# EDGAR Filing Document

**Accession Number:** 0001616533
**File Stem:** 0001616533-26-000010
**Filing Date:** 2026-1
**Character Count:** 242478
**Document Hash:** c2c034e0864df1bcb5d02340c4f22271
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001616533-26-000010.hdr.sgml**: 20260106

**ACCESSION NUMBER**: 0001616533-26-000010

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 107

**CONFORMED PERIOD OF REPORT**: 20251128

**FILED AS OF DATE**: 20260106

**DATE AS OF CHANGE**: 20260106

**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:** 0829

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38102
- **FILM NUMBER:** 26512129

**BUSINESS ADDRESS:**
- **STREET 1:** 45800 NORTHPORT LOOP WEST
- **CITY:** FREMONT
- **STATE:** CA
- **ZIP:** 94538
- **BUSINESS PHONE:** (510) 623-1231

**MAIL ADDRESS:**
- **STREET 1:** 45800 NORTHPORT LOOP WEST
- **CITY:** FREMONT
- **STATE:** CA
- **ZIP:** 94538

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

?xml version='1.0' encoding='ASCII'? sgh-20251128

**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 November 28, 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-20251128_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.)

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| | |
|:---|:---|
| 45800 Northport Loop West | |
| Fremont, CA | 94538 |
| (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 January 2, 2026, the registrant had 52,560,157 shares of common stock outstanding.

------

**Table of Contents**

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| | | |
|:---|:---|:---|
| | | **Page** |
| **[PART I. Financial Information](#i4985713dc64f40908812c73f1489a282_13)** | **[PART I. Financial Information](#i4985713dc64f40908812c73f1489a282_13)** | |
| &nbsp;&nbsp;&nbsp;[Item 1](#i4985713dc64f40908812c73f1489a282_16) | [Financial Statements](#i4985713dc64f40908812c73f1489a282_16) | [5](#i4985713dc64f40908812c73f1489a282_16) |
| &nbsp;&nbsp;&nbsp;[Item 2](#i4985713dc64f40908812c73f1489a282_115) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#i4985713dc64f40908812c73f1489a282_115) | [28](#i4985713dc64f40908812c73f1489a282_115) |
| &nbsp;&nbsp;&nbsp;[Item 3](#i4985713dc64f40908812c73f1489a282_148) | [Quantitative and Qualitative Disclosures About Market Risk](#i4985713dc64f40908812c73f1489a282_148) | [36](#i4985713dc64f40908812c73f1489a282_148) |
| &nbsp;&nbsp;&nbsp;[Item 4](#i4985713dc64f40908812c73f1489a282_151) | [Controls and Procedures](#i4985713dc64f40908812c73f1489a282_151) | [37](#i4985713dc64f40908812c73f1489a282_151) |
| **[PART II. Other Information](#i4985713dc64f40908812c73f1489a282_154)** | **[PART II. Other Information](#i4985713dc64f40908812c73f1489a282_154)** |  |
| &nbsp;&nbsp;&nbsp;[Item 1](#i4985713dc64f40908812c73f1489a282_157) | [Legal Proceedings](#i4985713dc64f40908812c73f1489a282_157) | [38](#i4985713dc64f40908812c73f1489a282_157) |
| &nbsp;&nbsp;&nbsp;[Item 1A](#i4985713dc64f40908812c73f1489a282_160) | [Risk Factors](#i4985713dc64f40908812c73f1489a282_160) | [38](#i4985713dc64f40908812c73f1489a282_160) |
| &nbsp;&nbsp;&nbsp;[Item 2](#i4985713dc64f40908812c73f1489a282_163) | [Unregistered Sales of Equity Securities and Use of Proceeds](#i4985713dc64f40908812c73f1489a282_163) | [38](#i4985713dc64f40908812c73f1489a282_163) |
| &nbsp;&nbsp;&nbsp;[Item 3](#i4985713dc64f40908812c73f1489a282_166) | [Defaults Upon Senior Securities](#i4985713dc64f40908812c73f1489a282_166) | [38](#i4985713dc64f40908812c73f1489a282_166) |
| &nbsp;&nbsp;&nbsp;[Item 4](#i4985713dc64f40908812c73f1489a282_169) | [Mine Safety Disclosures](#i4985713dc64f40908812c73f1489a282_169) | [39](#i4985713dc64f40908812c73f1489a282_169) |
| &nbsp;&nbsp;&nbsp;[Item 5](#i4985713dc64f40908812c73f1489a282_172) | [Other Information](#i4985713dc64f40908812c73f1489a282_172) | [39](#i4985713dc64f40908812c73f1489a282_172) |
| &nbsp;&nbsp;&nbsp;[Item 6](#i4985713dc64f40908812c73f1489a282_178) | [Exhibits](#i4985713dc64f40908812c73f1489a282_178) | [39](#i4985713dc64f40908812c73f1489a282_178) |
| **[Signatures](#i4985713dc64f40908812c73f1489a282_181)** | **[Signatures](#i4985713dc64f40908812c73f1489a282_181)** | [41](#i4985713dc64f40908812c73f1489a282_181) |

---

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|:---|:---|
| 2 | ![logo.jpg](sgh-20251128_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.

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.

**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," "target," "commit," "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 and demand 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, tariffs, or other factors; 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 Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda. ("Zilia Technologies") (formerly SMART Modular Technologies do Brasil - Indústria e Comércio de Componentes Ltda.) and its business, including the planned sale of our remaining 19% interest therein and the timing and closing of such sale; 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 percentage of our revenue; changes in customer demand and sales mix; 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

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|:---|:---|
| 3 | ![logo.jpg](sgh-20251128_g1.jpg) |

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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; potential sales of our common stock by the holder of our Issued CPS (as defined below) or the anticipation of such sales; 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 our Annual Report on Form 10-K for the fiscal year ended August 29, 2025 (the "2025 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.

Our fiscal year is the 52- or 53-week period ending on the last Friday in August. Fiscal years 2026 and 2025 each contain 52 weeks. 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.

Certain information included herein or elsewhere, such as on our website or related materials, is disclosed in response to certain third-party frameworks or stakeholder expectations. However, such information, even if significant, is not necessarily material for purposes of our SEC filings, even if we use "material" or similar language. Particularly in the sustainability context, "materiality" is subject to multiple definitions that differ from — and are often more expansive than — the definition under U.S. federal securities laws.

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|:---|:---|
| 4 | ![logo.jpg](sgh-20251128_g1.jpg) |

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**PART I. Financial Information**

**Item 1. Financial Statements**

**INDEX TO FINANCIAL STATEMENTS**

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| | |
|:---|:---|
| | **Page** |
| [Consolidated Balance Sheets](#i4985713dc64f40908812c73f1489a282_19) | [6](#i4985713dc64f40908812c73f1489a282_19) |
| [Consolidated Statements of Operations](#i4985713dc64f40908812c73f1489a282_22) | [7](#i4985713dc64f40908812c73f1489a282_22) |
| [Consolidated Statements of Comprehensive Income (Loss)](#i4985713dc64f40908812c73f1489a282_25) | [8](#i4985713dc64f40908812c73f1489a282_25) |
| [Consolidated Statements of Shareholders' Equity](#i4985713dc64f40908812c73f1489a282_28) | [9](#i4985713dc64f40908812c73f1489a282_28) |
| [Consolidated Statements of Cash Flows](#i4985713dc64f40908812c73f1489a282_31) | [10](#i4985713dc64f40908812c73f1489a282_31) |
| [Notes to Consolidated Financial Statements](#i4985713dc64f40908812c73f1489a282_34) | [11](#i4985713dc64f40908812c73f1489a282_34) |

---

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|:---|:---|
| 5 | ![logo.jpg](sgh-20251128_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Balance Sheets**

(In thousands, except par value amounts)

(Unaudited)

---

| | | |
|:---|:---|:---|
| **As of** | **November 28,<br>2025** | **August 29,<br>2025** |
| **Assets** | | |
| Cash and cash equivalents | $461451 | $453754 |
| Accounts receivable, net | 326892 | 307904 |
| Accounts receivable, net - related party | 15076 |  |
| Inventories | 213205 | 255182 |
| Other current assets | 50390 | 47387 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 1067014 | 1064227 |
| Property and equipment, net | 90383 | 92603 |
| Operating lease right-of-use assets | 57254 | 58847 |
| Intangible assets, net | 80568 | 87754 |
| Goodwill | 145895 | 145895 |
| Deferred tax assets | 99023 | 99107 |
| Other noncurrent assets | 58058 | 68767 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1598195 | $1617200 |
| **Liabilities, Temporary Equity and Stockholders' Equity** |  |  |
| Accounts payable and accrued expenses | $347526 | $318761 |
| Current debt | 19974 | 19945 |
| Deferred revenue | 43648 | 73893 |
| Other current liabilities | 46962 | 61300 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 458110 | 473899 |
| Long-term debt | 442333 | 441893 |
| Noncurrent operating lease liabilities | 61406 | 62736 |
| Other noncurrent liabilities | 31877 | 30445 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 993726 | 1008973 |
| Commitments and contingencies |  |  |
| Temporary equity |  |  |
| &nbsp;&nbsp;Preferred stock, $0.03 par value; authorized 30,000 shares; 200 shares of convertible preferred stock issued and outstanding as of November 28, 2025 and August 29, 2025. Redemption amount of 200,400 and 200,500 as of November 28, 2025 and August 29, 2025, respectively | 202710 | 202710 |
| Penguin Solutions stockholders' equity: |  |  |
| Common stock, $0.03 par value; authorized 200,000 shares; 63,605 shares issued and 52,560 outstanding as of November 28, 2025; 62,756 shares issued and 52,738 outstanding as of August 29, 2025 | 1908 | 1883 |
| Additional paid-in capital | 565105 | 551712 |
| Retained earnings | 48946 | 46709 |
| &nbsp;&nbsp;Treasury stock, 11,045 and 10,018 shares held as of November 28, 2025 and August 29, 2025, respectively | (226269) | (206076) |
| &nbsp;&nbsp;Accumulated other comprehensive income | 13 | 18 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Penguin Solutions stockholders' equity | 389703 | 394246 |
| Noncontrolling interest in subsidiary | 12056 | 11271 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 401759 | 405517 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities, temporary equity and stockholders' equity | $1598195 | $1617200 |

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

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|:---|:---|
| 6 | ![logo.jpg](sgh-20251128_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Statements of Operations**

(In thousands, except per share amounts)

(Unaudited)

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| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Net sales: |  |  |
| &nbsp;&nbsp;Products | $246392 | $270260 |
| &nbsp;&nbsp;Services | 64505 | 70842 |
| &nbsp;&nbsp;Related party | 32174 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | 343071 | 341102 |
| Cost of sales: |  |  |
| &nbsp;&nbsp;Products | 220055 | 215149 |
| &nbsp;&nbsp;Services | 26907 | 28141 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total cost of sales | 246962 | 243290 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 96109 | 97812 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;Research and development | 18693 | 19811 |
| &nbsp;&nbsp;Selling, general and administrative | 53092 | 60536 |
| &nbsp;&nbsp;Other operating expense | 4742 | 109 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 76527 | 80456 |
| Operating income | 19582 | 17356 |
| Non-operating (income) expense: |  |  |
| &nbsp;&nbsp;Interest expense, net | 47 | 4396 |
| &nbsp;&nbsp;Other non-operating expense | 11675 | 636 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-operating expense | 11722 | 5032 |
| Income (loss) before taxes | 7860 | 12324 |
| Income tax provision (benefit) | 1805 | 6360 |
| Net income (loss) | 6055 | 5964 |
| Net income (loss) attributable to noncontrolling interest | 785 | 747 |
| Net income (loss) attributable to Penguin Solutions | 5270 | 5217 |
| Preferred stock dividends | 3033 |  |
| Income available for distribution | 2237 | 5217 |
| Income allocated to participating securities | 231 |  |
| Net income available to common stockholders | $2006 | $5217 |
| Earnings (loss) per share |  |  |
| &nbsp;&nbsp;Basic | $0.04 | $0.10 |
| &nbsp;&nbsp;Diluted | $0.04 | $0.10 |
| Common stock used in per share calculations: |  |  |
| &nbsp;&nbsp;Basic | 52900 | 53482 |
| &nbsp;&nbsp;Diluted | 54991 | 54312 |

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

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|:---|:---|
| 7 | ![logo.jpg](sgh-20251128_g1.jpg) |

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**Penguin Solutions, Inc.**

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

(In thousands)

(Unaudited)

---

| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Net income (loss) | $6055 | $5964 |
| Other comprehensive income (loss), net of tax: |  |  |
| &nbsp;&nbsp;Gain (loss) on investments | (5) | 9 |
| Comprehensive income (loss) | 6050 | 5973 |
| Comprehensive income attributable to noncontrolling interest | 785 | 747 |
| Comprehensive income (loss) attributable to Penguin Solutions | $5265 | $5226 |

---

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

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|:---|:---|
| 8 | ![logo.jpg](sgh-20251128_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Statements of Stockholders' Equity**

(In thousands)

(Unaudited)

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common** | **Common** | **Additional<br>Paid-in-capital** | | | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total Penguin Solutions**<br>**Stockholders'**<br>**Equity** | **Non-<br>controlling<br>Interest in<br>Subsidiary** | |
| | **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>**Stockholders'**<br>**Equity** | **Non-<br>controlling<br>Interest in<br>Subsidiary** |<br>**Total<br>Equity** |
| **As of August 29, 2025** | 62756 | $1883 | $551712 | $46709 | $(206076) | $18 | $394246 | $11271 | $405517 |
| Net income |  |  |  | 5270 |  |  | 5270 | 785 | 6055 |
| Other comprehensive income (loss) |  |  |  |  |  | (5) | (5) |  | (5) |
| Stock issued under equity plans | 849 | 25 | 3313 |  |  |  | 3338 |  | 3338 |
| Repurchase of shares |  |  |  |  | (20193) |  | (20193) |  | (20193) |
| Stock-based compensation expense |  |  | 10080 |  |  |  | 10080 |  | 10080 |
| Preferred stock dividends |  |  |  | (3033) |  |  | (3033) |  | (3033) |
| **As of November 28, 2025** | 63605 | $1908 | $565105 | $48946 | $(226269) | $13 | $389703 | $12056 | $401759 |
|  |  |  | **Additional<br>Paid-in-capital** |  |  | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total Penguin Solutions<br>Stockholders'<br>Equity** | **Non-<br>controlling<br>Interest in<br>Subsidiary** |  |
|  | **Shares<br>Issued** | **Amount** | **Additional<br>Paid-in-capital** | **Retained<br>Earnings** | **Treasury<br>Shares** | **Accumulated<br>Other<br>Comprehensive<br>Income (Loss)** | **Total Penguin Solutions<br>Stockholders'<br>Equity** | **Non-<br>controlling<br>Interest in<br>Subsidiary** | **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 |
| Stock issued under equity plans | 841 | 25 | 3335 |  |  |  | 3360 |  | 3360 |
| Repurchase of shares |  |  |  |  | (11123) |  | (11123) |  | (11123) |
| Stock-based compensation expense |  |  | 11531 |  |  |  | 11531 |  | 11531 |
| **As of November 29, 2024** | 61067 | $1832 | $528201 | $35202 | $(164879) | $19 | $400375 | $8574 | $408949 |

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

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|:---|:---|
| 9 | ![logo.jpg](sgh-20251128_g1.jpg) |

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**Penguin Solutions, Inc.**

**Consolidated Statements of Cash Flows**

(In thousands)

(Unaudited)

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| | | |
|:---|:---|:---|
| **Three Months Ended** | **November 28,<br>2025** | **November 29,<br>2024** |
| **Cash flows from operating activities** | | |
| Net income (loss) | $6055 | $5964 |
| 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 | 12819 | 14961 |
| &nbsp;&nbsp;Amortization of debt issuance costs | 658 | 953 |
| &nbsp;&nbsp;Stock-based compensation expense | 10080 | 11531 |
| &nbsp;&nbsp;Loss on impairment of non-marketable equity investment | 10000 |  |
| &nbsp;&nbsp;Deferred income taxes, net | 85 | 211 |
| &nbsp;&nbsp;Other | 2129 | (712) |
| &nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (34064) | (23885) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | 41977 | (93380) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | (876) | 705 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses and other liabilities | (17805) | 97471 |
| Net cash provided by operating activities | 31058 | 13819 |
| **Cash flows from investing activities** |  |  |
| Capital expenditures and deposits on equipment | (2853) | (1836) |
| Proceeds from sales and maturities of investment securities |  | 3780 |
| Purchases of held-to-maturity investment securities |  | (20723) |
| Other | (521) | (143) |
| Net cash used for investing activities | (3374) | (18922) |
| **Cash flows from financing activities** |  |  |
| Payments to acquire common stock | (20193) | (11123) |
| Payment of preferred stock cash dividends | (3133) |  |
| Proceeds from issuance of common stock | 3339 | 3360 |
| Net cash used for financing activities | (19987) | (7763) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 7697 | (12866) |
| Cash, cash equivalents and restricted cash at beginning of period | 454070 | 383477 |
| Cash, cash equivalents and restricted cash at end of period | $461767 | $370611 |

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

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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**

***U.S. Domestication*:** On June 30, 2025, we consummated the redomiciliation of the parent company of our corporate group, Penguin Solutions (Cayman), Inc., formerly known as 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, and the accounts of Penguin Solutions Delaware and its consolidated subsidiaries after the consummation of the U.S. Domestication. Unless stated otherwise or the context otherwise requires, references to "Penguin Solutions," "we," "us," "our," and the "Company" in the accompanying consolidated financial statements (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.

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 29, 2025 (the "2025 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 2025 Annual Report.

***Fiscal Year*:** Our fiscal year is the 52- or 53-week period ending on the last Friday in August. Fiscal years 2026 and 2025 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated.

**Recently Issued Accounting Standards**

In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-06, *Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Improvements to the Accounting for and Disclosure of Internal-Use Software*, which replaces the previous stage-based model for capitalizing internal-use software development costs with a principles-based approach. Under the new guidance, capitalization begins when management authorizes and commits to funding a project and it is probable the project will be completed and used as intended. The ASU also incorporates website development guidance into Accounting Standards Codification ("ASC") 350-40 and introduces the concept of "significant development uncertainty," which, if present, would delay capitalization. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, including interim periods within those years, with early adoption permitted at the beginning of an annual period. The new guidance may be applied prospectively, retrospectively, or using a modified prospective approach. We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures, though we do not expect there to be a material impact.

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In July 2025, the FASB issued ASU 2025-05, *Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets* ("ASU 2025-05"). ASU 2025-05 provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, *Revenue from Contracts with Customers*. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. We are currently evaluating the potential impact of adopting ASU 2025-05 on our consolidated financial statements and disclosures.

In November 2024, the FASB issued 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.

**Cash and Investments**

As of November 28, 2025 and August 29, 2025, all of our debt securities, the fair values of which approximated their carrying values, were classified as held to maturity. As of November 28, 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 November 28, 2025** | **As of November 28, 2025** | **As of August 29, 2025** | **As of August 29, 2025** |
| | **Cash and Cash Equivalents** | **Short-term Investments** | **Cash and Cash Equivalents** | **Short-term Investments** |
| Cash | $434306 | $— | $426870 | $— |
| Level 1: |  |  |  |  |
| &nbsp;&nbsp;Money market funds | 27145 |  | 26884 |  |
|  | $461451 | $— | $453754 | $— |

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**Non-marketable Equity Investments**

As of both November 28, 2025 and August 29, 2025, other noncurrent assets included $43.0 million and $53.0 million, respectively, 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 net income (loss).

During the quarter ended November 28, 2025, the Company identified several significant qualitative impairment indicators related to one of its non-marketable equity investments. These indicators included substantial deterioration in the investee's financial condition, liquidity position, and operating performance, as well as

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| 12 | ![logo.jpg](sgh-20251128_g1.jpg) |

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significant leadership and governance changes. Collectively, these factors raised substantial doubt regarding the Company's ability to recover the carrying value of the investment.

In accordance with ASC 321, the Company evaluated the fair value of the investment, taking into consideration the investee's financial condition, operational viability, and overall governance environment. Based on this assessment, the Company concluded that the fair value of the investment was effectively zero as of the reporting date.

As a result, the Company recognized a full impairment charge of $10.0 million during the quarter ended November 28, 2025. The impairment is recorded within Other non-operating expense in the Consolidated Statements of Operations. Following the impairment, the carrying amount of the investment is zero.

The Company may have certain rights or claims in the event the investee pursues a formal restructuring or bankruptcy process. However, due to significant uncertainty regarding the recoverability of any amounts and the investee's insolvency, no potential recoveries have been recognized as of the reporting date. The Company will continue to monitor developments and will recognize any future proceeds, if realized, in the period received within net income (loss).

**Accounts Receivable**

We continue to maintain a trade receivable sales program that allows us to sell certain of our trade receivables up to $60.0 million, on a non-recourse basis to a third-party financial institution. As of November 28, 2025, there have been no trade accounts receivable sold under this program.

**Inventories**

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| | | |
|:---|:---|:---|
| **As of** | **November 28,<br>2025** | **August 29,<br>2025** |
| Raw materials | $108272 | $92393 |
| Work in process | 27199 | 32002 |
| Finished goods | 77734 | 130787 |
|  | $213205 | $255182 |

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As of November 28, 2025 and August 29, 2025, 13% and 21%, respectively, of total inventories were owned and held under our logistics services program.

**Property and Equipment**

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| | | |
|:---|:---|:---|
| **As of** | **November 28,<br>2025** | **August 29,<br>2025** |
| Equipment | $90724 | $90160 |
| Buildings and building improvements | 70275 | 69245 |
| Furniture, fixtures and software | 44261 | 46784 |
| Land | 14983 | 14983 |
|  | 220243 | 221172 |
| Accumulated depreciation | (129860) | (128569) |
|  | $90383 | $92603 |

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Depreciation expense for property and equipment was $5.1 million and $5.0 million in the first quarter of 2026 and 2025, respectively.

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**Intangible Assets and Goodwill**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Gross**<br>**Amount** | **Accumulated**<br>**Amortization** | **Gross**<br>**Amount** | **Accumulated**<br>**Amortization** |
|<br>**As of** | **November 28, 2025** | **November 28, 2025** | **August 29, 2025** | **August 29, 2025** |
| Intangible assets: |  |  |  |  |
| &nbsp;&nbsp;Technology | $144984 | $(89500) | $144445 | $(83375) |
| &nbsp;&nbsp;Customer relationships | 33000 | (14641) | 33000 | (13602) |
| &nbsp;&nbsp;Trademarks/trade names | 15786 | (9061) | 15786 | (8500) |
|  | $193770 | $(113202) | $193231 | $(105477) |
| Goodwill by segment: |  |  |  |  |
| &nbsp;&nbsp;Advanced Computing | $131175 |  | $131175 |  |
| &nbsp;&nbsp;Integrated Memory | 14720 |  | 14720 |  |
|  | $145895 |  | $145895 |  |

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In the first quarter of 2026 and 2025, we capitalized $0.5 million and $0.4 million, respectively, for intangible assets with weighted-average useful lives of 18.6 years and 18.5 years, respectively. Amortization expense for intangible assets was $7.7 million and $9.9 million in the first quarter of 2026 and 2025, respectively. Amortization expense is expected to be $25.0 million for the remainder of 2026, $29.7 million for 2027, $10.0 million for 2028, $6.1 million for 2029, $5.4 million for 2030 and $4.4 million for 2031 and thereafter.

**Accounts Payable and Accrued Expenses**

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| | | |
|:---|:---|:---|
| **As of** | **November 28,<br>2025** | **August 29,<br>2025** |
| Accounts payable <sup>(1)</sup> | $304938 | $267498 |
| Salaries, wages and benefits | 20894 | 34169 |
| Income and other taxes | 16953 | 15304 |
| Other | 4741 | 1790 |
|  | $347526 | $318761 |

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(1)Included in accounts payable for property and equipment of $1.2 million and $1.7 million as of November 28, 2025 and August 29, 2025, respectively.

**Debt**

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| | | |
|:---|:---|:---|
| **As of** | **November 28,<br>2025** | **August 29,<br>2025** |
| 2030 Notes | 194201 | 193906 |
| 2029 Notes | 148132 | 147987 |
| 2026 Notes | 19974 | 19945 |
| 2025 Loans | 100000 | 100000 |
|  | 462307 | 461838 |
| Less current debt | (19974) | (19945) |
| Long-term debt | $442333 | $441893 |

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**Credit Agreement**

On February 7, 2022, Penguin Solutions and SMART Modular Technologies, Inc. (collectively, the "Borrowers") entered into a credit agreement, subsequently amended (the "2022 Amended Credit Agreement"), with a syndicate of banks and Citizens Bank, N.A., as administrative agent that provided for a term loan credit facility (the "Amended 2022 TLA") and a revolving credit facility (the "2022 Revolver"), in each case, maturing on February 7, 2027.

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On June 24, 2025 (the "Refinancing Closing Date"), 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 $400.0 million (the "2025 Credit Facility" and the revolving loans thereunder, the "2025 Loans"), maturing on June 24, 2030. 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 $200.0 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 $300.0 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 recognized a loss on extinguishment of $2.9 million.

As of November 28, 2025, there was $100.0 million of principal amount outstanding under the 2025 Loans, and unamortized issuance costs were $3.5 million.

**Convertible Senior Notes**

**Convertible Senior Notes Interest**

Unamortized debt discount and issuance costs are amortized over the terms of our Convertible Senior Notes due 2026 (the "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 November 28, 2025 and August 29, 2025, the effective interest rate for our 2026 Notes was 2.83%*.* As of November 28, 2025 and August 29, 2025, the effective interest rate for our 2029 Notes was 2.40%. As of November 28, 2025 and August 29, 2025, 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:

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| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Contractual stated interest | $1842 | $1842 |
| Amortization of debt issuance costs | 470 | 458 |
|  | $2312 | $2300 |

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**Maturities of Debt**

As of November 28, 2025, maturities of debt were as follows:

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| | |
|:---|:---|
| 2026 | $20000 |
| 2027 |  |
| 2028 |  |
| 2029 | 150000 |
| 2030 | 300000 |
| 2031 and thereafter |  |
| Less unamortized discount and issuance costs | (7693) |
|  | $462307 |

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**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:

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| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Fixed lease cost | $2818 | $2975 |
| Variable lease cost | 583 | 448 |
| Short-term lease cost | 413 | 468 |
|  | $3814 | $3891 |

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Cash flows from operating activities included payments for operating leases of $1.5 million and $2.3 million in the first quarter of 2026 and 2025, respectively.

As of November 28, 2025 and August 29, 2025, the weighted-average remaining lease term for our operating leases was 9.6 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 2 years to 5 years. In determining the present value of our operating lease liabilities, we have assumed we will not extend any lease terms.

As of November 28, 2025, minimum payments of lease liabilities were as follows:

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| | |
|:---|:---|
| Remainder of 2026 | $7247 |
| 2027 | 9549 |
| 2028 | 9540 |
| 2029 | 9617 |
| 2030 | 9788 |
| 2031 and thereafter | 43828 |
|  | 89569 |
| Less imputed interest | (22471) |
| Present value of total lease liabilities | $67098 |

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**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

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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.

**Temporary Equity**

**Convertible Preferred Stock**

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").

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.

At the time of issuance, we evaluated the terms and conditions of the Issued Cayman CPS. Based on this evaluation, we determined that the Issued Cayman CPS did not contain redemption features that were outside the Company's control and therefore initially classified the Issued Cayman CPS as permanent equity within the consolidated balance sheet.

On June 30, 2025, we completed the U.S. Domestication, at which time 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. 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, par value $0.03 per share, designated as convertible preferred stock (the "Issued CPS"). In connection with this event, we reassessed the classification of the Issued CPS.

The terms of the Issued CPS are substantially the same as those of the Issued Cayman CPS. However, the Cayman governing documents included protective provisions that set forth the Company's ability to solely control redemption features. These provisions are not explicitly included in the Company's amended and restated certificate of incorporation or the CPS Delaware Certificate of Designation. The Company evaluated the absence of these provisions in the Delaware governing documents and determined that the CPS should be classified as temporary equity beginning June 30, 2025. Accordingly, the Issued CPS was reclassified to temporary equity effective June 30, 2025.

In accordance with SEC guidance on redeemable equity securities, we reclassified the Issued CPS out of permanent equity at its fair value as of the date of the U.S. Domestication. The reclassification resulted in an adjustment to additional paid-in capital, representing the difference between the historical carrying amount and the fair value at the reclassification date. This adjustment had no impact on the Company's net income, comprehensive income, or cash flows.

As of June 30, 2025, we recorded $202.7 million of Issued CPS within temporary equity on the consolidated balance sheet. As of August 29, 2025 and November 28, 2025, we did not adjust the carrying values of the Issued CPS to the redemption values of such shares because a deemed liquidation event did not occur and the shares were not probable of becoming redeemable in the future as of the consolidated balance sheet date.

*<u>Amended and Restated Investor Agreement</u>*

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 such that the rights and restrictions relating to SKT's beneficial

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ownership of the Issued Cayman CPS in place prior to the U.S. Domestication apply in respect of SKT's holdings of Issued CPS following consummation of the U.S. Domestication.

*<u>Delaware Certificate of Designation for Convertible Preferred Stock</u>*

On June 27, 2025, in connection with the U.S. Domestication, Penguin Solutions Delaware executed and adopted the CPS Delaware Certificate of Designation that sets forth the terms, rights and obligations of 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 3.3 hereto, to the description of the Issued CPS contained in the description of the Registrant's capital stock, filed as Exhibit 4.1 to the 2025 Annual Report, and to the information under the heading "Comparison of Rights of Cayman Islands Shareholders and Delaware Stockholders" in Penguin Solutions Cayman's definitive proxy statement on Schedule 14A filed with the SEC on May 2, 2025.

*<u>Conversion</u>*

A holder of Issued CPS may convert such holder's Issued CPS into common stock at any time, provided that the shares of Issued CPS may, at our option, automatically be converted into common stock on any date following the second anniversary of the closing of the SKT Investment upon which the volume-weighted average price of the common stock for any fifteen consecutive trading day period equals or exceeds 150% of the then-applicable conversion price. The shares of Issued CPS are convertible into common stock 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 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 stock issuance limitation. We declared and paid preferred cash dividends of $3.1 million in the first quarter of 2026. As of November 28, 2025, we accrued preferred dividends of $0.4 million.

*<u>Liquidation Preference</u>*

In case of a Liquidation Trigger Event (as defined in the CPS Delaware Certificate of Designation), each holder of Issued CPS will be entitled to receive, in preference to holders of common stock, 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 CPS would receive had such holder, immediately prior to such Liquidation Trigger Event, converted the shares of Issued CPS into shares of common stock. The liquidation preference associated with the Issued CPS was $1,000 per share at August 29, 2025.

*<u>Voting Rights</u>*

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

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

SKT (through Astra AI Infra) 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 Astra AI Infra) beneficially own less than five percent of the common stock then issued and outstanding (calculated on a fully-diluted basis) directly or by holding Issued CPS.

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

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

**Equity**

**Penguin Solutions Stockholders' Equity**

**Common Stock Repurchase Authorization**

On April 4, 2022, our Board of Directors approved a $75.0 million stock repurchase authorization (the "2022 Authorization"), under which we may repurchase our outstanding common stock from time to time through open market purchases, privately-negotiated transactions or otherwise. On each of January 8, 2024 and October 6, 2025, the Audit Committee of the Board of Directors approved additional $75.0 million stock repurchase authorizations (the "2024 Authorization" and "2025 Authorization," respectively, and together, the "Current Authorizations"). The Current Authorizations, which consist solely of amounts approved pursuant to the 2024 Authorization and 2025 Authorization as all amounts under the 2022 Authorization have been utilized, have no expiration date but may be suspended or terminated by the Board of Directors at any time. In the first quarter of 2026 and 2025, we repurchased 791 thousand and 467 thousand shares of common stock for $15.0 million and $7.8 million, respectively, under the Current Authorizations. As of November 28, 2025, an aggregate of $96.5 million remained available for the repurchase of our common stock under the Current Authorizations. Certain of our agreements, including the 2025 Credit Agreement, the SKT Purchase Agreement and the CPS Delaware Certificate of Designation, contain restrictions that limit our ability to repurchase our common stock.

**Other Stock Repurchases**

Common stock withheld as payment of withholding taxes and exercise prices in connection with the vesting or exercise of equity awards are treated as common stock repurchases. In the first quarter of 2026 and 2025, we repurchased 235 thousand and 213 thousand shares of common stock as payment of withholding taxes for $5.2 million and $3.3 million, respectively.

**Accumulated Other Comprehensive Income (Loss)**

Changes in accumulated other comprehensive income (loss) by component in the first quarter of 2026 were as follows:

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|:---|:---|
| | **Gains (Losses)**<br>**on**<br>**Investments** |
| **As of August 29, 2025** | $28 |
| Other comprehensive income (loss) before reclassifications | 13 |
| Reclassifications out of accumulated other comprehensive income |  |
| Other comprehensive income (loss) | 13 |
| **As of November 28, 2025** | $41 |

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**Fair Value Measurements**

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair<br>Value** | **Carrying<br>Value** | **Fair<br>Value** | **Carrying<br>Value** |
| **As of** | **November 28, 2025** | **November 28, 2025** | **August 29, 2025** | **August 29, 2025** |
| Assets: |  |  |  |  |
| &nbsp;&nbsp;Derivative financial instruments | $4300 | $4300 | $4223 | $4223 |
| Liabilities: |  |  |  |  |
| &nbsp;&nbsp;2030 Notes | $207726 | $194201 | $224048 | $193906 |
| &nbsp;&nbsp;2029 Notes | $175356 | $148132 | $197363 | $147987 |
| &nbsp;&nbsp;2026 Notes | $22838 | $19974 | $25713 | $19945 |

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The deferred cash adjustment resulting from the divestiture of an 81% interest in Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda. (formerly SMART Modular Technologies do Brasil - Indústria e Comércio de Componentes Ltda.) 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 November 28, 2025, 3.6 million shares of our common stock were available for future awards under our equity plans.

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

Restricted Award activity was as follows:

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| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Restricted awards granted | 1500 | 635 |
| Weighted-average grant date fair value per share | $21.46 | $30.25 |
| Aggregate vesting date fair value of shares vested | $13364 | $9028 |

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As of November 28, 2025, total unrecognized compensation costs for unvested Restricted Awards were $95.4 million, which were expected to be recognized over a weighted-average period of 2 years, 10 months.

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

Under our ESPP, employees purchased 247 thousand shares of common stock for $3.3 million in the first quarter of 2026 and 253 thousand shares of common stock for $3.2 million in the first quarter of 2025.

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**Stock-Based Compensation Expense**

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

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| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Stock-based compensation expense by caption: |  |  |
| &nbsp;&nbsp;Cost of sales | $1386 | $1643 |
| &nbsp;&nbsp;Research and development | 1494 | 1689 |
| &nbsp;&nbsp;Selling, general and administrative | 7200 | 8199 |
|  | $10080 | $11531 |

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Income tax benefits for stock-based awards were $1.4 million in the first quarter of 2026, respectively, and $1.5 million in the first quarter of 2025, 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:

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| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Cost of materials and services invoiced in connection with logistics services | $262185 | $212947 |

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**Customer Contract Balances**

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| | | |
|:---|:---|:---|
| **As of** | **November 28,<br>2025** | **August 29,<br>2025** |
| Contract assets <sup>(1)</sup> | $2696 | $1929 |
| Contract liabilities: <sup>(2)</sup> |  |  |
| &nbsp;&nbsp;Deferred revenue | $59326 | $89943 |
| &nbsp;&nbsp;Customer advances | 24213 | 21525 |
|  | $83539 | $111468 |

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(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 November 28, 2025, we expect to recognize revenue of $47.9 million of the balance of $59.3 million in the next 12 months and the remaining amount thereafter. In the first quarter of 2026, we recognized revenue of $42.6 million from satisfying performance obligations related to amounts included in deferred revenue as of August 29, 2025. In addition, as of November 28, 2025, other current liabilities included $15.2 million that is not included in the above remaining performance obligations. While this liability relates to amounts received from customers in

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connection with arrangements that 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 quarter of 2026, we recognized revenue of $18.9 million from satisfying performance obligations related to amounts included in customer advances as of August 29, 2025.

As of November 28, 2025 and August 29, 2025, other current liabilities included $16.8 million and $17.7 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 $4.7 million and $0.1 million in the first quarter of 2026 and 2025, 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 29, 2025** | $1063 |
| Additions | 4742 |
| Cash payments | (3516) |
| **As of November 28, 2025** | $2289 |

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The 2026 beginning restructuring liability balance was $1.1 million, of which $0.3 million remained outstanding as of November 28, 2025. The total unpaid balance as of November 28, 2025 was $2.3 million, and it is expected to be fully paid by the end of 2026.

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

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| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Loss (gain) from changes in foreign currency exchange rates | 1212 | 1028 |
| Loss (gain) on disposition of assets | (19) | (20) |
| Loss (gain) on non-marketable equity investments | 10000 |  |
| Other | 482 | (372) |
|  | $11675 | $636 |

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**Income Taxes**

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| | | |
|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Income (loss) before taxes | $7860 | $12324 |
| Income tax provision (benefit) | $1805 | $6360 |
| Effective tax rate | 23.0% | 51.6% |

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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 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.

The effective tax rate was 23.0% in the first quarter of 2026 and was higher than the U.S. statutory tax rate of 21.0% primarily due to cross border tax costs, state income taxes, and nondeductible compensation paid to officers, partially offset by foreign operations which reflects the impact of lower tax rates in locations outside the U.S. and tax credits. The effective tax rate was 51.6% in the first quarter of 2025, 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, 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 common share ("EPS") pursuant to the two-class method as a result of the issuance of the Issued CPS. The two-class method is an earnings allocation formula that determines EPS for common 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 common stock and participating securities based on their respective rights to receive dividends. The Issued CPS is considered a participating security. The Issued CPS is not included in the computation of basic EPS in periods in which we have a net loss, as the Issued CPS is not contractually obligated to share in our net losses.

With respect to the Issued 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 common stockholders 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 common stock includes 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** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Net income (loss) attributable to Penguin Solutions – Basic and Diluted | $5270 | $5217 |
| Less: Preferred stock dividends | 3033 |  |
| Income available for distribution | 2237 | 5217 |
| Income allocated to participating securities | 231 |  |
| Net income available to common stockholders | $2006 | $5217 |
| Weighted-average shares outstanding – Basic | 52900 | 53482 |
| Dilutive effect of equity plans and Convertible Senior Notes | 2091 | 830 |
| Weighted-average shares outstanding – Diluted | 54991 | 54312 |
| Earnings (loss) per share: |  |  |
| &nbsp;&nbsp;Basic | $0.04 | $0.10 |
| &nbsp;&nbsp;Diluted | $0.04 | $0.10 |
| Unweighted anti-dilutive shares: |  |  |
| &nbsp;&nbsp;Equity plans | 662 | 1371 |
| &nbsp;&nbsp;Convertible Senior Notes |  |  |
| &nbsp;&nbsp;Preferred stock | 6096 |  |
|  | 6758 | 1371 |

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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 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 ("CODM"), the Chief Executive Officer, evaluates our results of operations to make decisions about allocating resources and assessing performance using segment net sales, cost of sales, operating expenses, and operating income (loss). The CODM is regularly provided this segment information to assess relative segment performance and allocate resources to the segment in the annual planning process.

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 sales, 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** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Net sales: |  |  |
| &nbsp;&nbsp;Advanced Computing | $151452 | $177426 |
| &nbsp;&nbsp;Integrated Memory | 136521 | 96706 |
| &nbsp;&nbsp;Optimized LED | 55098 | 66970 |
| Total net sales | $343071 | $341102 |
| Costs of Goods Sold |  |  |
| &nbsp;&nbsp;Advanced Computing | $99678 | $114931 |
| &nbsp;&nbsp;Integrated Memory | 105528 | 75565 |
| &nbsp;&nbsp;Optimized LED | 34944 | 45484 |
| Total Costs of Goods Sold | 240150 | 235980 |
| Operating Expense |  |  |
| &nbsp;&nbsp;Advanced Computing | $29655 | $32379 |
| &nbsp;&nbsp;Integrated Memory | 15061 | 14024 |
| &nbsp;&nbsp;Optimized LED | 16677 | 17801 |
| Total Operating Expenses | 61393 | 64204 |
| Segment operating income: |  |  |
| &nbsp;&nbsp;Advanced Computing | $22119 | $30117 |
| &nbsp;&nbsp;Integrated Memory | 15932 | 7116 |
| &nbsp;&nbsp;Optimized LED | 3477 | 3685 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total segment operating income | 41528 | 40918 |
| Reconciliation of profit (loss) |  |  |
| &nbsp;&nbsp;Stock-based compensation expense | (10080) | (11531) |
| &nbsp;&nbsp;Amortization of acquisition-related intangibles | (7508) | (9755) |
| &nbsp;&nbsp;Cost of sales-related restructuring | 483 | 42 |
| &nbsp;&nbsp;Diligence, acquisition and integration expense |  | (833) |
| Redomiciliation costs |  | (1243) |
| &nbsp;&nbsp;Restructuring charges | (4742) | (109) |
| &nbsp;&nbsp;Other | (99) | (133) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total unallocated | (21946) | (23562) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-operating expense | $(11722) | $(5032) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income (loss) before taxes | $7860 | $12324 |

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Depreciation included in segment operating income was as follows:

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| | | |
|:---|:---|:---|
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Advanced Computing | $2135 | $1779 |
| Integrated Memory | 889 | 924 |
| Optimized LED | 2070 | 2314 |
|  | $5094 | $5017 |

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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 ASC 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

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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 subsequently entered into statements of work to provide 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. At the beginning of fiscal 2026 we had $18.3 million in cash deposits recorded as a contract liability. During the quarter ended November 28, 2025, we recognized revenue of $32.2 million, on the fulfillment of AI hardware solutions and installation services. As of November 28, 2025, $15.1 million remained outstanding in accounts receivable.

**Subsequent Events**

On December 29, 2025, the Company entered into a certain Stock Transfer Agreement (the "Stock Transfer Agreement"), by and among the Company, Lexar Europe B.V., a company organized under the laws of the Netherlands ("Buyer"), Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda., a sociedade limitada governed by the laws of Brazil ("Zilia Technologies"), Shenzhen Longsys Electronics Co., Ltd., a company limited by shares governed by the laws of the People's Republic of China ("Parent"), and Shanghai Intelligent Memory Semiconductor Co., Ltd., a limited liability company governed by the laws of the People's Republic of China ("Parent Funding Entity", together with Buyer and Parent, the "Parent Group Companies" and each a "Parent Group Company").

Pursuant to the Stock Transfer Agreement, the Company will sell its equity interest in Zilia Technologies to the Buyer for a gross cash purchase price of $46.1 million (the "Transaction"). The closing of the Transaction is subject to customary closing conditions and is expected to occur on or about March 30, 2026, or such earlier date as may be mutually agreed. If certain required approvals have not been obtained by March 30, 2026, the closing is expected to occur no later than April 28, 2026.

The Company's equity investment in Zilia Technologies is accounted for under the measurement alternative accordance with ASC 321, *Investments – Equity Securities*, and had a carrying value of $37.8 million as of November 28, 2025. As of the date of filing of this Form 10-Q, the Transaction has not closed and the investment continues to be carried at its historical cost basis, adjusted for any previously recognized impairments or observable price changes, as applicable.

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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 2025 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 2025 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 2026 and 2025 each contain 52 weeks. All period references are to our fiscal periods unless otherwise indicated. 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 "PART I - Item 1. Business" of the 2025 Annual Report.

**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 our High Performance Computing (HPC) and AI products, as well as traditional workload optimization and efficiency applications. We expect increased AI adoption and broader implementation by enterprises within but not limited to verticals such as financial services, oil and gas, telecommunications, manufacturing and education, as well as increased sovereign AI adoption, as organizations seek scalable infrastructure solutions, though the extent and timing of such adoption and implementation may vary and may affect our results of operations. 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, HPC and enterprise storage, as well as emerging demand for higher density and greater bandwidth solutions for AI deployments, and we anticipate growing demand for higher performance and reliability memory solutions, such as our CXL family of products, to support both traditional use cases and increasingly complex AI applications, although there can be no assurance that such demand will materialize as expected or at all. 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. However, broader macro-economic trends, including regional market demand and the global macro-economic environment, 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, have impacted and can continue to impact our business and results of operations, 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 due to factors such as the following: recognition of revenue sometimes being tied to customer decisions as to the completion of delivery and system go-live events; certain sales being affected by the timing of customer deployments and shipments or customer budget considerations; changes in customer spending on our products and services (including as a result of the macro-economic demand factors discussed above); the impact of customer churn rates (including discounting and churn of significant customers from whom we derive a significant

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percentage of our revenue); discontinuation of certain of our products from time to time; shifts in our customer mix, including expected trends with respect to growth in demand from non-hyperscaler customers for HPC and AI solutions; and margin being driven by the proportion of higher margin software and managed services within our 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 may have direct implications for our operating income and margins. Our Integrated Memory business has gross margins which are lower than the Company average and if revenue from this business grows faster than revenue for the Company overall, it may negatively impact total Company gross margins. Additionally, our revenue and margins will be negatively impacted by the winding down of our Penguin Edge business, which we expect to wind down and discontinue prior to the end of fiscal 2026. The comparability of our results of operations 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 and successfully integrate such businesses, 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 as well as certain raw materials, 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 HPC and AI components for our Advanced Computing business; the costs of such components and raw materials may fluctuate from time to time due to market conditions. 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 contributed 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, constrained memory supply may affect our ability to meet demand in our Integrated Memory business on a timely basis or at all, and the global semiconductor shortage, particularly during its peak, has adversely affected our results of operations. 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 and may negatively affect gross margins due to changes in shipment timing and product mix. 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 results of operations 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** |
| | **November 28,<br>2025** | **November 28,<br>2025** | **November 29,<br>2024** | **November 29,<br>2024** |
| Net sales: |  |  |  |  |
| &nbsp;&nbsp;Advanced Computing | $151452 | 44.1% | $177426 | 52.0% |
| &nbsp;&nbsp;Integrated Memory | 136521 | 39.8% | 96706 | 28.4% |
| &nbsp;&nbsp;Optimized LED | 55098 | 16.1% | 66970 | 19.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total net sales | 343071 | 100.0% | 341102 | 100.0% |
| Cost of sales | 246962 | 72.0% | 243290 | 71.3% |
| &nbsp;&nbsp;Gross profit | 96109 | 28.0% | 97812 | 28.7% |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;Research and development | 18693 | 5.4% | 19811 | 5.8% |
| &nbsp;&nbsp;Selling, general and administrative | 53092 | 15.5% | 60536 | 17.7% |
| &nbsp;&nbsp;Other operating expense | 4742 | 1.4% | 109 | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 76527 | 22.3% | 80456 | 23.6% |
| Operating income | 19582 | 5.7% | 17356 | 5.1% |
| Non-operating (income) expense: |  |  |  |  |
| &nbsp;&nbsp;Interest expense, net | 47 | —% | 4396 | 1.3% |
| &nbsp;&nbsp;Other non-operating (income) expense | 11675 | 3.4% | 636 | 0.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-operating (income) expense | 11722 | 3.4% | 5032 | 1.5% |
| Income (loss) before taxes | 7860 | 2.3% | 12324 | 3.6% |
| Income tax provision (benefit) | 1805 | 0.5% | 6360 | 1.9% |
| Net income (loss) | 6055 | 1.8% | 5964 | 1.7% |
| Net income attributable to noncontrolling interest | 785 | 0.2% | 747 | 0.2% |
| Net income (loss) attributable to Penguin Solutions | 5270 | 1.6% | 5217 | 1.5% |
| Preferred stock dividends | 3033 | 0.9% |  | —% |
| Income available for distribution | 2237 | 0.7% | 5217 | 1.5% |
| Income allocated to participating securities | 231 | 0.1% |  | —% |
| Net income available to common stockholders | $2006 | 0.6% | $5217 | 1.5% |

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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**

Net sales increased by $2.0 million, or 0.6%, in the first quarter of 2026, 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 $39.8 million, or 41.2%, in the first quarter of 2026, compared to the same period in the prior year, primarily due to higher sales volumes of Flash and DRAM products stemming from improved market demand and increased supply chain services. Advanced Computing net sales decreased by $26.0 million, or 14.6%, in the first quarter of 2026, compared to the same period in the prior year, primarily due to the ongoing wind down of our Penguin Edge business and lower hardware sales stemming from the timing of customer projects. Optimized LED net sales decreased by $11.9 million, or 17.7%, in the first quarter of 2026, compared to the same period in the prior year, reflecting a broad-based decline in demand across the business.

Cost of sales increased by $3.7 million, or 1.5%, in the first quarter of 2026, compared to the same period in the prior year. The increase was primarily driven by increased product sales from our Integrated Memory segment in the first quarter of 2026.

Gross margin decreased to 28.0% in the first quarter of 2026 compared to 28.7% in the same period in 2025, primarily due to the ongoing wind down of our high-margin Penguin Edge 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

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as to future operational plans and which management believes provides supplemental non-GAAP information that is useful to investors in analyzing and assessing our past and future operating performance. These non-GAAP measures exclude certain items, such as stock-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; cost of sales-related restructuring; diligence, acquisition and integration expense; restructuring charges; impairment of goodwill; changes in the fair value of contingent consideration; redomiciliation costs; (gain) loss on non-marketable equity securities; 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** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| GAAP operating income | $19582 | $17356 |
| &nbsp;&nbsp;Stock-based compensation expense | 10080 | 11531 |
| &nbsp;&nbsp;Amortization of acquisition-related intangibles | 7508 | 9755 |
| &nbsp;&nbsp;Cost of sales-related restructuring | (483) | (42) |
| Diligence, acquisition and integration expense |  | 833 |
| Redomiciliation costs <sup>(1)</sup> |  | 1243 |
| &nbsp;&nbsp;Restructuring charges | 4742 | 109 |
| &nbsp;&nbsp;Other <sup>(1)</sup> | 99 | 133 |
| Non-GAAP operating income | $41528 | $40918 |
| Non-GAAP operating income by segment: |  |  |
| &nbsp;&nbsp;Advanced Computing | $22119 | $30117 |
| &nbsp;&nbsp;Integrated Memory | 15932 | 7116 |
| &nbsp;&nbsp;Optimized LED | 3477 | 3685 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total non-GAAP operating income by segment | $41528 | $40918 |
| &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 $8.0 million, or 26.6%, in the first quarter of 2026, as compared to the same period in the prior year, primarily due to the ongoing wind down of our Penguin Edge business.

Integrated Memory operating income increased by $8.8 million, or 123.9%, in the first quarter of 2026, as compared to the same period in the prior year, primarily due to increased net revenue stemming from improved market demand for Flash and DRAM products.

Optimized LED operating income decreased by $0.2 million, or 5.6%, in the first quarter of 2026, as compared to the same period in the prior year, primarily due to the decline in net sales, partially offset by lower personnel-related expenses due to headcount reductions.

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

**Research and Development**

Research and development expense decreased by $1.1 million, or 5.6%, in the first quarter of 2026, as compared to the same period in the prior year, primarily due to lower personnel-related expenses mainly driven by headcount reductions, as well as lower subcontract services mainly within Advanced Computing.

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**Selling, General and Administrative**

Selling, general and administrative expense decreased by $7.4 million, or 12.3%, in the first quarter of 2026, as compared to the same period in the prior year, primarily due to lower personnel-related expenses mainly driven by headcount reductions as well as lower subcontract services following the completion of our U.S. Domestication in the fourth quarter of 2025.

**Other Operating (Income) Expense**

Other operating expenses in the first quarter of 2026 and 2025 included restructuring charges of $4.7 million and $0.1 million, respectively, 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 ongoing wind down of our Penguin Edge business. We anticipate that such activities will continue into future quarters, for which we expect to record additional restructuring charges.

**Interest Expense, Net**

Net interest expense decreased by $4.3 million in the first quarter of 2026, compared to the same period in the prior year, primarily due to the full repayment of the Amended 2022 TLA (as defined below) in the fourth quarter of 2025.

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

Other non-operating (income) expense in the first quarter of 2026 includes a charge of $10.0 million for the impairment of a non-marketable equity investment. See "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Cash and Investments – Non-Marketable Equity Investments."

In addition, other non-operating (income) expense in the first quarter of 2026 and 2025 included 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 first quarter of 2026 decreased by $4.6 million as compared to the same period in the prior year, primarily due to the benefits from the U.S. Domestication and changes in jurisdictional mix of earnings.

Our effective tax rate was 23.0% in the first quarter of 2026 and was higher than the U.S. statutory tax rate of 21.0% primarily due to cross border tax costs, state income taxes, and nondeductible compensation paid to officers, partially offset by foreign operations, which reflects the impact of lower tax rates in locations outside the U.S. and tax credits. The effective tax rate was 51.6% in the first quarter of 2025 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 consolidated financial statements is not expected to be 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."

**Liquidity and Capital Resources**

As of November 28, 2025, we had cash, cash equivalents and short-term investments of $461.5 million, of which $282.4 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, investments in working capital, research and development expenditures, and other operation expenses. We expect that future capital expenditures will focus on expansion of 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.

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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.

**Entry Into 2025 Credit Agreement and Repayment of 2022 TLA**

On February 7, 2022, Penguin Solutions Cayman and SMART Modular Technologies, Inc. (the "Borrowers") 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 was 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 November 29, 2024, 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"), 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 (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 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 recognized a loss on extinguishment of debt of $2.9 million.

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.

For additional details regarding the 2025 Credit Agreement, refer to "PART II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Debt – Credit Agreement" in the 2025 Annual Report and "Item 1. Financial Statements – Notes to Consolidated Financial Statements – Debt – Credit Agreement" in this Quarterly Report.

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**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 (the "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. As of November 28, 2025, $20.0 million in aggregate principal amount of 2026 Notes were outstanding.

*2029 Notes*

In February 2023, we issued $150.0 million in aggregate principal amount of 2.00% Convertible Senior Notes due 2029 (the "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 November 28, 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 November 28, 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 2025 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 common stock 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 2025 Annual Report.

**Preferred Stock 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 (the "Investor Agreement"), and the Certificate of Designation of Convertible Preferred Shares setting forth the terms, rights, and obligations of the Issued Cayman CPS (the "CPS Cayman Certificate of Designation") became effective. The Investor Agreement and the CPS Cayman Certificate of Designation provided for certain rights and

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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 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, have an initial liquidation preference of 1x and are 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 CPS Delaware Certificate of Designation of Penguin Solutions, Inc., effective as of June 27, 2025, filed hereto as Exhibit 3.3, and to the section entitled "Comparison of Rights of Cayman Islands Shareholders and Delaware Stockholders" contained in Penguin Solutions 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 – Temporary Equity – Convertible Preferred Stock."

**Cash Flows**

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| | **Three Months Ended** | **Three Months Ended** |
| | **November 28,<br>2025** | **November 29,<br>2024** |
| Net cash provided by operating activities | $31058 | $13819 |
| Net cash used for investing activities | (3374) | (18922) |
| Net cash used for financing activities | (19987) | (7763) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $7697 | $(12866) |

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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, stock-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 in the first quarter of 2026 consisted primarily of net income of $6.1 million, adjusted for non-cash items of $35.8 million. Operating cash flows were negatively affected by a $10.8 million net change in our operating assets and liabilities, primarily from the effects of a decrease of $17.8 million in accounts payable and accrued expenses and other liabilities primarily due to a decrease in deferred revenue from customer services, offset by lower accounts payable related to the timing of trade purchases, and an increase of $34.1 million in accounts receivable, primarily due to the timing of orders and an increase in Integrated Memory net revenue, and overall offset by a decrease of $42.0 million in inventories primarily related to a shift in intra-quarter timing of shipments.

Net cash provided by operating activities in the first quarter of 2025 consisted primarily of net income of $6.0 million, adjusted for non-cash items of $26.9 million. Operating cash flows were negatively affected by a $19.1 million net change in our operating assets and liabilities, primarily from the effects of an increase of $93.4 million in inventories, primarily to support our Advanced Computing business, and an increase of $23.9 million in accounts receivable due to increased sales, partially offset by the effects of an increase of $97.5 million in

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accounts payable and accrued expenses and other liabilities primarily due to higher customer deposits resulting from refundable amounts received from customers in advance of satisfying performance obligations.

***Investing Activities*:** Net cash used for investing activities in the first quarter of 2026 consisted primarily of $2.9 million for capital expenditures and deposits on equipment.

Net cash used for investing activities in the first quarter of 2025 consisted primarily of $16.9 million net purchase of marketable investment securities and $1.8 million for capital expenditures and deposits on equipment.

***Financing Activities*:** Net cash used for financing activities in the first quarter of 2026 consisted primarily of $20.2 million of payments to acquire our common stock (including $15.0 million under our stock repurchase program) and $3.1 million in payments of preferred stock cash dividends, partially offset by $3.3 million in proceeds from the issuance of common stock from our equity plans.

Net cash used for financing activities in the first quarter of 2025 consisted primarily of $11.1 million of payments to acquire our ordinary shares (including $7.8 million under our stock repurchase program), partially offset by $3.4 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 2025 Annual Report. There have been no material changes to our critical accounting estimates from those described in the 2025 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 2025 Annual Report. There have been no material changes to our significant accounting policies from those described in the 2025 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.

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

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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 November 28, 2025 and August 29, 2025, 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 $1.2 million and $2.7 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. As of November 28, 2025, we had $100.0 million outstanding under the 2025 Credit Agreement. In addition, the 2025 Credit Facility under the 2025 Credit Agreement provides for additional borrowings of up to $300.0 million for a total commitment of $400.0 million. 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 November 28, 2025, we had cash, cash equivalents and short-term investments of $461.5 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 November 28, 2025 to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit 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 first quarter of 2026, 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**

There have been no material changes to the risks described in "PART I – Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended August 29, 2025 (the "2025 Annual Report"). You should carefully consider the risks and uncertainties and the other information in our 2025 Annual Report and 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. Our business, financial condition or results of operations could be materially and adversely affected if any of these risks occur 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 in our 2025 Annual Report.

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

**Issuer Purchases of Equity Securities**

On April 4, 2022, our Board of Directors approved a $75.0 million stock repurchase authorization (the "2022 Authorization"), under which we may repurchase our outstanding common stock from time to time through open market purchases, privately-negotiated transactions or otherwise. On each of January 8, 2024 and October 6, 2025, the Audit Committee of the Board of Directors approved additional $75.0 million stock repurchase authorizations (the "2024 Authorization" and "2025 Authorization," respectively, and together, the "Current Authorizations"). The Current Authorizations, which consist solely of amounts approved pursuant to the 2024 Authorization and 2025 Authorization as all amounts under the 2022 Authorization have been utilized, have no expiration date but may be suspended or terminated by the Board of Directors at any time. As of November 28, 2025, an aggregate of $96.5 million remained available for the repurchase of our common stock under the Current Authorizations. Certain of our agreements, including the 2025 Credit Agreement, the SKT Purchase Agreement and the CPS Delaware Certificate of Designation, contain restrictions that limit our ability to repurchase our common stock.

The following table sets forth information relating to repurchases of our equity securities during the three months ended November 28, 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** |
| August 30, 2025 - September 26, 2025 |  | $— |  | $36510000 |
| September 27, 2025 - October 24, 2025 | 58074 | $21.73 | 58074 | $110248000 |
| October 25, 2025 - November 28, 2025 | 732861 | $18.75 | 732861 | $96510000 |
|  | 790935 | $18.96 | 790935 |  |

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**Item 3. Defaults Upon Senior Securities**

None.

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**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

On November 11, 2025, Joseph Clark, our President of Optimized LED, adopted a Rule 10b5-1 trading arrangement (the "Clark 10b5-1 Plan") that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Clark 10b5-1 Plan provides for the sale of up to (i) 52,943 shares of common stock, plus (ii) one-half of the net shares of common stock that may be acquired by Mr. Clark upon the future vesting of 27,513 restricted stock units and all of the net shares of common stock that may be acquired by Mr. Clark upon the future vesting of up to 30,932 performance-based restricted stock units (net of shares of common stock surrendered to Penguin Solutions to satisfy tax withholding obligations in connection with vesting), each subject to pre-established limit prices, commencing on February 10, 2026 and continuing until all shares are sold or until July 30, 2027, whichever occurs first.

On November 11, 2025, Anne Kuykendall, our Senior Vice President and Chief Legal Officer, adopted a Rule 10b5-1 trading arrangement (the "Kuykendall 10b5-1 Plan") that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Kuykendall 10b5-1 Plan provides for the sale of up to (i) 28,000 shares of common stock, plus (ii) 25% of the net shares of common stock that may be acquired by Ms. Kuykendall upon the future vesting of 18,043 restricted stock units (net of shares of common stock surrendered to Penguin Solutions to satisfy tax withholding obligations in connection with vesting), each at market price, commencing on February 25, 2026 and continuing until all shares are sold or until December 31, 2026, whichever occurs first.

During the fiscal quarter ended November 28, 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 | <u>[Amended and Restated Certificate of Incorporation of Penguin Solutions, Inc., effective as of June 27, 2025](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex31.htm)</u> |  | 8-K12B | 001-38102 | 3.1 | 06/30/2025 |
| 3.2 | <u>[Amended and Restated Bylaws of Penguin Solutions, Inc., effective as of June 30, 2025](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex33.htm)</u> |  | 8-K12B | 001-38102 | 3.3 | 06/30/2025 |
| 3.3 | <u>[Certificate of Designation of Convertible Preferred Stock, effective as of June 27, 2025](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152807/d936172dex32.htm)</u> |  | 8-K12B | 001-38102 | 3.2 | 06/30/2025 |
| 4.1 | <u>[Form of Common Stock Certificate](https://www.sec.gov/Archives/edgar/data/1616533/000119312525152888/d33122dex41.htm)</u> |  | S-8 POS | 333-286347 | 4.1 | 06/30/2025 |
| 4.2 | <u>[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)</u> |  | 8-K12B | 001-38102 | 4.4 | 06/30/2025 |
| 10.1\* | <u>[Amended a](pengq1-26form10xqex101.htm)[nd Restated Offer Letter by and between Penguin Solutions, Inc. and Tony Frey](pengq1-26form10xqex101.htm)[, dated July 29, 2025](pengq1-26form10xqex101.htm)</u> | X |  |  |  |  |
| 10.2\*\* | <u>[Stock Transfer Agreement, dated as of December 29, 2025, by and among SMART Modular Technologies (LX) S.à. r.l., Lexar Europe B.V., Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda., Shenzhen Longsys Electronics Co., Ltd., and Shanghai Intelligent Memory Semiconductor Co., Ltd.](pengq1-26form10xqex102.htm)</u> | X |  |  |  |  |
| 31.1 | <u>[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](pengq1-26form10xqex311.htm)</u> | X |  |  |  |  |
| 31.2 | <u>[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](pengq1-26form10xqex312.htm)</u> | X |  |  |  |  |
| 32.1\*\*\* | <u>[Certification of C](pengq1-26form10xqex321.htm)[hief](pengq1-26form10xqex321.htm)[Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](pengq1-26form10xqex321.htm)</u> | X |  |  |  |  |
| 32.2\*\*\* | <u>[Certification of C](pengq1-26form10xqex322.htm)[hief](pengq1-26form10xqex322.htm)[Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](pengq1-26form10xqex322.htm)</u> | 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 |  |  |  |  |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | X |  |  |  |  |

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\* Constitutes a management contract or compensatory plan or arrangement.

\*\* Certain schedules and exhibits have been omitted from this filing 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.

\*\*\* 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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**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: January 6, 2026 | By: | /s/ Mark Adams |
|  |  | Mark Adams |
|  |  | President and Chief Executive Officer |
|  |  | (Principal Executive Officer) |
| Date: January 6, 2026 | By: | /s/ Nate Olmstead |
|  |  | Nate Olmstead |
|  |  | Senior Vice President and Chief Financial Officer |
|  |  | (Principal Financial and Accounting Officer) |

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## Exhibit 10.1

**Exhibit 10.1**

![image_0.jpg](image_0.jpg)

July 29, 2025

Tony Frey

Dear Tony,

You and Penguin Solutions, Inc. ("Penguin Solutions" and, together with its subsidiaries and affiliates, the "**Company**") are parties to an offer letter dated July 2, 2025 (the "**Prior Offer Letter**"), which sets forth the terms of your employment with Penguin Solutions. This amended and restated offer letter (this "**Offer Letter**"), which is effective as of July 29, 2025, sets forth the terms of your employment with Penguin Solutions that is expected to commence on the Start Date (as defined below), and amends, restates, and supersedes the Prior Offer Letter in its entirety.

1.<u>Position, Location</u>. You will serve in the exempt position of Senior Vice President and Chief Revenue Officer, reporting to Mark Adams, President and Chief Executive Officer. You will be based at our Milpitas, California location, but will be permitted to primarily work remotely from your home office in Marin County, California.

2.<u>Term</u>. Your start date will be August 25, 2025, or such other date that is mutually agreed by the parties hereto (the date you commence employment with the Company, your "**Start Date**"). Your employment hereunder will commence on the Start Date and continue until terminated pursuant to <u>Section 8</u> below (the "**Term**"). You will have duties and responsibilities consistent with your position, including oversight of sales generally (other than Optimized LED sales). During the Term, you will devote your full business time and attention to the performance of your duties for the Company, and you will not engage in any other business, profession or occupation for compensation or otherwise without the prior written consent of the Chief Legal Officer or Chief Executive Officer of the Company (such consent shall not unreasonably be withheld, conditioned or delayed); provided that you may participate in civic or charitable activities as long as such activities do not interfere with the performance of your responsibilities hereunder.

3.<u>Base Salary</u>. During the Term, you will receive an annualized base salary of $425,000 per year (the "**Base Salary**"), payable in accordance with the normal payroll policies of the Company and subject to the usual withholdings and deductions. You agree to serve, without additional compensation, if requested by the Company, as an officer and/or director of any other member of the Company Group (as defined in **<u>Exhibit A</u>**).

4.<u>Sign-On Bonus</u>. On your first normal Company payroll date following the Start Date, you will receive a sign-on bonus of $50,000 (the "Sign-On Bonus"), provided that you must immediately repay the Sign-On Bonus to the Company if, prior to the first anniversary of the Start Date, either (i) your employment is terminated for Cause (as defined in <u>Exhibit A</u>) or (ii) you resign from employment without Good Reason (as defined in <u>Exhibit A</u>).

5.<u>Performance Bonus</u>. Subject to the achievement of the applicable performance goals and methodologies determined by the Board of Directors of Penguin Solutions (the "**Board**") in its sole discretion, commencing in the Company's 2026 fiscal year you will be entitled to participate in the Company's annual bonus program pursuant to which you will be eligible to earn an annual bonus (the "**Annual Bonus**") with a target amount equal to 100% of the Base Salary. The actual bonus payable is contingent upon

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achievement of pre-defined goals for the Company and is subject to Board and management approval. For the Company's 2026 fiscal year only, your Annual Bonus will be determined on a quarterly basis (with 20% of the target Annual Bonus amount applying to each of the first and second fiscal quarters and 30% of the target Annual Bonus amount applying to each of the third and fourth fiscal quarters), with a maximum quarterly payout of 100% of the target bonus amount applicable to the first three fiscal quarters, and with any additional portion being held back for review after the end of the Company's 2026 fiscal year. For the Company's 2026 fiscal year only, the portion of the Annual Bonus earned for a fiscal quarter will be paid no later than two and one-half (2½) months following the end of the fiscal quarter to which the portion of the Annual Bonus relates. For the Company's 2027 fiscal year and thereafter, the Annual Bonus will be determined on an annual basis, and the Annual Bonus, if any, earned for a fiscal year will be paid no later than two and one-half (2½) months following the end of the fiscal year to which the Annual Bonus relates. The Company and/or the Board will have the right, but not the obligation, at its sole discretion, to amend, modify or terminate any bonus program, including changes to (i) the performance period of the Annual Bonus, (ii) the performance goals and methodologies of calculating bonus achievement, and/or (iii) the Company's fiscal year. Your individual payout is adjusted by your manager's rating of your individual performance. Bonuses are not considered as earned until bonus payment and are only earned if you are employed continually through the date of bonus payment. You must be employed and working (not on any form of leave) for no less than 50% of the working days in any performance period to be eligible for a bonus with respect to such performance period.

6.<u>Equity Awards</u>. As an inducement to your agreeing to the employment contained herein, on or as soon as reasonably practical after your Start Date, you will be eligible to receive the equity awards described in **<u>Exhibit B</u>** subject to the terms of the applicable Penguin Solutions award agreements and the Penguin Solutions 2021 Inducement Plan (as amended from time to time, the "**Stock Plan**"). Starting in the Company's 2026 fiscal year, you will also be eligible to participate in Penguin Solutions' equity compensation refresh program in a manner generally consistent with other similarly-situated executives (including with respect to the mix of time-based and performance-based equity awards), as determined in the sole discretion of the Board, or the Compensation Committee of the Board, from time to time, provided that the total value of such refresh awards in the 2026 fiscal year shall equal $1.2 million (based on the trailing average closing price of an ordinary share of Penguin Solutions over the 30 trading days ending on and including the trading day preceding the grant date of the awards).

7.<u>Benefits</u>. During the Term, you will be eligible to participate in employee benefit plans and programs that are available to similarly-situated executives of Penguin Solutions from time to time; provided that the Company may terminate or modify any benefit plan or program at any time in its discretion. Any requested details about the Company's employee benefit plans and programs, including but not limited to the Company's 401(k) plan, will be provided to you as soon as reasonably practicable after the Start Date.

8.<u>Termination of Employment</u>. Your employment may be terminated by you or the Company for any reason (including, without limitation, with or without Cause), at any time. Neither you nor your estate, as applicable, will accrue any additional compensation (including, without limitation, any Base Salary or Annual Bonus) or other benefits following any termination of your employment other than as set forth in this Offer Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)If your employment is terminated due to your death or Disability (as defined in **<u>Exhibit A</u>**), then you will only be entitled to receive (i) your Base Salary through the date of termination (the "**Accrued Salary**"), which will be paid within 15 days following the date of termination or such earlier date as may be required by law,

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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;(ii) any other accrued and vested employee benefits that are required to be paid to you under the Company's employee benefit plans and in accordance with the Company's policies, excluding for the avoidance of doubt, any severance plans, policies or programs (the "**Accrued Benefits**"), and (iii) any earned (without regard to the requirement of continued employment through the payment date) but unpaid Annual Bonus for any fiscal year preceding the fiscal year in which the date of termination occurs (the "**Accrued Bonus**" and, collectively with the Accrued Salary and the Accrued Benefits, the "**Accrued Amounts**"), which Accrued Bonus will be paid at the same time as bonuses are paid to other executives, generally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)If your employment is terminated by the Company without Cause (and other than due to your death or Disability) or if you resign from your employment for Good Reason, in each case outside a Change in Control Protection Period (as defined in **<u>Exhibit A</u>**), then you will be entitled to the Accrued Amounts and, subject to <u>Section 10</u> below, the following additional payments and benefits: (i) an aggregate amount equal to 75% of your then-current Base Salary (the "**Cash Severance**"), payable in accordance with the schedule set forth in <u>Section 10</u> below; (ii) to the extent any Annual Bonus could be earned in the fiscal year in which the termination occurs under the terms of the Company's annual bonus program but such Annual Bonus has not yet been earned, a prorated bonus (based on the Board's determination of Company performance through the date of termination), prorated based on the number of days you were employed by the Company during such fiscal year, payable at the same time as bonuses for such fiscal year are paid to the Company's other executives (the "**Pro-Rated Bonus**"); and (iii) to the extent that you and/or members of your family are covered under Company-provided health plans, payment or reimbursement of health benefit continuation coverage under COBRA or otherwise ("**Health Care Continuation**") from the termination date through the earlier of (x) 9 months following the termination date or (y) the date you become eligible for health benefits with another employer, which will be paid no later than the due date of payments for such coverage; *provided* that the Company may, in its discretion and to the extent permitted by Section 409A of the Internal Revenue Code of 1986, as amended (the "**Code**"), in lieu of the Health Care Continuation provide a lump sum payment calculated based on the monthly premiums in effect immediately prior to the expiration of COBRA coverage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)If, during a Change in Control Protection Period, (i) your employment is terminated by the Company without Cause (and other than due to your death or Disability) or (ii) you resign from employment for Good Reason, then, in lieu of any payments or benefits pursuant to <u>Section 8(b)</u> above, you will be entitled to the Accrued Amounts and, subject to <u>Section 10</u> below, the following additional payments and benefits: (i) an aggregate amount equal to 150% of your then-current Base Salary plus an amount equal to 150% of the Annual Bonus paid or payable for the most recently completed fiscal year (together, the "**Change in Control Cash Severance**"), payable in accordance with the schedule set forth in <u>Section 10</u> below; (ii) a Pro-Rated Bonus; (iii) Health Care Continuation from the termination date through the earlier of (x) 18 months following the termination date or (y) the date you become eligible for health benefits with another employer, which will be paid no later than the due date of payments for such coverage *provided* that the Company may, in its discretion and to the extent permitted by Section 409A of the Code, in lieu of the Health Care Continuation provide a lump sum payment calculated based on the monthly premiums in effect immediately prior to the expiration of COBRA coverage; and (iv) except to the extent otherwise specifically provided in the award agreement governing any particular equity award, 100% vesting of all outstanding equity awards (including,

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without limitation, any equity awards subject to performance conditions, after giving application to <u>Section 9</u> below).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)If your employment is terminated or you resign for any reason other than as described in clauses (a) through (c) above, you will not be entitled to any payments or benefits, other than the Accrued Salary and the Accrued Benefits.

9.<u>Treatment of Performance-Based Equity on Change in Control</u>. Except to the extent otherwise specifically provided in the award agreement governing any particular equity award, upon a Change in Control (as defined in **<u>Exhibit A</u>**), to the extent you hold any equity awards that remain subject to issuance or vesting based on performance (the "**Performance Awards**"), to the extent not already vested, a prorated portion of the Performance Awards (based on the Board's determination of performance measured through the Change in Control), prorated through the date of the Change in Control, will become issued and/or vested upon the Change in Control, and the remainder of the Performance Awards (the "**Remainder Awards**") will issue and/or vest in equal monthly installments over the remainder of the original performance period (unless accelerated under <u>Section 8</u> above); provided that if the successor to Penguin Solutions does not assume or substitute the Remainder Awards with a substantially equivalent award, the full amount of the Remainder Awards will become issued and/or vested upon the Change in Control. Notwithstanding the foregoing, in the event that any of the Performance Awards are subject to Section 409A of the Code and the issuance of such Performance Awards in accordance with this <u>Section 9</u> would violate Section 409A of the Code, then the Performance Awards will vest in accordance with this <u>Section 9</u> but shall be issued in accordance with the schedule set forth in the original award agreement to the extent required to comply with Section 409A of the Code.

10.<u>Termination Payment Matters</u>. Any payments or benefits made pursuant to <u>Section 8</u> above, other than the Accrued Salary and the Accrued Benefits, will be subject to your execution, delivery and non-revocation of an effective release of all claims against the Company, in a form provided by the Company (the "**Release**"), within the 60-day period following the date that your employment terminates (such 60-day period, the "**Release Period**"). The Cash Severance or Change in Control Cash Severance, as applicable, will be paid in accordance with the Company's regular payroll practices in substantially equal installments over the six-month period following the date of termination; provided that the first installment will be paid on the first or second Company payroll date following the date on which the Release has become effective and irrevocable; provided *further*, if the Release Period spans two calendar years, then the first installment of the severance pay will commence on the first or second Company payroll date that occurs in the second calendar year. Any installments that otherwise would have been paid prior to the date on which the first installment is paid will instead be paid on the first installment payment date. Upon the termination of your employment for any reason, you agree to resign, as of the date of your termination and to the extent applicable, from the Board (and any committees thereof) and all other boards of directors (and any committees thereof), officer, and other fiduciary positions of or relating to each member of the Company Group. During the Term and at any time thereafter, you agree to cooperate (i) with the Company in the defense of any legal matter involving any matter that arose during your employment with any member of the Company Group and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding pertaining to any member of the Company Group; provided that the Company will reimburse you for any reasonable travel and out of pocket expenses you incur in providing such cooperation. You will promptly notify the Company if you become eligible for health benefits with another employer while still receiving payments or benefits hereunder.

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11.<u>Conditions</u>. This offer, and any employment pursuant to this offer, is contingent on you: (i) completing the Company's standard employment application paperwork, (ii) providing the legally required proof of your identity and authorization to work in the United States, (iii) passing a background check, (iv) passing a references check that is performed by the Company, and (v) executing and complying with the Company's standard Employment, Confidential Information and Invention Assignment Agreement and the Company's standard Arbitration and Class Action Waiver Agreement. At all times, you will be subject to, and abide by, all applicable Company policies and requirements, including but not limited to those relating to expense reimbursement, insider trading, stock ownership guidelines, corrupt practices, technology, publicity, safety, discrimination, and harassment.

12.<u>Representations</u>. By signing and accepting this Offer Letter, you represent and warrant to the Company that: (i) as of the Start Date you will not be subject to any pre-existing contractual or other legal obligation with any person, company or business enterprise which would prohibit or restrict your employment with, or your providing services to, the Company as its employee; and (ii) you will not use in the course of your employment with the Company and to the benefit of the Company, any confidential or proprietary information of another person, company or business enterprise to whom you currently provide, or previously provided, services.

13.<u>At Will Employment</u>. You understand that your employment is "at will" at all times, which means that you or the Company may terminate your employment at any time, for any reason or no reason at all. This Offer Letter does not constitute, and may not be construed as, a commitment for employment for any specific duration.

14.<u>Miscellaneous</u>. No provision of this Offer Letter may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in a writing signed by you and another duly authorized signatory of Penguin Solutions. This Offer Letter is not assignable by you, and it will governed by, and construed in accordance with, the laws of the State of California without reference to principles of conflict of laws. Any legal proceeding involving this Offer Letter must be brought in the State of California. The parties agree and consent to both jurisdiction and venue in the State of California. The Company's obligation to pay or provide any amounts or benefits hereunder is subject to set-off, counterclaim or recoupment of any amounts you owe to any member of the Company Group as reasonably determined in accordance with Company policy (except to the extent any such action would violate, or result in the imposition of tax under, Section 409A of the Code). This Offer Letter (together with its exhibits and schedules, as well as other documents and agreements to the extent referenced herein) constitutes the entire agreement between the parties as of the date hereof regarding the terms of your employment and supersedes all previous agreements and understandings between the parties with respect to the subject matter hereof, whether written or oral. Any compensation paid to you by any member of the Company Group which is subject to recovery under any Company policy, law, government regulation or stock exchange listing requirement, will be subject to such deductions and clawback as may be required to be made thereby (or by any policy adopted by any member of the Company Group). The Company is entitled to withhold from any payment due to you any amounts required to be withheld by applicable laws or regulations.

15.<u>409A Matters</u>. This Offer Letter is intended to comply with Section 409A of the Code or one or more exemptions therefrom. Without limiting the foregoing, if on the date of termination of employment you are a "specified employee" (within the meaning of Section 409A of the Code), then to the extent required in order to comply with Section 409A of the Code, amounts that constitute "nonqualified deferred compensation" (as defined in Section 409A of the Code) and are not otherwise exempt from Section 409A of the Code that would otherwise be payable during the six-month

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period immediately following the termination date will instead be paid (without interest) on the earlier of (i) the first business day after the date that is six months following the termination date or (ii) your death. All references herein to "termination date" or "termination of employment" mean "separation from service" as an employee within the meaning of Section 409A of the Code. It is intended that each installment of payments hereunder constitutes a separate "payment" for purposes of Section 409A of the Code. To the extent that any provision hereof is ambiguous as to its compliance with Section 409A of the Code, the provision will be interpreted so that all payments hereunder comply with Section 409A of the Code or one or more exemptions therefrom. To the extent any expense reimbursement or in-kind benefit is subject to Section 409A of the Code, (1) the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit in one calendar year will not affect the expenses eligible for reimbursement in any other taxable year, (2) in no event will any expenses be reimbursed after the last day of the calendar year following the calendar year in which you incurred such expenses, and (3) in no event will any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit. The Company makes no representation or warranty that, and will have no liability to you or any other person if, any payments or benefits are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy the conditions thereof or an exemption therefrom.

16.<u>280G Matters</u>. If payments or benefits owed to you by the Company are considered "parachute payments" under Section 280G of the Code, then such payments will be limited to the greatest amount which may be paid to you under Section 280G of the Code without causing any loss of deduction to the Company thereunder, but only if, by reason of such reduction, the net after tax benefit to you exceeds the net after tax benefit to you if such reduction were not made (in each case, taking into account all applicable income, employment, and excise taxes). These determinations will be made at the Company's expense by a nationally recognized certified public accounting firm designated by the Company and reasonably acceptable to you (the "**Accounting Firm**"). In the event of any mistaken underpayment or overpayment under this <u>Section 16</u>, as determined by the Accounting Firm, the amount thereof will be paid to you or refunded to the Company, as applicable, 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 your taxable income and wages for purposes of all applicable income and employment taxes, with interest at the applicable Federal rate for purposes of Section 7872(f)(2) of the Code. Any reduction in payments required by this <u>Section 16</u> will, to the extent possible, be made in a manner does not violate the provisions of Section 409A of the Code and will occur in the following order: (1) any Cash Severance, (2) any other cash amount, (3) any benefit valued as a "parachute payment," and (4) the acceleration of vesting of any equity-based awards, in each case, with payments to be paid later in time reduced first.

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To confirm your acceptance of this Offer Letter, please sign below. I look forward to your positive response, and I am very excited about having you join us.

Sincerely,

<u>/s/ Mark Adams&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Mark Adams <br>President & CEO

Accepted and Agreed:

<u>/s/ Tony Frey&nbsp;&nbsp;&nbsp;&nbsp;</u><br>Tony Frey

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**<u>Exhibit A</u><br>Definitions**<br>

"**Cause**" means the occurrence of one or more of the following, as determined in good faith by the Board: (A) your act of fraud or material dishonesty against any member of the Company Group which the Board reasonably determines had or will have a materially detrimental effect on the reputation or business of any member of the Company Group, (B) your conviction of, or plea of nolo contendere to, (i) a felony (excluding minor traffic offenses) or (ii) any other crime which the Board reasonably determines had or will have a materially detrimental effect on the reputation or business of any member of the Company Group, (C) your intentional or gross misconduct, (D) your willful improper disclosure of confidential information, (E) your action or conduct that causes material harm to any member of the Company Group (including, without limitation, the reputation of any member of the Company Group), or that otherwise brings you or any member of the Company Group into public disrepute, (F) your material violation of any policy of any member of the Company Group (including, without limitation, any policy relating to discrimination, sexual harassment or misconduct), or of this Offer Letter (or any other material agreement between you and any member of the Company Group), after written notice from the Company, and a reasonable opportunity of not less than 30 days to cure (to the extent curable) such violation, (G) your failure to reasonably cooperate with any member of the Company Group in any investigation or formal proceeding, or (H) your continued material violations of your duties, or repeated material failures or material inabilities to perform any reasonably assigned duties (other than due to your Disability), after written notice from the Board and a reasonable opportunity of not less than 30 days to cure (to the extent curable) such violations, failures or inabilities (and during which time you will be given a reasonable opportunity to address any issues with the Board).

"**Change in Control**" has the meaning set forth in the Stock Plan.

"**Change in Control Protection Period**" means the period beginning 2 months prior to and ending 12 months following a Change in Control.

"**Company Group**" means Penguin Solutions and each of its subsidiaries.

"**Disability**" means your inability, due to physical or mental incapacity, to perform your duties under this Offer Letter 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 Offer Letter, you hereby (i) consent to any such examinations by a physician which are relevant to a determination of whether you are mentally and/or physically disabled and (ii) agree to furnish such medical information as may be reasonably requested.

"**Good Reason**" means the occurrence, without your written consent, of any of the following events: (A) a change in your title to which you do not consent or a material reduction in the nature or scope of your responsibilities, duties or authority from those contemplated by the title offered in this Offer Letter, (B) a material reduction in your then-current Base Salary (other than due to a general salary reduction program), (C) you cease to report to the Chief Executive Officer of Penguin Solutions, or (D) you are required to permanently relocate your primary home residence as a result of the Company's relocation of your primary office location outside a 50-mile radius of the Company's current offices in Milpitas, California; provided that any such event described in clauses (A) through (D) above will not constitute Good Reason unless (i) you deliver to the Board a notice of termination for Good Reason within 90 days after you first learn of the existence of the circumstances giving rise to Good Reason, (ii) within 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, and (iii) following such failure to cure, you resign your employment within 30 days thereof.

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**<u>Exhibit B</u><br>Initial Equity Awards**<br>

The terms of your initial equity awards will be consistent with those set forth in the summary below. Your initial equity awards will be subject to the terms and conditions set forth in the Stock Plan and an award agreement issued to you in connection with each grant (collectively, the "**Award Documentation**"), which will supersede and replace the summary set forth below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.*<u>Time-Based RSU Award</u>*. On the Start Date or as soon as reasonably practicable thereafter, you will be granted restricted share units to acquire a number of ordinary shares of Penguin Solutions with an aggregate value of $1,250,000, based on the trailing average closing price of an ordinary share of Penguin Solutions over the 30 trading days ending on and including the trading day preceding the grant date of the award (the "**RSUs**"). Subject to your continued service through each vesting date, (i) 25% of the RSUs will vest in an open trading window approximately one year after the grant date and (ii) the remainder of the RSUs will vest in equal quarterly installments (equal to 1/16th of the total number of RSUs) in an open trading window approximately every three months thereafter (through the final vesting date on approximately the fourth annual anniversary of the grant date). Open trading windows typically occur in the second half of every January, April, July and October. Any fraction of a share that vests on any vesting date will be rounded down to the next whole number, with any such fraction added to the portion of the shares that vests on the subsequent vesting date. The RSUs will be subject to vesting acceleration upon a qualifying termination of your service following a Change in Control, as set forth in and subject to the terms of the Offer Letter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.*<u>Performance-Based RSU Award</u>*. On the Start Date or as soon as reasonably practicable thereafter, you will be granted performance-based restricted share units to acquire a number of ordinary shares of Penguin Solutions with an aggregate value of $1,250,000, based on the trailing average closing price of an ordinary share of Penguin Solutions over the 30 trading days ending on and including the trading day preceding the grant date of the award (the "**PRSUs**"). The PRSUs will vest subject to (i) the achievement of Company total shareholder return goals relative to the Russell 2000 Index over a three-year performance period, in each case as established by the Compensation Committee of the Board, and (ii) continued service through the end of the performance period. The PRSUs will be subject to pro-rata vesting acceleration upon a Change in Control, as set forth in and subject to the terms of the Offer Letter.

## Exhibit 10.2

**Exhibit 10.2**

**<u>STOCK TRANSFER AGREEMENT</u>**

This Stock Transfer Agreement (this "<u>Agreement</u>"), dated as of December 29, 2025, is made and entered into by and among SMART Modular Technologies (LX) S.à. r.l., a société à responsabilité limitée governed by the laws of Grand Duchy of Luxembourg ("<u>Transferor</u>"), Lexar Europe B.V., a company organized under the laws of the Netherlands ("<u>Transferee</u>"), Zilia Technologies Indústria e Comércio de Componentes Eletrônicos Ltda., a sociedade limitada governed by the laws of Brazil (formerly known as SMART Modular Technologies Do Brasil – Indústria e Comércio de Componentes Eletrônicos Ltda.) (the "<u>Company</u>"), Shenzhen Longsys Electronics Co., Ltd., a company limited by shares governed by the laws of the People's Republic of China and, as of the date hereof, listed on the Shenzhen Stock Exchange (Stock Code: 301308) ("<u>Parent</u>"), and Shanghai Intelligent Memory Semiconductor Co., Ltd. (上海慧忆半导体有限公司), a limited liability company governed by the laws of the People's Republic of China ("<u>Parent Funding Entity</u>", together with Transferee and Parent, the "<u>Parent Group Companies</u>" and each a "<u>Parent Group Company</u>"). Capitalized terms used but not defined herein shall have the respective meanings given to them in that certain Stock Purchase Agreement, dated June 13, 2023, as amended by that Side Letter to Stock Purchase Agreement dated October 24, 2023, by and among Transferor, Transferee, Parent, Parent Funding Entity and Penguin Solutions, Inc. (formerly known as Smart Global Holdings, Inc.) (collectively, the "<u>Purchase Agreement</u>").

**RECITALS**

WHEREAS, pursuant to the Purchase Agreement, Transferee acquired 81% of the issued and outstanding quotas of capital stock of the Company;

WHEREAS, currently, Transferor owns 19% of the issued and outstanding quotas of capital stock of the Company (collectively, the "<u>Transferred Quotas</u>"), and Transferee owns the remaining 81% of the issued and outstanding quotas of capital stock of the Company;

WHEREAS, Transferor desires to sell, transfer, assign and deliver to Transferee, and Transferee desires to purchase, acquire, assume and accept from Transferor, all of Transferor's right, title and interest in and to the Transferred Quotas on the terms and conditions set forth herein, such that following the transfer of the Transferred Quotas, Transferee shall be the sole equity owner of the Company;

WHEREAS, the Company, Transferor, Transferee, and Parent are party to that certain Quotaholders Agreement of the Company dated as of November 29, 2023 (the "<u>Quotaholders Agreement</u>"), which contains certain approval rights of the parties hereto and certain transfer restrictions that may be triggered by the transfer of the Transferred Quotas and the other transactions contemplated herein, including the Acquisition, as defined below (collectively, the "<u>Transactions</u>") (such approval and/or transfer restrictions, collectively, the "<u>Transfer Restrictions</u>");

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WHEREAS, the parties hereto desire to waive all Transfer Restrictions with respect to the Transactions and terminate the Quotaholders Agreement upon the closing of the Transactions; and

WHEREAS, the board of directors (or the equivalent governing body) of each of Transferor, Transferee, Parent Funding Entity, and Parent has approved such entity's entry into this Agreement and the consummation of the transactions contemplated by this Agreement.

NOW THEREFORE, in consideration of the mutual agreements contained in this Agreement, and intending to be legally bound by the terms and conditions of this Agreement, the parties agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.<u>Sale and Purchase of Transferred Quotas</u>**. At the Closing (as defined below), subject to the terms and conditions of this Agreement, Transferee shall (and Parent shall cause Transferee to) purchase, acquire, assume and accept from Transferor (the "<u>Acquisition</u>") and Transferor shall sell, transfer, assign and deliver to Transferee, free and clear of all Liens (other than restrictions on transfer under applicable securities laws) all of Transferor's right, title and interest in and to the Transferred Quotas for an aggregate purchase price of $46.08 million (the "<u>Purchase Price</u>"). Unless otherwise specified in this Agreement, all references to currency, monetary values and dollars set forth herein shall mean United States (U.S.) dollars and all payments hereunder shall be made in U.S. dollars. Any reference to "dollars" or "$" in this Agreement are to U.S. dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.<u>Withholding</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)At the Closing, Transferor shall provide Transferee with the calculation of the capital gain earned by Transferor in Brazil, as a result of this Agreement (the "<u>Taxable Capital Gains</u>"), indicating the amount to be withheld by the Transferee with respect to the Brazilian *Imposto de Renda na Fonte Sobre Ganho de Capital* on the Taxable Capital Gain. The Taxable Capital Gain shall be calculated based on the difference between the Purchase Price and the acquisition cost originally incurred in Brazilian currency by Transferor for acquiring or subscribing to the Transferred Quotas (the "<u>Transferor Acquisition Cost</u>"). Five (5) Business Days prior to the Closing, Transferor shall provide Transferee with the preliminary calculation of the Taxable Capital Gain, along with all information reasonably necessary to support such calculation. For purposes of the collection of the *Brazilian Imposto de Renda na Fonte Sobre Ganho de Capital*, the Purchase Price shall be converted into Brazilian currency at the higher of the following foreign exchange rates: (i) the exchange rate for selling released by the Central Bank of Brazil (*Cotações de Fechamento PTAX do Dólar dos EUA* – *<u>https://www.bcb.gov.br/estabilidadefinanceira/historicocotacoes</u>*) ("<u>PTAX</u>") as of the second (2<sup>nd</sup>) Business Day prior to the Closing; and (ii) the PTAX on the Closing. The Transferor Acquisition Cost, in turn, shall be calculated in Brazilian Reais considering the foreign exchange rates valid as of the acquisition dates in which the Transferred Quotas have been transferred, assigned and delivered by Transferor. Transferee shall make such withholding and provide Transferor with copies of the *Documento de Arrecadação de Receitas Federais* – DARF, with proof of payment by the end of the term set forth under article 21, paragraph 1, of the Normative Ruling (*Instrução Normativa*) No. 1,455/2014, as amended, enacted by the Brazilian Internal Revenue Service (*Receita Federal*). Transferee shall not be entitled to withhold from the Purchase Price any amounts other than the amounts contemplated by this <u>Section 2(a)</u> or permitted by <u>Section 2(b)</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;(b)In the event of a change in law after the date of this Agreement that imposes an additional Tax withholding requirement on payments hereunder, Transferee shall notify Transferor promptly of such requirement and shall be permitted to make any such required

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withholding to the extent required by such change in law, <u>provided</u>, <u>however</u>, that Transferee shall first cooperate with Transferor to reduce or eliminate any such withholding to the greatest extent permitted by applicable Law. Any amounts withheld hereunder as described in this <u>Section 2</u> will be treated for purposes of this Agreement as having been paid to the Person(s) on whose behalf such withholding was made.

&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 Brazilian tax authorities issue an infraction notice challenging the collection of the Brazilian *Imposto de Renda na Fonte Sobre Ganho de Capital* payable as a result of the Acquisition, Transferor shall either pay the corresponding charges, assuming the financial burden of that claim, or control the corresponding defense at its own expense. For the avoidance of doubt, Transferor shall be responsible for any and all costs incurred by Transferor in connection with the defense, including attorneys' fees, judicial costs and guaranties. Transferee shall execute such powers of attorney and take such other actions as may be reasonably necessary to give effect to the preceding sentence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.<u>Closing; Closing Conditions</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;**3.1**The closing of the sale and purchase of the Transferred Quotas (the "<u>Closing</u>") shall take place remotely at 4:00 p.m. Pacific Time on March 30, 2026, or at such earlier date and time the Transferor and Transferee mutually agree upon, in writing (email being sufficient). Notwithstanding the foregoing, if any applicable Parent Group Company has not obtained any of the applicable requisite approvals set forth in <u>Schedule 5.3</u> attached hereto by March 30, 2026, as evidenced in writing by such Parent Group Company, the Closing shall instead take place no later than April 28, 2026.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2**At the Closing, Transferor and Transferee shall execute an amendment and restatement of the Company's articles of association (*alteração ao contrato social*) formalizing the assignment of the Transferred Quotas by Transferor and their acquisition by Transferee ("<u>Amendment to Company's Articles of Association</u>"), substantially in the form attached hereto as <u>Exhibit 3.2</u>. Immediately following Transferee's receipt of Transferor's electronically signed signature to the Amendment to Company's Articles of Association, Transferee shall pay Transferor the Purchase Price by wire transfer of immediately available funds to the account designated in writing by Transferor (such designation to be made at least two (2) Business Days prior to the date of the Closing).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3**The obligations of Transferor to consummate the Transactions are subject to the satisfaction (or, to the extent permitted by applicable Law, waiver by Transferor) at the Closing of the following condition: the representations and warranties of the Company and each Parent Group Company in <u>Sections 5.1</u>, <u>5.2</u>, and <u>5.3</u> herein shall be true and correct in all respects as of the Closing (except to the extent any such failure to be true and correct would not reasonably be expected to have a material adverse effect on the ability of any Parent Group Company or the Company to consummate the Acquisition and the other transactions contemplated by this Agreement (a "<u>Purchaser Material Adverse Effect</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;**3.4**The obligations of each Parent Group Company to consummate the Transactions are subject to the satisfaction (or, to the extent permitted by applicable Law, waiver by Transferee) at the Closing of the following condition: the representations and warranties of Transferor in <u>Sections 6.1</u>, <u>6.2</u>, and <u>6.3</u> herein shall be true and correct in all respects as of the Closing (except to the extent any such failure to be true and correct would not reasonably be expected to have a material adverse effect on the ability of the Transferor to consummate the Acquisition and the other transactions contemplated by this Agreement (a "<u>Transferor Material Adverse Effect</u>")).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.<u>Release</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;**4.1**Effective as of the Closing and in partial consideration of the consummation of the Transactions, Transferor, for itself and its respective heirs, representatives, successors, assigns, employees, officers, directors, stockholders, partners, members, agents and affiliates (each of such parties as a releasor, the "<u>Transferor Releasors</u>"), hereby forever fully, irrevocably and unconditionally releases and discharges each of the Company, Transferee, and each of their respective affiliates, and each of their respective members (direct and indirect), partners (direct and indirect), managers, directors, officers, employees, agents, lenders (and agents related thereto) and representatives thereof (collectively, the "<u>Transferor Released Parties</u>") from any and all actions, suits, claims, demands, debts, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, promises, judgments, liabilities or obligations of any kind whatsoever in law or equity and causes of action of every kind and nature, or otherwise (including, claims for damages, costs, expenses, and attorneys', brokers' and accountants' fees and expenses) arising out of or related to events, facts, conditions or circumstances existing or arising on or prior to the Closing, which the Transferor Releasors can, shall or may have against any Transferor Released Party, whether known or unknown, suspected or unsuspected, unanticipated as well as anticipated and that now exist or may hereafter accrue related to, or arising out of, the Purchase Agreement, the Quotaholders Agreement, the Transactions or otherwise in the capacity of the Transferor Released Parties as quotaholders or managers of the Company, as applicable (collectively, the "<u>Transferor Released Claims</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;**4.2**The Transferor Releasors hereby irrevocably agree to refrain from directly or indirectly asserting any claim or demand or commencing (or causing to be commenced) any suit, action, or proceeding of any kind, in any court or before any tribunal, against any Transferor Released Party based upon any Transferor Released Claim. The Transferor Released Parties are intended third-party beneficiaries of this <u>Section 4</u> and shall have the right, power and authority to enforce the provisions hereof as though they were parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3**Effective as of the Closing and in partial consideration of the consummation of the Transactions, each of the Parent Group Companies, for itself and its respective heirs, representatives, successors, assigns, employees, officers, directors, stockholders, partners, members, agents and affiliates (each of such parties as a releasor, the "<u>Transferee Releasors</u>"), hereby forever fully, irrevocably and unconditionally releases and discharges each of the Company, Transferor, and each of their respective affiliates, and each of their respective members (direct and indirect), partners (direct and indirect), managers, directors, officers, employees, agents, lenders (and agents related thereto) and representatives thereof (collectively, the "<u>Transferee Released Parties</u>") from any and all actions, suits, claims, demands, debts, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, controversies, promises, judgments, liabilities or obligations of any kind whatsoever in law or equity and causes of action of every kind and nature, or otherwise (including, claims for damages, costs, expenses, and attorneys', brokers' and accountants' fees and expenses) arising out of or related to events, facts, conditions or circumstances existing or arising on or prior to the Closing, which the Transferee Releasors can, shall or may have against any Transferee Released Party, whether known or unknown, suspected or unsuspected, unanticipated as well as anticipated and that now exist or may hereafter accrue related to, or arising out of, the Purchase Agreement, the Quotaholders Agreement, the Transactions or otherwise in the capacity of the Transferee Released Parties as quotaholders or managers of the Company, as applicable (collectively, the "<u>Transferee Released Claims</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;**4.4**The Transferee Releasors hereby irrevocably agree to refrain from directly or indirectly asserting any claim or demand or commencing (or causing to be commenced) any suit, action, or proceeding of any kind, in any court or before any tribunal, against any Transferee Released Party based upon any Transferee Released Claim. The Transferee Released Parties are

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intended third-party beneficiaries of this <u>Section 4</u> and shall have the right, power and authority to enforce the provisions hereof as though they were parties hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5**Notwithstanding anything to the contrary contained in this <u>Section 4</u>, the parties acknowledge and agree that Transferor Released Claims and Transferee Released Claims shall not include any claims arising from the actual fraud of a party in connection with this Agreement. Each party, on behalf of itself and each affiliated Transferor Releasor or Transferee Releasor, as applicable, hereby acknowledges that such person (i) has been advised by legal counsel and (ii) is familiar with and expressly waives any and all rights granted pursuant to Section 1542 of the California Civil Code (or the analogous provision of any other applicable state or federal statute or common law principle of similar effect), which provides as follows:

"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, which if known to him or her, would have materially affected his or her settlement with the debtor or released party."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.<u>Representations, Warranties and Covenants of the Company and each Parent Group Company</u>**. Each Parent Group Company and the Company agrees and represents and warrants to Transferor that as of the date of this Agreement and as of the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1<u>Authorization</u>**. All legal action on the part of each Parent Group Company and the Company necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Parent Group Companies and the Company hereunder and the transfer of the Transferred Quotas hereunder has been taken, and this Agreement, when executed and delivered by each Parent Group Company and the Company, shall constitute valid and legally binding obligations of such Parent Group Company and the Company, enforceable against such Parent Group Company and the Company in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws of general application affecting enforcement of creditors' rights generally, and as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2<u>Non-Contravention</u>**. The execution, delivery and performance by each Parent Group Company and the Company of this Agreement does not, nor the consummation by Transferee of the Transactions will, (i) conflict with or violate the articles of association, certificate of incorporation, bylaws and other organizational documents, of any Parent Group Company or the Company, as applicable, (ii) result in a breach of or constitute a default (with or without due notice or lapse of time or both) under or create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under any material Contract to which any Parent Group Company or the Company is a party or by which any of their respective material assets is bound, (iii) conflict with or violate any Judgment or Law applicable to any Parent Group Company or the Company, (iv) result in the creation of any Lien upon any of the material assets of any Parent Group Company or the Company, except, in the case of clauses (ii), (iii) and (iv), any such items that would not reasonably be expected to have a Purchaser Material Adverse 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;**5.3<u>Approvals</u>**. No consent of, license from, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to any Parent Group Company, the Company or any Transferee affiliate in connection with the execution, delivery and performance of this Agreement or the consummation of the Transactions, other than (i) compliance with and filings, notifications and approvals listed on <u>Schedule 5.3</u> or

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(ii) as would not reasonably be expected, individually or in the aggregate, to have a Purchaser Material Adverse 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;**5.4<u>No Litigation</u>**. There is no litigation, claim, action, suit, arbitration, complaint, charge, investigation or proceeding pending or involving or, to the Company's knowledge or the Transferee's knowledge, threatened with respect to the Transferred Quotas or that questions the validity of this Agreement or any action taken or to be taken by the Company or the Transferee pursuant to this Agreement before or by any court or Governmental Entity or any other person or entity. To the Company's knowledge and the Transferee's knowledge, no event has occurred and no condition exists on the basis of which any such litigation, claim, action, suit, arbitration, complaint, charge, investigation or proceeding may reasonably be asserted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5<u>Availability of Funds</u>**. Parent, Parent Funding Entity or Transferee has and will have at the Closing, sufficient immediately available funds to pay the Purchase Price and to perform Parent, Parent Funding Entity and Transferee's other obligations under 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;**5.6<u>Transferor's Representations; Independent Investigation</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Each Parent Group Company is a sophisticated purchaser and possesses such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of its investment under this Agreement. Each of the Parent Group Companies acknowledges and agrees that, other than the representations and warranties of Transferor specifically contained in <u>Section 6</u>, there are no representations or warranties of Transferor or any other Person either expressed or implied with respect to the Business, the Transferred Quotas, the Transferred Subsidiaries or the transactions contemplated hereby, individually or collectively. Each Parent Group Company, together with and on behalf of their respective affiliates and Representatives, specifically disclaims that it or they are relying upon or have relied upon any such other representations or warranties that may have been made by any person, and each Parent Group Company, together with and on behalf of its affiliates and Representatives, acknowledges and agrees that Transferor and its affiliates have specifically disclaimed and do hereby specifically disclaim any such other representation or warranty made by 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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Except as expressly set forth in any representation or warranty in <u>Section 6</u>, each Parent Group Company acknowledges and agrees that it is not relying on any information, documents or materials made available or otherwise furnished to or for a Parent Group Company, their respective affiliates or their respective Representatives by Transferor, any of its affiliates, or any of their respective Representatives in connection with the transactions contemplated by this Agreement, including any financial projections or other statements regarding future performance, any management presentation or confidential information memoranda and any other information, documents or material, whether oral or written, made available to the Parent Group Companies, their affiliates or their respective Representatives in any "data room", presentation, "break-out" discussions, responses to questions submitted on behalf of the Parent Group Companies, their affiliates or their respective Representatives or otherwise furnished to the Parent Group Companies, their affiliates or their respective Representatives in any form in expectation of the transactions contemplated hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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)Nothing in this <u>Section 5.6</u> shall limit, or provide a defense against, any claim for actual fraud.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.<u>Representations and Warranties of Transferor</u>**. Transferor represents and warrants to the Company and the Parent Group Companies that as of the date of this Agreement and as of the Closing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1<u>Authorization</u>**. All legal action on the part of Transferor and its partners necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of Transferor hereunder and the transfer of the Transferred Quotas hereunder has been taken, and this Agreement, when executed and delivered by Transferor, shall constitute valid and legally binding obligations of Transferor, enforceable against Transferor in accordance with its terms. The execution, delivery and performance of this Agreement, and the consummation of the transactions contemplated hereby will not result in a violation of, or default under, any instrument, judgment, order, writ, decree or contract known to Transferor, or an event that results in the creation of any lien, charge or encumbrance upon the Transferred Quotas.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2<u>Title to Transferred Quotas</u>**. Transferor owns all right, title and interest (legal and beneficial) in and to the Transferred Quotas. Immediately prior to the Closing, Transferor will have valid marketable title to the Transferred Quotas to be transferred under this Agreement in the Closing, free and clear of all Liens. At the date of the Closing, Transferor's entire right, title and interest in and to the Transferred Quotas to be transferred under this Agreement in the Closing will be conveyed to Transferee as set forth herein. Transferor has good and marketable title to the Transferred Quotas being transferred by Transferor, and the right and authority to sell such Transferred Quotas to Transferee pursuant to this Agreement and without any third party consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3<u>Non-Contravention; Approvals</u>**. Subject to due execution by the Parent Group Companies of this Agreement and waiver of the Transfer Restrictions, the execution, delivery and performance of this Agreement, and the consummation of the Transactions, do not and will not result in the creation or imposition of any Lien on the Transferred Quotas, nor be in conflict with or constitute (with or without due notice or lapse of time or both) a default under (i) any agreement to which Transferor is a party or by which the Transferred Quotas may be bound, or contravene, conflict or (ii) constitute a violation of any order or judgment to which it is subject, except, in the case of <u>clauses (i)</u> through <u>(ii)</u>, any such items that would not reasonably be expected to have a Transferor Material Adverse Effect. As of the Closing, and subject to due execution by the Parent Group Companies of this Agreement, the Company and Transferee's adherence to the covenants in this Agreement and waiver of the Transfer Restrictions, Transferor shall have complied with all procedures and requirements necessary to validly transfer all of the Transferred Quotas to Transferee hereunder pursuant to and in accordance with the governing documents of the Company or otherwise, and the transfer of the Transferred Quotas to Transferee is not subject to any right of first refusal, preemptive, tag-along or drag-along right or other comparable obligations or restrictions that have not been duly waived or properly complied with. Except (i) as set forth on <u>Schedule 5.3</u> or (ii) as would not reasonably be expected, individually or in the aggregate, to have a Transferor Material Adverse Effect, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any foreign, federal, state or local Governmental Entity or other person or entity on the part of Transferor is required in connection with the consummation of the transactions contemplated by this Agreement, except those that have been duly waived or properly complied with to the extent applicable to the transfer of the Transferred Quotas to Transferee pursuant hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.4<u>Transferor Can Protect Its Interest</u>**. Transferor represents that by reason of its business or financial experience, Transferor has the capacity to protect its own interests in connection with the transactions contemplated in this Agreement. Transferor expressly acknowledges and understands that the Transferred Quotas may increase in value after the date hereof. Transferor confirms, acknowledges, and understands that by selling and transferring the

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Transferred Quotas, Transferor will irrevocably forego all potential or actual gain that might be realized if Transferor had continued to hold such Transferred Quotas.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.5<u>No Litigation</u>**. There is no litigation, claim, action, suit, arbitration, complaint, charge, investigation or proceeding pending or involving or, to Transferor's knowledge, threatened with respect to the Transferred Quotas or that questions the validity of this Agreement or any action taken or to be taken by Transferor pursuant to this Agreement before or by any court or Governmental Entity or any other person or entity. To Transferor's knowledge, no event has occurred and no condition exists on the basis of which any such litigation, claim, action, suit, arbitration, complaint, charge, investigation or proceeding may reasonably be asserted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.<u>Termination of Quotaholders Agreement</u>.** Each of the Company, Transferor, Parent and Transferee fully consents to the Transactions, waives any transfer restrictions (including the Transfer Restrictions and any notice requirements) in favor of such party applicable to the Transactions. Each of the Company, Transferor, Parent and Transferee hereby agree that the Quotaholders Agreement shall terminate effective as of and contingent upon the Closing, without any further action by any party hereto or thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.<u>Informed Decision</u>.** Each of Transferor and the Parent Group Companies (collectively, the "<u>Transacting Parties</u>") has entered into this Agreement based on its knowledge, investigation and analysis. Neither Transacting Party shall be liable to the other Transacting Party for any omission to provide any information to the other Transacting Party that may have impacted the other Transacting Party in making its decision to purchase or sell, as the case may be, the Transferred Quotas. Nothing in this <u>Section 8</u> shall limit, or provide a defense against, any claim for actual fraud.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.<u>Tax Covenants</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;**9.1**<u>Transfer Taxes</u>. Each of (i) Parent or, at the direction of Parent, Transferee and (ii) Transferor shall be liable for and pay, and indemnify the other party against, any Transfer Taxes for which each is primarily liable under applicable Law. Transferee and Transferor shall, and shall cause their respective subsidiaries to, cooperate in timely making all filings, returns, reports and forms as may be required in connection with payment of any Transfer Taxes. Transferor shall, or Transferee shall, as applicable, execute and deliver all instruments and certificates necessary to enable the other to comply with any filing requirements relating to any such Transfer Taxes. For avoidance of doubt, Parent or, at the direction of Parent, Transferee shall be liable for and pay any *Imposto sobre Operações Financeiras sobre Operações de câmbio* arising out of, in connection with or attributable to the transactions effectuated pursuant 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;**9.2**<u>Cooperation</u>. Transferee agrees to retain all records relating to Taxes of the Transferred Subsidiaries for all taxable periods (or portions thereof) ending on or prior to the Closing Date until the expiration of the applicable statutes of limitation (including any extensions thereof) for the taxable period or periods to which such records relate. Transferee and Transferor agree to provide each other with such information and assistance as is reasonably necessary, including access to records and personnel, for the preparation of any Tax Returns or for the defense of any Tax claim or assessment, whether in connection with an audit or otherwise.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.<u>General Provisions</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;**10.1<u>Successors and Assigns; Assignment; Survival</u>**. The rights and obligations of the parties under this Agreement may only be assigned with the prior written consent of (i) Transferee, in the event of assignment by Transferor, and (ii) Transferor, in the

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event of assignment by a Parent Group Company. Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. The representations, warranties and covenants contained herein shall not survive the Closing (other than the covenants contained herein which are to be performed following the Closing and shall survive the Closing in accordance with their terms). For the avoidance of doubt, no claim for damages based upon any representation, warranty or covenant of any party may be brought after the Closing, except as expressly provided in <u>Section 4</u> with respect to actual fraud.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.2<u>Governing Law</u>**. This Agreement will be governed by and construed in accordance with the laws of the State of New York, without giving effect to that body of laws pertaining to conflict of laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.3<u>Arbitration</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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)All disputes, controversies or claims arising out of or relating to this Agreement or the transactions contemplated hereby (whether in contract, tort, equity or otherwise), including the arbitrability of any dispute or controversy that cannot be settled by mutual agreement (each, a "<u>Dispute</u>") shall be resolved by final and binding arbitration under the Rules of Arbitration ("<u>ICC Rules</u>") (as modified herein) of the International Chamber of Commerce (the "<u>ICC</u>") before an arbitral tribunal of three (3) arbitrators. The seat of the arbitration shall be New York, New York, and the language of the arbitration shall be English.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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)Transferor and Transferee shall each nominate one (1) arbitrator in accordance with the ICC Rules. Should a party fail to nominate an arbitrator within the time period provided in the ICC Rules, then such arbitrator shall be appointed by the ICC Court of Arbitration (the "ICC Court") in accordance with the ICC Rules. The first two arbitrators so nominated shall jointly nominate the third arbitrator (who shall act as presiding arbitrator) prior to the thirtieth (30th) day following the appointment of the second co-arbitrator. Failing such nomination within that timeframe, the ICC Court shall appoint the presiding arbitrator. Notwithstanding the foregoing, no arbitrator shall be a past or present employee or agent of, or consultant or counsel to, any party or any affiliate of a party, unless such restriction is waived in writing by the other party to the proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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)The substantive law governing the Dispute shall be the law of the State of New York as specified in <u>Section 10.2</u> herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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)The arbitral tribunal shall have the power and authority to determine the arbitrability of any dispute arising under or relating to this Agreement or the subject matter hereof. Subject to any other relevant limitations set forth elsewhere herein, the arbitral tribunal shall have power to award any remedy that it determines to be lawful and appropriate and which is in accordance with the terms of this Agreement, including monetary damages, specific performance and other legal and equitable relief (including provisional and/or permanent injunctive relief), provided, however, that the arbitral tribunal shall have no authority or power to limit, expand, alter, modify, revoke or suspend any condition or provision of this Agreement, nor any authority or power to award punitive, consequential, exemplary or treble damages or any other type of relief in the nature of a penalty, and the parties hereby expressly waive any right they might otherwise have to such relief.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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)Any award of the arbitral tribunal constituted under this <u>Section 10.3</u> shall be final and binding upon the parties. Each of the parties agrees that the arbitral award may be enforced against it or its assets wherever they may be found and that a judgment upon the arbitral award may be entered in any court having jurisdiction thereof.

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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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Notwithstanding the foregoing provisions of this <u>Section 10.3</u>, each party may seek temporary, provisional or interim measures (including specific performance and injunctive relief) in aid of arbitration and enforcement of any arbitral award in any state or federal court located in New York County, New York, and each party irrevocably submits to the exclusive jurisdiction of such courts for such limited purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.4<u>Specific Performance</u>**. The parties agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties do not perform their obligations under the provisions of this Agreement (including failing to take such actions as are required of them hereunder to consummate the transactions contemplated by this Agreement) in accordance with its specified terms or otherwise breach such provisions. The parties acknowledge and agree that (a) the parties shall be entitled to an injunction or injunctions, specific performance or other equitable relief in accordance with <u>Section 10.3</u> to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction without proof of damages or inadequacy of legal remedy and without the posting or provision of any bond or other security, this being in addition to any other remedy to which they are entitled under this Agreement and (b) the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and, without that right, none of Transferor nor any of the Parent Group Companies would have entered into this Agreement. The parties hereto agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, and not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.5<u>Further Assurances</u>**. The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of 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;**10.6<u>Entire Agreement</u>**. This Agreement and the documents referred to herein, constitute the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.7<u>Counterparts</u>**. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.8<u>Severability</u>**. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in 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;**10.9<u>Amendment and Waivers</u>**. This Agreement may be amended only by a written agreement executed by each of the parties hereto. No amendment of or waiver of, or modification of any obligation under this Agreement will be enforceable unless set forth in a writing signed by the party against which enforcement is sought. Any amendment effected in accordance with this section will be binding upon all parties hereto and each of their respective successors and assigns. No delay or failure to require performance of any provision of this

------

Agreement shall constitute a waiver of that provision as to that or any other instance. No waiver granted under this Agreement as to any one provision herein shall constitute a subsequent waiver of such provision or of any other provision herein, nor shall it constitute the waiver of any performance other than the actual performance specifically waived.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.10<u>Taxes</u>**. Each of Transferor and Transferee has reviewed with its own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement and shall bear any and all taxes imposed on such party under any applicable law with respect to the transactions contemplated hereunder, if and as applicable. Each party hereunder relies solely on such advisors and not on any statements or representations of 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;**10.11<u>Fees and Expenses</u>**. Each of Transferor and Transferee shall be responsible for its own costs and expenses incurred or to be incurred in connection with this Agreement, including negotiating and preparing this Agreement and in closing and carrying out the Transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.12<u>Public Announcements</u>**. Other than any press release or public statement jointly agreed by Transferor and Transferee following execution of this Agreement, no party shall issue any press release, website posting or other public announcement with respect to this Agreement or the Transactions without (i) in the case of a Parent Group Company, the prior written consent of Transferor or (ii) in the case of Transferor, the prior written consent of Transferee, in each case, except as may be required by Law or stock exchange rules (in which case the disclosing party shall, to the extent legally permissible, provide the other party a reasonable opportunity to review and comment and consider in good faith such comments). The restrictions set forth in the preceding sentence shall expire at Closing, and thereafter either party may make such disclosures (including as may be required by Law or stock exchange rules) as they deem necessary or appropriate without the consent of the other party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.13<u>Notices</u>**. All notices hereunder shall be in writing and shall be deemed given (a) when delivered personally, one (1) Business Day after deposit with an internationally recognized overnight courier, or (b) when transmitted via email (without "bounce back" or error) if prior to 5:00 p.m. in the place of receipt (and otherwise the next Business Day), in each case to the addresses and emails set forth in the signature pages hereto (or such other address or email as a party may designate by notice in accordance with this <u>Section 10.13</u>).

[*Remainder of page intentionally left blank. Signature pages follow*.]

------

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

**TRANSFEROR:**

**SMART MODULAR TECHNOLOGIES (LX) S.À R.L.**

By: /s/ Anne Kuykendall&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Name: Anne Kuykendall&nbsp;&nbsp;&nbsp;&nbsp;

Title: Class A Manager

Address:

c/o Penguin Solutions, Inc.

45800 Northport Loop W

Fremont, CA 94538

Attention: Senior Vice President and Chief Legal Officer

Email: &nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

with copies to (which shall not constitute notice):

Latham & Watkins LLP

140 Scott Drive

Menlo Park, California 94025

Attention:&nbsp;&nbsp;&nbsp;&nbsp;Mark Bekheit

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tessa Bernhardt

Email:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

and

Machado, Meyer, Sendacz e Opice Advogados

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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. Brig. Faria Lima, 3200 – Itaim Bibi

São Paulo – SP, 01453-050, Brazil

Attention:&nbsp;&nbsp;&nbsp;&nbsp;Adriana Pallis

Email: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

[Signature Page to Stock Transfer Agreement]

------

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

**COMPANY:**

**ZILIA TECHNOLOGIES INDÚSTRIA E COMÉRCIO DE COMPONENTES ELETRÔNICOS LTDA**

By:&nbsp;&nbsp;&nbsp;&nbsp;/s/ Rogerio Duair Jacomimi Nunes

Name: Rogerio Duair Jacomimi Nunes

Title: Authorized Signatory

Address:

Legal & Compliance Department

Avenida Tégula, nº 888

Edifício Ametista, Módulos 2 (Mezanino) e 3

Ponte Alta – CEP, Atibaia

São Paulo, Brazil

CEP 12952-812

Attention: Rogerio Duair Jacomimi Nunes; Christopher H. Chang

Email: [\*\*\*]

with copies to (which shall not constitute notice):

Sidley Austin LLP

Building One, Suite 100

1001 Page Mill Rd

Palo Alto, CA 94304

Attention: &nbsp;&nbsp;&nbsp;&nbsp;Yabo Lin

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rob Carlson

Email:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

and

Pinheiro Neto Advogados

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R. Hungria, 1100 – Jardim Europa

São Paulo – SP, 01455-906, Brazil

Attention:&nbsp;&nbsp;&nbsp;&nbsp;Miguel Tornovsky

Email: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

------

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

**TRANSFEREE:**

**LEXAR EUROPE B.V.**

By: /s/ Christopher H. Chang

Name: Christopher H. Chang

Title: Authorized Signatory

Address: c/o Shenzhen Longsys Electronics Co., Ltd.

1737 N First Street, Suite 680, San Jose, CA 95112

Attention: Senior Vice President

Email: [\*\*\*]

with copies to (which shall not constitute notice):

Sidley Austin LLP

Building One, Suite 100

1001 Page Mill Rd

Palo Alto, CA 94304

Attention: &nbsp;&nbsp;&nbsp;&nbsp;Yabo Lin

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rob Carlson

Email:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

and

Pinheiro Neto Advogados

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R. Hungria, 1100 – Jardim Europa

São Paulo – SP, 01455-906, Brazil

Attention:&nbsp;&nbsp;&nbsp;&nbsp;Miguel Tornovsky

Email: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

[Signature Page to Stock Transfer Agreement]

------

**PARENT:** 

**SHENZHEN LONGSYS ELECTRONICS CO., LTD.**

By: /s/ Christopher H. Chang

Name: Christopher H. Chang

Title: Authorized Signatory

Address: c/o Shenzhen Longsys Electronics Co., Ltd.

1737 N First Street, Suite 680, San Jose, CA 95112

Attention: Senior Vice President

Email: [\*\*\*]

with copies to (which shall not constitute notice):

Sidley Austin LLP

Building One, Suite 100

1001 Page Mill Rd

Palo Alto, CA 94304

Attention: &nbsp;&nbsp;&nbsp;&nbsp;Yabo Lin

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rob Carlson

Email:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

and

Pinheiro Neto Advogados

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R. Hungria, 1100 – Jardim Europa

São Paulo – SP, 01455-906, Brazil

Attention:&nbsp;&nbsp;&nbsp;&nbsp;Miguel Tornovsky

Email: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

[Signature Page to Stock Transfer Agreement]

------

---

| | |
|:---|:---|
| <br>**PARENT FUNDING ENTITY:**<br>**SHANGHAI INTELLIGENT MEMORY SEMICONDUCTOR CO., LTD. (上海慧忆半导体有限公司)** | <br>**PARENT FUNDING ENTITY:**<br>**SHANGHAI INTELLIGENT MEMORY SEMICONDUCTOR CO., LTD. (上海慧忆半导体有限公司)** |
| By: | /s/ Christopher H. Chang |
| Name:  | Christopher H. Chang |
| Title:  | Authorized Signatory |

---

Address: c/o Shenzhen Longsys Electronics Co., Ltd.

1737 N First Street, Suite 680, San Jose, CA 95112

Attention: Senior Vice President

Email: [\*\*\*]

with copies to (which shall not constitute notice):

Sidley Austin LLP

Building One, Suite 100

1001 Page Mill Rd

Palo Alto, CA 94304

Attention: &nbsp;&nbsp;&nbsp;&nbsp;Yabo Lin

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rob Carlson

Email:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

and

Pinheiro Neto Advogados

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R. Hungria, 1100 – Jardim Europa

São Paulo – SP, 01455-906, Brazil

Attention:&nbsp;&nbsp;&nbsp;&nbsp;Miguel Tornovsky

Email: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[\*\*\*]

[Signature Page to Stock Transfer Agreement]

## 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: January 6, 2026 | 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: January 6, 2026 | 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 November 28, 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: January 6, 2026 | 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 November 28, 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: January 6, 2026 | By: | /s/ Nate Olmstead |
|  |  | Nate Olmstead |
|  |  | Senior Vice President and Chief Financial Officer |

---

<br>