
As of	May 29, 2026		August 29, 2025

2030 Notes	194,763		193,906
2029 Notes	148,401		147,987
2026 Notes	—		19,945
2025 Loans	100,000		100,000
	443,164		461,838
Less current debt	(148,401)		(19,945)
Long-term debt	$	294,763	$	441,893

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.

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.

The Convertible Senior Notes due 2026 (the “2026 Notes”) were senior unsecured obligations of the Company that matured on February 15, 2026. Per the terms of an indenture (the “2026 Indenture”) between the Company and U.S. Bank Trust Company National Association, as trustee, the Company elected to settle the principal

portion of the 2026 Notes in cash and the excess conversion value in shares of the Company’s common stock. At maturity, the outstanding principal amount of $20.0 million was paid in cash with no excess conversion value.

Concurrently with the expiration of the 2026 Notes, the associated capped call transactions were settled pursuant to their terms and, as a result, the Company received approximately 13,000 shares of its common stock, which have been recorded as treasury stock.

The closing price of our common stock exceeded 130% of the conversion price for our Convertible Senior Notes due 2029 (the “2029 Notes”) for at least 20 trading days (whether or not consecutive) in the 30 consecutive trading days ended on May 29, 2026. As a result, the 2029 Notes are convertible by holders through August 28, 2026. Because the holders possess the unilateral right to demand conversion during the fiscal quarter ending August 28, 2026 and we are required to settle the principal amount of any converted notes in cash, the entire carrying value of the 2029 Notes is reflected as current debt on our Consolidated Balance Sheet as of May 29, 2026.

Upon receiving a notice of conversion, we are required to pay the principal amount in cash and have the option to settle any amount in excess of the principal amount in cash, shares of our common stock, or a combination thereof. If we elect to settle any part of the excess in cash, the settlement obligation becomes a derivative debt liability subject to mark-to-market accounting treatment based on the volume-weighted-average price of our common stock over a period of 40 consecutive trading days, beginning on, and including, the second trading day immediately after the Conversion Date (as defined in the 2029 Indenture) (“the Observation Period”). During the Observation Period, the derivative liability is remeasured to fair value at each reporting period and upon final settlement, with any subsequent changes in fair value recognized as a gain or loss in our Consolidated Statement of Operations.

Unamortized debt discount and issuance costs are amortized over the terms of our 2026 Notes, our 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 August 29, 2025 and up through the date of maturity, the effective interest rate for our 2026 Notes was 2.83%. As of May 29, 2026 and August 29, 2025, the effective interest rate for our 2029 Notes was 2.40%. As of May 29, 2026 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:


	Three Months Ended				Nine Months Ended
	May 29, 2026		May 30, 2025		May 29, 2026		May 30, 2025
Contractual stated interest	$	1,789	$	1,904	$	5,458	$	5,588
Amortization of debt issuance costs	388		402		1,319		1,321
	$	2,177	$	2,306	$	6,777	$	6,909