&nbsp;Share-based compensation expense | 33362 | 32801 |
| &nbsp;&nbsp;Impairment of goodwill | 11373 |  |
| &nbsp;&nbsp;Loss on extinguishment or prepayment of debt |  | 1117 |
| &nbsp;&nbsp;Deferred income taxes, net | 1122 | (3646) |
| &nbsp;&nbsp;Other | (2469) | (2772) |
| &nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (40760) | 7406 |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | (30776) | (2321) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | 13741 | (5703) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses and other liabilities | 133908 | 84626 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of acquisition-related contingent consideration |  | (29000) |
| Net cash provided by operating activities from continuing operations | 183616 | 117677 |
| Net cash used for operating activities from discontinued operations | (4099) | (28336) |
| Net cash provided by operating activities | 179517 | 89341 |
| **Cash flows from investing activities** |  |  |
| Capital expenditures and deposits on equipment | (6087) | (13629) |
| Proceeds from maturities of investment securities | 27485 | 31870 |
| Purchases of held-to-maturity investment securities | (46127) | (19503) |
| Purchases of non-marketable investments |  | (1000) |
| Other | (1015) | (1264) |
| Net cash used for investing activities from continuing operations | (25744) | (3526) |
| Net cash provided by investing activities from discontinued operations | 28350 | 119389 |
| Net cash provided by investing activities | 2606 | 115863 |
| **Cash flows from financing activities** |  |  |
| Proceeds from issuance of preferred shares, net of $8,818 paid issuance costs | 191182 |  |
| Repayments of debt |  | (126634) |
| Payment of acquisition-related contingent consideration |  | (21000) |
| Payments to acquire ordinary shares | (49240) | (17991) |
| Payment of preferred share cash dividends | (5100) |  |
| Distribution to noncontrolling interest |  | (1470) |
| Proceeds from issuance of ordinary shares | 7745 | 8064 |
| Other |  | (584) |
| Net cash provided by (used for) financing activities from continuing operations | 144587 | (159615) |
| Net cash used for financing activities from discontinued operations |  | (606) |
| Net cash provided by (used for) financing activities | 144587 | (160221) |
| Effect of changes in currency exchange rates |  | (1256) |
| Net increase in cash, cash equivalents and restricted cash | 326710 | 43727 |
| Cash, cash equivalents and restricted cash at beginning of period | 383477 | 410064 |
| Cash, cash equivalents and restricted cash at end of period | $710187 | $453791 |

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The accompanying notes are an integral part of these consolidated financial statements.

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|:---|:---|
| 11 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Penguin Solutions, Inc.**

**Notes to Consolidated Financial Statements**

(Tabular amounts in thousands, except per share amounts)

(Unaudited)

**Significant Accounting Policies**

**Basis of Presentation**

On June 30, 2025, the Company consummated the redomiciliation of the parent company of our corporate group, Penguin Solutions, Inc., a Cayman Islands exempted company ("Penguin Solutions Cayman"), from the Cayman Islands to the State of Delaware in the United States, resulting in Penguin Solutions, Inc., a Delaware corporation ("Penguin Solutions Delaware"), becoming our publicly traded parent company (the "U.S. Domestication"). The U.S. Domestication was approved by the shareholders of Penguin Solutions Cayman and effected via a court-sanctioned scheme of arrangement under Cayman Islands law, pursuant to which each ordinary share of Penguin Solutions Cayman was exchanged for one share of common stock of Penguin Solutions Delaware, and each convertible preferred share of Penguin Solutions Cayman was exchanged for one share of convertible preferred stock of Penguin Solutions Delaware.

The accompanying consolidated financial statements include the accounts of Penguin Solutions Cayman and its consolidated subsidiaries prior to the consummation of the U.S. Domestication, which occurred subsequent to the end of the quarter ended May 30, 2025. Unless stated otherwise or the context otherwise requires, references to "Penguin Solutions," "we," "us," "our," and the "Company" in the accompanying consolidated financial statements mean Penguin Solutions Cayman prior to the effective time of the U.S. Domestication and do not reflect the consummation of the U.S. Domestication.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") consistent in all material respects with those applied in our Annual Report on Form 10-K for the fiscal year ended August 30, 2024 filed by our predecessor Penguin Solutions Cayman (the "2024 Annual Report") and the applicable rules and regulations of the SEC regarding interim financial information. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of our management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, consisting of a normal recurring nature, to fairly state the financial information set forth herein. These consolidated interim financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the 2024 Annual Report.

***Presentation of SMART Brazil as Discontinued Operations*:** On June 13, 2023, we entered into an agreement to divest of an 81% interest in SMART Modular Technologies do Brasil – Indústria e Comercio de Componentes Ltda. ("SMART Brazil"). We concluded that, as of August 25, 2023, (i) the net assets of SMART Brazil met the criteria for classification as held for sale and (ii) the proposed sale represented a strategic shift that was expected to have a major effect on our operations and financial results. On November 29, 2023, we completed the divestiture. The balance sheets, results of operations and cash flows of SMART Brazil have been presented as discontinued operations for all periods presented. SMART Brazil was previously included within our Integrated Memory segment. See "Divestiture of SMART Brazil."

Unless otherwise noted, amounts and discussion within these notes to the consolidated financial statements relate to our continuing operations.

***Fiscal Year*:** Our fiscal year is the 52- or 53-week period ending on the last Friday in August. Fiscal years 2025 and 2024 contain 52 weeks and 53 weeks, respectively. All period references are to our fiscal periods unless otherwise indicated.

Financial information for our subsidiaries in Brazil was included in our consolidated financial statements on a one-month lag because their fiscal years ended on July 31 of each year. In connection with the completion of the

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|:---|:---|
| 12 | ![logo.jpg](sgh-20250530_g1.jpg) |

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divestiture of an 81% interest in SMART Brazil, we ceased consolidating the operations of SMART Brazil in our financial statements as of the November 29, 2023 disposal date. As a result, financial information for the first quarter of 2024 includes the four-month period for our SMART Brazil operations from August 1, 2023 to November 29, 2023.

**Preferred Share Investment**

On December 13, 2024, we closed the SKT Investment (as defined below). Pursuant to the terms of the Securities Purchase Agreement (the "SKT Purchase Agreement") by and between Penguin Solutions and SK Telecom Co., Ltd. ("SKT"), we sold to Astra AI Infra LLC ("Astra AI Infra"), an affiliate of SKT, 200,000 convertible preferred shares, par value $0.03 per share, of Penguin Solutions (the "Issued Cayman CPS") at a price of $1,000 per share or an aggregate price of $200.0 million (the "SKT Investment"). The Issued Cayman CPS have an initial liquidation preference of 1x. Shares of Issued Cayman CPS are not redeemable upon or repurchased upon the election of the holders of shares of Issued Cayman CPS and are only redeemable, at our option, in one installment upon notice, provided that no such notice shall be sent until at least five years after the date of the closing of the SKT Investment. The shares of Issued Cayman CPS vote together with the ordinary shares, par value $0.03 per share, of Penguin Solutions, on an as-converted basis, and entitle the holder to receive dividends of six percent per annum, cumulative, payable quarterly in-kind or in cash at our option, subject to certain conditions.

The holder of shares of Issued Cayman CPS may convert the shares of Issued Cayman CPS into ordinary shares at any time, provided that the Issued Cayman 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 15 consecutive trading day period equals or exceeds 150% of the then-applicable conversion price. The shares of Issued Cayman CPS are convertible into ordinary shares at an initial conversion price of $32.81, subject to adjustment upon the occurrence of certain events. Holders of Issued Cayman CPS are also entitled to certain protective provisions.

Additionally, on the closing date of the SKT Investment, we and Astra AI Infra entered into an Investor Agreement (the "Investor Agreement"), and the Certificate of Designation relating to the Issued Cayman CPS (the "CPS Certificate of Designation") became effective. The Investor Agreement and the CPS Certificate of Designation provide for certain rights and restrictions relating to the SKT Investment, including but not limited to board representation rights, pro rata rights, registration rights and consent rights, and standstill provisions, disposition restrictions and voting obligations.

**Divestiture of SMART Brazil**

**Overview of Transaction**

On November 29, 2023, we completed the divestiture of SMART Brazil pursuant to the terms of that certain Stock Purchase Agreement (the "Brazil Purchase Agreement"), by and among SMART Modular Technologies (LX) S.à r.l., a société à responsabilité limitée governed by the laws of the Grand Duchy of Luxembourg and a wholly owned subsidiary of Penguin Solutions (the "Brazil Seller"), Lexar Europe B.V., a company organized under the laws of The Netherlands (the "Brazil Purchaser"), Shenzhen Longsys Electronics Co., Ltd., a company limited by shares governed by the laws of the People's Republic of China ("Longsys"), solely with respect to certain provisions therein, Shanghai Intelligent Memory Semiconductor Co., Ltd., a limited liability company governed by the laws of the People's Republic of China and, solely with respect to certain provisions therein, Penguin Solutions.

Pursuant to the Brazil Purchase Agreement, Brazil Seller sold to Brazil Purchaser, and Brazil Purchaser purchased from Brazil Seller, 81% of Brazil Seller's right, title and interest in and to the outstanding quotas of SMART Brazil, with Brazil Seller retaining a 19% interest in SMART Brazil (the "Retained Interest").

Pursuant to the Brazil Purchase Agreement, Brazil Seller has a right to receive, and Brazil Purchaser is obligated to pay, (i) a deferred payment due 18 months following the closing and (ii) subject to and at the time of exercise of the Put/Call Option (as defined below), an additional deferred cash adjustment equal to 19% of the amount of SMART Brazil's net cash as of the closing (as calculated pursuant to the Brazil Purchase Agreement).

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| 13 | ![logo.jpg](sgh-20250530_g1.jpg) |

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Pursuant to the Brazil Purchase Agreement, at the closing, SMART Brazil, Brazil Seller, Brazil Purchaser and Longsys entered into a Quotaholders Agreement, which provides Brazil Seller with a put option to sell the Retained Interest in SMART Brazil to Brazil Purchaser (the "Put Option") during three exercise windows following SMART Brazil's fiscal years ending December 31, 2026, December 31, 2027 or December 31, 2028 (the "Exercise Windows"), with such Exercise Windows beginning on June 15, 2027 and ending on July 15, 2027, beginning on June 15, 2028 and ending on July 15, 2028 and beginning on June 15, 2029 and ending on July 15, 2029, respectively. A call option has also been granted to Brazil Purchaser to require Brazil Seller to sell the Retained Interest to Brazil Purchaser during the Exercise Windows (together with the Put Option, the "Put/Call Option"). The price for the Put/Call Option is based on a 100% enterprise value of 7.5x net income for SMART Brazil for the preceding fiscal year at the time of exercise.

Total consideration in exchange for the sale of an 81% interest in SMART Brazil amounted to $194.1 million which included cash at closing of $164.9 million, a deferred payment with fair value of $25.4 million and a deferred cash adjustment with a fair value of $3.7 million. The deferred payment, comprised of a notional amount of $28.4 million discounted at 7.5%, was received in May 2025. The deferred payment is included in other current assets in the accompanying consolidated balance sheets for prior periods presented. The fair value of the deferred cash adjustment, comprised of a notional amount of $4.8 million discounted at 7.5%, equal to 19% of the amount of SMART Brazil's net cash as of the closing (as calculated pursuant to the Brazil Purchase Agreement). The deferred cash adjustment, which is accounted for as a derivative financial instrument, is due at the time of exercise of the Put/Call Option and was included in other noncurrent assets in the accompanying consolidated balance sheet.

**Presentation of SMART Brazil Operations**

As of August 25, 2023, we concluded that the net assets of SMART Brazil met the criteria for classification as held for sale. In addition, the divestiture of SMART Brazil was expected to have a major effect on our operations and financial results. As a result, we have presented the results of operations, cash flows and financial position of SMART Brazil as discontinued operations in the accompanying consolidated financial statements and notes for all periods presented.

A disposal group classified as held for sale is measured at the lower of its carrying amount or fair value less costs to sell. Accordingly, we evaluated the carrying value of the net assets of SMART Brazil (including $206.3 million recognized within shareholders' equity related to the cumulative translation adjustment from SMART Brazil), estimated costs to sell and expected proceeds and concluded the net assets were impaired as of August 25, 2023. As a result, we recognized an impairment charge of $153.0 million in the fourth quarter of 2023 to write down the carrying value of the net assets of SMART Brazil. In addition, we concluded that the outside basis of SMART Brazil inclusive of any withholding taxes should be recognized upon the classification as held for sale as of August 25, 2023. Accordingly, we recognized withholding taxes on the expected capital gain and deferred tax liabilities of $28.6 million in 2023.

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| 14 | ![logo.jpg](sgh-20250530_g1.jpg) |

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Assets and liabilities of SMART Brazil as of the November 29, 2023 disposal date were as follows:

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| | |
|:---|:---|
| **As of** | **November 29,<br>2023** |
| Cash and cash equivalents | $40927 |
| Accounts receivable, net | 16482 |
| Inventories | 26103 |
| Other current assets | 17800 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 101312 |
| Property and equipment, net | 66870 |
| Operating lease right-of-use assets | 6912 |
| Goodwill | 19856 |
| Other noncurrent assets | 27490 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | 222440 |
| Impairment of SMART Brazil assets | (153036) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets, net of impairment | $69404 |
| Accounts payable and accrued expenses | $20576 |
| Current debt | 3872 |
| Other current liabilities | 1023 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 25471 |
| Long-term debt | 11938 |
| Noncurrent operating lease liabilities | 5686 |
| Noncurrent deferred tax liabilities | 28564 |
| Other noncurrent liabilities | 93 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | $71752 |
| Net assets (liabilities) of discontinued operations | $(2348) |

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The following table presents the results of operations for SMART Brazil:

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| | |
|:---|:---|
| **Nine Months Ended** | **May 31,<br>2024** |
| Net sales | $55159 |
| Cost of sales | 50560 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 4599 |
| Operating expenses: |  |
| &nbsp;&nbsp;Research and development | 157 |
| &nbsp;&nbsp;Selling, general and administrative | 5421 |
| &nbsp;&nbsp;Other operating (income) expense | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 5642 |
| Operating loss | (1043) |
| Non-operating (income) expense: |  |
| &nbsp;&nbsp;Loss from divestiture of 81% interest in SMART Brazil | 10888 |
| &nbsp;&nbsp;Interest (income) expense, net | (1262) |
| &nbsp;&nbsp;Other non-operating (income) expense | 138 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-operating (income) expense | 9764 |
| Loss before taxes | (10807) |
| Income tax benefit | (2659) |
| Net loss from discontinued operations | $(8148) |

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| 15 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Loss from Divestiture of SMART Brazil**

The following table presents the calculation of the loss from the divestiture of an 81% interest in SMART Brazil:

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| | |
|:---|:---|
| Proceeds, less costs to sell and other expenses: |  |
| &nbsp;&nbsp;Consideration | $194092 |
| &nbsp;&nbsp;Costs to sell and other expenses | (4150) |
|  | 189942 |
| Basis in 81% interest in SMART Brazil: |  |
| &nbsp;&nbsp;Net assets of SMART Brazil | 145194 |
| &nbsp;&nbsp;Cumulative translation adjustment <sup>(1)</sup> | 212397 |
|  | 357591 |
| Gain on revalue of 19% Retained Interest in SMART Brazil <sup>(2)</sup> | 3725 |
| Pre-tax loss on divestiture of 81% interest in SMART Brazil | 163924 |
| Income tax provision | 26580 |
| Loss on divestiture of 81% interest in SMART Brazil | $190504 |

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(1)The sale of an 81% interest in SMART Brazil resulted in the de-consolidation of SMART Brazil and, accordingly, the release of the related cumulative translation adjustment. Included in the basis calculation above is the balance of cumulative translation adjustment for SMART Brazil as of the closing. The release of the cumulative translation adjustment is included in net income (loss) from discontinued operations in the accompanying consolidated statement of operations.

(2)In connection with the transaction, we revalued our 19% Retained Interest in SMART Brazil based on the implied value for 100% of SMART Brazil, adjusted for lack of control premium. As of May 30, 2025, the carrying value of our remaining 19% interest in SMART Brazil was $37.8 million and was included in other noncurrent assets in the accompanying consolidated balance sheets as a non-marketable equity investment.

***Recognition Periods*:** The loss from the divestiture of an 81% interest in SMART Brazil was recognized as follows:

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| | |
|:---|:---|
| | **Three Months Ended** |
| | **December 1,<br>2023** |
| Pre-tax loss on divestiture of 81% interest in SMART Brazil | $10888 |
| Income tax provision (benefit) | (1984) |
| Loss on divestiture of 81% interest in SMART Brazil | $8904 |

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**Recently Issued Accounting Standards**

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosure (Subtopic 220-40): Disaggregation of Income Statement Expenses*. The amendments in this ASU require disclosure, in the notes to the financial statements, of specified information about certain costs and expenses, as well as a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. This ASU also requires disclosure of the total amount of selling expenses and an entity's definition of selling expenses. The amendments in this ASU are effective for us in 2028 for annual reporting and in 2029 for interim reporting, with early adoption permitted and may be applied prospectively or retrospectively. We do not expect ASU 2024-03 to have an impact on our financial position, results of operations and cash flows. We are currently evaluating the impact on our consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740): Improvements to Income Tax Disclosures.* The amendments in this ASU are intended to increase transparency through improvements to annual disclosures primarily related to income tax rate reconciliation and income taxes paid. The amendments in this ASU are effective for us in 2026 for annual reporting, with early adoption permitted. The ASU may be applied on a prospective basis, although retrospective application is permitted. We are evaluating the timing and effects of this ASU on our income tax disclosures.

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| 16 | ![logo.jpg](sgh-20250530_g1.jpg) |

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In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280): Improvements to Segment Reporting Disclosures*, which will require an entity to provide more detailed information about its reportable segment expenses that are included within management's measurement of profit and loss and will require certain annual disclosures to be provided on an interim basis. The amendments in this ASU are effective for us in 2025 for annual reporting and in 2026 for interim reporting and are required to be applied using the full retrospective method of transition. We are evaluating the effects of adoption of this ASU on our segment disclosures.

**Cash and Investments**

As of May 30, 2025 and August 30, 2024, all of our debt securities, the fair values of which approximated their carrying values, were classified as held to maturity. As of May 30, 2025, restricted cash, which is included in other noncurrent assets, was $0.3 million. Cash, cash equivalents and short-term investments were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **As of May 30, 2025** | **As of May 30, 2025** | **As of August 30, 2024** | **As of August 30, 2024** |
| | **Cash and Cash Equivalents** | **Short-term Investments** | **Cash and Cash Equivalents** | **Short-term Investments** |
| Cash | $684483 | $— | $354037 | $— |
| Level 1: |  |  |  |  |
| &nbsp;&nbsp;Money market funds | 25388 |  | 29110 |  |
| &nbsp;&nbsp;U.S. Treasury securities |  | 25676 |  | 6337 |
|  | $709871 | $25676 | $383147 | $6337 |

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**Non-marketable Equity Investments**

As of both May 30, 2025 and August 30, 2024, other noncurrent assets included $53.0 million of non-marketable equity investments, which are accounted for under the measurement alternative at cost less impairment, if any. In the event an observable price change occurs in an orderly transaction for an identical or a similar investment, the carrying value of investments would be remeasured to fair value as of the date that the observable transaction occurred, with any resulting gains or losses recorded in results of operations.

**Accounts Receivable**

In the third quarter of 2023, we entered into a trade accounts receivable sale program with a third-party financial institution to sell certain of our trade accounts receivable on a non-recourse basis pursuant to a factoring arrangement. This program allows us to sell certain of our trade accounts receivables up to $60.0 million. As of May 30, 2025, there have been no trade accounts receivable sold under this program.

**Inventories**

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|:---|:---|:---|
| **As of** | **May 30,<br>2025** | **August 30,<br>2024** |
| Raw materials | $85062 | $75514 |
| Work in process | 26615 | 18742 |
| Finished goods | 72671 | 56957 |
|  | $184348 | $151213 |

---

As of May 30, 2025 and August 30, 2024, 19% and 14%, respectively, of total inventories were owned and held under our logistics services program.

---

| | |
|:---|:---|
| 17 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Property and Equipment**

---

| | | |
|:---|:---|:---|
| **As of** | **May 30,<br>2025** | **August 30,<br>2024** |
| Equipment | $90291 | $89848 |
| Buildings and building improvements | 67984 | 70462 |
| Furniture, fixtures and software | 48138 | 48027 |
| Land | 14983 | 16126 |
|  | 221396 | 224463 |
| Accumulated depreciation | (127514) | (117915) |
|  | $93882 | $106548 |

---

Depreciation expense for property and equipment was $5.0 million and $15.4 million in the third quarter and first nine months of 2025, respectively, and $5.6 million and $20.3 million in the third quarter and first nine months of 2024, respectively.

**Intangible Assets and Goodwill**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Gross**<br>**Amount** | **Accumulated**<br>**Amortization** | **Gross**<br>**Amount** | **Accumulated**<br>**Amortization** |
|<br>**As of** | **May 30, 2025** | **May 30, 2025** | **August 30, 2024** | **August 30, 2024** |
| Intangible assets: |  |  |  |  |
| &nbsp;&nbsp;Technology | $143809 | $(77254) | $142539 | $(58948) |
| &nbsp;&nbsp;Customer relationships | 47700 | (27107) | 72500 | (45556) |
| &nbsp;&nbsp;Trademarks/trade names | 27974 | (19992) | 27964 | (17045) |
|  | $219483 | $(124353) | $243003 | $(121549) |
| Goodwill by segment: |  |  |  |  |
| &nbsp;&nbsp;Advanced Computing | $135865 |  | $147238 |  |
| &nbsp;&nbsp;Integrated Memory | 14720 |  | 14720 |  |
|  | $150585 |  | $161958 |  |

---

In the first nine months of 2025 and 2024, we capitalized $1.3 million and $1.4 million, respectively, for intangible assets with weighted-average useful lives of 18.7 years and 18.4 years, respectively. Amortization expense for intangible assets was $8.6 million and $27.6 million in the third quarter and first nine months of 2025, respectively, and $9.9 million and $30.1 million in the third quarter and first nine months of 2024, respectively. Amortization expense is expected to be $8.0 million for the remainder of 2025, $30.3 million for 2026, $29.7 million for 2027, $10.0 million for 2028, $6.1 million for 2029 and $11.1 million for 2030 and thereafter.

During the second quarter of 2023, we initiated a plan within our Advanced Computing segment pursuant to which we are winding down manufacturing and discontinuing the sale of products offered through our Penguin Edge business by approximately the end of calendar 2025. The Penguin Edge technology is becoming obsolete and is only sold to a small number of customers who we expect to phase out the technology. In each quarter of 2025, to assess the fair value of the Penguin Edge business and reporting unit for the purpose of goodwill impairment, we utilized a discounted cash flow model using assumptions for what a market participant would value the business based on expected future cash flows through the expected completion of the wind down. We used this valuation approach because there were no comparable transactions in the marketplace of a similar business being sold while in the process of winding down. Further, since the Penguin Edge business has no expansion or product initiatives, those expected future cash flows incorporated expected revenues, the costs associated with fulfilling customer contracts, and the costs associated with winding down the Penguin Edge business. In determining the fair value of the Penguin Edge business, it was our expectation that the business would continue to be profitable and generate positive free cash flow through the wind down of the business. We calculated the expected remaining cash flows based on existing contracts, future expected orders based on historical order volumes, and future expected orders identified through customer engagements for last-time buy planning, which were expected to fully consume all inventory on hand. Net estimated discounted cash flows were calculated by taking the total proceeds expected from sales, minus cash outflows for costs associated with fulfilling customer contracts, operating expenses, collection of receivables recognized as of May 30, 2025, and costs associated with the wind

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|:---|:---|
| 18 | ![logo.jpg](sgh-20250530_g1.jpg) |

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down of the Penguin Edge business. We assumed no capital expenditures because we are no longer investing in the business.

We applied a discount rate of 16.25%, which we believe reflects the return a market participant would require when purchasing the Penguin Edge business given the risk profile of the remaining operations and the limited future cash flows from winding down. However, given the short period of time associated with the remaining cash flows for the business, changes to the discount rate would not have produced a materially different fair value estimate. Since the Penguin Edge business is no longer investing in growth initiatives and operating costs are significantly lower than for an ongoing business, we observed a positive present value of future expected cash flows, which we then compared to the carrying value of the business.

Based on our analysis, the fair value of the Penguin Edge business was determined to be lower than its carrying value, resulting in an impairment charge of $5.3 million in the third quarter of 2025, and an aggregate total of $11.4 million in the first nine months of 2025. The goodwill impairments were recorded to align the carrying value of the Penguin Edge reporting unit with the fair value of the Penguin Edge reporting unit as of the end of the respective reporting periods. The goodwill impairment loss recognized reduced the Penguin Edge reporting unit's carrying value to its fair value as of the end of the reporting period. As the Penguin Edge business continues to wind down, cash flows from the business will be received by us, decreasing the remaining cash flows from customer contracts and resulting in further declines in the fair value of the business and additional impairments of goodwill. We expect to fully impair the $4.7 million of remaining goodwill of the Penguin Edge reporting unit as of May 30, 2025, by the end of calendar 2025.

**Accounts Payable and Accrued Expenses**

---

| | | |
|:---|:---|:---|
| **As of** | **May 30,<br>2025** | **August 30,<br>2024** |
| Accounts payable <sup>(1)</sup> | $272090 | $182037 |
| Salaries, wages and benefits | 28398 | 22819 |
| Income and other taxes | 6761 | 11863 |
| Other | 3323 | 2371 |
|  | $310572 | $219090 |

---

(1)Included accounts payable for property and equipment of $0.8 million and $0.4 million as of May 30, 2025 and August 30, 2024, respectively.

**Debt**

---

| | | |
|:---|:---|:---|
| **As of** | **May 30,<br>2025** | **August 30,<br>2024** |
| Amended 2022 TLA | $298107 | $297297 |
| 2030 Notes | 193613 | 192778 |
| 2029 Notes | 147842 | 147439 |
| 2026 Notes | 19916 | 19833 |
|  | 659478 | 657347 |
| Less current debt | (19916) |  |
| Long-term debt | $639562 | $657347 |

---

**Credit Facility**

On February 7, 2022, Penguin Solutions and SMART Modular Technologies, Inc. entered into a credit agreement (the "2022 Original Credit Agreement") with a syndicate of banks and Citizens Bank, N.A., as administrative agent that provided for (i) a term loan credit facility in an aggregate principal amount of $275.0 million and (ii) a revolving credit facility in an aggregate principal amount of $250.0 million, in each case, maturing on February 7, 2027. The 2022 Original Credit Agreement was subsequently amended (the "2022 Amended Credit Agreement"), and as of May 30, 2025, pursuant to the 2022 Amended Credit Agreement, there was $300.0 million of principal amount outstanding under the Amended 2022 TLA, unamortized issuance costs were $1.9 million and the effective interest rate was 7.17%. As of May 30, 2025, there were no amounts outstanding under the 2022 Revolver and unamortized issuance costs were $1.6 million.

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|:---|:---|
| 19 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Convertible Senior Notes**

**Repurchase of Convertible Senior Notes**

On August 6, 2024, we repurchased $80.0 million aggregate principal amount of our 2.25% Convertible Senior Notes due 2026 (the "2026 Notes") for $100.6 million cash (including payment for accrued interest) in privately-negotiated transactions. The repurchase was accounted for as debt extinguishment. Accordingly, we recognized a loss in the fourth quarter of 2024, included in other non-operating expense, of $20.4 million, consisting of $19.7 million premium paid to extinguish the 2026 Notes and $0.7 million for the write-off of unamortized issuance costs.

**Convertible Senior Notes Interest**

Unamortized debt discount and issuance costs are amortized over the terms of our 2026 Notes, our 2.00% Convertible Senior Notes due 2029 (the "2029 Notes") and our 2.00% Convertible Senior Notes due 2030 (the "2030 Notes," and together with the 2026 Notes and the 2029 Notes, the "Convertible Senior Notes") using the effective interest method. As of May 30, 2025 and August 30, 2024, the effective interest rate for our 2026 Notes was 2.83%*.* As of May 30, 2025 and August 30, 2024, the effective interest rate for our 2029 Notes was 2.40%. As of May 30, 2025 and August 30, 2024, the effective interest rate for our 2030 Notes was 2.65%. Aggregate interest expense for our Convertible Senior Notes consisted of contractual stated interest and amortization of issuance costs and included the following:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Contractual stated interest | $1904 | $1313 | $5588 | $4025 |
| Amortization of debt issuance costs | 402 | 267 | 1321 | 828 |
|  | $2306 | $1580 | $6909 | $4853 |

---

**Maturities of Debt**

As of May 30, 2025, maturities of debt were as follows:

---

| | |
|:---|:---|
| Remainder of 2025 | $— |
| 2026 | 20000 |
| 2027 | 300015 |
| 2028 |  |
| 2029 | 150000 |
| 2030 and thereafter | 200000 |
| Less unamortized discount and issuance costs | (10537) |
|  | $659478 |

---

**Leases**

We have operating leases through which we utilize facilities, offices, and equipment in our manufacturing operations, research and development activities and selling, general and administrative functions. Sublease income was not significant in any period presented. The components of operating lease expense were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Fixed lease cost | $2585 | $3192 | $8535 | $9878 |
| Variable lease cost | 822 | 479 | 1885 | 1327 |
| Short-term lease cost | 466 | 415 | 1379 | 1617 |
|  | $3873 | $4086 | $11799 | $12822 |

---

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|:---|:---|
| 20 | ![logo.jpg](sgh-20250530_g1.jpg) |

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Cash flows from operating activities included payments for operating leases of $6.2 million and $6.7 million in the first nine months of 2025 and 2024, respectively.

As of May 30, 2025 and August 30, 2024, the weighted-average remaining lease term for our operating leases was 9.0 years and 10.1 years, respectively, and the weighted-average discount rate was 6.1% and 6.1%, respectively. Certain of our operating leases include one or more options to extend the lease term for periods from two to five years. In determining the present value of our operating lease liabilities, we have assumed we will not extend any lease terms.

As of May 30, 2025, minimum payments of lease liabilities were as follows:

---

| | |
|:---|:---|
| Remainder of 2025 | $2853 |
| 2026 | 9489 |
| 2027 | 9387 |
| 2028 | 9375 |
| 2029 | 9604 |
| 2030 and thereafter | 53574 |
|  | 94282 |
| Less imputed interest | (24653) |
| Present value of total lease liabilities | $69629 |

---

**Commitments and Contingencies**

**Product Warranty and Indemnities**

We generally provide a limited warranty that our products are in compliance with applicable specifications existing at the time of delivery. Under our standard terms and conditions of sale, liability for certain failures of product during a stated warranty period is usually limited to repair or replacement of defective items or return of amounts paid for such items. Our warranty obligations are not material.

We are party to a number of agreements in which we have agreed to defend, indemnify and hold harmless our customers and suppliers from damages and costs, which may arise from product defects as well as from any alleged infringement by our products of third-party 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.

**Contingencies**

From 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 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.

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| | |
|:---|:---|
| 21 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Equity**

**Penguin Solutions Shareholders' Equity**

**Preferred Shares**

On 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 Issued Cayman CPS at a price of $1,000 per share or an aggregate price of $200.0 million.

*<u>Conversion</u>*

A holder of Issued Cayman CPS may convert such holder's Issued Cayman CPS into ordinary shares at any time, provided that the shares of Issued Cayman 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 shares of Issued Cayman 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).

*<u>Dividends</u>*

The shares of Issued Cayman CPS entitle the holder to receive dividends of six percent per annum, cumulative, and payable quarterly in-kind or in cash at our option, subject to certain conditions, including a share issuance limitation. We declared and paid preferred cash dividends of $2.9 million and $5.1 million in the third quarter and first nine months of 2025, respectively. As of May 30, 2025, we accrued preferred dividends of $0.5 million.

*<u>Liquidation Preference</u>*

In case of a Liquidation Trigger Event (as defined in the CPS Certificate of Designation), each holder of Issued Cayman CPS will be entitled to receive, in preference to holders of ordinary shares, the greater of (i) the original issue price plus accrued but unpaid dividends (whether or not declared) to the date of the applicable Liquidation Trigger Event to the extent such accrued but unpaid dividends are not compounded dividends as of such time and (ii) the amount such holder of Issued Cayman CPS would receive had such holder, immediately prior to such Liquidation Trigger Event, converted the shares of Issued Cayman CPS into shares of common stock. The liquidation preference associated with the Issued Cayman CPS was $1,000 per share at May 30, 2025.

*<u>Voting Rights</u>*

Except as specified under applicable law, each holder of Issued Cayman CPS will be entitled to vote or consent as a single class with the holders of ordinary shares on all matters submitted for a vote of or consent by holders of ordinary shares, such number of votes equal to the largest number of whole ordinary shares in which all Issued Cayman CPS held of record by such holder could then be converted.

*<u>Director Designation Rights</u>*

SKT (through the SPV) is entitled to nominate one director if the total number of directors of the Company is eleven or less, and two directors if the total number of directors of the Company is twelve or more, to be elected or appointed to the Board of Directors of the Company (any such director, an "Investor Designee"). The right to nominate an Investor Designee continues until such time as SKT and its subsidiaries and affiliates (including the SPV) beneficially own less than five percent of the ordinary shares then issued and outstanding (calculated on a fully-diluted basis) directly or by holding Issued Cayman CPS.

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|:---|:---|
| 22 | ![logo.jpg](sgh-20250530_g1.jpg) |

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*<u>Company Redemption Rights</u>*

Holders of Issued Cayman CPS do not have pre-emptive, subscription, or redemption rights. We may repurchase the CPS in one installment upon notice to the holders of Issued Cayman CPS, provided that no such notice shall be sent until at least five years after the date of the closing of the SKT Investment.

**Share Repurchase Authorization**

On April 4, 2022, our Board of Directors approved a $75.0 million share repurchase authorization (the "Initial Authorization"), under which we may repurchase our outstanding ordinary shares from time to time through open market purchases, privately-negotiated transactions or otherwise. On January 9, 2024, we announced that the Audit Committee of the Board of Directors approved an additional $75.0 million share repurchase authorization (the "Additional Authorization," and together with the Initial Authorization, the "Current Authorization"). The Current Authorization, which consists solely of amounts approved pursuant to the Additional Authorization as all amounts under the Initial Authorization have been utilized, has no expiration date but may be suspended or terminated by the Board of Directors at any time. In the first nine months of 2025 and 2024, we repurchased 2,456 thousand and 931 thousand ordinary shares for $40.9 million and $13.9 million, respectively, under the Current Authorization. As of May 30, 2025, an aggregate of $36.8 million remained available for the repurchase of our ordinary shares (and upon the consummation of the U.S. Domestication, the repurchase of our shares of common stock) under the Current Authorization. Certain of our agreements, including the 2022 Amended Credit Agreement, the SKT Purchase Agreement and the CPS Certificate of Designation, contain restrictions that limit our ability to repurchase our ordinary shares.

**Other Share Repurchases**

Ordinary shares withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards are treated as ordinary share repurchases. In the first nine months of 2025 and 2024, we repurchased 484 thousand and 239 thousand ordinary shares as payment of withholding taxes for $8.3 million and $4.1 million, respectively.

**Accumulated Other Comprehensive Income (Loss)**

Changes in accumulated other comprehensive income (loss) by component in the first nine months of 2025 were as follows:

---

| | |
|:---|:---|
| | **Gains (Losses)**<br>**on**<br>**Investments** |
| **As of August 30, 2024** | $10 |
| Other comprehensive income (loss) before reclassifications | 13 |
| Reclassifications out of accumulated other comprehensive income |  |
| Other comprehensive income (loss) | 13 |
| **As of May 30, 2025** | $23 |

---

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|:---|:---|
| 23 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Fair Value Measurements**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair<br>Value** | **Carrying<br>Value** | **Fair<br>Value** | **Carrying<br>Value** |
| **As of** | **May 30, 2025** | **May 30, 2025** | **August 30, 2024** | **August 30, 2024** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Derivative financial instruments | $4147 | $4147 | $3929 | $3929 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;Amended 2022 TLA | $300015 | $298107 | $300015 | $297821 |
| &nbsp;&nbsp;2030 Notes | $187316 | $193613 | $199144 | $193355 |
| &nbsp;&nbsp;2029 Notes | $162402 | $147842 | $173255 | $147724 |
| &nbsp;&nbsp;2026 Notes | $21932 | $19916 | $23254 | $19891 |

---

The deferred cash adjustment resulting from the divestiture of an 81% interest in SMART Brazil is accounted for as a derivative financial instrument and is revalued at the end of each reporting period. The asset's fair value, as measured on a recurring basis, was based on Level 2 measurements, including market-based observable inputs of interest rates and credit-risk spreads.

The fair value of the Amended 2022 TLA, as measured on a non-recurring basis, was estimated based on Level 2 measurements, including discounted cash flows and interest rates based on similar debt issued by parties with credit ratings similar to ours. The fair values of our Convertible Senior Notes, as measured on a non-recurring basis, were determined based on Level 2 measurements, including the trading prices of the Convertible Senior Notes.

**Equity Plans**

As of May 30, 2025, 8.4 million of our ordinary shares were available for future awards under our equity plans.

The disclosures related to our restricted awards and employee share purchase plan include both our continuing and discontinued operations.

**Restricted Share Awards and Restricted Share Units Awards ("Restricted Awards")**

Restricted Award activity was as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Restricted awards granted | 1323 | 1213 | 2006 | 1837 |
| Weighted-average grant date fair value per share | $17.09 | $19.93 | $18.35 | $22.47 |
| Aggregate vesting date fair value of shares vested | $6091 | $6629 | $25768 | $25584 |

---

As of May 30, 2025, total unrecognized compensation costs for unvested Restricted Awards were $78.1 million, which were expected to be recognized over a weighted-average period of 2.7 years.

**Employee Share Purchase Plan ("ESPP")**

Under our ESPP, employees purchased 529 thousand ordinary shares for $6.8 million in the first nine months of 2025 and 584 thousand ordinary shares for $6.8 million in the first nine months of 2024.

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|:---|:---|
| 24 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**Share-Based Compensation Expense**

Share-based compensation expense for our continuing operations was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Share-based compensation expense by caption: |  |  |  |  |
| &nbsp;&nbsp;Cost of sales | $1393 | $1760 | $4812 | $5301 |
| &nbsp;&nbsp;Research and development | 1531 | 1968 | 4818 | 5382 |
| &nbsp;&nbsp;Selling, general and administrative | 7327 | 7464 | 23732 | 22371 |
|  | $10251 | $11192 | $33362 | $33054 |

---

Income tax benefits for share-based awards were $1.4 million and $4.3 million in the third quarter and first nine months of 2025, respectively, and $1.9 million and $5.4 million in the third quarter and first nine months of 2024, respectively.

**Revenue and Customer Contract Balances**

**Net Sales and Gross Billings**

We provide certain services on an agent basis, whereby we procure product, materials and services on behalf of our customers and then resell such product, materials or services to our customers. As a result, we recognize only the amount related to the agent component as revenue in our results of operations. The cost of products, materials and services invoiced to our customers under these arrangements, but not recognized as revenue or cost of sales in our results of operations, were as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Cost of materials and services invoiced in connection with logistics services | $238492 | $160161 | $682100 | $359800 |

---

**Customer Contract Balances**

---

| | | |
|:---|:---|:---|
| **As of** | **May 30,<br>2025** | **August 30,<br>2024** |
| Contract assets <sup>(1)</sup> | $1150 | $1801 |
| Contract liabilities: <sup>(2)</sup> |  |  |
| &nbsp;&nbsp;Deferred revenue | $116220 | $76178 |
| &nbsp;&nbsp;Customer advances | 5881 | 6036 |
|  | $122101 | $82214 |

---

(1)Contract assets are included in other current and noncurrent assets.

(2)Contract liabilities are included in other current and noncurrent liabilities based on the timing of when our customers are expected to take control of the asset or receive the benefit of the service.

Contract assets represent amounts recognized as revenue for which we do not have the unconditional right to consideration.

Deferred revenue represents amounts received from customers in advance of satisfying performance obligations. As of May 30, 2025, we expect to recognize revenue of $101.4 million of the balance of $116.2 million in the next 12 months and the remaining amount thereafter. In the first nine months of 2025, we recognized revenue of $59.5 million from satisfying performance obligations related to amounts included in deferred revenue as of August 30, 2024. In addition, as of May 30, 2025, other current liabilities included $16.9 million that is not included in the above remaining performance obligations. While this liability relates to amounts received from customers in connection with arrangements that

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| 25 | ![logo.jpg](sgh-20250530_g1.jpg) |

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are cancellable at the customer's discretion, we have not had to refund any such amounts to our customers in the periods presented.

Customer advances, which is included in other current liabilities in the accompanying consolidated balance sheets, represent amounts received from customers for advance payments to secure product. In the first nine months of 2025, we recognized revenue of $0.5 million from satisfying performance obligations related to amounts included in customer advances as of August 30, 2024.

As of May 30, 2025 and August 30, 2024, other current liabilities included $14.3 million and $12.2 million, respectively, for estimates of consideration payable to customers, including estimates for pricing adjustments and returns.

**Other Operating (Income) Expense**

In recent periods, we executed plans that included the elimination of certain projects across our businesses, which resulted in workforce reductions. In connection therewith, we recorded restructuring charges of $1.0 million and $6.7 million in the first nine months of 2025 and 2024, respectively, consisting solely of employee severance costs and other benefits, reflected in Other Operating (Income) Expense in the Consolidated Statements of Operations. These charges were primarily concentrated in the period management defined, committed, and communicated the plan, and therefore, they were accrued and recorded in the respective period announced. We anticipate there will be additional restructuring activities in future quarters, for which we will record additional charges.

The following table summarizes the liabilities directly attributable to us that were recognized under the plans discussed above:

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| | |
|:---|:---|
| **As of August 30, 2024** | $849 |
| Additions | 968 |
| Cash payments | (1149) |
| **As of May 30, 2025** | $668 |

---

The 2024 beginning restructuring liability balance was $1.4 million, which was fully settled in 2024. The $0.8 million balance as of August 30, 2024 was fully settled in the nine months ended May 30, 2025. The unpaid balance as of May 30, 2025 is expected to be fully paid by the end of 2025.

**Other Non-operating (Income) Expense**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Loss on extinguishment or prepayment of debt | $— | $792 | $— | $1117 |
| Loss (gain) from changes in foreign currency exchange rates | (1134) | 606 | (82) | 242 |
| Loss (gain) on disposition of assets | (38) | (626) | 35 | (540) |
| Other | (267) | (331) | (965) | (706) |
|  | $(1439) | $441 | $(1012) | $113 |

---

**Income Taxes**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Income (loss) before taxes | $10709 | $4903 | $39547 | $(13584) |
| Income tax provision (benefit) | $7259 | $(1323) | $21262 | $4409 |
| Effective tax rate | 67.8% | (27.0)% | 53.8% | (32.5)% |

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Income taxes include a provision (benefit) for federal, state and foreign taxes based on the annual estimated effective tax rate applicable to us and our subsidiaries, adjusted for certain discrete items, which are fully recognized in the period they occur. We have historically determined our interim income tax provision (benefit) by applying the annual estimated effective income tax rate expected to be applicable for the full fiscal year to the income (loss) before taxes for jurisdictions which are subject to income tax. In determining the full year estimate, we do not include the impact of unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax provision (benefit) and income (loss) before taxes. Accordingly, the interim effective tax rate may not be reflective of the annual estimated effective tax rate. Additionally, our income tax provision (benefit) is subject to volatility and could be impacted by changes in our geographic earnings, non-deductible share-based compensation and certain tax credits.

Our effective tax rate was 67.8% and 53.8% in the third quarter and first nine months of 2025, respectively, and differed from the U.S. statutory rate primarily due to losses generated in a jurisdiction where no tax benefit can be recognized and to withholding taxes, state income taxes, and nondeductible compensation paid to officers, partially offset by research and development tax credits. Our effective tax rate was (27.0)% and (32.5)% in the third quarter and first nine months of 2024, respectively, and differed from the U.S. statutory rate primarily due to losses generated in a jurisdiction where no tax benefit can be recognized, withholding taxes, research and development tax credits, and state income taxes.

Determining the consolidated income tax provision (benefit), income tax liabilities and deferred tax assets and liabilities involves judgment. We calculate and provide for income taxes in each of the tax jurisdictions in which we operate, which involves estimating current tax exposures as well as making judgments regarding the recoverability of deferred tax assets in each jurisdiction. The estimates used could differ from actual results, which may have a significant impact on operating results in future periods.

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**Earnings Per Share**

We calculate basic earnings per ordinary share ("EPS") pursuant to the two-class method as a result of the issuance of the Issued Cayman CPS on December 13, 2024. The two-class method is an earnings allocation formula that determines EPS for ordinary shares and participating securities according to dividend and participation rights in undistributed earnings. Under this method, all current period earnings, distributed and undistributed, are allocated to ordinary shares and participating securities based on their respective rights to receive dividends. The Issued Cayman CPS is considered a participating security. The Issued Cayman CPS is not included in the computation of basic EPS in periods in which we have a net loss, as the Issued Cayman CPS is not contractually obligated to share in our net losses.

With respect to the Issued Cayman CPS, diluted EPS is calculated using the more dilutive of the two-class method or if-converted method. The two-class method uses net income available to ordinary shareholders and assumes conversion of all potential shares other than the participating securities. The if-converted method uses net income and assumes conversion of all potential shares including the participating securities.

Dilutive potential ordinary shares include outstanding share options, unvested restricted share units, Convertible Senior Notes and Convertible Preferred Shares.

The following table summarizes the computation of basic and diluted EPS under the two-class or if-converted method in applicable periods, as well as the anti-dilutive shares excluded:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Net income (loss) from continuing operations | $2661 | $5616 | $15960 | $(19777) |
| Net income (loss) from discontinued operations |  |  |  | (8148) |
| Net income (loss) attributable to Penguin Solutions – Basic and Diluted | 2661 | 5616 | 15960 | (27925) |
| Less: Preferred share dividends | 3033 |  | 5633 |  |
| Income available for distribution | (372) | 5616 | 10327 | (27925) |
| Income allocated to participating securities |  |  | 678 |  |
| Net income available to ordinary shareholders | $(372) | $5616 | $9649 | $(27925) |
| Weighted-average shares outstanding – Basic | 53130 | 52570 | 53355 | 52219 |
| Dilutive effect of equity plans and Convertible Senior Notes | 608 | 1713 | 981 |  |
| Weighted-average shares outstanding – Diluted | 53738 | 54283 | 54336 | 52219 |
| Basic earnings (loss) per ordinary share: |  |  |  |  |
| Continuing operations | $(0.01) | $0.11 | $0.18 | $(0.38) |
| Discontinued operations |  |  |  | (0.15) |
|  | $(0.01) | $0.11 | $0.18 | $(0.53) |
| Method used: | Two-Class |  | Two-Class |  |
| Diluted earnings (loss) per ordinary share: |  |  |  |  |
| &nbsp;&nbsp;Continuing operations | $(0.01) | $0.10 | $0.18 | $(0.38) |
| &nbsp;&nbsp;Discontinued operations |  |  |  | (0.15) |
|  | $(0.01) | $0.10 | $0.18 | $(0.53) |
| Unweighted anti-dilutive shares: |  |  |  |  |
| &nbsp;&nbsp;Equity plans | 1608 | 848 | 1295 | 6077 |
| &nbsp;&nbsp;Convertible Senior Notes |  |  |  |  |
| &nbsp;&nbsp;Preferred shares | 6096 |  | 6096 |  |
|  | 7704 | 848 | 7391 | 6077 |

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Upon any conversion of our Convertible Senior Notes, we will be required to pay cash in an amount at least equal to the principal portion and have the option to settle any amount in excess of the principal portion in cash and/or shares

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of common stock. As a result, only the amounts expected to be settled in excess of the principal portion are considered in calculating diluted earnings per share under the if-converted method.

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**Segment and Other Information**

Segment information presented below is consistent with how our chief operating decision maker evaluates operating results to make decisions about allocating resources and assessing performance. We have the following three business units, which are our reportable segments:

&nbsp;&nbsp;&nbsp;&nbsp;• ***Advanced Computing*:** Our Advanced Computing segment, under our Penguin Computing and Stratus brands, offers specialized platform solutions and services for artificial intelligence, high-performance computing, machine learning, advanced modeling and the internet of things that span the continuum of edge, core and cloud. Our solutions are designed specifically for customers across multiple markets, including hyperscale, financial services, energy, government, education, healthcare and others.

&nbsp;&nbsp;&nbsp;&nbsp;• ***Integrated Memory*:** Our Integrated Memory segment, under our SMART Modular Technologies brand, provides high-performance and reliable integrated memory solutions through the design, development and advanced packaging of leading-edge to extended lifecycle products. These specialty products are tailored to meet customer-specific requirements across networking and communications, enterprise storage and computing, including server applications and other vertical markets. These products are marketed to original equipment manufacturers and to commercial and government customers. The Integrated Memory segment also offers SMART Supply Chain Services, which provides customized, integrated supply chain services to enable our customers to better manage supply chain planning and execution, reduce costs and increase productivity.

&nbsp;&nbsp;&nbsp;&nbsp;• ***Optimized LED*:** Our Optimized LED segment, under our Cree LED brand, offers a broad portfolio of application-optimized LEDs focused on improving lumen density, intensity, efficacy, optical control and/or reliability. Backed by expert design assistance and superior sales support, our LED products enable our customers to develop and market LED-based products for general lighting, video displays and specialty lighting applications.

Segments are determined based on sources of revenue, types of customers and operating performance. There are no differences between the accounting policies for our segment reporting and our consolidated results of operations. Operating expenses directly associated with the activities of a specific segment are charged to that segment. Certain other indirect operating income and expenses are generally allocated to segments based on their respective percentage of net sales. We do not identify (other than goodwill) or report internally our assets nor allocate certain expenses and amortization, interest, other non-operating (income) expense or taxes to segments.

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| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| Net sales: |  |  |  |  |
| &nbsp;&nbsp;Advanced Computing | $132498 | $144968 | $510081 | $405197 |
| &nbsp;&nbsp;Integrated Memory | 130124 | 91629 | 332090 | 260594 |
| &nbsp;&nbsp;Optimized LED | 61629 | 63983 | 188701 | 193857 |
| Total net sales | $324251 | $300580 | $1030872 | $859648 |
| Segment operating income: |  |  |  |  |
| &nbsp;&nbsp;Advanced Computing | $24684 | $28921 | $91734 | $69113 |
| &nbsp;&nbsp;Integrated Memory | 12457 | 4471 | 30543 | 17682 |
| &nbsp;&nbsp;Optimized LED | 1333 | (67) | 6205 | (277) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total segment operating income | 38474 | 33325 | 128482 | 86518 |
| Unallocated: |  |  |  |  |
| &nbsp;&nbsp;Share-based compensation expense | (10251) | (11192) | (33362) | (32801) |
| &nbsp;&nbsp;Amortization of acquisition-related intangibles | (8439) | (9766) | (27033) | (29525) |
| &nbsp;&nbsp;Cost of sales-related restructuring | (369) | (387) | (404) | (1271) |
| &nbsp;&nbsp;Diligence, acquisition and integration expense | (296) | (4) | (1696) | (6678) |
| Redomiciliation costs | (3702) |  | (7304) |  |
| &nbsp;&nbsp;Impairment of goodwill | (5294) |  | (11373) |  |
| &nbsp;&nbsp;Restructuring charges |  | (465) | (968) | (6739) |
| &nbsp;&nbsp;Other | (280) |  | (655) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total unallocated | (28631) | (21814) | (82795) | (77014) |
| &nbsp;&nbsp;&nbsp;&nbsp;Consolidated operating income (loss) | $9843 | $11511 | $45687 | $9504 |

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**Related Party Transactions**

From time to time, we may enter into an agreement with a related party in the ordinary course of business. These agreements are reviewed and approved or ratified by the Audit Committee of the Board pursuant to our related person transaction policy. We follow Accounting Standards Codification 850, *Related Party Disclosures*, for the identification of related parties and disclosure of related party transactions, under which related parties are defined as members of our Board of Directors, affiliates of the Company, management and principal owners of our outstanding stock and members of their immediate families. Related parties also include any other person or entity with significant influence over our management or operations. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. We assess related parties each reporting period.

On May 26, 2025, we entered into an agreement with SKT, a related party, under which we anticipate providing solutions to support SKT's future AI data center infrastructure initiatives. SKT, through Astra AI Infra, a special purpose vehicle formed by SKT, holds more than 10% of the voting interest of the Company. Additionally, Min Yong Ha, an executive of SKT, is a member of our Board of Directors. As of May 30, 2025, no transactions had occurred under the terms of this agreement. Subsequent to May 30, 2025, we have recognized a total transaction amount of $34.6 million, representing a receivable and a corresponding contract liability for payment on the fulfillment of AI hardware solutions and installation services at a future date.

**Subsequent Events**

**2025 Credit Agreement**

On June 24, 2025 (the "Refinancing Closing Date"), Penguin Solutions Cayman (the "Parent Borrower") and SMART Modular Technologies, Inc., a California corporation (the "Co-Borrower" and together with the Parent Borrower, the "Borrowers"), entered into that certain Credit Agreement (the "2025 Credit Agreement") by and among the Borrowers, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and an issuing bank.

The 2025 Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $400.0 million (the "2025 Credit Facility" and the revolving loans thereunder, the "2025 Loans"), maturing on June 24, 2030 (subject to certain earlier "springing maturity" dates upon certain conditions specified in the 2025 Credit Agreement). The 2025 Credit Agreement provides that up to $35.0 million of the 2025 Credit Facility is available for issuances of letters of credit.

On the Refinancing Closing Date, we borrowed $100.0 million under the 2025 Credit Facility, and simultaneously applied such proceeds, together with approximately $200.0 million cash on hand, to repay in full all borrowings and terminate all commitments under that certain Credit Agreement, dated as of February 7, 2022 and as amended subsequently from time to time, by and among the Borrowers, the subsidiary loan parties party thereto, the lenders party thereto and Citizens Bank, N.A., as administrative agent, collateral agent and an issuing bank (the "2022 Amended Credit Agreement"). The 2022 Amended Credit Agreement provided for a $300.0 million term loan "A" facility due 2027 (the "Amended 2022 TLA") and a $250.0 million revolving credit facility due 2027 (the "2022 Revolver"). Immediately prior to the repayment and termination of the 2022 Amended Credit Agreement, we had $300.0 million of principal outstanding under the Amended 2022 TLA, with unamortized issuance costs of $1.8 million and the effective interest rate was 7.17%, and no amounts outstanding under the 2022 Revolver, with unamortized issuance costs of $1.5 million. Following the extinguishment of the 2022 Amended Credit Agreement, we will recognize a loss on extinguishment of $3.3 million.

***Interest and fees***: Under the 2025 Credit Agreement, 2025 Loans bear interest at a rate per annum equal to either, at the Borrowers' option, Term Secured Overnight Financing Rate ("Term SOFR") rate or a base rate, in each case plus an applicable margin based on the Total Leverage Ratio (as defined in the 2025 Credit Agreement) and ranges from 1.25% to 3.00% per annum with respect to Term SOFR borrowings and from 0.25% to 2.00% per annum with respect to base rate borrowings. In addition, we are required to pay a quarterly unused commitment fee at an initial rate of 0.25%, which may increase up to a rate of 0.35% based on certain Total Leverage Ratio levels specified in the 2025 Credit Agreement.

***Security***: The 2025 Credit Agreement is jointly and severally guaranteed on a senior basis by certain subsidiaries of the Parent Borrower organized in the United States and the Cayman Islands. In addition, the 2025 Credit

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Agreement is secured by a pledge of the capital stock of, or equity interests in, certain subsidiaries of the Parent Borrower and by substantially all of the assets of certain subsidiaries of the Parent Borrower organized in the United States and the Cayman Islands.

***Covenants***: The 2025 Credit Agreement contains customary representations and warranties and affirmative covenants, as described in the 2025 Credit Agreement. The 2025 Credit Agreement also contains a number of negative covenants that, among other things, restrict, subject to certain exceptions, the Borrowers' ability and the ability of the Borrowers' subsidiaries to: incur additional indebtedness; create liens on assets; engage in mergers or consolidations; sell assets; pay dividends; make distributions or repurchase capital stock; make investments, loans or advances; repay or repurchase certain subordinated debt (except as scheduled or at maturity); create restrictions on the payment of dividends or other amounts to the Borrowers from the Borrowers' restricted subsidiaries; make certain acquisitions; engage in certain transactions with affiliates; amend material agreements governing the Borrowers' subordinated debt and fundamentally change the Borrowers' business.

The 2025 Credit Agreement also includes the following financial maintenance covenants tested on the final day of each fiscal quarter:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• First Lien Leverage Ratio (as defined in the 2025 Credit Agreement) of 3.25 to 1.00;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Total Leverage Ratio of 4.50 to 1.00; provided, that in connection with any Material Acquisition (as defined in the 2025 Credit Agreement), at the election of the Borrowers, the maximum Total Leverage Ratio for the next four quarterly testing periods after such Material Acquisition has been consummated will be automatically increased to 5.00 to 1.00; provided further, that (x) no more than two such elections may be made during the term of the 2025 Credit Agreement and (y) following the first such election, no subsequent election may be made unless the Total Leverage Ratio has been less than or equal to 4.50 to 1.00 as of the last day of at least two consecutive quarterly testing periods following the expiration of the first increase; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Interest Coverage Ratio (as defined in the 2025 Credit Agreement) of at least 3.00 to 1.00.

For purposes of calculating the First Lien Leverage Ratio and the Total Leverage Ratio, the consolidated debt of the Parent Borrower and its Restricted Subsidiaries (as defined in the 2025 Credit Agreement) is reduced by up to $175.0 million of the aggregate amount of unrestricted cash and Permitted Investments (as defined in the 2025 Credit Agreement) of the Parent Borrower and its Restricted Subsidiaries.

**Redomiciliation**

On June 30, 2025, we completed the U.S. Domestication. The U.S. Domestication was approved by the shareholders of Penguin Solutions Cayman and effected by way of the scheme of arrangement process under Cayman Islands law, pursuant to which each ordinary share of Penguin Solutions Cayman was exchanged for one share of common stock of Penguin Solutions Delaware, and each convertible preferred share of Penguin Solutions Cayman was exchanged for one share of convertible preferred stock of Penguin Solutions Delaware. The issuance of shares of Penguin Solutions Delaware capital stock pursuant to the court-sanctioned scheme of arrangement under Cayman Islands law was exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended.

**Convertible Senior Notes**

The consummation of the U.S. Domestication on June 30, 2025 and the transactions associated therewith constituted an "Ordinary Share Change Event" (as defined in each of the Indentures (as defined below)) pursuant to the terms of the Indentures. As a result, noteholders have a 35-trading-day window, beginning on June 30, 2025, where such noteholders have the option to convert their Convertible Senior Notes pursuant to the terms of the indentures governing the Convertible Senior Notes.

On June 30, 2025, immediately following the consummation of the U.S. Domestication, Penguin Solutions Delaware entered into that certain (i) Second Supplemental Indenture, dated as of June 30, 2025 (the "2026 Second Supplemental Indenture"), by and among Penguin Solutions Delaware, Penguin Solutions Cayman and U.S. Bank Trust Company, National Association, a national banking association organized under the laws of the United States of America, as trustee (in such capacity, the "Trustee"), to the Indenture, dated as of February 11, 2020 (as the same was supplemented by that certain First Supplemental Indenture, dated as of August 26, 2022, between Penguin Solutions Cayman and the Trustee), by and between Penguin Solutions Cayman and the Trustee (the "2026 Indenture"), pursuant to which Penguin Solutions Cayman issued the 2026 Notes; (ii) First Supplemental Indenture, dated as of June 30, 2025 (the "2029 First Supplemental Indenture"), by and among Penguin Solutions Cayman, Penguin Solutions Delaware and the Trustee, to the Indenture, dated as of January

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23, 2023, by and between Penguin Solutions Cayman and the Trustee (the "2029 Indenture"), pursuant to which Penguin Solutions Cayman issued the 2029 Notes; and (iii) First Supplemental Indenture, dated as of June 30, 2025 (the "2030 First Supplemental Indenture," and together with the 2026 Second Supplemental Indenture and the 2029 First Supplemental Indenture, the "Supplemental Indentures"), by and among Penguin Solutions Cayman, Penguin Solutions Delaware and the Trustee, to the Indenture, dated as of August 6, 2024, by and between Penguin Solutions Cayman and the Trustee (the "2030 Indenture," and together with the 2026 Indenture and the 2029 Indenture, the "Indentures"), pursuant to which Penguin Solutions Cayman issued the 2030 Notes.

In connection with the U.S. Domestication and the associated "Ordinary Share Change Event" under each Indenture, the Supplemental Indentures entered into as described in the foregoing paragraph provide that (i) the Convertible Senior Notes will, in each case, be fully and unconditionally guaranteed by Penguin Solutions Delaware and (ii) Penguin Solutions Cayman will satisfy its conversion obligations under the Convertible Senior Notes by paying or delivering, as applicable and in accordance with the terms of the Indentures, either (x) solely cash or (y) a combination of cash and common stock of Penguin Solutions Delaware, together, if applicable, with cash in lieu of fractional shares of common stock. Pursuant to the terms of the Supplemental Indentures, Penguin Solutions Delaware agreed to deliver such common stock when issuable under the applicable Indentures.

**Common Stock** 

In connection with the U.S. Domestication, Penguin Solutions Delaware filed an Amended and Restated Certificate of Incorporation on June 27, 2025 and adopted Amended and Restated Bylaws on June 30, 2025, filed as Exhibits 3.1 and 3.3 hereto, respectively. The terms of our common stock are described in Item 8.01 of our Current Report on Form 8-K filed with the SEC on June 30, 2025 in connection with the consummation of the U.S. Domestication, and under the heading "*Comparison of Rights of Cayman Islands Shareholders and Delaware Stockholders*" in Penguin Solution Cayman's definitive proxy statement filed with the SEC on May 2, 2025.

**Preferred Stock**

*Amended and Restated Investor Agreement*

On June 30, 2025, effective upon consummation of the U.S. Domestication, Penguin Solutions Delaware assumed the Investor Agreement from Penguin Solutions Cayman and Penguin Solutions Delaware and SK Telecom Co., Ltd. ("SKT") amended and restated the Investor Agreement (as amended and restated, the "Amended and Restated Investor Agreement") such that the rights and restrictions relating to SKT's beneficial ownership of the Issued Cayman CPS in place prior to the U.S. Domestication apply in respect of SKT's holdings of Issued CPS (as defined below) following consummation of the U.S. Domestication.

*Delaware Certificate of Designation for Convertible Preferred Stock*

On June 27, 2025, in connection with the U.S. Domestication, Penguin Solutions Delaware executed and adopted a Certificate of Designation of Convertible Preferred Stock (the "CPS Delaware Certificate of Designation") that sets forth the terms, rights and obligations of a series of 200,000 shares of preferred stock of Penguin Solutions Delaware having a par value of $0.03 per share, designated as convertible preferred stock (the "Issued CPS"). The principal attributes of the Issued Cayman CPS and the Issued CPS are substantially the same, subject to changes to give effect to requirements of Delaware law. Refer to the Certificate of Designation of Penguin Solutions, Inc., effective as of June 27, 2025, filed as Exhibit 3.2 hereto, to the description of the Issued CPS contained in Item 8.01 of our Current Report on Form 8-K filed with the SEC on June 30, 2025 in connection with the consummation of the U.S. Domestication, and to the information under the heading "Comparison of Rights of Cayman Islands Shareholders and Delaware Stockholders" in Penguin Solution Cayman's definitive proxy statement filed with the SEC on May 2, 2025.

*Assumption and Amendment and Restatement of Equity Plans*

Effective upon the completion of the U.S. Domestication, Penguin Solutions Delaware assumed Penguin Solutions Cayman's equity incentive plans and all outstanding awards and rights thereunder and amended and restated each plan in the form of the Amended and Restated 2017 Stock Incentive Plan, the Amended and Restated 2021 Inducement Plan and the Amended and Restated 2018 Employee Stock Purchase Plan (together with any applicable predecessor plans, the "Incentive Plans"), to provide, among other things, that Penguin Solutions Delaware common stock will be issued, held, available for issuance or used to measure or satisfy benefits as appropriate under the Incentive Plans, in substitution for Penguin Solutions Cayman ordinary shares. The assumed awards and rights continue to have substantially the same terms and conditions that applied prior to

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the consummation of the U.S. Domestication (including any applicable vesting and change in control provisions and the U.S. Domestication did not constitute a change in control for the purposes of such provisions).

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following discussion and analysis should be read in conjunction with the consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report and in the 2024 Annual Report. This discussion contains forward-looking statements that involve risks, uncertainties and other factors. Our actual results could differ materially from those contained in these forward-looking statements due to a number of risks, uncertainties and other factors, including those discussed below and elsewhere in this Quarterly Report and in the 2024 Annual Report. See also "Cautionary Note Regarding Forward-Looking Statements."*

*Our fiscal year is the 52- or 53-week period ending on the last Friday in August. Fiscal years 2025 and 2024 contain 52 weeks and 53 weeks, respectively. All period references are to our fiscal periods unless otherwise indicated. All financial information for our subsidiaries in Brazil is included in our consolidated financial statements on a one-month lag because their fiscal years ended on July 31 of each year. In connection with the completion of the divestiture of an 81% interest in SMART Brazil (as defined below), we ceased consolidating the operations of SMART Brazil in our financial statements as of the November 29, 2023 disposal date. As a result, financial information for the first quarter of 2024 includes the four-month period for the SMART Brazil operations from August 1, 2023 to November 29, 2023. All tabular amounts are in thousands, except percentages.*

**Overview**

On June 30, 2025, we completed the U.S. Domestication of the parent company of our corporate group, Penguin Solutions Cayman, from the Cayman Islands to the State of Delaware in the United States, resulting in Penguin Solutions Delaware becoming our publicly traded parent company and the successor issuer to Penguin Solutions Cayman. The financial information in this Quarterly Report for periods prior to the completion of the U.S. Domestication relates to Penguin Solutions Cayman. Unless stated otherwise or the context requires otherwise, the terms "Penguin Solutions," "Company," "we," "our," "us" or similar terms (i) for periods prior to the effectiveness of the U.S. Domestication, refer to Penguin Solutions Cayman and its consolidated subsidiaries and (ii) for periods at or after the completion of the U.S. Domestication, refer to Penguin Solutions Delaware and its consolidated subsidiaries. See "Explanatory Note" and "About this Quarterly Report," above.

For an overview of our business, see "Item 1. Business" of the 2024 Annual Report.

**Divestiture of SMART Brazil**

On November 29, 2023, we completed the divestiture of an 81% interest in SMART Modular Technologies do Brasil – Indústria e Comercio de Componentes Ltda. ("SMART Brazil") to Lexar Europe B.V., an affiliate of Shenzhen Longsys Electronics Co. Ltd.

***Presentation of SMART Brazil as Discontinued Operations*:** In accordance with authoritative guidance under U.S. GAAP, we have presented the balance sheets, results of operations and cash flows of SMART Brazil operations in this Quarterly Report, including in the accompanying consolidated financial statements and notes, as discontinued operations for all periods presented. The SMART Brazil operations were previously reported as part of our Integrated Memory segment. Unless otherwise noted, discussion within this Quarterly Report relates solely to our continuing operations and excludes the SMART Brazil operations.

See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Divestiture of SMART Brazil."

**Factors Affecting Our Operating Performance**

***Macro-Economic Demand Factors*:** Our business segments each have their own unique set of demand factors. Our Advanced Computing business is driven by demand for high-performance compute solutions across AI and machine learning initiatives, as well as traditional workload optimization and efficiency applications. Demand in our Integrated Memory segment is driven by end-market demand from OEMs for customer-specific solutions in vertical markets such as industrial, government, networking, high-performance compute and enterprise storage, as well as emerging demand for higher density and greater bandwidth solutions for AI deployments. Finally, demand for our Optimized LED products is derived from targeted end-market applications, such as general high-power and mid-power lighting and specialty lighting, including video display and horticulture applications. We

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believe our diversified business segments may sometimes provide a natural hedge against downturns in any particular industry and resulting negative impacts on the financial and operational success of our customers. However, broader macro-economic trends, including global conflicts impacting international relations, recessionary indicators, high inflation rates, uncertainty and costs associated with trade policies and tariffs, and interest rates, can adversely affect all three segments concurrently.

***Shifts in the Mix and Timing of Our Revenue*:** Shifts in the mix of revenue from our operating segments, and in the timing of revenue, which can vary significantly from period to period, can impact our business and operating results, including gross and operating margins. For example, our Advanced Computing segment has shown solid growth, but is subject to variability in its sales and margin profile from period to period for reasons such as the following: recognition of revenue is tied to, among other things, customer decisions as to the completion of delivery and system go-live events, sales can be affected by the timing of customer deployments, contract renewal decisions by customers, or customer budget and volume considerations and margin is driven by the extent to which higher margin software and managed services comprise Advanced Computing sales. Our resource commitments and planning for each segment are relatively fixed in the short term, and as such, variability in expected revenue mix will have direct implications for our operating income and margins. Additionally, our revenue will be negatively impacted by the winding down of our Penguin Edge business, which we expect to wind down and discontinue by approximately the end of calendar year 2025. The comparability of our operating results against prior periods will also be affected following the wind down of our Penguin Edge business.

***Our Ability to Identify, Complete and Successfully Integrate Acquisitions*:** A substantial portion of our growth over the last several years has been driven by acquisitions, and we intend to continue to use corporate development as an engine for growth. Within our existing segments, we plan to pursue acquisitions to expand features and functionality, expand into adjacent businesses and grow our customer base and geographic footprint. From time to time, we may seek to expand our addressable market by entering new business segments where, as we did with our Cree LED and Stratus Technologies acquisitions, we identify a business opportunity at scale with a path to being accretive to our overall operations in the near term. If we are unable to identify and complete attractive acquisitions, we may not be successful in growing our revenue and/or expanding our margins. Any acquisitions we do complete may require us to incur debt or raise capital through equity financings or may subject us to unforeseen liabilities or costs, or operational challenges, that in turn impede our ability to realize the expected returns on our investment.

***Disruptions in Our Supply Chain May Adversely Affect Our Businesses*:** We depend on third-party suppliers for key components of our products, such as commodity DRAM components from offshore foundries that we use in our specialty memory products, third-party wafers that we use in our memory and LED businesses and AI and HPC components for our Advanced Computing business. In our memory and LED businesses, we have adopted a "Fab-Light" business model to reduce our capital expenditures and operating expenses, while affording greater flexibility in adapting to shifts in demand and other market trends. Our Fab-Light business model contributes to margin expansion in our overall business. However, our reliance on third-party manufacturers exposes us to risk of supply chain disruption and lost business. For example, the recent global semiconductor shortage has adversely affected our operating results. In addition, in our Advanced Computing business, where we source components from third parties, the high demand for and limited supply of AI components globally, as well as any delays in the production of such components, continues to affect our sourcing of these components and the timing of deployments. In particular, we continue to experience extended lead times for certain components that are incorporated into our overall solutions, which impacts how quickly we are able to ramp existing and new customer projects. If such disruptions worsen or are prolonged, or if there is meaningful disruption in our supply arrangement with any of our third-party suppliers, our operating results and financial condition may continue to be adversely affected.

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**Results of Operations**

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| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 30,<br>2025** | **May 31,<br>2024** | **May 31,<br>2024** | **May 30,<br>2025** | **May 30,<br>2025** | **May 31,<br>2024** | **May 31,<br>2024** |
| Net sales: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Advanced Computing | $132498 | 40.9% | $144968 | 48.2% | $510081 | 49.5% | $405197 | 47.1% |
| &nbsp;&nbsp;Integrated Memory | 130124 | 40.1% | 91629 | 30.5% | 332090 | 32.2% | 260594 | 30.3% |
| &nbsp;&nbsp;Optimized LED | 61629 | 19.0% | 63983 | 21.3% | 188701 | 18.3% | 193857 | 22.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | 324251 | 100.0% | 300580 | 100.0% | 1030872 | 100.0% | 859648 | 100.0% |
| Cost of sales | 229168 | 70.7% | 211674 | 70.4% | 733329 | 71.1% | 605958 | 70.5% |
| &nbsp;&nbsp;Gross profit | 95083 | 29.3% | 88906 | 29.6% | 297543 | 28.9% | 253690 | 29.5% |
| Operating expenses: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Research and development | 20222 | 6.2% | 19681 | 6.5% | 59940 | 5.8% | 61596 | 7.2% |
| &nbsp;&nbsp;Selling, general and administrative | 59724 | 18.4% | 57249 | 19.0% | 179575 | 17.4% | 175851 | 20.5% |
| &nbsp;&nbsp;Impairment of goodwill | 5294 | 1.6% |  | —% | 11373 | 1.1% |  | —% |
| &nbsp;&nbsp;Other operating expense |  | —% | 465 | 0.2% | 968 | 0.1% | 6739 | 0.8% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 85240 | 26.3% | 77395 | 25.7% | 251856 | 24.4% | 244186 | 28.4% |
| Operating income | 9843 | 3.0% | 11511 | 3.8% | 45687 | 4.4% | 9504 | 1.1% |
| Non-operating (income) expense: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;Interest expense, net | 573 | 0.2% | 6167 | 2.1% | 7152 | 0.7% | 22975 | 2.7% |
| &nbsp;&nbsp;Other non-operating (income) expense | (1439) | (0.4)% | 441 | 0.1% | (1012) | (0.1)% | 113 | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-operating (income) expense | (866) | (0.3)% | 6608 | 2.2% | 6140 | 0.6% | 23088 | 2.7% |
| Income (loss) before taxes | 10709 | 3.3% | 4903 | 1.6% | 39547 | 3.8% | (13584) | (1.6)% |
| Income tax provision | 7259 | 2.2% | (1323) | (0.4)% | 21262 | 2.1% | 4409 | 0.5% |
| Net income (loss) from continuing operations | 3450 | 1.1% | 6226 | 2.1% | 18285 | 1.8% | (17993) | (2.1)% |
| Net loss from discontinued operations |  | —% |  | —% |  | —% | (8148) | (0.9)% |
| Net income (loss) | 3450 | 1.1% | 6226 | 2.1% | 18285 | 1.8% | (26141) | (3.0)% |
| Net income attributable to noncontrolling interest | 789 | 0.2% | 610 | 0.2% | 2325 | 0.2% | 1784 | 0.2% |
| Net income (loss) attributable to Penguin Solutions | 2661 | 0.9% | 5616 | 1.9% | 15960 | 1.6% | (27925) | (3.2)% |
| Preferred share dividends | 3033 | 0.9% |  | —% | 5633 | 0.5% |  | —% |
| Income available for distribution | (372) | (0.1)% | 5616 | 1.9% | 10327 | 1.0% | (27925) | (3.2)% |
| Income allocated to participating securities |  | —% |  | —% | 678 | 0.1% |  | —% |
| Net income (loss) available to ordinary shareholders | $(372) | (0.1)% | $5616 | 1.9% | $9649 | 0.9% | $(27925) | (3.2)% |

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Percentages represent percentage of total net sales. Summations of percentages may not compute precisely due to rounding.

**Net Sales, Cost of Sales and Gross Profit**

In the third quarter of 2025, net sales increased by $23.7 million, or 7.9%, compared to the same period in the prior year, primarily due to higher sales from our Integrated Memory business segment, partially offset by lower sales from our Advanced Computing and Optimized LED business segments. Integrated Memory net sales increased by $38.5 million, or 42.0%, compared to the same period in the prior year, primarily due to higher sales volumes of DRAM products stemming from improved market demand, along with higher supply chain services. Advanced Computing net sales decreased by $12.5 million, or 8.6%, in the third quarter of 2025, compared to the same period in the prior year, primarily due to lower hardware sales stemming from the timing of customer projects. Optimized LED net sales decreased by $2.4 million, or 3.7%, in the third quarter of 2025, compared to the same period in the prior year, primarily due to lower direct sales across China and Europe.

In the first nine months of 2025, net sales increased by $171.2 million, or 19.9%, compared to the same period in the prior year. The increase in the nine-month period was due to higher sales from our Advanced Computing and Integrated Memory business segments, partially offset by lower sales from our Optimized LED business segment. Advanced Computing net sales increased by $104.9 million, or 25.9%, in the first nine months of 2025, compared to the same period in the prior year, primarily due to higher hardware sales driven by increased demand for AI solutions and high-performance computing within the first half of 2025. Integrated Memory net sales increased by $71.5 million, or 27.4%, in the first nine months of 2025, compared to the same period in the prior year, primarily due to higher sales volumes of DRAM and Flash storage products stemmi

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ng from improved market demand. Optimized LED net sales decreased by $5.2 million, or 2.7%, in the first nine months of 2025, compared to the same period in the prior year, primarily due to lower direct sales across China and Europe.

Cost of sales increased by $17.5 million, or 8.3%, and $127.4 million, or 21.0%, in the third quarter and first nine months of 2025, respectively, compared to the same periods in the prior year. The increase was primarily driven by increased product sales from our Integrated Memory segment in the third quarter and first nine months of 2025, along with increased product sales from our Advanced Computing segment in the first nine months of 2025.

Gross margin decreased to 29.3% in the third quarter of 2025 compared to 29.6% in the same period in 2024, and to 28.9% in the first nine months of 2025 compared to 29.5% in the same period of 2024, primarily due to unfavorable mix from higher product revenue in our Advanced Computing business.

**Non-GAAP Measure of Segment Operating Income**

Below is a table of our operating income, measured on a non-GAAP basis, which Penguin Solutions management uses to supplement Penguin Solutions' financial results under GAAP to analyze its operations and make decisions as to future operational plans and believes that this supplemental non-GAAP information is useful to investors in analyzing and assessing our past and future operating performance. These non-GAAP measures exclude certain items, such as share-based compensation expense; amortization of acquisition-related intangible assets (consisting of amortization of developed technology, customer relationships, trademarks/trade names and backlog acquired in connection with business combinations); acquisition-related inventory adjustments; diligence, acquisition and integration expense; restructuring charges; impairment of goodwill; changes in the fair value of contingent consideration; redomiciliation costs; and other infrequent or unusual items. While amortization of acquisition-related intangible assets is excluded, the revenues from acquired companies is reflected in our non-GAAP measures and these intangible assets contribute to revenue generation. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Segment and Other Information."

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, as they exclude important information about our financial results, as noted above. The presentation of these adjusted amounts varies from amounts presented in accordance with GAAP and therefore may not be comparable to amounts reported by other companies.

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| | **Three Months Ended** | **Three Months Ended** | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** | **May 30,<br>2025** | **May 31,<br>2024** |
| GAAP operating income | $9843 | $11511 | $45687 | $9504 |
| &nbsp;&nbsp;Share-based compensation expense | 10251 | 11192 | 33362 | 32801 |
| &nbsp;&nbsp;Amortization of acquisition-related intangibles | 8439 | 9766 | 27033 | 29525 |
| &nbsp;&nbsp;Cost of sales-related restructuring | 369 | 387 | 404 | 1271 |
| Diligence, acquisition and integration expense | 296 | 4 | 1696 | 6678 |
| Redomiciliation costs <sup>(1)</sup> | 3702 |  | 7304 |  |
| &nbsp;&nbsp;Impairment of goodwill | 5294 |  | 11373 |  |
| &nbsp;&nbsp;Restructuring charges |  | 465 | 968 | 6739 |
| &nbsp;&nbsp;Other <sup>(1)</sup> | 280 |  | 655 |  |
| Non-GAAP operating income | $38474 | $33325 | $128482 | $86518 |
| Non-GAAP operating income by segment: |  |  |  |  |
| &nbsp;&nbsp;Advanced Computing | $24684 | $28921 | $91734 | $69113 |
| &nbsp;&nbsp;Integrated Memory | 12457 | 4471 | 30543 | 17682 |
| &nbsp;&nbsp;Optimized LED | 1333 | (67) | 6205 | (277) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-GAAP operating income by segment | $38474 | $33325 | $128482 | $86518 |
| &nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> In the second quarter of 2025 we began breaking out redomiciliation costs from "Other." All periods presented have been adjusted to reflect this change. | &nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> In the second quarter of 2025 we began breaking out redomiciliation costs from "Other." All periods presented have been adjusted to reflect this change. | &nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> In the second quarter of 2025 we began breaking out redomiciliation costs from "Other." All periods presented have been adjusted to reflect this change. | &nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> In the second quarter of 2025 we began breaking out redomiciliation costs from "Other." All periods presented have been adjusted to reflect this change. | &nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> In the second quarter of 2025 we began breaking out redomiciliation costs from "Other." All periods presented have been adjusted to reflect this change. |

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Advanced Computing operating income decreased by $4.2 million, or 14.7%, in the third quarter of 2025, as compared to the same period in the prior year, primarily due to decreased net revenue from lower hardware sales, and increased by $22.6 million, or 32.7%, in the first nine months of 2025, as compared to the same period in the prior year, primarily due to increas

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ed net revenue, as well as lower operating expenses, mainly driven by lower subcontract services, partially offset by increased operating expenses, mainly driven by increased personnel costs stemming from bonus achievement.

Integrated Memory operating income increased by $8.0 million, or 178.6%, and $12.9 million, or 72.7%, in the third quarter and first nine months of 2025, respectively, as compared to the same periods in the prior year, primarily due to increased net revenue, partially offset by increased operating expenses, mainly driven by increased personnel costs stemming from bonus achievement.

Optimized LED operating income increased by $1.4 million and $6.5 million, in the third quarter and first nine months of 2025, respectively, as compared to the same periods in the prior year, primarily due to higher gross profit, stemming from more favorable product mix.

**Operating and Non-operating (Income) Expense**

**Research and Development**

Research and development expense increased by $0.5 million, or 2.7%, and decreased $1.7 million, or 2.7%, in the third quarter and first nine months of 2025, respectively, as compared to the same periods in the prior year. The increase in the three-month period, compared to the same period in the prior year, was primarily due to higher personnel-related expenses stemming from increased bonus achievement as a result of company performance. The decrease in the nine-month period, compared to the same period in the prior year, was primarily due to decreased personnel-related expenses mainly driven by headcount reductions, as well as lower subcontract services mainly driven by Penguin Computing.

**Selling, General and Administrative**

Selling, general and administrative expense increased by $2.5 million, or 4.3%, and $3.7 million, or 2.1%, in the third quarter and first nine months of 2025, respectively, as compared to the same periods in the prior year, primarily due to higher personnel-related expenses stemming from increased bonus achievement as a result of company performance, partially offset by decreased professional services as compared to increased cost in the prior year due to the SMART Brazil divestiture referenced above.

**Impairment of Goodwill**

During the second quarter of 2023, we initiated a plan pursuant to which we intend to wind down manufacturing and discontinue the sale of certain products offered through our Penguin Edge business by approximately the end of calendar year 2025. In connection therewith and with the preparation of the financial statements included in this Quarterly Report, we assessed goodwill associated with our Penguin Edge business within our Advanced Computing segment and concluded it was partially impaired. As a result, we recorded charges of $5.3 million and $11.4 million in the third quarter and first nine of 2025, respectively, to impair the carrying value of Advanced Computing goodwill. We currently anticipate that the goodwill of the Penguin Edge reporting unit of $4.7 million as of May 30, 2025 will be fully impaired by the end of calendar 2025. For additional information regarding the goodwill impairment, refer to "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Intangible Assets and Goodwill."

**Other Operating (Income) Expense**

There were no other operating expenses in the third quarter of 2025 and $0.5 million operating expenses attributable to restructuring charges in the third quarter of 2024. Other operating expense in the first nine months of 2025 and 2024 included restructuring charges of $1.0 million and $6.7 million, respectively. The restructuring charges for all periods presented were primarily for employee severance costs and other benefits resulting from workforce reductions, the elimination of certain projects across our businesses and other costs associated with the wind down of our Penguin Edge business. We anticipate that these activities will continue into future quarters and anticipate recording additional restructuring charges.

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**Interest Expense, Net**

Net interest expense decreased by $5.6 million and $15.8 million in the third quarter and first nine months of 2025, respectively, compared to the same periods in the prior year, primarily due to principal payments made on the Amended 2022 TLA (as defined below) during the last half of fiscal 2024.

**Other Non-operating (Income) Expense**

Other non-operating (income) expense in the third quarter and first nine months of 2025 and 2024 primarily reflected foreign currency gains (losses). See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Other Non-operating (Income) Expense."

**Income Tax Provision (Benefit)**

Income tax provision in the third quarter and first nine months of 2025 increased by $8.6 million and by $16.9 million, respectively, as compared to the same periods in the prior year, primarily due to an increase in profit before tax in jurisdictions subject to income tax, partially offset by a reduction in withholding tax.

Our effective tax rate was 67.8% and 53.8% in the third quarter and first nine months of 2025, respectively, and differed from the U.S. statutory rate primarily due to losses generated in a jurisdiction where no tax benefit can be recognized and to withholding taxes, state income taxes, and nondeductible compensation paid to officers, partially offset by research and development tax credits. Our effective tax rate was (27.0)% and (32.5)% in the third quarter and first nine months of 2024, respectively, and differed from the U.S. statutory rate primarily due to losses generated in a jurisdiction where no tax benefit can be recognized, withholding taxes and state income taxes.

The global minimum tax under the Pillar Two framework became effective for us in the first quarter of 2025. While the impact on our unaudited consolidated financial statements is currently not material, our analysis is ongoing as the Organisation for Economic Co-operation and Development continues to release additional guidance and countries enact related legislation.

See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Income Taxes."

**Net Income (Loss) From Discontinued Operations**

As discussed above, we have presented the results of SMART Brazil as discontinued operations in our consolidated statements of operations. In the first quarter of 2024, we completed the divestiture, and in connection therewith, recognized a loss of $8.9 million.

See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Divestiture of SMART Brazil."

**Liquidity and Capital Resources**

As of May 30, 2025, we had cash, cash equivalents and short-term investments of $735.5 million, of which $545.5 million was held by subsidiaries outside of the United States. Our principal uses of cash and capital resources have been acquisitions, debt service requirements, capital expenditures, research and development expenditures and working capital requirements. We expect that future capital expenditures will focus on expanding our research and development activities, manufacturing equipment upgrades, acquisitions and IT infrastructure and software upgrades. Cash and cash equivalents generally consist of funds held in demand deposit accounts, money market funds and time deposits. We do not acquire investments for trading or speculative purposes.

We may from time to time seek additional equity or debt financing. Any future equity or debt financing may be dilutive to our existing investors and may include debt service requirements and financial and other restrictive covenants that may constrain our operations and growth strategies. In the event that we seek additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued product innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.

We expect that our existing cash and cash equivalents, short-term investments, borrowings available under our credit facilities and cash generated by operating activities will be sufficient to fund our operations for at least the next 12 months.

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**Repayment of 2022 TLA and 2025 Credit Facility**

On February 7, 2022, Penguin Solutions and SMART Modular Technologies, Inc. entered into a credit agreement (the "2022 Original Credit Agreement") with a syndicate of banks and Citizens Bank, N.A., as administrative agent that provided for (i) a term loan credit facility in an aggregate principal amount of $275.0 million (the "2022 TLA") and (ii) a revolving credit facility in an aggregate principal amount of $250.0 million (the "2022 Revolver"), in each case, maturing on February 7, 2027. The 2022 Original Credit Agreement provided that up to $35.0 million of the 2022 Revolver is available for issuances of letters of credit. On August 29, 2022, the 2022 Original Credit Agreement was amended (the "2022 Amended Credit Agreement") to, among other things, provide for incremental term loans so that the aggregate amount of term loans was $300.0 million (together with the 2022 TLA, the "Amended 2022 TLA"), amend the First Lien Leverage Ratio (as defined in the 2022 Amended Credit Agreement) and increase the aggregate amount of unrestricted cash and permitted investments netted from the definitions of Consolidated First Lien Debt and Consolidated Net Debt. As of May 30, 2025, there was $300.0 million of aggregate principal amount outstanding under the Amended 2022 TLA and there were no amounts outstanding under the 2022 Revolver.

On June 24, 2025 (the "Refinancing Closing Date"), Penguin Solutions (the "Parent Borrower") and SMART Modular Technologies, Inc. (the "Co-Borrower" and together with the Parent Borrower, the "Borrowers") entered into a new Credit Agreement (the "2025 Credit Agreement") by and among the Borrowers, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, collateral agent and an issuing bank. The 2025 Credit Agreement provides for a revolving credit facility in an aggregate principal amount of $400 million (the "2025 Credit Facility" and the revolving loans thereunder, the "2025 Loans"), maturing on June 24, 2030.

Under the 2025 Credit Agreement, 2025 Loans bear interest at a rate per annum equal to either, at the Borrowers' option, Term Secured Overnight Financing Rate ("Term SOFR") rate or a base rate, in each case plus an applicable margin based on the Total Leverage Ratio (as defined in the 2025 Credit Agreement) and ranges from 1.25% to 3.00% per annum with respect to Term SOFR borrowings and from 0.25% to 2.00% per annum with respect to base rate borrowings. In addition, we are required to pay a quarterly unused commitment fee at an initial rate of 0.25%, which may increase up to a rate of 0.35% based on certain Total Leverage Ratio levels specified in the 2025 Credit Agreement.

On the Refinancing Closing Date, we borrowed $100 million under the 2025 Credit Facility, and simultaneously applied such proceeds, together with $200 million cash on hand, to repay in full all borrowings and terminate all commitments under the 2022 Amended Credit Agreement. Immediately prior to the repayment and termination of the 2022 Amended Credit Agreement, we had $300 million of principal outstanding under the Amended 2022 TLA, with unamortized issuance costs of $1.8 million and an effective interest rate of 7.17%, and no amounts outstanding under the 2022 Revolver, with unamortized issuance costs of $1.5 million. Following the termination of the 2022 Amended Credit Agreement, we will recognize a loss on extinguishment of debt equal to the unamortized issuance costs of $3.3 million.

For a description of the material terms of the 2025 Credit Agreement, see "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Subsequent Events."

**Convertible Senior Notes**

*2026 Notes*

In February 2020, we issued $250.0 million in aggregate principal amount of 2.25% Convertible Senior Notes due 2026 ("2026 Notes") pursuant to an indenture (the "2026 Indenture") between us and U.S. Bank Trust Company National Association, as trustee. The 2026 Notes will mature on February 15, 2026, unless earlier converted, redeemed or repurchased.

On January 18, 2023, we exchanged $150.0 million principal amount of 2026 Notes for $150.0 million principal amount of new 2029 Notes (as defined below). On August 6, 2024, we repurchased $80.0 million aggregate principal amount of our 2026 Notes for $100.6 million cash (including payment for accrued interest) in privately-negotiated transactions. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt – Convertible Senior Notes – Repurchase of Convertible Senior Notes" in this Quarterly Report. As of May 30, 2025, $20.0 million in aggregate principal amount of 2026 Notes were outstanding.

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*2029 Notes*

In February 2023, we issued $150.0 million in aggregate principal amount of 2.00% Convertible Senior Notes due 2029 ("2029 Notes") pursuant to an indenture (the "2029 Indenture"), dated as of January 23, 2023, between the Company and U.S. Bank Trust Company, National Association, as trustee. The 2029 Notes will mature on February 1, 2029, unless earlier converted, redeemed or repurchased. As of May 30, 2025, $150.0 million in aggregate principal amount of 2029 Notes were outstanding.

*2030 Notes*

On August 6, 2024 and August 14, 2024, we issued $175.0 million and $25.0 million aggregate principal amount, respectively, of our 2.00% Convertible Senior Notes due 2030 (collectively, the "2030 Notes," and together with the 2026 Notes and the 2029 Notes, the "Convertible Senior Notes") pursuant to, and governed by, an indenture (the "2030 Indenture"), dated August 6, 2024, between us and U.S. Bank Trust Company, National Association, as trustee. The 2030 Notes will mature on August 15, 2030, unless earlier converted, redeemed or repurchased. As of May 30, 2025, $200.0 million in aggregate principal amount of 2030 Notes were outstanding.

For additional details of the terms of our Convertible Senior Notes, refer to "PART II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Debt – Convertible Senior Notes" in the 2024 Annual Report and "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt – Convertible Senior Notes" in this Quarterly Report.

*Capped Calls*

In connection with our Convertible Senior Notes, we have entered into privately-negotiated capped call transactions, which are intended to reduce the effect of potential dilution upon conversion of our Convertible Senior Notes. The capped calls provide for our receipt of cash or shares, at our election, from counterparties if the trading price of our ordinary shares is above the strike price on the expiration date.

For additional information on our Capped Call Transactions, refer to "PART II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Equity – Capped Calls" in the 2024 Annual Report.

**Divestiture of SMART Brazil**

In November 2023, we completed the divestiture of SMART Brazil. In connection with the divestiture, we sold an 81% interest and retained a 19% interest in SMART Brazil. At the closing of the transaction, we received cash of $143.0 million, net of tax, from the sale. In addition, we received a deferred payment of $24.3 million (net of $4.2 million withholding tax) in May 2025. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Divestiture of SMART Brazil."

**Preferred Share Investment**

On December 13, 2024, we closed the SKT Investment (as defined below) by SK Telecom Co., Ltd. ("SKT"). Pursuant to the SKT Purchase Agreement, we sold to Astra AI Infra LLC, an affiliate of SKT ("Astra AI Infra"), 200,000 convertible preferred shares, par value $0.03 per share, of Penguin Solutions (the "Issued Cayman CPS"), at a price of $1,000 per share or an aggregate price of $200.0 million (the "SKT Investment").

On the closing date of the SKT Investment, we and Astra AI Infra entered into an Investor Agreement, and the CPS Certificate of Designation became effective. The Investor Agreement and the CPS Certificate of Designation provided for certain rights and restrictions relating to the SKT Investment, including but not limited to board representation rights, pro rata rights, registration rights and consent rights, and standstill provisions, disposition restrictions and voting obligations.

On June 27, 2025, in connection with the U.S. Domestication, Penguin Solutions Delaware executed and adopted a Certificate of Designation of Convertible Preferred Stock (the "CPS Delaware Certificate of Designation") that sets forth the terms, rights and obligations of a series of 200,000 shares of preferred stock of Penguin Solutions Delaware having a par value of $0.03 per share, designated as convertible preferred stock (the "Issued CPS"), which principal attributes remain substantially the same as prior to the U.S. Domestication, subject to changes to

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give effect to requirements of Delaware Law. The shares of Issued CPS are convertible into shares of common stock at an initial conversion price of $32.81, subject to adjustment upon the occurrence of certain events, will have an initial liquidation preference of 1x and will only be redeemable at our option, subject to certain conditions. The holder of Issued CPS may convert such holder's Issued CPS into shares of common stock at any time, provided that the Issued CPS may, at our option, automatically be converted into shares of common stock on any date following the second anniversary of the closing upon certain conditions. The Issued CPS entitles the holder to receive dividends of six percent per annum, cumulative, and payable quarterly in-kind or in cash at our option. Shares of Issued CPS are not redeemable upon or repurchased upon the election of the holders of Issued CPS. Refer to the Certificate of Designation of Penguin Solutions, Inc., effective as of June 27, 2025, filed hereto as Exhibit 3.2, and to the section entitled "Comparison of Rights of Cayman Islands Shareholders and Delaware Stockholders" contained in Penguin Solution Cayman's definitive proxy statement filed with the SEC on May 2, 2025.

On June 30, 2025, effective upon consummation of the U.S. Domestication, Penguin Solutions Delaware assumed the Investor Agreement from Penguin Solutions Cayman and Penguin Solutions Delaware and SKT amended and restated the Investor Agreement (as amended and restated, the "Amended and Restated Investor Agreement") such that the rights and restrictions relating to SKT's beneficial ownership of the Issued Cayman CPS in place prior to the U.S. Domestication apply in respect of SKT's holdings of the Issued CPS following consummation of the U.S. Domestication.

See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Preferred Share Investment" and "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Subsequent Events."

**Cash Flows**

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| | | |
|:---|:---|:---|
| | **Nine Months Ended** | **Nine Months Ended** |
| | **May 30,<br>2025** | **May 31,<br>2024** |
| Net cash provided by operating activities from continuing operations | $183616 | $117677 |
| Net cash used for investing activities from continuing operations | (25744) | (3526) |
| Net cash provided by (used for) financing activities from continuing operations | 144587 | (159615) |
| Net increase in cash and cash equivalents from discontinued operations | 24251 | 90447 |
| Effect of changes in currency exchange rates |  | (1256) |
| Net increase in cash, cash equivalents and restricted cash | $326710 | $43727 |

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***Operating Activities*:** Cash flows from operating activities reflects net income, adjusted for certain non-cash items, including depreciation and amortization expense, share-based compensation, gains and losses from investing or financing activities, and from the effects of changes in operating assets and liabilities.

Net cash provided by operating activities from continuing operations in the first nine months of 2025 resulted primarily from net income of $18.3 million, adjusted for non-cash items of $89.2 million. Operating cash flows were positively affected by a $76.1 million net change in our operating assets and liabilities, primarily from the effects of an increase of $133.9 million in accounts payable and accrued expenses and other liabilities primarily due to increase in deferred revenue from customer services and higher accounts payable related to the timing of trade purchases, and a decrease of $13.7 million in other assets, partially offset by an increase of $30.8 million in inventories, primarily to support future demand across both Advanced Computing and Integrated Memory, and an increase of $40.8 million in accounts receivable primarily due to increased sales.

Net cash provided by operating activities from continuing operations in the first nine months of 2024 resulted primarily from a net loss of $18.0 million, adjusted for non-cash items of $80.7 million. Operating cash flows were favorably affected by a $55.0 million net change in our operating assets and liabilities, primarily from the effects of an increase of $84.6 million in accounts payable and accrued expenses and other liabilities, partially offset by the payment of $29.0 million of contingent consideration related to our 2023 acquisition of Stratus Technologies. The increase in accounts payable and accrued expenses and other liabilities was primarily due to timing of payments, as well as higher deferred revenue resulting from amounts received from customers in advance of satisfying performance obligations.

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***Investing Activities*:** Net cash used for investing activities from continuing operations in the first nine months of 2025 consisted primarily of $18.6 million net purchase of marketable investment securities and $6.1 million for capital expenditures and deposits on equipment.

Net cash used for investing activities from continuing operations in the first nine months of 2024 consisted of $13.6 million for capital expenditures and deposits on equipment, offset by net maturities of marketable investment securities of $11.4 million.

***Financing Activities*:** Net cash provided by financing activities from continuing operations in the first nine months of 2025 consisted primarily of $191.2 million of proceeds from the issuance of preferred shares, net of issuance costs of $8.8 million, and $7.7 million in proceeds from the issuance of ordinary shares from our equity plans, partially offset by $49.2 million of payments to acquire our ordinary shares (including $40.9 million under our share repurchase program).

Net cash used for financing activities from continuing operations in the first nine months of 2024 consisted primarily of $126.6 million in principal repayment of debt, $21.0 million for payment of contingent consideration related to our 2023 acquisition of Stratus Technologies and $18.0 million of payments to acquire our ordinary shares (including $13.9 million under our share repurchase program), partially offset by $8.1 million in proceeds from the issuance of ordinary shares from our equity plans.

**Critical Accounting Estimates**

The preparation of these financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. We evaluate our estimates and judgments on an ongoing basis. Estimates and judgments are based on historical experience, forecasted events and various other assumptions that we believe to be reasonable under the circumstances; however, actual results could differ from those estimates. Our management believes our critical accounting estimates require management's most difficult, subjective or complex judgments and are critical in the portrayal of our financial condition and results of operations. Our discussion of critical accounting estimates is intended to supplement our summary of significant accounting policies so that readers will have greater insight into the uncertainties involved in applying our critical accounting policies and estimates.

For a summary of our critical accounting estimates, see "PART II – Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates" of the 2024 Annual Report. There have been no material changes to our critical accounting estimates from those described in the 2024 Annual Report.

For a summary of our significant accounting policies, see "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Significant Accounting Policies" of this Quarterly Report and "PART II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Significant Accounting Policies" of the 2024 Annual Report. There have been no material changes to our significant accounting policies from those described in the 2024 Annual Report.

**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

**Foreign Exchange Risk**

We are subject to inherent risks attributed to operating in a global economy. Our international sales and our operations in foreign countries subject us to risks associated with fluctuating currency values and exchange rates. Because a significant portion of our sales are denominated in U.S. dollars, increases in the value of the U.S. dollar could increase the price of our products so that they become relatively more expensive to customers in a particular country, possibly leading to a reduction in sales and profitability in that country. In addition, we have certain costs that are denominated in foreign currencies and decreases in the value of the U.S. dollar could result in increases in such costs, which could have a material adverse effect on our results of operations.

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As a result of our international operations, we generate a portion of our net sales and incur a portion of our expenses in currencies other than the U.S. dollar, such as the Japanese Yen, Malaysian Ringgit and Chinese Renminbi. We present our consolidated financial statements in U.S. dollars and remeasure certain assets and liabilities into U.S. dollars at applicable exchange rates. Consequently, increases or decreases in the value of the U.S. dollar may affect the value of these items with respect to our non-U.S. dollar businesses in our consolidated financial statements, even if their value has not changed in their local currency. Our customer pricing and material cost of sales are generally based on U.S. dollars. Accordingly, the impact of currency fluctuations to our consolidated statements of operations is primarily to our other costs of sales (i.e., non-material components) and our operating expenses as those items are typically denominated in local currency. Our consolidated statements of operations are also impacted by foreign currency gains and losses arising from transactions denominated in a currency other than the U.S. dollar. These translations could significantly affect the comparability of our results between financial periods or result in significant changes to the carrying value of our assets and liabilities. As a result, changes in foreign currency exchange rates impact our reported results.

Based on our monetary assets and liabilities denominated in foreign currencies as of May 30, 2025 and August 30, 2024, we estimate that a 10% adverse change in exchange rates versus the U.S. dollar would result in losses recorded in non-operating expense of $2.2 million and $2.5 million, respectively, to revalue these assets and liabilities.

**Interest Rate Risk**

We are subject to interest rate risk in connection with our variable-rate debt, which included borrowings under the Amended 2022 TLA until our repayment of outstanding amounts thereunder on June 24, 2025, and includes borrowings under our 2025 Credit Facility pursuant to the 2025 Credit Agreement entered into on June 24, 2025. As of July 1, 2025, we had $100.0 million outstanding under the 2025 Credit Facility. In addition, the 2025 Credit Agreement provides for borrowings of up to $400.0 million aggregate principal amount under a revolving credit facility. Assuming that we would satisfy the financial covenants required to borrow and that the amounts available under the 2025 Credit Facility were fully drawn, a 1.0% increase in interest rates would result in an increase in annual interest expense, and a decrease in our cash flows, of $4.0 million per year.

As of May 30, 2025, we had cash, cash equivalents and short-term investments of $735.5 million. We maintain our cash and cash equivalents in deposit accounts, money market funds with various financial institutions and in short-duration fixed income securities. Due to the short-term nature of these instruments, we believe that we do not have any material exposure to changes in the fair value of these investments as a result of changes in interest rates. Increases or decreases in interest rates would be expected to augment or reduce future interest income by an insignificant amount.

**Item 4. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures**

An evaluation was performed under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based upon that evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective as of May 30, 2025 to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

**Changes in Internal Control Over Financial Reporting**

During the third quarter of 2025, there were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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**PART II. Other Information**

**Item 1. Legal Proceedings**

For a discussion of legal proceedings, see "PART I. Financial Information – Item 1. Financial Statements – Notes to Consolidated Financial Statements – Commitments and Contingencies" and "Item 1A. Risk Factors."

**Item 1A. Risk Factors**

Other than as set forth below, there have been no material changes to the risks described in "PART I – Item 1A. Risk Factors" in the 2024 Annual Report. You should carefully consider the risks and uncertainties and the other information in this Quarterly Report, including "PART I. Financial Information – Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes, in "PART I – Item 1A. Risk Factors" in the 2024 Annual Report. Our business, financial condition or results of operations could be materially and adversely affected if any of these risks occurs and, as a result, the market price of our common stock could decline and you could lose all or part of your investment.

This Quarterly Report also contains forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements" for additional information. Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including the risks facing our Company described below, in the 2024 Annual Report.

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

On June 30, 2025, we consummated the redomiciliation of the parent company of our corporate group from the Cayman Islands to the State of Delaware in the United States. We may not realize the benefits we anticipate from the U.S. Domestication, particularly as the achievement of the benefits are in many important respects subject to factors that we do not and cannot control, including the reaction of third parties with whom we enter into contracts and do business and the reaction of investors. Additionally, the anticipated benefits from the U.S. Domestication may not offset the direct and indirect costs and expenses incurred in connection with the U.S. Domestication. Our 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 expect the U.S. Domestication to increase our effective tax rate, there is a risk that our effective tax rate may increase after the U.S. Domestication. Following the U.S. Domestication, our effective tax rate may change significantly, which could materially impact our financial results, including our earnings and cash flow, for periods after the U.S. Domestication, 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 these income tax laws, regulations and treaties in various jurisdictions, including other than 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 our ability 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.

***The market for our common stock may differ from the market for the Penguin Solutions Cayman ordinary shares and the market price of our common stock may as a result be subject to volatility.***

The market price, trading volume or volatility, or potential investor pool of our common stock may be different from those of the Penguin Solutions Cayman ordinary shares.

As a result, the market price of our common stock could be subject to wide fluctuations, which may be unrelated to the Penguin Solutions group of companies' operating performance and prospects but nevertheless affect the price of our common stock. This volatility may affect the ability of holders of our common stock to sell their shares at an advantageous price.

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***Anti-takeover provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could delay, defer, discourage, or prevent a takeover attempt.***

Our amended and restated certificate of incorporation and amended and restated bylaws contain, and the General Corporation Law of the State of Delaware (the "Delaware General Corporation Law") contains, provisions which could have the effect of delaying, deferring, discouraging or preventing acquisitions of the Company that some stockholders may favor. These provisions provide for the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• a classified board of directors with three-year staggered terms, who can only be removed for cause, and only by the affirmative vote of the holders of at least 66 2/3% of the voting power of all then-outstanding voting stock entitled to vote at an election of directors, which may delay the ability of stockholders to change the membership of a majority of our board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the exclusive right of our board of directors to set the size of the board of directors and to elect a director to fill a vacancy, however occurring, including by an expansion of the board of directors, which prevents stockholders from being able to fill vacancies on our board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our board of directors to authorize the issuance of shares of undesignated preferred stock and to determine the price and other terms of those shares, including voting or other rights or preferences, without stockholder approval, which could impede the success of any attempt to change control of the Company and be used to significantly dilute the ownership of a hostile acquirer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• in addition to our board of directors' ability to adopt, amend, or repeal our amended and restated bylaws, our stockholders may adopt, amend, or repeal our amended and restated bylaws only with the affirmative vote of the holders of at least 66 2/3% of the voting power of the outstanding shares of voting stock of the Company entitled to vote generally in an election of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the required approval of at least 66 2/3% of the voting power of all then outstanding shares of the Company entitled to vote thereon, voting together as a single class, to adopt, amend, or repeal certain provisions of our amended and restated certificate of incorporation;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement that any action required or permitted to be taken by its stockholders must be effected at a duly called annual or special meeting of its stockholders and may not be taken by written consent in lieu of a meeting; however, any action required or permitted to be taken by the holders of the CPS, voting separately as a series or class, may be taken by written consent;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the requirement that a special meeting of stockholders may be called only by or at the direction of our board of directors, the chairperson of our board of directors, or our chief executive officer or president, thus prohibiting a stockholder from calling a special meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to bring other business before a stockholders' meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• certain litigation against us can only be brought in Delaware; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the limitation of liability of, and provision of indemnification to, our directors and officers.

These provisions, alone or together, could delay, defer, discourage or prevent hostile takeovers and changes in control or changes in our management. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire.

As a Delaware corporation, we are also subject to provisions of the Delaware General Corporation Law, including Section 203 thereof, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of our outstanding common stock.

Any provision of our amended and restated certificate of incorporation, amended and restated bylaws or the Delaware General Corporation Law that has the effect of delaying, deferring, discouraging or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

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***Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.***

Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law.

In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered or intend to enter into with our directors and officers provide that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we will indemnify our directors and officers to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to any criminal proceeding, had no reasonable cause to believe such person's conduct was unlawful;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we are required to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, except that such directors or officers will undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers, employees, and agents.

Our directors' and officers' liability insurance policies may not be available to us in the future at a reasonable rate, may not cover all potential claims for indemnification, and may not be adequate to indemnify us for all liability that may be imposed.

***Our amended and restated certificate of incorporation provides for an exclusive forum in the Court of Chancery of the State of Delaware for certain disputes between us and our stockholders, and that the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act.***

Our amended and restated certificate of incorporation provides that unless we consent in writing to the selection of an alternative forum, (a) the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, the federal district court for the District of Delaware or other state courts of the State of Delaware) will, to the fullest extent permitted by law, be the sole and exclusive forum for: (i) any derivative action, suit or proceeding brought on behalf of the Company, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder to the Company or our stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the Delaware General Corporation Law or our amended and restated certificate of incorporation or amended and restated bylaws (as either may be amended from time to time), or (iv) any action, suit or proceeding asserting a claim against the Company that is governed by the internal affairs doctrine; and (b) the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause or causes of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant to such complaint.

Any person or entity purchasing or otherwise acquiring any interest in any security of the Company will be deemed to have notice of and consented to these provisions. Nothing in our amended and restated certificate of incorporation or amended and restated bylaws precludes stockholders that assert claims under the Exchange Act, from bringing such claims in federal court to the extent that the Exchange Act confers exclusive federal jurisdiction over such claims, subject to applicable law.

We believe these provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. If a court were to find the choice of forum provision that is contained in our amended and restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, results of operations, and financial condition. For example, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts

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The choice of forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our current or former director, officer or stockholder to the Company, which may discourage such claims against us or any of our current or former director, officer or stockholder to the Company and result in increased costs for investors to bring a claim.

***Tariffs, other trade restrictions, or taxes have had in the past and could have in the future, an adverse impact on our business, operations, and financial results.***

We source materials from, manufacture products in, and sell products in foreign countries, including China, making the price and availability of our merchandise susceptible to international trade risks and other international conditions. For example, any economic and political uncertainty caused by the U.S. tariffs imposed on goods from China and other countries by the current administration, and any corresponding tariffs or currency devaluations from China or such other countries in response, has negatively impacted, and may in the future negatively impact, demand and/or has in the past increased, or may in the future increase, the cost for certain of our products, particularly within our LED business. In addition, many of our customers also rely on international trade and may experience impacts similar to our own, which could in turn affect their relationship with us. Furthermore, the imposition of additional tariffs, duties, border adjustment taxes or other trade restrictions by the United States could result in the adoption of additional or increased tariffs or other trade restrictions by other countries. Tariffs may in the future increase our cost of materials and may cause us to increase prices to our customers, which we believe may reduce demand for our products. Our price increases may not be sufficient to fully offset the impact of tariffs and may result in lowering our margin on products sold. In sum, if the United States Government increases or implements additional tariffs, or if additional tariffs or trade restrictions are implemented by other countries, the resulting trade barriers could have a significant adverse impact on our suppliers, our customers and on our business. The volatility and unpredictability of international trade policies and conditions add further complexity to our operations, making it challenging to forecast and plan effectively. We are not able to predict future trade policy of the United States (including any potential changes in U.S. trade policy if there is a change in administration) or of any foreign countries in which we operate or purchase goods, or the terms of any trade agreements or their impact on our business. The adoption and expansion of trade restrictions and tariffs, quotas and embargoes, the occurrence or threat of a trade war or other governmental action related to tariffs or trade agreements or policies, has the potential to adversely impact demand for our products, our costs, our customers, our suppliers and the world and U.S. economies, which in turn could have a material adverse effect on our business, operating results and financial condition.

***Our credit agreement may limit our flexibility in operating our business.***

We, through Penguin Solutions Cayman and SMART Modular Technologies, as Borrowers, are party to the 2025 Credit Agreement, as described in more detail in "PART I – Item 1. Financial Statements– Notes to Consolidated Financial Statements – Subsequent Events." This agreement contains, and future credit agreements may contain, restrictive covenants that limit our ability to engage in specified transactions and prohibit us from voluntarily prepaying certain of our other indebtedness. For instance, the covenants in our 2025 Credit Agreement limit the ability of Penguin Solutions Cayman and certain of its subsidiaries to, among other things:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• incur additional indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• create liens on assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• engage in mergers or consolidations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sell assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• pay dividends, make distributions or repurchase capital stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make investments, loans or advances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• repay or repurchase certain subordinated debt (except as scheduled or at maturity);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make certain acquisitions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• engage in certain transactions with affiliates; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• amend material agreements governing our subordinated debt and fundamentally change our business.

Under the 2025 Credit Agreement, we also are required to satisfy and maintain certain specified financial ratios. Our ability to meet those financial ratios could be affected by events beyond our control, and there can be no assurance that we will meet those ratios.

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The failure to comply with any of these covenants would cause a default under the 2025 Credit Agreement. A default, if not waived, could result in acceleration of the outstanding indebtedness under the 2025 Credit Agreement as well as under our outstanding Convertible Senior Notes, in which case such indebtedness would become immediately due and payable. If any default occurs, we may not be able to pay our debt or borrow sufficient funds to refinance it. Even if new financing is available, it may not be available on terms that are acceptable to us. Complying with these covenants may cause us to take actions that we otherwise would not take or not take actions that we otherwise would take.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

**Issuer Purchases of Equity Securities**

On April 5, 2022, we announced that our Board of Directors approved a $75.0 million share repurchase authorization (the "Initial Authorization"), under which we may repurchase our outstanding ordinary shares from time to time through open market purchases, privately-negotiated transactions or otherwise. On January 9, 2024, we announced that the Audit Committee of the Board of Directors approved an additional $75.0 million share repurchase authorization (the "Additional Authorization," and together with the Initial Authorization, the "Current Authorization"). The Current Authorization, which consists solely of amounts approved pursuant to the Additional Authorization as all amounts under the Initial Authorization have been utilized, has no expiration date but may be suspended or terminated by the Board of Directors at any time. As of May 30, 2025, the remaining aggregate dollar value of shares that may be repurchased under the Current Authorization was $36.8 million. Certain of our agreements, including the 2025 Credit Agreement, the SKT Purchase Agreement and the CPS Certificate of Designation relating to the SKT Investment, contain restrictions that limit our ability to repurchase our shares of common stock.

The following table sets forth information relating to repurchases of our equity securities during the three months ended May 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total number of shares purchased** | **Average price paid per share** | **Total number of shares purchased as part of publicly announced plans or programs** | **Approximate dollar value of shares that may yet be purchased under the plans or programs** |
| March 1, 2025 - March 28, 2025 |  | $— |  | $66616000 |
| March 29, 2025 - April 25, 2025 | 1425200 | $16.03 | 1425200 | $43768000 |
| April 26, 2025 - May 30, 2025 | 397100 | $17.53 | 397100 | $36805000 |
|  | 1822300 | $16.36 | 1822300 |  |

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**Item 3. Defaults Upon Senior Securities**

None.

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

On April 21, 2025, Jack Pacheco, our Executive Vice President, Chief Operating Officer, and President, Integrated Memory, adopted a Rule 10b5-1 trading arrangement (the "Pacheco 10b5-1 Plan") that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Pacheco 10b5-1 Plan provides for the sale of up to 63,447 shares of common stock acquired upon the exercise of stock options, subject to pre-established limit prices, commencing on July 21, 2025 and continuing until all shares are sold or until December 31, 2025, whichever occurs first.

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| | |
|:---|:---|
| 50 | ![logo.jpg](sgh-20250530_g1.jpg) |

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During the fiscal quarter ended May 30, 2025, no other officers or directors of Penguin Solutions adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" (in each case, as defined in Item 408 of Regulation S-K).

**Item 6. Exhibits**

**INDEX TO EXHIBITS**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** | **Incorporated by Reference** |
|<br>**Exhibit<br>No.** |<br>**Description** |<br>**Filed<br>Herewith** | **Form** | **File No.** | **Exhibit** | **Filing<br>Date** |
| 3.1 | [Amended and Restated](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex31.htm)[Certificate](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex31.htm)[of](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex31.htm)[Incorporation](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex31.htm)[of Penguin Solutions, Inc.](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex31.htm)[, effective as of June 27, 2025](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex31.htm) |  | 8-K12B | 001-38102 | 3.1 | 06/30/2025 |
| 3.2 | [Certificate of Designation of Convertible Preferred Stock, effective as of June 27, 2025](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex32.htm) |  | 8-K12B | 001-38102 | 3.2 | 06/30/2025 |
| 3.3 | [Amended and Restated Bylaws](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex33.htm)[of](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex33.htm)[Penguin Solutions, Inc](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex33.htm)[.](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex33.htm)[, effective as](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex33.htm)[of](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex33.htm)[June 27, 2025](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex33.htm) |  | 8-K12B | 001-38102 | 3.3 | 06/30/2025 |
| 4.1 | [F](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex41.htm)[orm of Common Stoc](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex41.htm)[k Certificate](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex41.htm) |  | S-8 POS | 333-286347 | 4.1 | 06/30/2025 |
| 4.2 | [Second Supplemental Indenture in respect of the 2026 Notes](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[, dated as of](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[June 30](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[,](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[2025](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[, by and](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[among Penguin Solutions Delaware, Penguin Solutions Cayman](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[and](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[U.S. Bank Trust Company](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[,](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)[National Association, a national banking association organized under the laws of the United States of America, as trustee](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex41.htm)  |  | 8-K12B | 001-38102 | 4.1 | 06/30/2025 |
| 4.3 | [First Supplemental Indenture in respect of the 2029 Notes, dated as of June 30, 2025,](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[by and](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[among Penguin Solutions Delaware](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[,](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[Penguin Solutions Cayman](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[and](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[U.S. Bank Trust Company](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[,](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[National Association, a national banking association organized under the laws](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[of](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[the United States of America](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[,](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)[as trustee](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex42.htm)  |  | 8-K12B | 001-38102 | 4.2 | 06/30/2025 |
| 4.4 | [First Supplemental Indenture in respect of the 2030 Notes, dated as of June 30, 2025, by and among Penguin Solutions Delaware, Penguin Solutions Cayman and U.S. Bank Trust Company, National Association, a national banking association organized under the laws of the United States of America, as trustee](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex43.htm) |  | 8-K12B | 001-38102 | 4.3 | 06/30/2025 |
| 4.5 | [Amended and Restated Investor Agreement, dated as of June 30, 2025, by and between Penguin Solutions Delaware and Astra AI Infra LLC](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex44.htm) |  | 8-K12B | 001-38102 | 4.4 | 06/30/2025 |
| 10.1† | [Credit Agreement, dated as of June 24, 2025, by and among Penguin Solutions, Inc., SMART Modular Technologies, Inc., the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent and an Issuing Bank](https://www.sec.gov/Archives/edgar/data/1616533/000119312525147869/d81707dex101.htm) |  | 8-K | 001-38102 | 10.1 | 06/26/2025 |
| 10.2 | [Form of](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[I](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[ndemnification and](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[A](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[dvancement](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[A](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[greement for](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[D](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[irectors and](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[O](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)[fficers](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex101.htm)  |  | 8-K12B | 001-38102 | 10.1 | 06/30/2025 |
| 10.3\* | [Independent Director Compensation Policy](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex102.htm)  |  | 8-K12B | 001-38102 | 10.2 | 06/30/2025 |
| 10.4\* | [The Registrant's Amended and Restated 2017 Stock Incentive](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex103.htm)[Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex103.htm) |  | 8-K12B | 001-38102 | 10.3 | 06/30/2025 |
| 10.5\* | [The Registrant's Amended and Restated 2018 Employee Stock Purchase Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex104.htm) |  | 8-K12B | 001-38102 | 10.4 | 06/30/2025 |
| 10.6\* | [The Registrant's Amended and Restated 2021 Inducement Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex105.htm) |  | 8-K12B | 001-38102 | 10.5 | 06/30/2025 |
| 10.7\* | [The Registrant's Form of Restricted Stock Unit Award Agreement (Stock-Settled) under the Penguin Solutions, Inc. Amended and Restated 2017 Stock Incentive Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex994.htm) |  | S-8 POS | 333-286347 | 99.4 | 06/30/2025 |
| 10.8\* | [The Registrant's Form of Restricted Stock Unit Award Agreement (Cash-Settled) under the Penguin Solutions, Inc. Amended and Restated 2017 Stock Incentive Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex995.htm) |  | S-8 POS | 333-286347 | 99.5 | 06/30/2025 |

---

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|:---|:---|
| 51 | ![logo.jpg](sgh-20250530_g1.jpg) |

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---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| 10.9\* | [The Registrant's Form of Restricted Stock Unit Award Agreement (Stock-Settled) under the Penguin Solutions, Inc. Amended and Restated 2021 Inducement Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex996.htm) |  | S-8 POS | 333-286347 | 99.6 | 06/30/2025 |
| 10.10\* | [The Registrant's Form of Restricted Stock Unit Award Agreement (Cash-Settled) under the Penguin Solutions, Inc. Amended and Restated 2021 Inducement Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex997.htm) |  | S-8 POS | 333-286347 | 99.7 | 06/30/2025 |
| 10.11\* | [The Registrant's Form of Performance Stock Unit Award Agreement under the Penguin Solutions, Inc. Amended and Restated 2017 Stock Incentive Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex998.htm) |  | S-8 POS | 333-286347 | 99.8 | 06/30/2025 |
| 10.12\* | [The Registrant's Form of Performance Stock Unit Award Agreement under the Penguin Solutions, Inc. Amended and Restated 2021 Inducement Plan](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex999.htm) |  | S-8 POS | 333-286347 | 99.9 | 06/30/2025 |
| 10.13\* | [Offer Letter, dated as of August 12, 2020, by and between the Registrant and Mark Adams](https://www.sec.gov/Archives/edgar/data/1616533/000095010320015787/dp134424_ex1001.htm) |  | 8-K | 001-38102 | 10.1 | 08/13/2020 |
| 10.14\* | [Offer Letter](https://www.sec.gov/Archives/edgar/data/1616533/000162828024015494/sghq2-24form10xqex101.htm)[, dated as of Septembe](https://www.sec.gov/Archives/edgar/data/1616533/000162828024015494/sghq2-24form10xqex101.htm)[r 6, 202](https://www.sec.gov/Archives/edgar/data/1616533/000162828024015494/sghq2-24form10xqex101.htm)[2,](https://www.sec.gov/Archives/edgar/data/1616533/000162828024015494/sghq2-24form10xqex101.htm)[by and between](https://www.sec.gov/Archives/edgar/data/1616533/000162828024015494/sghq2-24form10xqex101.htm)[the Registrant](https://www.sec.gov/Archives/edgar/data/1616533/000162828024015494/sghq2-24form10xqex101.htm)[and Joseph Clark](https://www.sec.gov/Archives/edgar/data/1616533/000162828024015494/sghq2-24form10xqex101.htm) |  | 10-Q | 001-38102 | 10.1 | 04/09/2024 |
| 10.15\* | [Amended and Restated Offer Letter, effective as of September 25, 2023, by and between the Registrant and Anne Kuykendall](https://www.sec.gov/Archives/edgar/data/1616533/000162828025016182/pengq2-25form10qxex101.htm) |  | 10-Q | 001-38102 | 10.1 | 04/02/2025 |
| 10.16\* | [Amended and Restated Offer Letter, dated as of May 23, 2024, by and between the Registrant and Peter Manca](https://www.sec.gov/Archives/edgar/data/1616533/000162828024043646/pengq4-24form10xkex1015.htm) |  | 10-K | 001-38102 | 10.15 | 10/24/2024 |
| 10.17\* | [Offer Letter, dated as of June 18, 2024, by and between the Registrant and Nathan Olmstead](https://www.sec.gov/Archives/edgar/data/1616533/000162828024031519/sghq3-24form10xqex102.htm) |  | 10-Q | 001-38102 | 10.2 | 07/09/2024 |
| 10.18\* | [Transition Agreement](pengq3-25form10xqxex1018.htm)[, effective](pengq3-25form10xqxex1018.htm)[as of April 10, 2025,](pengq3-25form10xqxex1018.htm)[by and between SMART Modular Technologies, Inc. and Jack Pacheco](pengq3-25form10xqxex1018.htm) | X |  |  |  |  |
| 31.1 | [Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](pengq3-25form10xqex311.htm) | X |  |  |  |  |
| 31.2 | [Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](pengq3-25form10xqex312.htm) | X |  |  |  |  |
| 32.1\*\* | [Certification of C](pengq3-25form10xqex321.htm)[hief](pengq3-25form10xqex321.htm)[Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](pengq3-25form10xqex321.htm) | X |  |  |  |  |
| 32.2\*\* | [Certification of C](pengq3-25form10xqex322.htm)[hief](pengq3-25form10xqex322.htm)[Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](pengq3-25form10xqex322.htm) | X |  |  |  |  |
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | X |  |  |  |  |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X |  |  |  |  |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X |  |  |  |  |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X |  |  |  |  |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X |  |  |  |  |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X |  |  |  |  |

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| 52 | ![logo.jpg](sgh-20250530_g1.jpg) |

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104 Cover Page Interactive Data File (embedded within the Inline XBRL document) X

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|:---|:---|
| † | Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request. |
| \* | Constitutes a management contract or compensatory plan or arrangement. |
| \*\* | The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report, irrespective of any general incorporation language contained in such filing. |

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| 53 | ![logo.jpg](sgh-20250530_g1.jpg) |

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**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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| | | |
|:---|:---|:---|
| | **Penguin Solutions, Inc.** | **Penguin Solutions, Inc.** |
| Date: July 8, 2025 | By: | /s/ Mark Adams |
|  |  | Mark Adams |
|  |  | President and Chief Executive Officer |
|  |  | (Principal Executive Officer) |
| Date: July 8, 2025 | By: | /s/ Nate Olmstead |
|  |  | Nate Olmstead |
|  |  | Senior Vice President and Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

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|:---|:---|
| 54 | ![logo.jpg](sgh-20250530_g1.jpg) |

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## Exhibit 10.18

**EXHIBIT 10.18**

**Transition Agreement**

This Transition Agreement (the "**Agreement**") is entered into by and between Jack Pacheco (the "**Employee**") and SMART Modular Technologies, Inc. (together with Penguin Solutions, Inc. ("**Penguin**"), the "**Company**"), effective as of the eighth day after the date the Employee signs this Agreement (the "**Effective Date**"), if not revoked in accordance with Section 6(b). Reference is made to that certain Amended and Restated Employment Agreement between the Employee and the Company dated December 19, 2017 (the "**Employment Agreement**"). In consideration of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree to the terms set forth in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>Retirement Date</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Employee intends to retire from the Employee's role as an employee of the Company and each of its affiliates (together, the "**Company Entities**") effective as of December 31, 2025 (the "**Scheduled Retirement Date**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The parties agree that the Employee's status as an employee of the Company shall end effective as of the earliest of (i) the Scheduled Retirement Date, (ii) the date the Company terminates the Employee's employment for any reason, (iii) the date the Employee voluntarily resigns the Employee's employment for any reason, or (iv) the date of the Employee's death or Disability (as defined in the Employment Agreement) (the earliest such date, the "**Retirement Date**"). The parties further agree that the Employee's status as an officer of each Company Entity shall end effective as of the earlier of the Retirement Date or the Officer Transition Date (as defined below). The Employee hereby agrees to execute such further document(s) as shall be determined by the Company as necessary or desirable to give effect to the termination of the Employee's status as an officer of each Company Entity as of such earlier date, provided that such documents shall not be inconsistent with any of the terms of this Agreement. Nothing in this Agreement affects the Employee's status as an "at-will" employee of the Company while employed by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.<u>Employment Period</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The period from the Effective Date through the Retirement Date is referred to herein as the "**Employment Period**."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)During the period commencing on the Effective Date and ending on the earlier of (i) the date the Company appoints a new Chief Operating Officer ("**COO**") or President of Integrated Memory, or reassigns the responsibilities of either role to other Company employees (the "**Transition Date**") or (ii) the Retirement Date, the Employee shall (A) remain employed by the Company as the Company's COO and President of Integrated Memory, and (B) continue to perform substantially the same duties and responsibilities as the Employee currently provides to the Company or as otherwise reasonably requested by Penguin's Chief Executive Officer (the "**CEO**") or Penguin's board of directors (the "**Board**").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)If the Transition Date occurs before the Retirement Date, then during the period commencing on the Transition Date and ending on the Retirement Date, (i) the Employee shall no longer serve as COO and/or President of Integrated Memory to the extent the titles or responsibilities of such roles are assigned to other Company employees, but shall remain employed by the Company in the

------

remaining role (if any) until the remaining role's title or responsibilities are assigned to other Company employees (the date all such titles or responsibilities have been assigned to others, the "**Officer Transition Date**"), and (ii) commencing on the Officer Transition Date, the Employee shall remain employed as a Special Advisor reporting to the CEO and provide transition services as shall be assigned by the CEO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)During the Employment Period, the Employee shall continue to be paid the Employee's base salary at the rate in effect on the date of this Agreement, be eligible for all employee benefit plans available to senior executives of the Company and be eligible to vest into the Penguin equity incentive awards held by the Employee in accordance with their terms. Notwithstanding anything to the contrary in this Section 2, the Employee shall not be eligible for an annual bonus opportunity with respect to the Company's 2026 fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Once the Retirement Date occurs, the Company will pay the Employee (i) all then- accrued but unpaid base salary as soon as administratively practicable on or after the Retirement Date, and (ii) any then-earned but unpaid annual bonus for the Company's 2025 fiscal year at the same time such annual bonuses are paid to the Company's other executives, subject in each case to standard payroll deductions and withholdings (the "**Accrued Amounts**"). The Employee shall not be eligible for any severance payments or benefits in connection with the termination of the Employee's employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Consulting Period</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Provided that the Company does not terminate the Employee's status as an employee on the Retirement Date for Cause (as defined below), during the period (the "**Consulting Period**") commencing on the day after the Retirement Date and ending on the earliest of (i) the first anniversary of the Retirement Date, (ii) the date the Employee takes any action that constitutes Cause, (iii) the date the Employee ceases to provide or remain available to provide the Transition Services (as defined below), (iv) any termination date specified by the Employee, provided that the Employee has given the Company at least 30 days' prior written notice of such termination date, or (v) the date of the Employee's death or Disability, the Employee will serve as an independent contractor to the Company and shall provide the following transition services (the "**Transition Services**"): advice to the Company's CEO, Chief Financial Officer, President of Integrated Memory, Vice President of Operations, or any individual with those responsibilities, on an as-requested and as-needed basis in the Employee's areas of expertise and work experience and responsibility. As used herein, "**Cause**" has the meaning set forth in the Employment Agreement, except references therein to "this Agreement" shall be deemed to refer to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)During the Consulting Period, subject to the Employee's (i) compliance with this Agreement and (ii) delivery to the Company of a Supplemental Release (as defined below) within the time period specified in Section 6(d) below that becomes effective and irrevocable, the Employee shall continue to vest in his outstanding Penguin equity incentive awards that are subject solely to service-based vesting in accordance with their terms, and the Employee's Penguin share options shall remain outstanding and exercisable pursuant to their terms (the "**Continued Vesting**"), but he shall not be entitled to any other compensation during the Consulting Period. On the Retirement Date, the Employee's outstanding Penguin performance share unit awards shall be forfeited. At the end of the Consulting Period, all of the Employee's then-outstanding and unvested Penguin equity incentive awards shall be forfeited in accordance with their terms, and the Employee's then-outstanding and vested

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Penguin share options shall remain outstanding and exercisable for the period of time set forth in the award agreements for such share options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)During the Consulting Period, the Employee shall act solely as an independent contractor with respect to the Company, and as such, shall not be authorized to and shall not seek or attempt to bind, represent or speak on behalf of the Company to third parties without the prior written consent of the Company. The Employee shall be solely responsible for the payment of any federal, state, or local income or self-employment taxes imposed on him with respect to any amounts paid to the Employee in respect of the Consulting Period. During the Consulting Period the Employee shall not be eligible to participate in the benefit plans of the Company, including without limitation, any retirement, pension, profit sharing, group insurance, health insurance or similar plans, if any, that have been or may be instituted by the Company for the benefit of its employees; provided that the Employee may participate in the benefit plans of the Company in his status as a former employee of the Company where applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Other Matters Related to Retirement</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Employee acknowledges and agrees that the Accrued Amounts will be in complete satisfaction of any and all amounts due to the Employee from any Company Entity as a result of the Employee's employment through the Retirement Date and the termination thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Except for any right the Employee may have to healthcare coverage through the last day of the month in which the Retirement Date occurs, as well as his right to continue his participation and that of his eligible dependents in the Company's medical, dental, and vision plans under COBRA, the Employee's participation in all employee benefit plans of the Company will end as of the Retirement Date, in accordance with the terms of those plans. The Employee acknowledges that he will not earn paid time off or other similar benefits after the Retirement Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Within 30 days following the Retirement Date, the Employee must submit his final expense reimbursement statement reflecting all business expenses the Employee incurred through the Retirement Date, if any, for which the Employee seeks reimbursement, and, in accordance with Company policy, reasonable substantiation and documentation for the same. The Company will reimburse the Employee for the Employee's authorized and documented expenses within 30 days of receiving such statement pursuant to its regular business practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Employee agrees to return to the Company, on or before the Retirement Date, (i) any documents and other materials (whether in hardcopy, on electronic media or otherwise) related to the business of the Company Entities (in each case to the extent that such documents and other materials contain confidential information of the Company Entities) and (ii) any keys, access cards, credit cards, computer hardware and software, telephones and telephone-related equipment and any other similar property of any of the Company Entities in the Employee's possession or control. The Employee agrees to provide to the Company, on or before the Retirement Date, passwords necessary or desirable to obtain access to, or that would assist in obtaining access to, all information which the Employee has password-protected on any computer equipment, network or system of any of the Company Entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The Employee will be deemed to have resigned from any and all positions and offices that the Employee holds with the Company Entities as of the Retirement Date, without any further action required therefor (collectively, the "**Resignations**"). The Company, on its own behalf and on behalf of each of the Company Entities, hereby accepts the Resignations as of the Retirement Date, and

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the Employee agrees to sign and return such documents confirming the Resignations as the Company may reasonably require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.<u>Certain Covenants and Agreements</u>. The Employee hereby reaffirms and agrees to comply with the covenants and agreements set forth in Sections 7 and 8 of the Employment Agreement, provided that (i) the restrictions set forth in Section 7 of the Employment Agreement shall only remain in effect until the Retirement Date, and (ii) the restrictions set forth in Section 8 of the Employment Agreement shall remain in effect during and following the Consulting Period to the same extent as if the Employee were an employee of the Company during the Consulting Period (the foregoing covenants and agreements, the "**Restrictive Covenants**"). Additionally, the Employee agrees not to defame or disparage any Company Entity or any executive, manager, employee, director, or officer of any Company Entity in any medium to any person, provided that the Employee may confer in confidence with the Employee's legal representatives and make truthful statements as required by law. The Employee agrees to cooperate with the Company in the defense of any legal matter involving any matter that arose during the Employee's employment with any Company Entity, and with all government authorities on matters pertaining to any investigation, litigation or administrative proceedings pertaining to any Company Entity; provided that the Company will reimburse the Employee for any reasonable travel and out of pocket expenses the Employee incurs in providing such cooperation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.<u>Release</u>. The Employee hereby agrees to the following provisions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)In consideration for the benefits outlined in this Agreement, to which the Employee is not otherwise entitled, the Employee, on the Employee's own behalf and on behalf of the Employee's heirs, family members, executors, agents, and assigns, hereby releases the Company as follows (the "**Release**"): the Employee generally and completely releases the Company Entities and their directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns (together with the Company Entities, the "**Released Parties**") from any and all claims, demands, damages, loss, cost or expense, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called "**Claims**"), which the Employee now has or may hereafter have against the Released Parties, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof, including, without limiting the generality of the foregoing, any Claims arising out of, based upon, or relating to the Employee's hire, employment, separation from employment, or remuneration by the Released Parties, or any of them, including Claims arising under federal, state, or local laws relating to employment, Claims of any kind that may be brought in any court or administrative agency, any Claims arising under the Age Discrimination in Employment Act (the "**ADEA**"); Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991; the Equal Pay Act; the Civil Rights Act of 1866; the Family and Medical Leave Act of 1993; the Americans with Disabilities Act of 1990; the False Claims Act; the Employee Retirement Income Security Act; the Worker Adjustment and Retraining Notification Act; the Fair Labor Standards Act; the Sarbanes-Oxley Act of 2002; the California Credit Reporting Agencies Act; the California Fair Employment and Housing Act; the California Family Rights Act, the California WARN Act; and the California Labor Code; each as amended; and any and all other federal, state and local laws, statutes, executive orders, regulations municipal ordinances, common law, and any other jurisdiction worldwide; Claims for breach of contract; Claims arising in tort, including, without limitation, Claims of

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wrongful dismissal or discharge, discrimination, harassment, retaliation, fraud, misrepresentation, defamation, libel, infliction of emotional distress, violation of public policy, and/or breach of the implied covenant of good faith and fair dealing; and Claims for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive damages, injunctive relief and attorney's fees. This Release does not apply to (x) any claims which cannot be released as a matter of law, (y) any rights under this Agreement, or (z) any claims that Employee may have as a result of the indemnifications that employee may be entitled to as a current or former officer or director of any of the Company Entities as a matter of common law or under the Company's indemnification and directors and officers insurance coverage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Employee acknowledges that the Employee is knowingly and voluntarily waiving and releasing any rights the Employee has under the ADEA, and the applicable rules and regulations promulgated thereunder, and that the consideration given for the waiver and release is in addition to anything of value to which the Employee was already entitled. The Employee further acknowledges that the Employee has been advised by this writing, as required by the ADEA, that: (i) the Employee's waiver and release under this Agreement does not apply to any rights or claims that arise after the date the Employee signs this Agreement; (ii) the Employee has the right to consult with an attorney prior to signing this Agreement; (iii) the Employee has up to 21 days after the date this Agreement was first presented to the Employee to consider this Agreement (although the Employee may choose voluntarily to sign this Agreement earlier), and in the event of any changes to this Agreement, whether or not material, the Employee waives the restarting of the 21 day period; (iv) the Employee has seven days after the Employee signs this Agreement to revoke it; and (v) this Agreement will not be effective until the date on which the revocation period has expired, which will be the eighth day after the date the Employee signs this Agreement, assuming the Employee has returned it to the Company by such date. In addition, the Employee acknowledges that he has seven calendar days following his execution of the Supplemental Release (as defined below) to revoke the Supplemental Release; *provided* that any revocation of the Supplemental Release shall revoke only his release of claims that were not otherwise released upon his initial execution and non-revocation of this Agreement. In order to revoke this Agreement or the Supplemental Release, the Employee must provide written notice that he is revoking it within the applicable seven-day timeframe to Anne Kuykendall at [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In granting the general release herein, the Employee acknowledges that the Employee has read and understands California Civil Code section 1542, which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

The Employee expressly waives and relinquishes all rights and benefits under that section and any law of any jurisdiction of similar effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Employee hereby agrees to re-execute the Release and confirm the representations set forth in this Section 6 on or within five business days after the Retirement Date by signing the second signature line on the signature page hereto (the "**Supplemental Release**") and delivering a copy to the Company.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.<u>Cessation of Benefits</u>. In the event that the Employee (i) commits a material breach of this Agreement, (ii) files any charge, claim, demand, action or arbitration with regard to the Employee's employment, compensation or termination of employment under any federal, state, local or foreign law, or an arbitration under any industry regulatory entity, except in either case for a claim for breach of this Agreement or failure to honor the obligations set forth herein or (iii) materially violates any of the Restrictive Covenants, the Employee will immediately forfeit any right to the Continued Vesting, and, to the extent permitted by applicable law, all of the Employee's Penguin equity incentive awards that have vested during the Consulting Period shall immediately be forfeited for no consideration and to the extent that any such awards have been previously settled in ordinary shares of Penguin, the Employee shall be required to return such shares or their equivalent cash value to Penguin. Notwithstanding the foregoing, if an alleged breach of this Agreement or violation of a Restrictive Covenant (a) occurs more than 12 months after the end of the Consulting Period and (b) does not relate to any non-disparagement or confidentiality obligations of the Employee, the Employee will not be required to repay or forfeit amounts as set forth in this Section 7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.<u>Certain Exceptions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Nothing in this Agreement or otherwise limits the Employee's ability to (i) communicate directly with, cooperate with or provide information, including documents, not otherwise protected from disclosure by any applicable law or privilege, to any federal, state or local government agency or commission (each, a "**Government Agency**"), including without limitation the U.S. Securities and Exchange Commission (the "**SEC**"), the U.S. Commodity Futures Trading Commission, the U.S. Department of Justice, the U.S. Equal Employment Opportunity Commission, or the U.S. National Labor Relations Board, without notifying or seeking permission from the Company, (ii) exercise any rights the Employee may have under Section 7 of the U.S. National Labor Relations Act, or (iii) discuss or disclose information about unlawful acts in the workplace, such as harassment or discrimination based on a protected characteristic or any other conduct that Employee has reason to believe is unlawful. The Company may not retaliate against the Employee for any of these activities, and nothing in this Agreement requires the Employee to waive any monetary award or other payment that the Employee might become entitled to from the SEC or any other Government Agency or self-regulatory organization. Moreover, nothing in this Agreement or otherwise prohibits the Employee from notifying the Company that the Employee is going to make a report or disclosure to law enforcement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Further, nothing in this Agreement precludes the Employee from filing a charge of discrimination or unfair labor practice with the U.S. Equal Employment Opportunity Commission or a like charge or complaint with a state or local fair employment or labor Government Agency. However, the Employee may not receive a monetary award or any other form of personal relief from the Company in connection with any such charge or complaint that the Employee has filed or is filed on the Employee's behalf.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Pursuant to the Defend Trade Secrets Act of 2016, the Employee and the Company acknowledge and agree that the Employee will not have criminal or civil liability under any federal or state trade secret law for the disclosure of a trade secret that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition and without limiting the preceding sentence, if the Employee files a lawsuit for retaliation by the Company for

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reporting a suspected violation of law, the Employee may disclose the trade secret to the Employee's attorney and may use the trade secret information in the court proceeding, if the Employee (x) files any document containing the trade secret under seal and (y) does not disclose the trade secret, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.<u>Indemnification and D&O Coverage</u>. Nothing in this Agreement will adversely affect the Employee's rights with respect to Company provided indemnification and directors and officers ("**D&O**") insurance coverage relating to the Employee's services with the Company, whether before or after the Effective Date. In addition, the Employee will continue to have full rights to Company provided indemnification and D&O insurance coverage with respect to the Transition Services provided hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.<u>Section 409A</u>. This Agreement and the payments to be made hereunder are intended to comply with, or be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder ("**Section 409A**") and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and construed to be in compliance therewith or exempt therefrom. For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), the Employee's right to receive any installment payments under this Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment. The Company and the Employee acknowledge that the termination of the Employee's employment with the Company is intended to constitute an involuntary separation from service for purposes of Section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.<u>Miscellaneous</u>. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to such subject matter, including without limitation the Employment Agreement. The provisions and obligations of this Agreement that are intended to survive upon termination of this Agreement shall survive. This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the laws of the State of California without regard to its principles of conflict of laws. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. No amendment, modification, termination or waiver of any provisions of this Agreement and no consent to any departure by any party therefrom shall in any event be effective unless the same shall be in writing and signed by the parties hereto, and then such waiver or consent shall be effective only in the given instance and for the specific purpose for which given.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.<u>Assignment</u>. Neither this Agreement nor any right or interest hereunder shall be assignable by the Employee, his beneficiaries or legal representatives without the Company's prior written consent. The Company may assign this Agreement to any successor or assign (whether directly or indirectly, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company. This Agreement shall inure to the benefit of the Company and its permitted successors and assigns.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates set forth below.

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| | |
|:---|:---|
| **SMART MODULAR TECHNOLOGIES, INC.** | **SMART MODULAR TECHNOLOGIES, INC.** |
| By: | /s/ Nate Olmstead |
|  | Name:&nbsp;&nbsp;&nbsp;&nbsp;Nate Olmstead |
| Date: | Title:&nbsp;&nbsp;&nbsp;&nbsp;President<br>01 April 2025 |

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**THE EMPLOYEE HEREBY ACKNOWLEDGES THAT THE EMPLOYEE HAS READ THIS AGREEMENT, THAT THE EMPLOYEE FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT THE EMPLOYEE HEREBY ENTERS INTO THIS AGREEMENT VOLUNTARILY AND OF THE EMPLOYEE'S OWN FREE WILL.**

ACCEPTED AND AGREED:

<u>/s/ Jack Pacheco</u><br>Date: 02 April 2025****

**SUPPLEMENTAL RELEASE**

The Release and representations contained in Section 6 above are ratified and confirmed with respect to any Claims, acts or omissions through and as of the Retirement Date.

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| |
|:---|
| ACCEPTED AND AGREED: |
| Jack Pacheco |
| Date: |

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**AMENDED AND RESTATED EMPLOYMENT AGREEMENT**

**Jack Pacheco**

**AMENDED AND RESTATED EMPLOYMENT AGREEMENT** (the "**Agreement**"), dated as of December 19, 2017 (the "**Effective Date**"), by and between SMART Modular Technologies, Inc, a California corporation (the "Company"), and Jack Pacheco ("**Executive**" and, together with the Company, the "**Parties**" individually, a "**Party**").

**WHEREAS**, the Parties entered into that certain Employment Agreement dated as of October 10, 2011 (the "**Original Agreement**");

**WHEREAS**, the Parties desire to amend and restate the Original Agreement as more specifically set forth herein; and

**WHEREAS**, Executive acknowledges that (i) Executive's employment with the Company will provide Executive with trade secrets of, and confidential information concerning, SMART Global Holdings, Inc. ("**SGH**") and all of the direct and indirect subsidiaries of SGH (collectively with SGH, the "**Company Group**") and (ii) the covenants contained in this Agreement are essential to protect the business and goodwill of the Company Group.

**NOW, THEREFORE**, in consideration of the promises and the mutual covenants herein contained, the Parties hereby agree as follows:

1. &nbsp;&nbsp;&nbsp;&nbsp;<u>Term</u>.

Subject to earlier termination in accordance with the provisions of **Section 6** of this Agreement, Executive shall be employed by the Company for an initial period commencing on the Effective Date and ending at 11:59 pm Pacific time on the day before the first anniversary thereof (the "**Term**"); provided, that the Term shall be automatically extended for successive one-year periods thereafter unless, no later than ninety (90) days prior to the expiration of the initial one-year period, or any such successive one-year renewal period, either Party shall provide to the other Party written notice of its or Executive's desire not to extend the Term. Upon Executive's termination of employment with the Company for any reason, Executive shall immediately resign all positions with all members of the Company Group, including any position on the Company's Board of Directors (the "**Board**") and/or any other position as any officer or director of any other member of the Company Group.

2.&nbsp;&nbsp;&nbsp;&nbsp;<u>Position and Duties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;<u>Position</u>.

During the Term, Executive shall serve as Executive Vice President, Chief Operating Officer and Chief Financial Officer for the Company. If requested by the board of directors of SMART Global Holdings, Inc. (the "**SGH Board**"; the SGH Board as well as the board of directors of any subsidiary of SMART Global Holdings, Inc., are referred to herein as the "**Board**"), Executive hereby agrees to serve (without additional compensation) as a member of the Board and/or as an officer or director of any other member of the Company Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;<u>Duties</u>.

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Executive shall have the powers, authorities, and duties of management usually vested in the offices of Executive Vice President, Chief Operating Officer and Chief Financial Officer of a corporation of a similar size and nature to the Company, subject to the legal directives of the Company's chief executive officer, and, as applicable, the Board. Executive shall report solely to the Company's chief executive officer and the Board. Executive shall devote Executive's full business time and attention to the performance of Executive's duties hereunder and shall not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services, either directly or indirectly; provided that, nothing herein shall preclude Executive from (i) with the prior written consent of the Board, serving on the board of directors of other for-profit companies that do not compete with the Company, (ii) serving on civic or charitable boards or committees and (iii) managing personal investments, so long as all such activities described in (i) through (iii) above do not materially interfere with the performance of Executive's duties and responsibilities under this Agreement.

3.&nbsp;&nbsp;&nbsp;&nbsp;<u>Compensation</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;<u>Base Salary</u>.

During the Term, Executive shall receive an annual base salary (the "**Base Salary**") of $425,000.16, payable in regular installments in accordance with the Company's usual payroll practices. Executive shall be entitled to such increases (but not decreases) in Base Salary, if any, as may be determined from time to time in the sole discretion of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;<u>Annual Bonus</u>.

With respect to each fiscal year of the Company ending during the Term (a "**fiscal year**" is the period commencing on the first Monday after the last Friday of August and ending on the last Friday of August) and subject to the achievement of the applicable performance goals of the Executive and the Company and/or members of the Company Group, Executive shall be entitled to participate in the Company's annual bonus program pursuant to which Executive shall be eligible to earn an annual bonus with a target amount equal to 85% of the Base Salary (the "**Annual Bonus**"). The applicable performance goals for the Annual Bonus shall be determined by the SGH Board (or the compensation committee thereof), and shall be communicated to Executive within the first 90 days of the applicable fiscal year. The Annual Bonus, if any, earned for a fiscal year shall be paid to Executive on the date selected by the Company and/or the Board, which date shall fall within the two and one-half (2½) month period beginning on the first day of the fiscal year following the fiscal year to which the Annual Bonus relates. The Company and/or the Board shall have the right, but not the obligation, at its sole discretion, (i) to change from time-to-time the payment periods of the Annual Bonus to be semi-annual, quarterly or otherwise, with appropriate holdbacks to year-end within the pre-year-end periods and/or (ii) to change from time-to-time the Company's fiscal year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) &nbsp;&nbsp;&nbsp;&nbsp;<u>Equity Compensation</u>.

Executive will be granted equity awards at the discrection of the SGH Board (or a compensation committee thereof).

4. &nbsp;&nbsp;&nbsp;&nbsp;<u>Employee Benefits</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;<u>Benefit Plans</u>.

During the Term, Executive shall be able to participate in employee benefit plans and perquisite and fringe benefit programs on a basis no less favorable than such benefits and perquisites are provided by the

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Company from time to time to the Company's other senior executives. Additionally, Executive is entitled to participate in the Company's executive benefits program as in place from time-to-time, which currently includes an annual comprehensive physical exam, financial counseling services, life insurance, and disability benefits.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;<u>Expense Reimbursement</u>.

Executive shall be entitled to receive prompt reimbursement for all travel and business expenses reasonably incurred and properly accounted for by Executive (in accordance with the policies and procedures established from time to time by the Company) in performing services hereunder.

5. &nbsp;&nbsp;&nbsp;&nbsp;<u>Indemnification; D&O Coverage</u>.

Executive shall be subject to the Company's standard indemnification agreement, which agreement shall be executed by Executive and the Company on or prior to the Effective Date.

6. &nbsp;&nbsp;&nbsp;&nbsp;<u>Termination of Employment</u>.

The Term and Executive's employment hereunder may be terminated under the following circumstances:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;<u>Death</u>.

The Term and Executive's employment hereunder shall terminate upon Executive's death. Upon any termination of Executive's employment hereunder as a result of this **Section 6(a)**, Executive's estate shall be entitled to receive (A) Executive's Base Salary through the date of termination (the "**Accrued Salary**"), which shall be paid within fifteen (15) days following the date of termination or such earlier date as may be required by California law, and (B) any earned but unpaid Annual Bonus for any fiscal year preceding the fiscal year in which the termination occurs (the "**Accrued Bonus**"), which shall be paid at the same time as bonuses are paid to other senior executive officers, but in no event later than the date provided for in **Section 3(b)** hereof (the Accrued Bonus and the Accrued Salary, including the respective times by which such amounts are to be paid, are hereafter referred to as the "**Accrued Amounts**"). All other benefits, if any, due to Executive's estate following Executive's termination due to death shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive's estate shall not be entitled to any severance payments or benefits under any other agreement or any severance plan, policy or program of the Company Group. Executive's estate shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;<u>Disability</u>.

The Company may terminate the Term and Executive's employment hereunder for Disability. "**Disability**" shall mean Executive's inability, due to physical or mental incapacity, to perform Executive's duties under this Agreement with substantially the same level of quality as immediately prior to such incapacity for a period of 90 consecutive days or 120 days during any consecutive six-month period. In conjunction with determining Disability for purposes of this Agreement, Executive hereby (i) consents to any such examinations which are relevant to a determination of whether Executive is mentally and/or physically disabled and (ii) agrees to furnish such medical information as may be reasonably requested. Upon any termination of Executive's employment hereunder pursuant to this **Section 6(b)**, Executive shall be entitled to receive payment of the Accrued Amounts. All other benefits, if any, due to Executive following Executive's termination by the Company for Disability shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive shall not be

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entitled to any payments or benefits under any other agreement or any severance plan, policy or program of the Company Group. Executive shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) &nbsp;&nbsp;&nbsp;&nbsp;<u>Termination for Cause; Voluntary Termination</u>.

At any time during the Term, (i) the Company may terminate the Term and Executive's employment hereunder for "Cause" (as defined below) by Notice of Termination (as defined in **Section 6(f)**), and (ii) Executive may terminate the Term and Executive's employment hereunder "voluntarily" (that is, other than by death, Disability or for Good Reason, in accordance with **Section 6(a), 6(b) or 6(d)**, respectively); provided, that Executive will be required to give at least ninety (90) days advance written notice of such termination. "**Cause**" shall mean Executive's: (A) material breach of this Agreement, including failure to substantially perform Executive's duties, (B) willful failure to carry out, or comply with, in any material respect, any lawful and reasonable directive of the Board, not inconsistent with the terms of this Agreement, (C) commission at any time of any act or omission that results in, or that may reasonably be expected to result in, a conviction, plea of guilty or no contest or imposition of unadjudicated probation for any felony or any crime involving moral turpitude, (D) unlawful use (including being under the influence) or possession of illegal drugs on the Company's premises or while performing Executive's duties and responsibilities hereunder, (E) breach of any written policies or procedures of the Company Group that are applicable to Executive and that have previously been provided to Executive, which breach causes or is reasonably expected to cause material harm to any member of Company Group, or (F) commission at any time of any act of fraud, embezzlement, misappropriation, material misconduct, or breach of fiduciary duty against any member of the Company Group (or any of their respective affiliates, predecessors or successors), which, for the avoidance of doubt, shall not include any good faith disputes regarding immaterial amounts that relate to Executive's expense account, reimbursement claims or other de minimis matters; provided, however, in the case of (A), (B) or (E) above, if any such breach or failure is curable, such breach or failure shall only constitute Cause if Executive fails to cure such breach or failure to the reasonable satisfaction of the Board within fifteen (15) days of the date the Company delivers written notice of such breach or failure to Executive.

Upon the termination of the Term and Executive's employment hereunder pursuant to this **Section 6(c)** by the Company for Cause, Executive shall be entitled to receive Executive's Base Salary through the date of termination. Upon the termination of the Term and Executive's employment hereunder pursuant to this **Section 6(c)** due to Executive's voluntary termination, Executive shall be entitled to receive payment of the Accrued Amounts. All other benefits, if any, due to Executive following Executive's termination of employment for Cause or due to Executive's voluntary termination pursuant to this **Section 6(c)** shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive shall not be entitled to any severance payments or benefits under any other agreement or any severance plan, policy or program of the Company Group. Executive shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment. The termination of Executive's employment upon the expiration of the Term as a result of Executive's delivery of a notice of nonrenewal pursuant to **Section 1** shall be treated as a voluntary termination by Executive pursuant to this **Section 6(c)**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) &nbsp;&nbsp;&nbsp;&nbsp;<u>Termination for Good Reason or Without Cause Outside of the Change in Control Protection Period</u>.

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At any time outside of the "Change in Control Protection Period" (as defined below) during the Term, (i) Executive may terminate the Term and Executive's employment hereunder for "Good Reason" (as defined below) and (ii) the Company may terminate the Term and Executive's employment hereunder without Cause (that is, other than by death, Disability or for Cause, in accordance with **Section 6(a), 6(b) or 6(c)**, respectively). "**Good Reason**" shall mean the occurrence, without Executive's written consent, of any of the following events: (A) a material reduction in the nature or scope of Executive's responsibilities, duties or authority from those contemplated by this Agreement, (B) a reduction in the then current Base Salary, (C) causing or requiring Executive to report to any person other than the chief executive officer and/or the Board, (D) the relocation of Executive's primary office to a location that is not within a sixty (60) mile radius of the Company's offices in Newark, California or (E) any other breach by the Company of a material term of this Agreement, including but not limited to complying with **Section 10(d)(iii)** by causing any successor to the Company to expressly assume and agree to perform this Agreement; provided, that any such event described in (A) through (E) above shall not constitute Good Reason unless Executive delivers to the Company a Notice of Termination for Good Reason within ninety (90) days after Executive first learns of the existence of the circumstances giving rise to Good Reason, and within thirty (30) days following the delivery of such Notice of Termination for Good Reason the Company has failed to cure the circumstances giving rise to Good Reason.

Upon the termination of Executive's employment hereunder pursuant to this **Section 6(d)**, Executive shall receive (i) the Accrued Amounts and (ii) subject to Executive's continued compliance with the provisions of **Section 8** and subject to Executive's execution, delivery and non-revocation of an effective release of all claims against each member of the Company Group substantially in the form attached hereto as <u>Exhibit A</u> (the "**Release**") within the sixty (60) day period following the date of the termination of Executive's employment (such 60-day period, the "**Release Period**"): (A) severance pay in an aggregate amount equal to seventy-five percent (75%) of Executive's then current Base Salary; (B) to the extent any Annual Bonus could be earned in the current fiscal year under the terms of the Company's bonus program but is not yet earned or paid, a prorated bonus (based on the Board's determination of Company performance through the date of termination), prorated through the date of termination; and (C) payment or reimbursement of health benefit continuation coverage under COBRA or otherwise from the termination date through the earlier of (x) nine (9) months following the termination date or (y) the date Executive becomes eligible for health benefits with another employer, which shall be paid no later than the due date of payments for such coverage; provided that if Executive is no longer eligible for COBRA continuation coverage, the Company may provide a lump sum payment calculated based on the monthly premiums immediately prior to the expiration of COBRA coverage. The severance amounts provided hereunder will be paid in accordance with the Company's regular payroll practices in equal or substantially equal payments over the twelve (12) month period following the date of termination, with the first installment being paid on the first payroll date following the date on which the Release has become effective and irrevocable. Notwithstanding the foregoing, if the Release Period spans two (2) calendar years, then the first installment of the severance pay will commence on the first payroll date that occurs in the second calendar year, with any amounts otherwise payable prior to such payroll date being paid instead on such payroll date. All other benefits, if any, due Executive following a termination pursuant to this **Section 6(d)** shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive shall not be entitled to any severance payments or benefits under any other agreement or any severance plan, policy or program of the Company Group. Executive shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this Agreement following such termination of employment. The termination of Executive's employment upon the expiration of the Term as a result of the Company's delivery of a notice of

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nonrenewal pursuant to **Section 1** shall be treated as a termination by the Company without Cause pursuant to this **Section 6(d)** (unless Executive's employment is earlier terminated pursuant to **Sections 6(a), (b) or (c)** hereof).

If a termination of Executive's employment occurs without Cause or if Executive resigns for Good Reason under this **Section 6(d)** and such termination or resignation occurs outside of the "Change in Control Protection Period" (as defined below) but within one (1) year after the date when Iain MacKenzie is no longer the chief executive officer or co-chief executive officer of SGH, and subject to Executive's execution, delivery and non-revocation of a Release within the Release Period then, the health benefit continuation provided in sub-part (C) in the immediately preceding paragraph shall be increased from nine (9) months to twelve (12) months and all unvested equity awards held by Executive that would, but for the termination, vest within one (1) year of the effective date of such termination, (i) shall not expire or terminate until after the expiration of the Release Period and (ii) shall accelerate and vest if and when the Release has become effective and irrevocable; provided, that if the Release has not become effective prior to the expiration of the Release Period or the Release is revoked such unvested equity awards shall expire and be immediately terminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) &nbsp;&nbsp;&nbsp;&nbsp;<u>Termination for Good Reason or Without Cause during the Change in Control Protection Period</u>.

If, during the Change in Control Protection Period (defined below), Executive is terminated by the Company without Cause or Executive resigns for Good Reason, Executive shall be entitled to (i) the Accrued Amounts and (ii) subject to Executive's execution, delivery and non-revocation of a Release within the Release Period, the following payments and benefits in lieu of any severance benefits under **Section 6(d)** above: (A) 1.5 times Executive's then existing Base Salary; (B) 1.5 times the Annual Bonus paid or payable for the most recently completed fiscal year (in addition to the Annual Bonus paid or payable with respect to the most recently completed fiscal year); (C) to the extent any Annual Bonus could be earned in the current fiscal year under the terms of the Company's bonus program but is not yet earned or paid, a prorated bonus (based on the Board's determination of Company performance through the date of termination), prorated through the date of termination; (D) payment or reimbursement of health benefit continuation coverage under COBRA or otherwise from the termination date through the earlier of (x) eighteen (18) months following the termination date or (y) the date Executive becomes eligible for health benefits with another employer, which shall be paid no later than the due date of payments for such coverage; provided that if Executive is no longer eligible for COBRA continuation coverage, the Company may provide a lump sum payment calculated based on the monthly premiums immediately prior to the expiration of COBRA coverage; and (E) 100% vesting of all of the Executive's unvested and outstanding equity awards. The amounts payable under this **Section 6(e)** shall be paid, at the Company's sole discretion, in accordance with the Company's regular payroll practices in equal or substantially equal payments over a period of no longer than twelve (12) months following the date of termination, with the first installment being paid on the first payroll date following the date on which the Release has become effective and irrevocable. Notwithstanding the foregoing, if the Release Period spans two (2) calendar years, then the first installment will commence on the first payroll date that occurs in the second calendar year, with any amounts otherwise payable prior to such payroll date being paid instead on such payroll date. All other benefits, if any, due Executive following a termination pursuant to this **Section 6(e)** shall be determined in accordance with the plans, policies and practices of the Company; provided, that Executive shall not be entitled to any severance payments or benefits under any other agreement or any severance plan, policy or program of the Company Group. Executive shall not accrue any additional compensation (including any Base Salary or Annual Bonus) or other benefits under this

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Agreement following such termination of employment. For purposes of this **Section 6**, the "**Change in Control Protection Period**" means the twelve (12) month period following a "Change in Control" ("**Change in Control**" as used in this Agreement shall have the meaning as such term is defined in the Saleen Holdings, Inc. 2011 Share Incentive Plan).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) &nbsp;&nbsp;&nbsp;&nbsp;<u>Notice of Termination</u>.

Any purported termination of the Executive's employment by the Company or by Executive shall be communicated by written Notice of Termination to the other Party in accordance with **Section 10(e)** hereof. For purposes of this Agreement, "**Notice of Termination**" shall mean a notice that shall indicate the specific termination provision in this Agreement relied upon and shall, to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) &nbsp;&nbsp;&nbsp;&nbsp;<u>Board/Committee Resignation</u>.

Upon termination of Executive's employment for any reason, Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board (and any committees thereof) and, as applicable, the board of directors (and any committees thereof) of each of the other members of the Company Group.

7. &nbsp;&nbsp;&nbsp;&nbsp;<u>Non-Solicitation of Clients; No Hire</u>.

Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company Group and accordingly agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;During the Term and the "Restricted Period" (as defined below), Executive shall not, whether on Executive's own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever ("**Person**"), directly or indirectly, solicit or service, or assist in soliciting or servicing the business of any then current customer or client or "prospective customer or client" (as such term is defined herein), or any supplier, licensee, licensor or other business relation of any member of the Company Group in order to induce such Person to cease doing business with, or reduce the amount of business conducted with, the member of the Company Group, or in any way interfere with the relationship between any then current or prospective customer or client, or any supplier, licensee or business relation of any member of the Company Group:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;with whom Executive had personal contact or dealings on behalf of any member of the Company Group during the one-year period preceding Executive's termination of employment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;with whom Executive had knowledge of any member of the Company Group's plans with respect to such current or prospective customer or client, or supplier, licensee, business or Person;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;with whom any employees reporting to Executive have had personal contact or dealings on behalf of any member of the Company Group during the one-year period immediately preceding Executive's termination of employment; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) &nbsp;&nbsp;&nbsp;&nbsp;for whom Executive had direct or indirect responsibility during the one-year immediately preceding Executive's termination of employment.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;During the Term, Executive shall not directly or indirectly in any place in the world, own any interest in, manage, control, participate in (whether as an officer, director, manager, employee, partner, equity holder, member, agent, representative or otherwise), consult with, render services for, or in any other manner engage in any business engaged in anywhere in the world, by the Company or as conducted by any member of the Company Group as of the date of Executive's termination, other than any business that is not directly related to the business conducted by any member of the Company Group as of the date hereof, as such business may be extended or expanded, or proposed to be extended or expanded, prior to the date of Executive's termination; provided, that nothing herein shall prohibit Executive from investing in stocks, bonds, or other securities in any business if: (x) such stocks, bonds, or other securities are listed on any United States securities exchange or are publicly traded in an over the counter market, and such investment does not exceed, in the case of any capital stock of any one issuer, two percent (2%) of the issued and outstanding capital stock or in the case of bonds or other securities, two percent (2%) of the aggregate principal amount thereof issued and outstanding, or (y) such investment is completely passive and no control or influence over the management or policies of such business is exercised by Executive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) &nbsp;&nbsp;&nbsp;&nbsp;During the Restricted Period, Executive shall not, directly or indirectly, solicit, induce or encourage to cease to work with the Company or any member of the Company Group, any independent contractor, consultant or partner then under exclusive contract with any member of the Company Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) &nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement, the "**Restricted Period**" means the twelve (12) month period following the date of the termination of Executive's employment. Termination of Executive's employment by the Company without Cause or by Executive for Good Reason at any time during the Term is each a "**Qualifying Termination**".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) &nbsp;&nbsp;&nbsp;&nbsp;In consideration for the covenants contained in **Sections 7(a), (b) and (c)** and provided that Executive is not otherwise in breach of **Sections 7 and 8** hereof or the Release, in the event Executive experiences a Qualifying Termination, the Company shall, during the Restricted Period, pay to Executive payments in the amount of fifty percent (50%) per month of Executive's monthly Base Salary (the "**Restrictive Covenant Payments**"), which Restrictive Covenant Payments shall be payable in accordance with the Company's normal payroll practices. Payments made pursuant to the terms of **Section 6** shall count toward any Restrictive Covenant Payments due under this **Subsection (e)**.

8.&nbsp;&nbsp;&nbsp;&nbsp;<u>Non-Solicitation of Employees/Contractors; Confidentiality; Intellectual Property</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;<u>Non-Solicitation of Employees/Contractors</u>.

During the twelve (12) month period following the termination of Executive's employment for any reason, Executive shall not, without the prior written consent of the Company, whether on Executive's own behalf or on behalf of or in conjunction with any Person:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;directly or indirectly solicit, induce or encourage any employee of any member of the Company Group to leave the employment of the Company Group; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;directly hire any employee who was a direct report of Executive and was employed by the Company Group as of the date of Executive's termination of employment with the Company or who left the employment of the Company Group coincident with, or within one year after, the termination of Executive's employment with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;<u>Confidentiality</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;Executive shall not at any time (whether during or after Executive's employment with the Company or any of its affiliates) (x) retain or use for the benefit, purposes or account of Executive or any other Person (other than the Company or any member of the Company Group) or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential information – including, without limitation, trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals – concerning the past, current or future business, activities and operations of the Company or any member of the Company Group and/or any third party that has disclosed or provided any of same to the Company or any member of the Company Group on a confidential basis ("**Confidential Information**") without the prior written authorization of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;"Confidential Information" shall not include any information that is (x) generally known to the industry or the public other than as a result of Executive's breach of this covenant or any breach of other confidentiality obligations by third parties (y) made legitimately available to Executive by a third party without breach of any confidentiality obligation or (z) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;Except as required by law, Executive shall not disclose to anyone, other than Executive's immediate family and legal or financial advisors, the existence or contents of this Agreement, provided they agree to maintain the confidentiality of such terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) &nbsp;&nbsp;&nbsp;&nbsp;Upon termination of Executive's employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, or any member of the Company Group (y) immediately destroy, delete, or return to the Company, at the Company's option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive's possession or control (including any of the foregoing stored or located in Executive's office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, any member of the Company Group or their affiliates, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) &nbsp;&nbsp;&nbsp;&nbsp;Executive and the Company acknowledge and agree that nothing in this Agreement or otherwise limits Executive's ability to communicate directly with and provide information, including documents, not otherwise protected from disclosure by any applicable law or privilege to the U.S. Securities and Exchange Commission (the "**SEC**"), any other federal, state or local governmental agency or commission ("**Government Agency**") or self-regulatory organization regarding possible legal violations, without disclosure to the Company. The

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Company may not retaliate against Executive for any of these activities, and nothing in this Agreement requires Executive to waive any monetary award or other payment that Executive might become entitled to from the SEC or any other Government Agency or self-regulatory organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) &nbsp;&nbsp;&nbsp;&nbsp;Further, nothing in this Agreement precludes Executive from filing a charge of discrimination, unfair labor practice or inappropriate working conditions with the Equal Employment Opportunity Commission or a like charge or complaint with a state or local fair employment or labor Government Agency. However, once this Agreement becomes effective, Executive may not receive a monetary award or any other form of personal relief from the Company in connection with any such charge or complaint that Executive has filed or is filed on Executive's behalf.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) &nbsp;&nbsp;&nbsp;&nbsp;<u>Intellectual Property</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;If Executive creates, invents, designs, develops, contributes to or improves any works of authorship, inventions, intellectual property, materials, documents or other work product (including, without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content or audiovisual materials) ("**Works**"), either alone or with third parties, at any time during Executive's employment by the Company or any member of the Company Group and within the scope of such employment and/or with the use of any of the Company Group resources ("**Company Works**"), Executive shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;Executive agrees to keep and maintain adequate and current written records (in the form of notes, sketches, drawings, and any other form or media requested by the Company) of all Company Works. The records will be available to and remain the sole property and intellectual property of the Company at all times.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;Executive shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government contract) at the Company's expense (but without further remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company's rights in the Company Works. If the Company is unable for any other reason to secure Executive's signature on any document for this purpose, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive's agent and attorney in fact, to act for and in Executive's behalf and stead to execute any documents and to do all other lawfully permitted acts in connection with the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) &nbsp;&nbsp;&nbsp;&nbsp;Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company or any of its subsidiaries or affiliates any confidential, proprietary or non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Executive shall comply with all relevant policies and guidelines of the Company, including, without limitation, policies and guidelines regarding the protection of

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confidential information and intellectual property and potential conflicts of interest. Executive acknowledges that the Company may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) &nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the foregoing, this **Section 8(c)** is subject to the provisions of California Labor Code Sections 2870, 2871 and 2872. In accordance with Section 2870 of the California Labor Code, Executive's obligation to assign Executive's right, title and interest throughout the world in and to all Company Works does not apply to any Works that Executive developed entirely on Executive's own time without using the Company's equipment, supplies, facilities, or Confidential Information except for those Works that relate to either (A) the business of the Company at the time of conception or reduction to practice of the Work, or actual or demonstrably anticipated research or development of the Company or (B) result from any work performed by Executive for the Company. A copy of California Labor Code Sections 2870, 2871 and 2872 is attached to this Agreement as <u>Exhibit B</u>. Executive shall disclose all Works to the Company, even if Executive does not believe that Executive is required under this Agreement, or pursuant to California Labor Code Section 2870, to assign Executive's interest in such Works to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) &nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Defend Trade Secrets Act of 2016, Executive and the Company acknowledge and agree that Executive shall not have criminal or civil liability under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition and without limiting the preceding sentence, if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive's attorney and may use the trade secret information in the court proceeding, if Executive (X) files any document containing the trade secret under seal and (Y) does not disclose the trade secret, except pursuant to court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) &nbsp;&nbsp;&nbsp;&nbsp;<u>General</u>. It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this **Section 8** to be reasonable (the "**Covenants**") if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

9. &nbsp;&nbsp;&nbsp;&nbsp;<u>Specific Performance</u>. Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the Covenants would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or anticipated or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

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10. &nbsp;&nbsp;&nbsp;&nbsp;<u>Miscellaneous</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;<u>Executive's Representations</u>.

Executive hereby represents and warrants to the Company that (i) Executive has read this Agreement in its entirety, fully understands the terms of this Agreement, has had the opportunity to consult with counsel prior to executing this Agreement and is signing the Agreement voluntarily and with full knowledge of its significance, (ii) the execution, delivery and performance of this Agreement by Executive does not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which he is bound, (iii) Executive is not a party to or bound by an employment agreement, non-compete agreement or confidentiality agreement with any other person or entity which would interfere in any material respect with the performance of Executive's duties hereunder and (iv) Executive shall not use any Confidential Information or trade secrets of any person or party other than a member of the Company Group in connection with the performance of Executive's duties hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;<u>Mitigation</u>.

Executive shall have no duty to mitigate Executive's damages by seeking other employment and, should Executive actually receive compensation from any such other employment, the payments required hereunder shall not be reduced or offset by any other compensation except as specifically provided herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;<u>Waiver</u>.

No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by Executive and an officer of the Company (other than Executive) duly authorized by the Board to execute such amendment, waiver or discharge. No waiver by either Party of any breach of the other Party of, or compliance with, any condition or provision of this Agreement shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) &nbsp;&nbsp;&nbsp;&nbsp;<u>Successors and Assigns</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive's legal representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) &nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall inure to the benefit of and be binding upon the Company and its successors and, other than as set forth in **Section 10(d)(iii)**, shall not be assignable by the Company without the prior written consent of the Executive (which shall not be unreasonably withheld).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) &nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be assignable by the Company to any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company; provided that, the Company shall require such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "**Company**" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) &nbsp;&nbsp;&nbsp;&nbsp;<u>Notice</u>.

For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, if delivered by overnight courier service, or if mailed by registered mail, return receipt requested, postage prepaid, addressed to the respective addresses or sent via facsimile to the respective facsimile numbers, as the case may be, as set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt; provided, however, that (i) notices sent by personal delivery or overnight courier shall be deemed given when delivered, (ii) notices sent by facsimile transmission shall be deemed given upon the sender's receipt of confirmation of complete transmission, and (iii) notices sent by registered mail shall be deemed given two days after the date of deposit in the mail.

If to Executive, to such address as shall most currently appear on the records of the Company.

If to the Company, to:

SMART Modular Technologies, Inc.<br>39870 Eureka Drive<br>Newark, California 94560-4809<br>Attention: Legal Department

With a copy, which shall not constitute notice, to:

Silver Lake Partners and<br>Silver Lake Sumeru<br>2775 Sand Hill Road, Suite 100<br>Menlo Park, California 94025<br>Fax No.: [\*\*\*]<br>Attention: Karen King

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) &nbsp;&nbsp;&nbsp;&nbsp;<u>GOVERNING LAW; CONSENT TO JURISDICTION</u>.

THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF CALIFORNIA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF CALIFORNIA WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. ANY ACTION TO ENFORCE THIS AGREEMENT MUST BE BROUGHT IN, AND THE PARTIES HEREBY CONSENT TO THE JURISDICTION OF, A COURT SITUATED IN ALAMEDA COUNTY, CALIFORNIA. EACH PARTY HEREBY WAIVES THE RIGHTS TO CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) &nbsp;&nbsp;&nbsp;&nbsp;<u>Set Off</u>.

The Company's obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of any amounts owed by

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Executive to the Company or any of its affiliates except to the extent any such set-off, counterclaim or recoupment would violate, or result in the imposition of tax under Section 409A of the Internal Revenue Code of 1986, as amended (the "**Code**"), in which case such right shall be null and void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) &nbsp;&nbsp;&nbsp;&nbsp;<u>Compliance with IRC Section 409A</u>.

Notwithstanding anything herein to the contrary, (i) if at the time of Executive's termination of employment with the Company, Executive is a "specified employee" as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) to the extent necessary to comply with the requirements of Section 409A of the Code until the first business day that is more than six months following Executive's termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax. In the event that payments under this Agreement are deferred pursuant to this **Section 10(h)** in order to prevent any accelerated tax or additional tax under Section 409A of the Code, then such payments shall be paid at the time specified under this **Section 10(h)** without any interest thereon. The Company shall consult with Executive in good faith regarding the implementation of this **Section 10(h)**; provided that neither the Company nor any member of the Company Group, employees or representatives shall have any liability to Executive with respect to the imposition of any early or additional tax under Section 409A of the Code, including, without limitation, under **Section 10(i)**. Notwithstanding anything to the contrary herein, to the extent required by Section 409A of the Code, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a "Separation from Service" within the meaning of Section 409A of the Code and, for purposes of any such provision of this Agreement, references to a "resignation," "termination," "termination of employment" or like terms shall mean "Separation from Service." For purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a "separate payment" within the meaning of Section 409A of the Code. Notwithstanding anything to the contrary herein, except to the extent any expense, reimbursement or in-kind benefit provided pursuant to this Agreement does not constitute a "deferral of compensation" within the meaning of Section 409A of the Code, (x) the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive during any calendar year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to Executive in any other calendar year, (y) the reimbursements for expenses for which Executive is entitled to be reimbursed shall be made on or before the last day of the calendar year following the calendar year in which the applicable expense is incurred and (z) the right to payment or reimbursement or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) &nbsp;&nbsp;&nbsp;&nbsp;<u>280G Cutback</u>.

Notwithstanding any other provision of this Agreement to the contrary, if payments made or benefits provided pursuant to **Section 6** herein are considered "parachute payments" under Code Section 280G, then such parachute payments plus any other payments made or benefits provided by the Company to

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Executive which are considered parachute payments shall be limited to the greatest amount which may be paid to Executive under Code Section 280G without causing any loss of deduction to the Company under such section, but only if, by reason of such reduction, the net after tax benefit to Executive shall exceed the net after tax benefit if such reduction were not made. "**Net after tax benefit**" for purposes of this Agreement shall mean the sum of (i) the total amounts payable to Executive under **Section 6**, plus (ii) all other payments and benefits which Executive receives or then is entitled to receive from the Company or an affiliate that would constitute a "parachute payment" within the meaning of Code Section 280G, less (iii) the amount of federal and state income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to Executive (based upon the rate in effect for such year as set forth in the Code at the time of termination of Executive's employment), less (iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above by Code Section 4999. The determination as to whether and to what extent payments are required to be reduced in accordance with this **Section 10(i)** shall be made at the Company's expense by a nationally recognized certified public accounting firm as may be designated by the Company and reasonably acceptable to Executive prior to a Change in Control (the "**Accounting Firm**"). In the event of any mistaken underpayment or overpayment under this **Section 10(i)**, as determined by the Accounting Firm, the amount of such underpayment or overpayment shall forthwith be paid to Executive or refunded to the Company, as the case may be, but only to the extent any such refund would result in (i) no portion of such payments being subject to the excise tax imposed by Section 4999 of the Code and (ii) a dollar-for-dollar reduction in Executive's taxable income and wages for purposes of federal, state and local income and employment taxes, with interest at the applicable Federal rate provided for in Code Section 7872(f)(2). Any reduction in payments required by this **Section 10(i)** shall, to the extent possible, be made in a manner does not violate the provisions of Section 409A of the Code and shall occur in the following order: (1) any cash severance, (2) any other cash amount payable to Executive, (3) any benefit valued as a "parachute payment," and (4) the acceleration of vesting of any equity-based awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) &nbsp;&nbsp;&nbsp;&nbsp;<u>Severability of Invalid or Unenforceable Provisions</u>.

The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which other provisions shall remain in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) &nbsp;&nbsp;&nbsp;&nbsp;<u>Advice of Counsel and Construction</u>.

Each Party acknowledges that such Party had the opportunity to be represented by counsel in the negotiation and execution of this Agreement. Accordingly, the rule of construction of contract language against the drafting party is hereby waived by each Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) &nbsp;&nbsp;&nbsp;&nbsp;<u>Entire Agreement</u>.

This Agreement constitutes the entire agreement between the parties as of the Effective Date and supersedes all previous agreements and understandings between the Parties with respect to the subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) &nbsp;&nbsp;&nbsp;&nbsp;<u>Withholding Taxes</u>.

The Company shall be entitled to withhold from any payment due to Executive hereunder any amounts required to be withheld by applicable tax laws or regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) &nbsp;&nbsp;&nbsp;&nbsp;<u>Section Headings</u>.

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The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) &nbsp;&nbsp;&nbsp;&nbsp;<u>Cooperation</u>.

During the Term and at any time thereafter, Executive agrees to cooperate (i) with the Company in the defense of any legal matter involving any matter that arose during Executive's employment with the Company or any other member of the Company Group and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to the Company or any other member of the Company Group. The Company will reimburse Executive for any reasonable travel and out of pocket expenses incurred by Executive in providing such cooperation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) &nbsp;&nbsp;&nbsp;&nbsp;<u>Survival</u>.

**Sections 5, 7, 8 and 9** shall survive and continue in full force in accordance with their terms notwithstanding any termination for any reason of this Agreement or of the Term or of Executive's employment with the Company or any other member of the Company Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) &nbsp;&nbsp;&nbsp;&nbsp;<u>Continuation of Employment; Termination On or After Expiration of the Term</u>.

Unless the Parties otherwise agree in writing, continuation of Executive's employment with the Company or any other member of the Company Group beyond the expiration of the Term shall be deemed an employment "at-will" and shall not be deemed to extend any of the provisions of this Agreement, and Executive's employment may thereafter be terminated "at-will" by Executive or the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;&nbsp;&nbsp;<u>Counterparts</u>.

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

*[Signature page follows.]*

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

**SMART MODULAR TECHNOLOGIES, INC.**

<br><u>By:/s/ IAIN MACKENZIE</u> <br>Name: Iain MacKenzie<br>Title: President & CEO

**EXECUTIVE**

<br><u>/s/ JACK PACHECO</u><br>Jack Pacheco

<br>*[Signature Page to Employment Agreement]*

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**<u>EXHIBIT A</u>**

**GENERAL RELEASE**

**THIS AGREEMENT AND RELEASE**, dated as of _______, 20__ (this "**<u>Agreement</u>**"), is entered into by and between ____________________ ("**<u>Executive</u>**") and ____________ (the "**<u>Company</u>**").

**WHEREAS**, Executive is currently employed with the Company; and

**WHEREAS**, Executive's employment with the Company will terminate effective as of ____, 20__;

**NOW, THEREFORE**, in consideration of the mutual promises and covenants contained in this Agreement and other good and valuable consideration, Executive and the Company hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;Executive shall be provided severance pay and other benefits (the "**<u>Severance Benefits</u>**") in accordance with the terms and conditions of **Section 6** of the amended and restated employment agreement by and between Executive and the Company, dated as of December 19, 2017 (the "**<u>Employment Agreement</u>**"); provided, that no such Severance Benefits shall be paid or provided if Executive revokes this Agreement pursuant to **Section 5** below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;Executive, for and on behalf of himself and Executive's heirs, successors, agents, representatives, executors and assigns, hereby waives and releases any common law, statutory or other complaints, claims, demands, expenses, damages, liabilities, charges or causes of action (each, a "**<u>Claim</u>**") arising out of or in any way relating to Executive's employment or termination of employment with, Executive's serving in any capacity in respect of, or Executive's status at any time as a holder of any securities of, any of the Company and any of its affiliates (collectively, the "**<u>Company Group</u>**"), both known and unknown, in law or in equity, which Executive may now have or ever had against any current or former member of the Company Group or any current or former equityholder, investor, agent, representative, administrator, trustee, attorney, insurer, fiduciary, employee, director or officer of any member of the Company Group, including their successors and assigns (collectively, the "**<u>Company Releasees</u>**"), including, without limitation, any Claim for any severance benefit which might have been due Executive under any previous agreement executed by and between any member of the Company Group and Executive; any Claim related to compensation or benefits from any of the Company Releasees, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in any member of the Company Group; any Claim for breach of contract, wrongful termination or breach of the implied covenant of good faith and fair dealing; any tort Claim, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys' fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended); and any complaint, charge or cause of action arising out of Executive's employment with any member of the Company Group under the Age Discrimination in Employment Act of 1967 ("**<u>ADEA</u>**," a law which prohibits discrimination on the basis of age against individuals who are age 40 or older), the National Labor Relations Act, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974, the Family Medical Leave Act, the Equal Pay Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the

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Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act (as amended), Calif. Gov't Code §12900 et seq., the California Family Rights Act, California law regarding Relocations, Terminations and Mass Layoffs and the California Labor Code, all as amended; Sections 1981 through 1988 of Title 42 of the United States Code, California Business and Professions Code § 17200 or any other provisions of the California unfair trade or business practices laws, the California Occupational Safety and Health Act, Divisions 4, 4.5, and 4.7 of the California Labor Code beginning at § 3200, any provision of the California Constitution, any provision of the California Labor Code that may lawfully be released, the Employee Retirement Income Security Act of 1974 (except for any vested benefits under any tax qualified benefit plan), the Immigration Reform and Control Act, the Workers Adjustment and Retraining Notification Act, the Fair Credit Reporting Act; any public policy, contract, tort, or common law; all other federal, state and local statutes, ordinances and regulations and any basis for recovering costs, fees, or other expenses including attorneys' fees incurred in these matters.. By signing this Agreement, Executive acknowledges that Executive intends to waive and release any rights known or unknown Executive may have against any and all of the Company Releasees under these and any other laws; provided that, Executive does not waive or release Claims (i) with respect to the right to enforce this Agreement or those provisions of the Employment Agreement that expressly survive the termination of Executive's employment with the Company, (ii) with respect to any vested right Executive may have under any employee pension or welfare benefit plan of any member of the Company Group or (iii) any rights to indemnification preserved by Section 5 of the Employment Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;Executive has read Section 1542 of the California Civil Code, which states in full: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." Executive expressly waives any rights that Executive may have under Section 1542 of the California Civil Code to the full extent that Executive may lawfully waive such rights pertaining to a general release of claims, and Executive affirms that Executive is releasing all known or unknown claims that Executive has or may have against the Company or any of the Company Releasees as stated in this Release.

**THIS MEANS THAT, BY SIGNING THIS RELEASE, EXECUTIVE WILL HAVE WAIVED ANY RIGHT EXECUTIVE MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST ANY OF THE COMPANY RELEASEES BASED ON ANY ACTS OR OMISSIONS OF ANY OF THE COMPANY RELEASEES UP TO THE DATE OF THE SIGNING OF THIS RELEASE.** Notwithstanding the above, nothing in this AGREEMENT shall prevent the Executive from (i) initiating or causing to be initiated on EXECUTIVE'S behalf any complaint, charge, claim or proceeding against the Company before any local, state or federal agency, court or other body challenging the validity of the waiver of EXECUTIVE'S claims under ADEA contained in this AGREEMENT (but no other portion of such waiver); or (ii) initiating or participating in (but not benefiting from) an investigation or proceeding conducted by the Equal Employment Opportunity Commission with respect to ADEA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;Executive acknowledges that Executive has been given [twenty-one (21)]<sup>1</sup> days from the date of receipt of this Agreement to consider all of the provisions of the Agreement and, to the extent Executive has not used the entire [21-day] period prior to executing this Agreement, Executive does hereby knowingly and voluntarily waive the remainder of said [21-day period]. EXECUTIVE FURTHER ACKNOWLEDGES THAT EXECUTIVE HAS READ THIS AGREEMENT CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO CONSULT AN ATTORNEY AND FULLY

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UNDERSTANDS THAT BY SIGNING BELOW EXECUTIVE IS GIVING UP CERTAIN RIGHTS WHICH EXECUTIVE MAY HAVE TO SUE OR ASSERT A CLAIM AGAINST ANY OF THE COMPANY RELEASEES, AS DESCRIBED HEREIN AND THE OTHER PROVISIONS HEREOF. EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER TO SIGN THIS AGREEMENT AND EXECUTIVE AGREES TO ALL OF ITS TERMS VOLUNTARILY.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;Executive shall have seven (7) days from the date of Executive's execution of this Agreement to revoke the release, including with respect to all claims referred to herein (including, without limitation, any and all claims arising under ADEA). If Executive revokes this Agreement, Executive will be deemed not to have accepted the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;Executive hereby agrees not to defame or disparage any member of the Company Group or any executive, manager, employee, director, or officer of any member of the Company Group in any medium to any person without limitation in time. Notwithstanding this provision, Executive may confer in confidence with Executive's legal representatives and make truthful statements as required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;Each party and its counsel have reviewed this Agreement and have been provided the opportunity to review this Agreement and accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. Instead, the language of all parts of this Agreement shall be construed as a whole, and according to their fair meaning, and not strictly for or against either party.

*[Signature Page Follows]*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Note to Draft: If Executive's termination of employment is in conjunction with the termination of other Company employees, period to be forty-five (45) days.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

**SMART MODULAR TECHNOLOGIES, INC.**

By: <br>Name:<br>Its:

**EXECUTIVE**

_________________________<br>Jack Pacheco

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**<u>EXHIBIT B</u>**

 **California Labor Code Sections 2870, 2871 and 2872**

**SECTION 2870**

(a)&nbsp;&nbsp;&nbsp;&nbsp;Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) &nbsp;&nbsp;&nbsp;&nbsp;Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) &nbsp;&nbsp;&nbsp;&nbsp;Result from any work performed by the employee for the employer.

(b)&nbsp;&nbsp;&nbsp;&nbsp;To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.

**SECTION 2871**

No employer shall require a provision made void and unenforceable by Section 2870 as a condition of employment or continued employment. Nothing in this article shall be construed to forbid or restrict the right of an employer to provide in contracts of employment for disclosure, provided that any such disclosures be received in confidence, of all of the employee's inventions made solely or jointly with others during the term of his or her employment, a review process by the employer to determine such issues as may arise, and for full title to certain patents and inventions to be in the United States, as required by contracts between the employer and the United States or any of its agencies.

**SECTION 2872**

If an employment agreement entered into after January 1, 1980 contains a provision requiring the employee to assign or offer to assign any of his or her rights in any invention to his or her employer, the employer must also, at the time the agreement is made, provide a written notification to the employee that the agreement does not apply to an invention which qualifies fully under the provisions of Section 2870. In any suit or action arising thereunder, the burden of proof shall be on the employee claiming the benefits of its provisions.

## Exhibit 31.1

**EXHIBIT 31.1**

**RULE 13a-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

I, Mark Adams, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Quarterly Report on Form 10-Q of Penguin Solutions, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: July 8, 2025 | By: | /s/ Mark Adams |
|  |  | Mark Adams |
|  |  | President and Chief Executive Officer |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**RULE 13a-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER**

I, Nate Olmstead, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this Quarterly Report on Form 10-Q of Penguin Solutions, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: July 8, 2025 | By: | /s/ Nate Olmstead |
|  |  | Nate Olmstead |
|  |  | Senior Vice President and Chief Financial Officer |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. 1350**

In connection with the Quarterly Report of Penguin Solutions, Inc. (the "Company") on Form 10-Q for the period ended May 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Mark Adams, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: July 8, 2025 | By: | /s/ Mark Adams |
|  |  | Mark Adams |
|  |  | President and Chief Executive Officer |

---

## Exhibit 32.2

**EXHIBIT 32.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. 1350**

In connection with the Quarterly Report of Penguin Solutions, Inc. (the "Company") on Form 10-Q for the period ended May 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Nate Olmstead, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: July 8, 2025 | By: | /s/ Nate Olmstead |
|  |  | Nate Olmstead |
|  |  | Senior Vice President and Chief Financial Officer |

---

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