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 ~~September~~December 3031, 2025


☐			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 001-13449


Quantum Corporation
(Exact name of registrant as specified in its charter)

Delaware

94-2665054

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

10770 E. Briarwood Avenue

Centennial

80112

(Address of Principal Executive Offices)

(Zip Code)


(408)			944-4000
Registrant's telephone number, including area code


N/A
(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value per share

QMCO

Nasdaq Global Market

Table of Contents

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

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

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	x	Smaller reporting company	x
		Emerging growth company	☐

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

As of the close of business on ~~November~~February 1112, ~~2025~~2026, there were 1314,~~721~~638,~~291~~029 shares of Quantum Corporation’s common stock issued and outstanding.

Table of Contents

QUANTUM CORPORATION

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended ~~September~~December 3031, 2025

Table of Contents

		Page
PART I
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Cash Flows	3
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit	4
	Index to Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2524
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
Signatures		38

Table of Contents

As used in this Quarterly Report on Form 10-Q, the terms "Quantum," the “Company,” "we," "us," and "our" refer to Quantum Corporation and its subsidiaries taken as a whole, unless otherwise noted or unless the context indicates otherwise.

Note Regarding Forward-Looking Statements

This report contains forward-looking statements. All statements contained in this report other than statements of historical fact, including, but not limited to, statements regarding our future operating results and financial position; our business strategy, focus and plans; our market growth and trends; our products, services and expected benefits thereof; expectations with respect to current and future litigation, and utilization of directors’ and officers’ liability insurance; and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including: the competitive pressures that we face; risks associated with executing our strategy; the impact of macroeconomic and geopolitical trends and events; the need to manage third-party suppliers and the distribution of our products and the delivery of our services effectively; the protection of our intellectual property assets, including intellectual property licensed from third parties; risks associated with our international operations; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs; our response to emerging technological trends; the execution and performance of contracts by us and our suppliers, customers, clients and partners; the hiring and retention of key employees; risks associated with business combination and investment transactions; the execution, timing and results of any transformation or restructuring plans, including estimates and assumptions related to the cost and the anticipated benefits of the transformation and restructuring plans; the outcome of any legal proceedings, claims and disputes; the ability to meet stock exchange continued listing standards; the possibility that Nasdaq may delist our securities; risks related to our restatement and revisions to financial statements; risks related to our ability to implement and maintain effective internal control over financial reporting in the future; risks related to changes in our management; and those risks described under Part II, Item 1A. Risk Factors. Moreover, we operate in a competitive and changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the effect of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this report or to conform these statements to actual results or revised expectations.

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

QUANTUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts, unaudited)

	September 30, 2025		March 31, 2025
	December 31, 2025		March 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	1413,~~670~~180	$	16,464
Restricted cash	~~659~~661		139
Accounts receivable, net of allowance for credit losses of $151 and $99, respectively	43,934		52,502
Accounts receivable, net of allowance for credit losses of $2,730 and $99, respectively	59,429		52,502
Inventories	1817,~~930~~629		22,434
Prepaid expenses	43,~~524~~744		2,738
Other current assets	78,~~416~~976		8,529
Total current assets	90103,~~133~~619		102,806
Property and equipment, net	109,~~697~~952		11,378
Goodwill	12,969		12,969
Intangible assets, net	—		281
Right-of-use assets	7,~~983~~755		8,580
Other long-term assets	1514,~~915~~977		19,388
Total assets	$	~~137~~149,~~697~~272	$	155,402
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	2429,~~193~~953	$	31,463
Accrued compensation	89,~~822~~669		9,214
Deferred revenue, current portion	6674,~~758~~917		75,076
Accrued restructuring	~~855~~905		786
Term debt	9952,~~634~~758		96,486
Revolving credit facility	—		26,600
Warrant liabilities	2316,~~895~~335		—
Other accrued liabilities	1718,~~588~~639		17,982
Total current liabilities	~~241~~203,~~745~~176		257,607
Deferred revenue, net of current portion	3533,~~144~~409		38,847
Operating lease liabilities	8,602		8,934
Convertible Note	75,873		—
Other long-term liabilities	12,705		14,380
Operating lease liabilities	8,406		8,934
Total liabilities	298,196		319,768
Other long-term liabilities	12,637		14,380
Commitments and contingencies (Note 10)
Total liabilities	333,501		319,768
Commitments and contingencies (Note 11)
Stockholders' deficit
Preferred stock, 20,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $0.01 par value; 225,000 shares authorized; 13,333 and 6,962 shares issued and outstanding	133		70
Common stock, $0.01 par value; 225,000 shares authorized; 14,135 and 6,962 shares issued and outstanding	141		70
Additional paid-in capital	~~846~~850,~~451~~512		779,645
Accumulated deficit	(1,~~006~~033,~~133~~976)		(942,471)
Accumulated other comprehensive loss	(~~950~~906)		(1,610)
Total stockholders’ deficit	(~~160~~184,~~499~~229)		(164,366)
Total liabilities and stockholders’ deficit	$	~~137~~149,~~697~~272	$	155,402

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts, unaudited)

	Three Months Ended September 30,				Six Months Ended September 30,
	Three Months Ended December 31,				Nine Months Ended December 31,
	2025		2024		2025		2024
Revenue:
Product	$	3546,~~368~~471	$	3938,~~278~~634	$	72119,~~905~~375	$	81120,~~931~~565
Service and subscription	2526,~~620~~520		3027,~~205~~724		5077,~~563~~082		5684,~~915~~640
Royalty	1,~~727~~595		2,~~363~~326		35,~~534~~130		57,~~265~~592
Total revenue	6274,~~715~~586		7168,~~846~~684		~~127~~201,~~002~~587		~~144~~212,~~111~~797
Cost of revenue:
Product	2835,~~748~~611		2930,~~774~~922		5995,~~493~~104		6293,~~330~~251
Service and subscription	10,~~415~~043		119,~~427~~874		2131,~~243~~287		2433,~~080~~954
Total cost of revenue	3945,~~163~~654		4140,~~201~~796		80126,~~736~~391		86127,~~410~~205
Gross profit	2328,~~552~~932		3027,~~645~~888		4675,~~266~~196		5785,~~701~~592
Operating expenses:
Sales and marketing	1112,~~819~~977		1312,~~578~~448		2437,~~474~~451		2639,~~873~~321
General and administrative	1110,~~006~~045		1314,~~977~~142		2434,~~576~~621		3549,~~042~~186
Research and development	5,~~692~~573		87,~~264~~683		1217,~~353~~926		1624,~~572~~255
Restructuring charges	31,~~193~~525		~~383~~1,342		57,~~616~~141		12,~~574~~916
Total operating expenses	3130,~~710~~120		3635,~~202~~615		6797,~~019~~139		80115,~~061~~678
Loss from operations	(8,158)		(5,557)		(20,753)		(22,360)
Income (loss) from operations	(1,188)		(7,727)		(21,943)		(30,086)
Other income (expense), net	(~~185~~387)		~~(1,334)~~960		(~~616~~1,261)		(~~1,375~~429)
Interest expense	(6,227)		(6,131)		(12,743)		(9,921)
Interest income	42		7		301		21
Change in fair value of warrant liabilities	1,525		3,550		1,525		5,216
Interest expense	(5,933)		(6,840)		(18,675)		(16,761)
Loss on debt extinguishment	(33,254)		(2,308)		(30,695)		(3,003)
Change in fair value of warrant liabilities	7,560		(61,630)		9,085		(56,414)
Loss before income taxes	(46,299)		(11,780)		(63,282)		(31,443)
Change in fair value of Convertible Note	1,599		—		1,599		—
Income tax provision	157		370		380		605
Loss on debt extinguishment	(28,946)		—		(59,641)		(3,003)
Net loss	$	(46,456)	$	(12,150)	$	(63,662)	$	(32,048)
Loss before income taxes	(27,253)		(75,230)		(90,535)		(106,672)
Net loss per share - basic and diluted	$	(3.49)	$	(2.54)	$	(5.65)	$	(6.69)
Income tax provision	590		70		970		675
Weighted average shares - basic and diluted	13,322		4,792		11,266		4,792
Net loss	$	(27,843)	$	(75,300)	$	(91,505)	$	(107,347)
Net loss	$	(46,456)	$	(12,150)	$	(63,662)	$	(32,048)
Net loss per share - basic and diluted	$	(2.03)	$	(15.35)	$	(7.58)	$	(22.22)
Foreign currency translation adjustments, net	(62)		659		660		801
Weighted average shares - basic and diluted	13,689		4,907		12,077		4,831
Total comprehensive loss	$	(46,518)	$	(11,491)	$	(63,002)	$	(31,247)
Net loss	$	(27,843)	$	(75,300)	$	(91,505)	$	(107,347)
Foreign currency translation adjustments, net	44		(1,077)		704		(276)
Total comprehensive loss	$	(27,799)	$	(76,377)	$	(90,801)	$	(107,623)

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

Six Months Ended September 30,

Nine Months Ended December 31,

2025

2024

Operating activities

Net loss

(6391,~~662~~505)

(32107,~~048~~347)

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization

12,~~857~~656

34,~~347~~440

Amortization of debt issuance costs

35,~~998~~830

23,~~081~~704

Non-cash lease expense

~~697~~976

~~934~~1,342

Gain (loss) on debt extinguishment

5,275

3,003

Loss on debt extinguishment

34,221

3,003

Provision for product and manufacturing inventories

34,~~633~~579

1,~~167~~165

Stock-based compensation

(~~205~~1,174)

12,~~641~~376

Paid-in-kind interest

35,~~579~~328

13,~~844~~515

Warrants issued in connection with debt amendments

25,420

—

Change in fair value of warrant liabilities

(19,~~525~~085)

(556,~~216)~~408

Other non-cash

1,936

851

Change in fair value of Convertible Note

(1,599)

—

Other non-cash

2,710

(281)

Changes in assets and liabilities:

Accounts receivable, net

8(7,~~429~~446)

166,~~638~~337

Inventories

(~~150~~580)

(15,625)

Prepaid expenses

(1,~~786~~006)

(19,~~446)~~406

Operating lease liabilities

(~~587~~857)

(~~500~~813)

Accounts payable

(72,~~794~~290)

~~5,253~~(382)

Accrued compensation

~~(393)~~454

(46,~~350~~512)

Accrued restructuring charges

69119

—

Deferred revenue

(125,~~021~~597)

(129,~~452~~854)

Other current assets

~~1,085~~(478)

(~~780~~124)

Other non-current assets

1,~~077~~967

1,~~280~~367

Other current liabilities

~~(241)~~1,163

24,~~122~~839

Other non-current liabilities

(1,~~180~~244)

1,~~062~~441

Net cash used in operating activities

(3237,~~489~~438)

(1720,~~194~~345)

Investing activities

Purchases of property and equipment

(~~1,606~~925)

(34,~~228~~324)

Net cash used in investing activities

(~~1,606~~925)

(34,~~228~~324)

Financing activities

Borrowings of long-term debt, net of debt issuance costs

(645,~~317)~~046

2425,~~655~~000

Repayments of long-term debt

(909)

(13,537)

Borrowing of Convertible Note

54,718

—

Borrowings of credit facility

71,625

209,852

Repayments of long-term debt on Assignment, net

(52,271)

(14,092)

Repayments of credit facility

(98,682)

(209,445)

Repayments of long term debt on Exchange, net

(56,979)

—

Proceeds from shares issued related to the SEPA, net

66,993

—

Borrowings of credit facility

71,625

311,135

Repayments of credit facility

(98,682)

(302,628)

Proceeds from shares issued related to the SEPA, net

72,031

—

Proceeds from the issuance of common stock, net

—

Net cash provided by financing activities

3235,~~791~~569

1119,~~525~~415

Effect of exchange rate changes on cash, cash equivalents and restricted cash

3032

(3)

Net change in cash, cash equivalents and restricted cash

(12,~~274~~762)

(85,~~900~~257)

Cash, cash equivalents and restricted cash at beginning of period

16,603

25,860

Cash, cash equivalents and restricted cash at end of period

1513,~~329~~841

1620,~~960~~603

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows:

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:

Cash and cash equivalents

1413,~~670~~180

1620,~~719~~381

Restricted cash

~~659~~661

~~241~~222

Cash, cash equivalents and restricted cash at the end of period

1513,~~329~~841

1620,~~960~~603

Supplemental disclosure of cash flow information

Cash paid for interest

4,~~591~~270

58,~~539~~841

Cash paid for income taxes, net

~~327~~556

1,~~304~~798

Non-cash transactions

Purchases of property and equipment included in accounts payable

~~117~~67

~~312~~88

Right-of-use assets obtained in exchange for new lease liabilities

961

~~472~~538

Paid-in-kind interest

35,~~579~~328

13,~~844~~515

Exchange of Term Loan for Convertible Note

77,472

—

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, unaudited)

	Common Stock			AdditionalPaid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Deficit
Three Months Ended	Shares	Amount
Balance, June 30, 2024	4,792	$	48	$	708,952	$	(847,278)	$	(2,051)	$	(140,329)
Balance, September 30, 2024	4,792	$	48	$	709,667	$	(859,427)	$	(1,392)	$	(151,104)
Net loss	—	—		—		(1275,~~150~~300)		—		(1275,~~150~~300)
Foreign currency translation adjustments, net	—	—		—		—		~~659~~(1,077)		~~659~~(1,077)
Stock-based compensation	—	—		716		—		—		716
Shares issued under employee incentive plans, net	109	1		(1)		—		—		—
Balance, September 30, 2024	4,792	$	48	$	709,668	$	(859,428)	$	(1,392)	$	(151,104)
Shares issued related to warrants	406	4		30,119		—		—		30,123
Balance, June 30, 2025	13,319	$	133	$	846,046	$	(959,677)	$	(888)	$	(114,386)
Stock-based compensation	—	—		736		—		—		736
Net loss	—	—		—		(46,456)		—		(46,456)
Balance, December 31, 2024	5,307	$	53	$	740,521	$	(934,727)	$	(2,469)	$	(196,622)
Foreign currency translation adjustments, net	—	—		—		—		(62)		(62)
Shares issued under employee incentive plans, net	14	—		81		—		—		81
Stock-based compensation	—	—		324		—		—		324
Balance, September 30, 2025	13,333	$	133	$	846,451	$	(1,006,133)	$	(950)	$	(160,499)
Net loss	—	—		—		(27,843)		—		(27,843)
Foreign currency translation adjustments, net	—	—		—		—		44		44
Shares issued under employee incentive plans, net	70	1		(1)		—		—		—
Shares issued related to the SEPA, (net of $804 issuance costs)	732	7		5,031		—		—		5,038
Stock-based compensation	—	—		(969)		—		—		(969)
Balance, December 31, 2025	14,135	$	141	$	850,512	$	(1,033,976)	$	(906)	$	(184,229)

See accompanying Notes to Condensed Consolidated Financial Statements.

QUANTUM CORPORATION

Table of Contents

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, unaudited)

	Common Stock			AdditionalPaid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Deficit
Six Months Ended	Shares	Amount
Nine Months Ended	Shares	Amount
Balance, March 31, 2024	4,792	$	48	$	708,027	$	(827,380)	$	(2,193)	$	(121,498)
Net loss	—	—		—		(32107,~~048~~347)		—		(32107,~~048~~347)
Foreign currency translation adjustments, net	—	—		—		—		~~801~~(276)		~~801~~(276)
Stock-based compensation	—	—		1,641		—		—		1,641
Shares issued under employee incentive plans, net	109	1		(1)		—		—		—
Balance, September 30, 2024	4,792	$	48	$	709,668	$	(859,428)	$	(1,392)	$	(151,104)
Shares issued related to warrants	406	4		30,119		—		—		30,123
Stock-based compensation	—	—		2,376		—		—		2,376
Balance, December 31, 2024	5,307	$	53	$	740,521	$	(934,727)	$	(2,469)	$	(196,622)
Balance, March 31, 2025	6,962	$	70	$	779,645	$	(942,471)	$	(1,610)	$	(164,366)
Net loss	—	—		—		(6391,~~662~~505)		—		(6391,~~662~~505)
Foreign currency translation adjustments, net	—	—		—		—		~~660~~704		~~660~~704
Shares issued under employee incentive plans	51	—		81		—		—		81
Shares issued under employee incentive plans, net	121	1		80		—		—		81
Shares issued related to the SEPA, (net of $2,700 issuance costs)	6,320	63		66,930		—		—		66,993
Shares issued related to the SEPA, (net of $3,502 issuance costs)	7,052	70		71,961		—		—		72,031
Stock-based compensation	—	—		(~~205~~1,174)		—		—		(~~205~~1,174)
Balance, September 30, 2025	13,333	$	133	$	846,451	$	(1,006,133)	$	(950)	$	(160,499)
Balance, December 31, 2025	14,135	$	141	$	850,512	$	(1,033,976)	$	(906)	$	(184,229)

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

INDEX TO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page
Note 1:	Description of Business and Summary of Significant Accounting Policies	7
Note 2:	Revenue	9
Note 3:	Balance Sheet Information	10
Note 4:	Debt	11
Note 5:	Fair Value of Financial Instruments	14
Note 6:	Leases	1516
Note 7:	Restructuring Charges	1617
Note 8:	~~Net~~Common ~~Loss Per Share~~Stock	1718
Note 9:	~~Income~~Net ~~Taxes~~Loss Per Share	1719
Note 10:	~~Commitments~~Income ~~and Contingencies~~Taxes	1819
Note 11:	~~Segment~~Commitments ~~Information~~and Contingencies	1920
Note 12:	~~Revision~~Segment ~~of Previously Issued Financial Statements~~Information	21
Note 13:	Subsequent Events	23

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1: DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Quantum Corporation, together with its consolidated subsidiaries, stores and manages digital video and other forms of unstructured data, providing streaming performance for video and rich media applications, along with low-cost, long-term storage systems for data protection and archiving. The Company helps customers around the world capture, create and share digital data and preserve and protect it for decades. The Company’s software-defined, hyperconverged storage solutions span from non-volatile memory express, to solid state drives, hard disk drives, tape and the cloud and are tied together leveraging a single namespace view of the entire data environment. The Company works closely with a broad network of distributors, value-added resellers, direct marketing resellers, original equipment manufacturers and other suppliers to meet customers’ evolving needs.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. ~~However,~~These ~~the~~interim ~~accompanying unaudited condensed consolidated~~ financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included within the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (the “Annual Report”). The condensed consolidated balance sheet as of March 31, 2025 has been derived from the audited consolidated financial statements included in the Annual Report.

The unaudited condensed consolidated interim financial statements reflect all adjustments, consisting only of normal and recurring items, necessary to present fairly our financial position as of ~~September~~December 3031, 2025, the results of operations and comprehensive loss, statements of cash flows, and changes in stockholders’ deficit for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024. Interim results are not necessarily indicative of full year performance because of short-term variations.

Going Concern

These condensed consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company’s ability to continue as a going concern exists.

The Company is required to repay the Term Loan (as defined herein) on August 5, 2026. AtThe ~~the present time, the~~ Company does not have sufficient cash to ~~be able to~~ make this repayment, nor does the Company expect to generate sufficient cash through operating activities to ~~make~~repay ~~this~~the ~~repayment~~Term Loan by August 5, 2026. OnThe ~~September 23, 2025, the~~ Company ~~entered~~may ~~into~~be arequired ~~transaction agreement with Dialectic (as further discussed herein) which laid out the terms~~ to exchange Dialectic’s portion of the Term Loan for one or more convertible notes with a three year maturity. The issuance of the convertible note(s) is subject to stockholder approval. In the same agreement, the Company also agreed to use ~~the~~ proceeds from the Standby Equity Purchase Agreement (“SEPA”) toor ~~repay~~other OCfinancing ~~III~~sources ~~Lenders~~to ~~for~~meet ~~its~~this ~~portion of the Term Loan~~obligation. ~~However,~~There ~~there~~can isbe no assurance that the ~~issuance~~Company ~~of the Convertible Note~~ will be ~~approved nor that we will be~~ able to raise sufficient ~~cash~~ proceeds ~~from~~under the SEPA toon ~~repay~~acceptable ~~the~~terms, ~~Term~~or ~~Loan.~~at ~~See Note 4: Debt for further information on our credit agreements~~all.

The condensed consolidated financial statements do not include any adjustments to the carrying amounts ~~and~~or classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern. ~~All credit facilities are collateralized by a pledge of the Company’s assets.~~

Revision of Previously Issued Financial Statements for Immaterial Misstatements

Table of Contents

In connection with the preparation of the Company’s Quarterly Report on Form 10-Q for the three and six months ended September 30, 2025, the Company identified that certain previously disclosed errors—which resulted in a restatement of the financial statements for the three and nine months ended December 31, 2024, as filed in the Annual Report also affected the financial statements for the three and six months ended September 30, 2024.

The impact of these errors on the three and six months ended September 30, 2024 was evaluated in accordance with SEC Staff Accounting Bulletins No. 99 and 108 and was determined to be immaterial to the previously issued financial statements. Accordingly, the Company has revised, rather than restated, the comparative financial information for September 30, 2024 presented in this Quarterly Report on Form 10-Q.

The nature of the revisions is as follows:

•Service contract term – The Company identified inconsistencies in the contract term used to recognize service and subscription revenue under ASC 606. Revenue is required to be deferred and recognized ratably over the contractual term of the arrangement. Management reviewed and updated the revenue recognition periods to ensure consistent application for all relevant contracts invoiced during the fiscal year ended March 31, 2025. These adjustments have been reflected in the revenue calculations presented herein. See Note 12: Revision of Previously Issued Financial Statements for more information.

•Application of ASC 606 related to standalone selling price (“SSP”) – The Company determined that the standalone selling prices used during the fiscal year ended March 31, 2025 had not been appropriately updated. Accordingly, prior to March 31, 2025, the Company refreshed the SSPs for all performance obligations in bundled contracts, maximizing the use of observable inputs. This adjustment resulted in changes to the allocation of transaction price and corresponding revenue recognition.

For further discussion of the restatement of the financial statements for the three and nine months ended December 31, 2024, refer to the Annual Report.

Reclassifications

Certain prior-period amounts in the condensed consolidated statements of cash flows have been reclassified to conform to the current period presentation. These reclassifications had no effect on total cash flows.

~~Reverse Stock Split~~7

On August 15, 2024, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of the issued shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at a ratio ranging from 1 share-for-5 shares up to a ratio of 1-for-20 shares, with the exact ratio, if any, to be selected by the board of directors (the “Board”). On August 15, 2024, the Board approved a 1-for-20 reverse stock split (the “Reverse Stock Split”) of the Common Stock. The Reverse Stock Split became effective as of August 26, 2024 at 4:01 p.m., Eastern Time (the “Effective Time”). At the Effective Time, every twenty issued shares of Common Stock were automatically reclassified into one issued share of Common Stock, with any fractional shares resulting from the Reverse Stock Split rounded up to the nearest whole share. The number of outstanding shares of Common Stock was reduced from approximately 95.9 million shares to approximately 4.8 million shares.

All share and per share amounts for Common Stock in these condensed consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from these estimates and assumptions due to risks and uncertainties. Such estimates include, but are not limited to, the determination of standalone selling price for revenue arrangements with multiple performance obligations, inventory adjustments, useful lives of intangible assets and property and equipment, stock-based compensation, fair value of warrants, and provision for income taxes including related reserves. Management bases its estimates on historical experience and on various other assumptions which management believes to be

Table of Contents

~~reasonable,~~Use ~~the results~~ of ~~which form the basis for making judgments about the carrying values of assets and liabilities.~~Estimates

Restricted Cash

Restricted cash is comprised of bank guarantees and similar required minimum balances that serve as cash collateral in connection with various items including insurance requirements, value added taxes, ongoing tax audits and leases in certain countries.

Convertible Note

Pursuant to ASC Topic 825, Financial Instruments (“ASC 825”), the Company has elected the fair value option for the convertible note issued in December 2025 (the “Convertible Note”). The Convertible Note is initially recorded at its estimated fair value on the date of issuance and subsequently remeasured at fair value at each reporting period-end. Changes in fair value are recognized in earnings in “Change in fair value of Convertible Note” in the condensed consolidated statements of operations and comprehensive loss, which includes the component related to accrued interest. In accordance with ASC 825, the portion of the change in fair value attributable to instrument-specific credit risk is recognized in other comprehensive income. For the three months ended December 31, 2025, the Company determined that the change attributable to instrument-specific credit risk was immaterial. See Note 5, Fair Value of Financial Instruments, with respect to the fair value option election, and Note 4, Debt, for a discussion of the Convertible Note.

Accounting Pronouncement Recently Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which required greater disaggregation of tax information in rate reconciliation and income taxes paid by jurisdiction. ASU 2023-09 was adopted beginning April 1, 2025, with no material impact.

Recent Accounting Pronouncement Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosures of specific expense categories included within each expense caption presented on the Statements of Operations. The new standard can be applied on either a fully retrospective or prospective basis ASU 2024-03 will be effective for our fiscal year beginning April 1, 2027, and interim periods within our fiscal year beginning April 1, 2028, with early adoption permitted. The Company is currently evaluating the impact of this new standard on its financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets~~" ("ASU 2025-05")~~. The amendments in this update provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under FASB Accounting Standards Codification 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for the Company beginning in the fiscal year beginning April 1, 2026, with early adoption permitted. The Company is currently evaluating the impact of this new standard on its financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, “Targeted Improvements to the Accounting for Internal-Use Software” (Topic 350). ASU 2025-06 eliminates references to software development project stages and revises the criteria that must be met to begin capitalizing internal-use software costs. The standard permits entities to adopt the guidance using a prospective, retrospective, or modified transition approach and becomes effective for us beginning January 1, 2028, with early adoption permitted. The Company is currently assessing the potential impact that ASU 2025-06 will have on its financial statements disclosures.8

Table of Contents

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software” (Topic 350). The updates eliminate references to software development project stages and revises the criteria that must be met to begin capitalizing internal-use software costs. The standard permits entities to adopt the guidance using a prospective, retrospective, or modified transition approach and becomes effective for the Company beginning January 1, 2028, with early adoption permitted. The Company is currently assessing the potential impact that ASU 2025-06 will have on its financial statements disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies certain aspects of interim reporting guidance. The standard is effective for interim periods within fiscal years beginning after December 15, 2027, which will be the Company’s fiscal year beginning April 1, 2029, with early adoption permitted. The Company is currently evaluating the impact of this guidance on its interim financial statements disclosures.

NOTE 2: REVENUE

Contract Balances

~~The~~As ~~following~~of ~~table~~December ~~presents~~31, 2025, March 31, 2025 and March 31, 2024, the Company’s ~~receivables~~contract ~~and~~assets ~~contract~~related ~~liabilities~~to ~~and~~performance ~~certain~~obligations ~~information~~completed ~~related~~in advance of the right to ~~this~~invoice and are included in other current asset in the condensed consolidated balance sheets. Contract assets were not material as of ~~September 30~~ December 31, 2025, March 31, 2025 and March 31, 2024. ~~(in~~As ~~thousands):~~ of March 31, 2024, accounts receivable totaled $67.8 million.

	September 30, 2025		March 31, 2025		March 31, 2024
Accounts receivable	$	43,934	$	52,502	$	67,788
Deferred revenue	$	101,902	$	113,923	$	116,687
Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period	$	48,123	$	74,048	$	76,304

Deferred revenue primarily consists of amounts that have been invoiced, which are typically with net 45-day payment terms, but have not yet been recognized as revenue and performance obligations pertaining to service and subscription contracts.

The following table presents the changes in the Company’s deferred revenue for the periods indicated (in thousands):


	Three Months Ended December 31,				Nine Months Ended December 31,
	2025		2024		2025		2024

Beginning balance	$	101,902	$	104,234	$	113,923	$	116,687
Additions	32,944		30,323		71,486		74,786
Recognition of deferred revenue	(26,520)		(27,724)		(77,083)		(84,640)
Ending balance	$	108,326	$	106,833	$	108,326	$	106,833
Short-term deferred revenue	$	74,917	$	66,762	$	74,917	$	66,762
Long-term deferred revenue	$	33,409	$	40,071	$	33,409	$	40,071

Remaining Performance Obligations

Total remaining performance obligations (“RPO”) representing contracted but not recognized revenue was $138.6 million as of December 31, 2025. RPO consists of both deferred revenue and uninvoiced, non-cancelable contracts that are expected to be invoiced and recognized as revenue in future periods and excludes variable consideration related to sales-based royalties.

RPO consisted of the following (in thousands):


	Current		Non-Current		Total
As of December 31, 2025	$	102,884	$	35,671	$	138,555

Table of Contents

Total remaining performance obligations (“RPO”) representing contracted but not recognized revenue was $130.3 million as of September 30, 2025. RPO consists of both deferred revenue and uninvoiced, non-cancelable contracts that are expected to be invoiced and recognized as revenue in future periods and excludes variable consideration related to sales-based royalties.

RPO consisted of the following (in thousands):

						Current						Non-Current						Total
As of September 30, 2025						$	92,504					$	37,803					$	130,307

NOTE 3: BALANCE SHEET INFORMATION

Certain significant amounts included in the Company's condensed consolidated balance sheets consist of the following (in thousands):

~~Manufacturing~~ Inventories

	September 30, 2025		March 31, 2025
	December 31, 2025		March 31, 2025
Finished goods	$	65,~~987~~810	$	10,471
Work in progress	1,~~517~~254		380
Raw materials	9,~~488~~909		9,485
Total manufacturing inventories	$	17,992	$	20,336
Service parts	656		2,098
Total inventories	$	17,629	$	22,434

Service Parts Inventories

	September 30, 2025		March 31, 2025
Finished goods	$	476	$	1,189
Component parts	462		909
Total service parts inventories	$	938	$	2,098

Intangibles, net

	September 30, 2025						March 31, 2025
	December 31, 2025						March 31, 2025
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Customer lists	$	4,398	$	(4,398)	$	—	$	4,398	$	(4,117)	$	281
Intangible assets, net	$	4,398	$	(4,398)	$	—	$	4,398	$	(4,117)	$	281

Intangible assets amortization expense was $0.10 million and $0.52 million, and $0.3 million and $0.98 million for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, respectively. The Company recorded amortization of developed technology in cost of product revenue, and customer lists in sales and marketing expenses in the condensed consolidated statements of operations and comprehensive loss.

Goodwill

As of ~~September~~December 3031, 2025 and March 31, 2025, goodwill was approximately $13.0 million. There were no impairments to goodwill as of ~~September~~December 3031, 2025 and March 31, 2025.


Other Long-Term Assets
	December 31, 2025		March 31, 2025
Capitalized SaaS implementation costs for internal use, net	$	12,504	$	13,910
Capitalized debt costs	—		2,871
Contract cost asset	964		1,144

Other	1,509		1,463
Total other long-term assets	$	14,977	$	19,388

Table of Contents

Other Long-Term Assets
	September 30, 2025		March 31, 2025
Capitalized SaaS implementation costs for internal use, net	$	12,972	$	13,910
Capitalized debt costs	—		2,871
Contract cost asset	1,068		1,144
Other	1,875		1,463
Total other long-term assets	$	15,915	$	19,388

NOTE 4: DEBT

The Company’s debt consisted of the following (in thousands):

	September 30, 2025		March 31, 2025
	December 31, 2025		March 31, 2025
Term Loan	$	~~106~~54,~~086~~636	$	102,507
Convertible Note	75,873		—
PNC Credit Facility	—		26,600
Less: current portion	(9952,~~634~~758)		(123,086)
Less: unamortized debt issuance costs (1)	(61,~~452~~878)		(6,021)
Long-term debt, net	$	—75,873	$	—

(1) The unamortized debt issuance costs related to the Term Loan are presented as a reduction of the carrying amount of the corresponding debt balance on the accompanying condensed consolidated balance sheets. Unamortized debt issuance costs related to the PNC Credit Facility are presented within other assets on the accompanying condensed consolidated balance sheets for the period ended March 31, 2025.

On August 5, 2021, the Company entered into a Term Loan Credit and Security Agreement (the “Term Loan Credit Agreement”), pursuant to which a senior secured term loan was issued (the “2021 Term Loan”), maturing on August 5, 2026. The Company also entered into an Amended and Restated Revolving Credit and Security Agreement on December 27, 2018 (the “PNC Credit Facility” and, together with the Term Loan Credit Agreement, the “Credit Agreements”), which, per its terms, was maturing on August 5, 2026 and provided for borrowings up to a maximum principal amount of the lesser of: (a) $40.0 million or (b) the amount of the borrowing base, as defined in the PNC Credit Facility agreement.

On June 1, 2023, the Company entered into amendments to the Credit Agreements (the “June 2023 Amendment”) which, among other things, provided an advance of $15.0 million in additional term loan borrowings (the “2023 Term Loan” and, together with the 2021 Term Loan, the "Term Loan") and incurred $0.9 million in original issuance discount and origination fees which have been recorded as a reduction to the carrying amount of the 2023 Term Loan and amortized to interest expense over the term of the loan. The terms of the 2023 Term Loan are substantially similar to the terms of the 2021 Term Loan, including in relation to maturity and security, except that, among other things, (a) the Applicable Margin (i) for any 2023 Term Loan designated an “ABR Loan” is 9.00% per annum and (ii) for any 2023 Term Loan designated as a “SOFR Loan” is 10.00% per annum, (b) accrued interest on the 2023 Term Loan is payable in kind ("PIK"), and is capitalized and added to the principal amount of the 2023 Term Loan at the end of each interest period applicable thereto, (c) the 2023 Term Loan does not amortize prior to the maturity date thereof, and (d) the 2023 Term Loan may not be prepaid prior to the payment in full of the existing term loans. In connection with the 2023 Term Loan, the Company issued warrants to purchase an aggregate of ~~0.06 million~~62,500 shares (the “June 2023 Warrants”) of the ~~Common~~Company’s ~~Stock~~common stock, at an exercise price of $20.00 per share.

On July 11, 2024, the Company entered into amendments to the Credit Agreements (the “July 2024 Amendments”) which, among other things, delayed the testing of the Company’s June 30, 2024 net leverage ratio financial covenant until July 31, 2024. In connection with the amendments, the Company issued the Term Loan lenders warrants to purchase an aggregate of 50,000 shares of the ~~Common~~common ~~Stock~~stock at a purchase price of $8.20 (the “July 2024 Warrants”).

The July 2024 Amendments to the 2021 Term Loan were accounted for as a modification. The fair value of the July 2024 Warrants of $0.4 million is reflected as a reduction to the carrying amount of the 2021 Term Loan and amortized to interest expense over the remaining term of the loan. The July 2024 Amendments to the PNC Credit Facility were accounted for as a modification and the $0.1 million in related fees and expenses were recorded to other assets and are amortized to interest expense over the remaining term of the agreement.

On August 13, 2024, the Company entered into amendments to the Credit Agreements (the “August 2024 Amendments”) which, among other things, (i) waived compliance with the June 30, 2024 net leverage ratio financial covenant; (ii) waived any non-compliance with the minimum liquidity financial covenant through the date of the amendments; (iii) removed the fixed charges coverage ratio financial covenant until the fiscal quarter ended September 30, 2025; (iv) waived the testing requirement for the net leverage ratio financial covenant for the fiscal quarter ended September 30, 2024; (v) replaced the net leverage ratio financial covenant with a minimum EBITDA financial covenant for the fiscal quarters ended December 31, 2024 and March 31, 2025; (vi) reset the net leverage

Table of Contents

~~Facility~~ratio ~~were~~financial ~~accounted~~covenant requirements for asthe afiscal ~~modification~~quarters ended June 30, 2025 and September 30, 2025; (vii) reduced the minimum liquidity covenant to $~~0.1~~10 million inthrough ~~related~~September ~~fees~~30, ~~and~~2025; ~~expenses~~(viii) ~~were~~adjusted ~~recorded~~the toapplicable ~~other~~interest ~~assets~~rates on the Term Loan and ~~are~~PNC ~~amortized~~Credit toFacility; ~~interest~~(ix) ~~expense~~removed ~~over~~required ~~the~~2021 ~~remaining~~Term ~~term~~Loan ofprincipal amortization until the ~~agreement~~fiscal quarter ended September 30, 2025; and (x) repriced certain lender warrants.

OnIn ~~August~~connection ~~13,~~with the August 2024 Amendments, the Company entered into ~~amendments~~a tonew ~~the~~senior ~~Credit~~secured ~~Agreements~~delayed ~~(the~~draw ~~“August~~term ~~2024~~loan ~~Amendments”)~~facility ~~which,~~with ~~among~~a ~~other~~borrowing ~~things,~~capacity of up to $26.3 million (i$25.0 million after original issuance discount) ~~waived~~and ~~compliance~~a ~~with~~commitment ~~the~~period ~~June~~expiring 30on October 31, 2024 ~~net~~(each ~~leverage~~draw, ~~ratio~~an ~~financial~~“August ~~covenant;~~2024 ~~(ii~~Term Loan”). ~~waived~~The ~~any~~Company ~~non-compliance~~borrowed ~~with~~$10.5 million ~~the~~at ~~minimum~~closing ~~liquidity~~(“Initial ~~financial~~August ~~covenant~~2024 ~~through~~Term ~~the~~Loan”). ~~date~~Borrowings ofunder the ~~amendments;~~August ~~(iii)~~2024 ~~removed~~Term ~~the~~Loan ~~fixed~~have ~~charges~~an ~~coverage~~August ~~ratio~~5, ~~financial~~2026 ~~covenant~~maturity ~~until~~date, which aligns with the ~~fiscal~~2021 ~~quarter~~Term ~~ended~~Loan. The principal is payable quarterly beginning September 30, 2025;, ~~(iv)~~at ~~waived~~a ~~the~~rate ~~testing~~per ~~requirement~~annum ~~for~~equal to 5% of the ~~net~~original ~~leverage~~principal ~~ratio~~balance. ~~financial~~The ~~covenant~~August ~~for~~2024 ~~the~~Term ~~fiscal~~Loan’s ~~quarter~~interest ~~ended~~rate ~~September~~margin 30is (a) until March 31, ~~2024;~~2025 (vi) ~~replaced~~for ~~the~~any ~~net~~August ~~leverage~~2024 ~~ratio~~Term ~~financial~~Loan ~~covenant~~designated ~~with~~as a ~~minimum~~‘SOFR ~~EBITDA~~Loan’, ~~financial~~12.00% ~~covenant~~per ~~for~~annum ~~the~~and ~~fiscal~~(ii) ~~quarters~~for ~~ended~~any ~~December~~August ~~31,~~ 2024 ~~and~~Term ~~March~~Loan ~~31,~~designated ~~2025;~~an ~~(vi)~~‘ABR ~~reset~~Loan’, ~~the~~11.00% ~~net~~per ~~leverage~~annum, ~~ratio~~in ~~financial~~each ~~covenant~~case, ~~requirements~~with ~~for~~6.00% ~~the~~of ~~fiscal~~such ~~quarters~~interest ~~ended~~rate ~~June~~margin 30paid-in-kind, ~~2025~~ and ~~September~~(b) 30from April 1, 2025;, (~~vii~~i) ~~reduced~~for ~~the~~any ~~minimum~~August ~~liquidity~~2024 ~~covenant~~Term toLoan ~~$10 million~~designated ~~through~~as ~~September~~a 30‘SOFR Loan’, ~~2025;~~14.00% per annum and (~~viii~~ii) ~~adjusted~~for ~~the~~any ~~applicable~~August 2024 Term Loan designated an ‘ABR Loan’, 13.00% per annum, in each case, with 8.00% of such interest ~~rates~~rate onmargin ~~the~~paid-in-kind. The August 2024 Term Loan ~~and~~also ~~PNC~~includes ~~Credit~~a ~~Facility;~~multiple ~~(ix)~~on ~~removed~~invested ~~required~~capital ~~2021~~payable to the August 2024 Term Loan ~~principal~~lenders. ~~amortization~~Subsequently, ~~until~~the Company borrowed the ~~fiscal~~remaining ~~quarter~~$15.8 million ~~ended~~of ~~September~~the ~~30,~~August ~~2025;~~2024 ~~and~~Term ~~(x)~~Loan’s ~~repriced~~borrowing ~~certain~~capacity ~~lender~~before ~~warrants~~September 30, 2024.

InSubsequent ~~connection~~to ~~with~~ the August 2024 Amendments, the ~~Company~~2021 ~~received~~Term aLoan ~~new~~amortizes ~~senior~~at ~~secured~~5.00% ~~delayed~~per ~~draw~~annum ~~term~~commencing ~~loan~~on ~~facility~~September ~~with~~30, a2025. Subsequent ~~borrowing capacity of up~~ to ~~$26.3 million~~the ~~($25.0 million~~August ~~after~~2024 ~~original~~Amendments ~~issuance~~and ~~discount~~(A) ~~and~~until aMarch ~~commitment period expiring on October~~ 31, ~~2024 (each draw~~2025, anloans ~~“August~~under ~~2024~~the 2021 Term Loan~~”).~~ ~~The~~designated ~~Company~~as ~~borrowed~~ABR ~~$10.5 million~~Loans atbear ~~closing~~interest ~~(“Initial~~at ~~August~~a ~~2024~~rate ~~Term~~per ~~Loan”).~~annum ~~Borrowings~~equal ~~under~~to the ~~August~~“ABR ~~2024~~Rate” ~~Term~~(calculated ~~Loan~~as ~~have~~the angreatest ~~August~~of 5,(i) ~~2026~~1.75%; ~~maturity~~(ii) ~~date,~~the ~~which~~Federal ~~aligns~~funds ~~with~~rate ~~the~~plus ~~2021 Term Loan~~0.50%; ~~The~~(iii) ~~principal~~a issecured ~~payable~~overnight ~~quarterly~~financing ~~beginning~~rate ~~September~~based ~~30,~~rate ~~2025,~~(the at“SOFR aRate”) ~~rate~~based ~~per~~upon ~~annum~~an ~~equal~~interest toperiod 5% of ~~the~~one ~~original~~month ~~principal~~plus ~~balance~~1.0%; ~~The~~and ~~August~~(iv) ~~2024~~the ~~Term~~“Prime ~~Loan’s~~Rate” ~~interest~~last ~~rate~~quoted ~~margin~~by isthe (aWall Street Journal), ~~until~~plus ~~March~~an 31applicable margin of 8.75%, ~~2025~~and (iy) ~~for~~SOFR ~~any~~Rate ~~August~~Loans ~~2024~~bear ~~Term~~interest ~~Loan~~at ~~designated as~~ a ~~‘SOFR~~rate ~~Loan’, 12.00%~~ per annum ~~and~~equal ~~(ii)~~to ~~for~~the ~~any~~SOFR ~~August~~Rate ~~2024~~plus ~~Term Loan designated~~ an ~~‘ABR~~applicable ~~Loan’,~~margin 11of 9.0075% ~~per annum~~, in each case, with 63.0075% of such interest rate margin paid-in-kind, with two specified step-downs in such applicable margin upon the receipt by the Company of cash proceeds from certain specified capital raises, and (bB) from and after April 1, 2025, ~~(i)~~loans ~~for~~under ~~any~~the ~~August~~2021 ~~2024~~ Term Loan designated as a(x) ~~‘SOFR~~ABR ~~Loan’,~~Loans ~~14.00%~~bear interest at a rate per annum equal to the ABR Rate, plus an applicable margin of 8.75%, and (iiy) ~~for~~SOFR ~~any~~Rate ~~August~~Loans ~~2024~~bear ~~Term~~interest ~~Loan~~at ~~designated~~a rate per annum equal to the SOFR Rate plus an ~~‘ABR~~applicable ~~Loan’,~~margin 13of 9.0075% ~~per annum~~, in each case, with 83.0075% of such ~~interest~~applicable ~~rate~~ margin paid-in-kind, with a step-up of 1.00% ~~The~~per ~~August~~annum ~~2024~~(which ~~Term~~shall ~~Loan~~be ~~also~~paid-in-kind) ~~includes~~if the Company’s total net leverage ratio is greater than 4.00x, and a ~~multiple~~step-down onof ~~invested~~1.00% ~~capital~~per ~~payable~~annum toif the ~~August~~Company’s ~~2024~~total ~~Term~~net ~~Loan~~leverage ~~lenders~~ratio is less than 3.50x ~~Subsequently,~~(which shall reduce the ~~Company~~paid-in-kind ~~borrowed~~component of the ~~remaining~~applicable ~~$15~~margin).~~8 million~~ The SOFR Rate is subject to a floor of ~~the~~2.00%. ~~August~~The ~~2024~~Company ~~Term~~can designate a loan as an ABR Rate Loan’s ~~borrowing~~or ~~capacity~~SOFR ~~before~~Rate ~~September~~Loan ~~30,~~in ~~2024~~its discretion.

Subsequent to the August 2024 Amendments, the 2021 Term Loan amortizes at 5.00% per annum commencing on September 30, 2025. Subsequent to the August 2024 Amendments and (A) until March 31, 2025, loans under the 2021 Term Loan designated as (x) ABR Loans bear interest at a rate per annum equal to the “ABR Rate” (calculated as the greatest of (i) 1.75%; (ii) the Federal funds rate plus 0.50%; (iii) a secured overnight financing rate based rate (the “SOFR Rate”) based upon an interest period of one month plus 1.0%; and (iv) the “Prime Rate” last quoted by the Wall Street Journal), plus an applicable margin of 8.75%, and (y) SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 9.75%, in each case, with 3.75% of such interest rate margin paid-in-kind, with two specified step-downs in such applicable margin upon the receipt by the Company of cash proceeds from certain specified capital raises, and (B) from and after April 1, 2025, loans under the 2021 Term Loan designated as (x) ABR Loans bear interest at a rate per annum equal to the ABR Rate, plus an applicable margin of 8.75%, and (y) SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 9.75%, in each case, with 3.75% of such applicable margin paid-in-kind, with a step-up of 1.00% per annum (which shall be paid-in-kind) if the Company’s total net leverage ratio is greater than 4.00x, and a step-down of 1.00% per annum if the Company’s total net leverage ratio is less than 3.50x (which shall reduce the paid-in-kind component of the applicable margin). The SOFR Rate is subject to a floor of 2.00%. The Company can designate a loan as an ABR Rate Loan or SOFR Rate Loan in its discretion.

Subsequent to the August 2024 Amendments, PNC Credit Facility loans designated as (x) PNC SOFR Loans bear interest at a rate per annum equal to a SOFR based rate, plus an applicable margin of 4.75% and (y) PNC Domestic Rate Loans and Swing Loans bear interest at a rate per annum equal to the greatest of (i) the base commercial lending rate of PNC Bank; (ii) the Overnight Bank Funding Rate plus 0.5%; and (iii) the daily SOFR rate plus 1.0%, plus an applicable margin of 3.75%. The Company can designate a loan as a PNC SOFR Loan or PNC Domestic Rate Loan in its discretion.

In connection with the August 2024 Amendments, the Company issued warrants to purchase an aggregate of 380,310 shares of ~~the~~common ~~Common Stock~~stock, at an exercise price of $6.20 per share (the “August 2024 Warrants”) and which had a fair value of $2.0 million.

The August 2024 Amendments to the 2021 Term Loan held by one lender was accounted for as a modification. The $1.2 million fair value of the August 2024 Warrants issued to this lender and the $0.5 million of PIK fees paid to this lender are reflected as a reduction to the carrying amount of their Term Loan and their initial delayed draw term loan and amortized to interest expense over the remaining term of the loan. The August 2024 Amendments to the 2021 Term Loan held by another lender was accounted for as a debt extinguishment. The Company recorded a loss on debt extinguishment of $3.0 million related to the write-off of a portion of unamortized debt issuance costs and fees and expenses incurred with the August 2024 Amendments.

On April 2, 2025, the Company consented to an assignment (the “Master Assignment Agreement”) of the 2021 Term Loan and 2024 Term Loans. One of the lenders sold and assigned all of its interests to Dialectic Technology SPV, LLC (“Dialectic”). The Master Assignment Agreement was accounted for as a debt extinguishment. The Company

Table of Contents

~~The~~recorded ~~August~~a ~~2024~~gain ~~Amendments~~on debt extinguishment of $2.4 million related to the ~~2021~~net ~~Term~~of ~~Loan~~discount ~~held~~on byissuance ~~one~~of ~~lender~~term ~~was~~loans ~~accounted~~to ~~for~~a asnew alender ~~modification.~~and ~~The~~write-off ~~$1.2 million~~of ~~fair~~all ~~value~~unamortized ofdebt ~~the~~issuance ~~August~~costs ~~2024~~and ~~Warrants~~fees ~~issued~~related to ~~this~~the previous lender. ~~and~~The ~~the~~ $0.54 million ofin ~~PIK~~new ~~fees paid to this~~ lender ~~are~~fees ~~reflected~~were recorded as a reduction to the carrying ~~amount~~amounts of ~~their~~the ~~Term Loan and their initial delayed draw~~ term ~~loan~~loans and amortized to interest expense over the remaining term of the loan. The August 2024 Amendments to the 2021 Term Loan held by another lender was accounted for as a debt extinguishment. The Company recorded a loss on debt extinguishment of $3.0 million related to the write-off of a portion of unamortized debt issuance costs and fees and expenses incurred with the August 2024 Amendments.

On April 2, 2025, the Company consented to an assignment (the “Master Assignment Agreement”) of the 2021 Term Loan and 2024 Term Loans. One of the lenders sold and assigned all of its interests to Dialectic. The Master Assignment Agreement was accounted for as a debt extinguishment. The Company recorded a gain on debt extinguishment of $2.4 million related to the net of discount on issuance of term loans to a new lender and write-off of all unamortized debt issuance costs and fees related to the previous lender. The $0.4 million in new lender fees were recorded as a reduction to the carrying amounts of the term loans and amortized to interest expense over the remaining term of the loan.

On May 5, 2025, the Company entered into an amendment (the “May 2025 Term Loan Amendment”) to the Term Loan. The May 2025 Term Loan Amendment, among other things, revised the prepayment requirements under the Credit Agreement in connection with the net cash proceeds received from the SEPA. The May 2025 Term Loan Amendment was accounted for as a modification and the $0.1 million in lender amendment fees were recorded as a reduction to the carrying amounts of the term loans and amortized to interest expense over the remaining term of the loan.

On August 13, 2025, the Company terminated its PNC Credit Facility. As of the date of termination, there were no amounts outstanding under the facility. In connection with the termination, the Company paid an exit fee of $1.2 million, which was recorded within Loss on Debt Extinguishment on the condensed consolidated statement of operations and comprehensive loss.

On August 13, 2025, the Company obtained waivers to certain covenants including the net leverage covenant under the Term Loan Credit Agreement for the quarter ended June 30, 2025. Additionally, the requirement to use certain proceeds of the SEPA to pay down the Term Loan was waived.

On September 23, 2025, the Company entered into athe ~~Transaction~~Fifteenth ~~Agreement~~Amendment (to the ~~“Transaction~~Term Loan Credit Agreement”) with ~~the~~Quantum ~~lenders~~LTO ~~under~~Holdings, ~~its~~LLC, ~~Credit~~Dialectic, ~~Agreement.~~OC ~~Pursuant~~III toLVS ~~this~~XXXIII ~~agreement~~LP (“LVS XXXIII”), ~~the~~OC ~~Company~~III ~~agreed~~LVS ~~will~~XL ~~issue~~LP to(“LVS ~~Dialectic~~XL” ~~Technology~~and ~~SPV~~together ~~LLC~~with (LVS XXXIII, the “~~Dialectic~~OC III Lenders”), onand aAlter ~~dollar-for-dollar~~Domus ~~basis~~(US) LLC, ~~one~~as ordisbursing ~~more~~agent ~~senior~~and ~~secured~~collateral ~~convertible~~agent ~~notes~~ (the “~~Convertible~~Fifteenth ~~Note~~Amendment”). inThe ~~exchange~~Fifteenth ~~for~~Amendment, among other things, (i) permits the ~~amounts~~Company ~~then~~to ~~outstanding~~retain ~~under~~up to $15.0 million of net cash proceeds from the ~~term~~SEPA ~~loans~~received on or after the date of the Fifteenth Amendment for working capital and general corporate purposes, (ii) converts certain tranches of Term Loans held by the OC III Lenders into new and separate tranches, (iii) defers payment of cash interest on Term Loans held by Dialectic accruing during the quarters ended September 30, 2025 and December 31, 2025, until the earliest of (a) the ~~“Debt~~date ~~Exchange”~~the Company elects to pay such deferred cash interest, (b). ~~The~~the ~~closing~~maturity of such term loans, or (c) the date the Debt Exchange isoccurs, at which point such deferred interest will be subject to ~~customary~~the ~~conditions~~terms of the Convertible Note indenture, ~~including~~and ~~approval~~increases the interest rate applicable to such term loans by 2.00% during the ~~Company’s~~period ~~stockholders.~~that Assuch ofcash ~~September~~interest ~~30,~~is ~~2025~~being deferred, ~~such~~(iv) ~~approval~~eliminates ~~has~~the ~~not~~existing ~~been~~maximum ~~obtained,~~total net leverage ratio covenant and minimum daily liquidity covenant (noting that, following the Debt Exchange ~~had~~(as ~~not~~defined ~~occurred.~~below), Asthe ofConvertible ~~September~~Note 30will be subject to a minimum liquidity covenant), ~~2025~~and (v) amends certain other provisions, ~~total~~including ~~Term~~mandatory ~~Loans~~prepayment ~~outstanding~~events, topayment ~~Dialectic~~of ~~was~~fees ~~$52~~and expenses, and reporting requirements.~~6 million.~~

OnIn ~~September~~connection ~~23,~~with ~~2025,~~ the ~~Company also entered into the~~ Fifteenth Amendment, to the ~~Term~~Company ~~Loan~~issued ~~Credit~~warrants ~~Agreement~~ (the “~~Fifteenth~~Forbearance ~~Amendment~~Warrant”). ~~The~~to ~~Fifteenth~~Dialectic ~~Amendment, among other things, (i) permits the Company~~ to ~~retain~~purchase up to ~~$15.0 million of net cash proceeds from the SEPA received on or after the date of the Fifteenth Amendment for working capital and general corporate purposes~~2, ~~(ii) converts certain tranches of term loans held by the OC III Lenders into new and separate tranches~~653,308 ~~(iii)~~shares ~~defers payment~~ of ~~cash~~its ~~interest~~common ~~on term loans held by Dialectic accruing during the quarters ending September 30~~stock, ~~2025~~representing ~~and~~19.9% ~~December 31, 2025, until the earliest~~ of ~~(a)~~ the ~~date the~~ Company’s ~~elects~~outstanding toshares ~~pay~~as ~~such deferred cash interest, (b) the maturity~~ of ~~such term loans, or (c)~~ the date ~~the Debt Exchange occurs, at which point such deferred interest will be subject to the terms~~ of the ~~Convertible~~Transaction ~~Note~~Agreement ~~indenture,~~(as ~~and~~defined ~~increases the interest rate applicable to such term loans by 2.00% during the period that such cash interest is being deferred, (iv~~below) ~~eliminates~~as ~~the~~consideration ~~existing~~for ~~maximum total net leverage ratio covenant and minimum daily liquidity covenant (noting that, following~~ the ~~Debt Exchange~~forbearance, ~~the Convertible Notes will be subject to a minimum liquidity covenant)~~waivers, and ~~(v)~~amendments ~~amends~~granted ~~certain~~under ~~other~~the ~~provisions,~~Fifteenth ~~including mandatory prepayment events, payment of fees and expenses, and reporting requirements~~Amendment.

InWith ~~connection~~respect ~~with~~to the ~~Fifteenth~~Term ~~Amendment~~Loans held by Dialectic, the ~~Company~~Fifteenth ~~issued~~Amendment ~~warrants~~was toaccounted ~~Dialectic~~for toas ~~purchase~~an upextinguishment tounder 2ASC 470-50,~~653,308~~ ~~shares~~resulting in the recognition of ~~Common~~a ~~Stock~~new debt instrument, ~~representing~~the ~~19.9%~~derecognition of the ~~Company’s~~original ~~outstanding~~term ~~shares~~loans, asand a loss on extinguishment of $31.0 million, which is included in loss on debt extinguishment for the ~~Transaction~~nine ~~Agreement~~months ~~date~~ended (December 31, 2025. The fair value of the “Forbearance Warrant”) aswas ~~consideration~~treated ~~for~~as ~~the~~a ~~forbearance,~~lender ~~waivers,~~fee and ~~amendments~~included ~~granted~~in ~~under~~ the extinguishment loss calculation. The Fifteenth Amendment to the Term Loans held by OC III Lenders was accounted for as a modification.

On September 23, 2025, the Company entered into a Transaction Agreement with Dialectic and the OC III Lenders (the “Transaction Agreement”). Pursuant to the Transaction Agreement, the Company agreed to issue to Dialectic, on a dollar-for-dollar basis, one or more senior secured convertible notes in exchange for the amounts then outstanding under the term loans held by Dialectic (the “Debt Exchange”). On December 18, 2025, the Company closed the transactions contemplated by the Transaction Agreement (the “Closing”), including its issuance to Dialectic of the Convertible Note. The Closing was conditioned upon, among other things, approval of the Debt Exchange by the Company’s shareholders, which approval was obtained on December 16, 2025.

The Convertible Note has a three-year maturity and bears interest at 10% per annum, payable in kind and compounded annually. The Convertible Note is secured by substantially all of the assets of the Company that secure the Term Loan. The initial conversion price equals $10.00 per share of the Company’s common stock (the “Conversion Price”). The Conversion Price is subject to four quarterly resets on the last day of each calendar

Table of Contents

~~The~~quarter ~~Fifteenth~~immediately ~~Amendment~~following toSeptember ~~the~~15, ~~Term~~2025 ~~Loans held by Dialectic was accounted for as an extinguishment under ASC 470-50~~(each, ~~resulting in the recognition of~~ a ~~new~~“Reset ~~debt~~Price ~~instrument,~~Date”) to the ~~derecognition~~greater of ~~the original term loans, and~~ (a) ~~loss on extinguishment of~~ $334.300 ~~and~~per ~~$30.7 million,~~share ~~which~~and is(b) ~~included~~the inlesser ~~loss~~of on(i) ~~debt~~the ~~extinguishment~~then-current ~~for~~Conversion ~~the~~Price ~~three~~ and ~~six~~(ii) ~~months~~the ~~ended September~~ 30,-day ~~2025.~~VWAP ~~The fair value~~ of the ~~Forbearance~~Company’s ~~Warrant~~common ~~was~~stock ~~treated~~immediately aspreceding ~~a lender fee and included in~~ the ~~extinguishment~~Reset ~~loss~~Price ~~calculation~~Date. ~~The Fifteenth Amendment to the Term Loans held by OC III Lenders was accounted for as a modification.~~

~~Related~~Dialectic ~~Party~~may, ~~Transaction~~at any time, elect to exchange all or any portion of the outstanding principal amount, accrued and unpaid interest and premium (if any) of the Convertible Note for shares of the Company’s common stock at the then-applicable Conversion Price. Beginning six months after the Closing, if certain conditions are met, the Company may, at its election, require Dialectic to exchange a portion of the outstanding Convertible Note into shares of the Company’s common stock at the then-applicable Conversion Price if the 10-day VWAP exceeds specified multiples of the Conversion Price (the “Company Mandatory Exchange”). The Company Mandatory Exchange, if triggered, occurs in tranches of 20%, 20%, 30%, and the remaining balance. If certain conditions are met, at the Company’s option, on the maturity date, any outstanding principal, accrued and unpaid interest, and premium (if any) may be exchanged for shares of the Company’s common stock at 80% of the average of the Daily VWAP for each of the five lowest consecutive trading days during the 20 consecutive trading days ending on (and including) the trading day immediately prior to the maturity date.

The ~~Term~~Company ~~Loan~~accounted ~~and~~for ~~Forbearance~~the ~~Warrant~~exchange ~~with~~of Dialectic’s ~~constitute~~term ~~related~~loans ~~party~~for ~~transactions,~~the asConvertible ~~John~~Note ~~Fichthorn,~~as aan ~~member~~extinguishment of the ~~Company's~~term ~~Board~~loan ofand ~~Directors,~~recognized isa ~~also~~loss ~~Managing~~on ~~Partner~~debt extinguishment of ~~Dialectic Capital Management, the investment advisor to Dialectic~~$28.9 ~~The~~million ~~principal~~for on the ~~Term~~three ~~Loan~~and ~~totaled~~nine ~~$52.6 million~~months asended ofDecember ~~September 30~~31, 2025~~,and~~. isThe ~~payable~~Company atelected ~~maturity.~~the ~~The~~fair ~~Forbearance~~value ~~Warrant~~option ~~allows~~under ~~Dialectic~~ASC to825 ~~purchase~~for upthe toConvertible ~~2,653,308~~Note. ~~shares,~~See ~~with~~Note a5, ~~fair~~Fair ~~value~~Value of ~~$23.9 million~~Financial asInstruments, offor ~~that~~additional ~~date~~information.

Forbearance Warrant

The Forbearance Warrant, issued on September 23, 2025, has an exercise price of $8.81 per share, representing 80% of the seven-day volume-weighted average price as of September 22, 2025, and is exercisable until the seventh anniversary of its issuance. It includes a put right that allows the holder to require the Company to repurchase the unexercised portion for cash after the fifth anniversary, or earlier upon a change of control or liquidation. The repurchase price equals the holder’s pro rata share of the original issue value of $20 million, adjusted for any exercised portion.

The Forbearance Warrant is classified as a liability under ASC 480, as it may require cash settlement and meets the definition of a derivative. It is initially measured at fair value, with subsequent changes recognized in the condensed consolidated statement of operations under “Change in fair value of warrant liabilities.” See Note 5:, Fair Value of Financial Instruments for more information.

~~Standby~~Related ~~Equity~~Party ~~Purchase Agreement~~Transaction

OnThe ~~January~~Forbearance 25Warrant and Convertible Note issued to Dialectic constitute related party transactions, ~~2025~~as John Fichthorn, a member of the Company's ~~entered~~Board ~~into~~of ~~the SEPA~~Directors, inis ~~which~~also ~~pursuant~~Managing toPartner ~~and~~of ~~subject~~Dialectic toCapital ~~its terms~~Management, the ~~Company~~investment ~~has~~adviser ~~the~~to ~~right,~~Dialectic. ~~but~~On ~~not~~issuance of the ~~obligation~~Convertible Note, toQuantum ~~sell~~paid up$1.1 million to ~~$200 million~~Dialectic offor ~~Common~~consulting ~~Stock~~services. atThe ~~any~~fair ~~time~~values ~~during~~of the ~~three-year~~Forbearance ~~period~~Warrant ~~following~~and ~~the~~Convertible ~~date~~Note as of ~~the~~December 31, ~~SEPA~~2025 are included in Note 5: Fair Value of Financial Instruments.

As of September 30, 2025, the Company has issued approximately 7.5 million shares of Common Stock under the SEPA for net proceeds of approximately $82.8 million, of which 6.3 million shares of Common Stock for net proceeds of approximately $66.3 million were issued in the six months ended September 30, 2025. No shares were issued in the three months ended September 30, 2025.

NOTE 5: FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s assets measured and recorded at fair value on a recurring basis may consist of money market funds, which are included in cash and cash equivalents in the condensed consolidated balance sheets. These instruments are valued using quoted market prices in active markets (Level 1 fair value measurements) at the respective balance sheet dates.

No impairment charges were recognized for non-financial assets for the three and ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024. The Company has no non-financial liabilities measured and recorded at fair value on a non-recurring basis.

~~Long-Term~~ Debt

~~The~~Debt ~~Company’s~~is ~~financial~~generally ~~liabilities~~recorded ~~were~~at ~~comprised~~amortized ~~primarily~~cost; ofhowever, ~~long-term~~the ~~debt~~Company aselected ofthe ~~September~~fair ~~30,~~value ~~2025.~~option ~~The~~for ~~carrying amounts of~~ the ~~Company’s~~Convertible ~~debt~~Note, ~~instruments~~which ~~are~~is recorded at ~~amortized~~fair ~~cost~~value on a recurring basis. The fair value of the Company’s ~~long-term~~ debt is disclosed for informational purposes only and is not recognized in the condensed consolidated balance sheets.

Table of Contents

The fair value of the Company’s debt was estimated using a discounted cash flow approach based on the Company’s current borrowing rates for similar types of debt instruments, adjusted for credit and nonperformance risk. The Company uses significant other observable market data and assumptions (Level 2 inputs, as defined in ASC 820, Fair Value Measurement) that it believes market participants would use in pricing such debt.

The carrying value and estimated fair value of the Company’s ~~long-term~~ debt were as follows (in thousands):

	September 30, 2025				March 31, 2025
	December 31, 2025				March 31, 2025
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loans	$	~~106~~54,~~086~~636	$	9952,~~135~~096	$	102,507	$	91,576
PNC Credit Facility	—$	—	—$	—	~~26,600~~$	26,600	~~24,755~~$	24,755
Convertible Note	$	75,873	$	75,873	$	—	$	—

Warrants

On September 23, 2025, the Company established the initial fair value for the Forbearance Warrant issued to Dialectic in connection with the Fifteenth Amendment. The fair value was subsequently remeasured as of ~~September 30~~December 31, 2025, and the resulting change in fair value was recognized in the condensed consolidated statement of operations and comprehensive loss under “Change in fair value of warrant liabilities.”

The Forbearance Warrant was valued using a Monte Carlo simulation model in conjunction with a Probability-Weighted Expected Return Model ~~(“PWERM”)~~. This model incorporates various assumptions, including the Company’s ~~Common~~common ~~Stock~~stock price, expected volatility, risk-free interest rate, and the remaining contractual term of the warrant.

Because the valuation relies on significant unobservable inputs, the fair value of the Forbearance Warrant is classified as Level 3 within the fair value hierarchy.

The following table summarizes the key assumptions used in estimating the fair value of the Forbearance Warrant at issuance and at ~~September~~December 3031, 2025:

	September 30, 2025	September 23, 2025
	December 31, 2025	September 23, 2025
Discount period (years)	6.9873 years	7.0 years
Risk-free interest rate	3.5746% - 3.8987%	3.52% - 3.83%
Stock price volatility	98100.00%	98.00%
Stock price at valuation date	$96.9245	$10.69
Probability1	35% - 15% - 50%	35% - 15% - 50%
Fair value (in thousands)	$2316,~~895~~335	$25,420

(1) Scenario probability as of issuance was based on timing expectations of management that a liquidation event occurring was estimated at 35%; a fundamental transaction occurring was estimated at 15%; and none of the previous events ~~was~~were estimated at 50%.

The table below sets forth a summary of changes in the fair value of the Company’s warrant liabilities for the period ended ~~September~~December 3031, 2025:

Balance at June 30, 2025	$	—
Issuance of warrants	$	25,420
Issuance of warrants	25,420
Change in fair value of warrant liabilities	(1,525)
Balance at September 30, 2025	$23,895	~~23,895~~
Change in fair value of warrant liabilities	(7,560)
Balance at December 31, 2025	$	16,335

NOTE 6: LEASES

Supplemental balance sheet information related to leases is as follows (in thousands):

Table of Contents

Operating Leases	September 30, 2025		March 31, 2025
Operating lease right-of-use asset	$	7,983	$	8,580
Operating lease liability within other accrued liabilities	$	702	$	856
Operating lease liability, net	8,602		8,934
Total operating lease liabilities	$	9,304	$	9,790

Convertible Note

The Company measures the Convertible Note at fair value using significant inputs that are not observable in active markets and therefore classifies the Convertible Note as a Level 3 measurement within the fair value hierarchy. Changes in the fair value of the Convertible Note resulting from updated assumptions and estimates are recognized as a fair value adjustment in the condensed consolidated statements of operations and comprehensive loss.

The Company estimated the fair value of the Convertible Note using a Monte Carlo simulation method, as the Convertible Note includes features for which the settlement outcome depends on the path of the Company’s stock price and other variables over time. In addition, the Company assigned probabilities to various possible settlement scenarios.

The significant assumptions used by the Company to estimate the fair value of the Convertible Note as of December 18, 2025 and December 31, 2025 are summarized below:


	December 31, 2025	December 18, 2025





Term (years)	2.97 years	3.0 years
Volatility	80.0%	120.0%
Dividend yield	0.00%	0.00%
Risk-free interest rate	3.52%	3.47%
Probability for maturity	65%	65%
Probability for liquidation event	35%	35%

The table below sets forth a summary of changes in the fair value of the Convertible Note for the period ended December 31, 2025:








Issuance of Convertible Note	$	77,472
Change in fair value of Convertible Note	(1,599)
Balance at December 31, 2025	$	75,873

NOTE 6: LEASES

Supplemental balance sheet information related to leases is as follows (in thousands):


Operating Leases	December 31, 2025		March 31, 2025
Operating lease right-of-use asset	$	7,755	$	8,580

Operating lease liability within other accrued liabilities	$	679	$	856
Operating lease liability, net	8,406		8,934
Total operating lease liabilities	$	9,085	$	9,790

Components of lease cost were as follows (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
	Three Months Ended December 31,				Nine Months Ended December 31,
Lease Cost	2025		2024		2025		2024
Operating lease cost	$	~~472~~545	$	~~779~~716	$	1,~~141~~686	$	12,~~491~~207
Variable lease cost	36145		8269		75220		~~152~~221
Total lease cost	$	~~508~~690	$	~~861~~785	$	1,~~216~~906	$	12,~~643~~428

Maturity of Lease Liabilities	Operating Leases
Remainder of fiscal year 2026	$	1,099
2027	1,852
2028	1,625
2029	1,247
2030	1,244
Thereafter	10,855
Total lease payments	17,922
Less: imputed interest	(8,618)
Present value of lease liabilities	$	9,304

Lease Term and Discount Rate	September 30, 2025		March 31, 2025
Weighted average remaining operating lease term (years)	10.21		10.19
Weighted average discount rate for operating leases	12.6	%	12.59	%

Operating cash outflows related to operating leases each totaled $1.1 million and $1.4 million for the six months ended September 30, 2025 and 2024, respectively.

NOTE 7: RESTRUCTURING CHARGES

During the quarters ended September 30, 2025 and 2024, the Company had certain approved restructuring plans to improve operational efficiencies and rationalize its cost structure. During the quarter ended September 30, 2025, the Company recognized $3.2 million of restructuring charges primarily related to employee severance and other termination benefits. These charges are presented within restructuring charges in the Condensed Consolidated Statements of Operations. The Company expects to recognize additional restructuring charges in future periods, primarily related to severance and termination benefits, and is expected to be substantially complete by the end of the fourth quarter of fiscal year 2026, which is subject to change.

The following tables present the activity and the estimated timing of future payouts for accrued restructuring included in other current liabilities in the condensed consolidated balance sheets (in thousands):

Table of Contents

	Severance and Benefits
Maturity of Lease Liabilities	Operating Leases
Balance as of March 31, 2024	$	—
Remainder of fiscal year 2026	$	556
Restructuring charges	1,571
2027	1,880
Cash payments	(1,511)
2028	1,625
Other non-cash	(2)
2029	1,247
Balance as of September 30, 2024	$	58
2030	1,244
Balance as of March 31, 2025	$	786
Thereafter	10,855
Restructuring charges	5,616
Total lease payments	17,407
Cash payments	(5,599)
Less: imputed interest	(8,322)
Other non-cash	52
Present value of lease liabilities	$	9,085
Balance as of September 30, 2025	$	855

During the three and six months ended September 30, 2025, the Company recognized approximately $0.2 million and $0.3 million in forfeitures of unvested restricted stock units (“RSUs”) in connection with workforce reductions and employee departures.


Lease Term and Discount Rate	December 31, 2025		March 31, 2025
Weighted average remaining operating lease term (years)	10.14		10.19
Weighted average discount rate for operating leases	12.7	%	12.59	%

~~NOTE~~Operating 8:cash ~~NET~~outflows ~~LOSS~~related ~~PER~~to ~~SHARE~~operating leases each totaled $1.6 million and $2.1 million for the nine months ended December 31, 2025 and 2024, respectively.

~~The~~NOTE ~~Company~~7: ~~has~~RESTRUCTURING performance share units, restricted stock units and options to purchase shares under its Employee Stock Purchase Plan, as amended and restated on July 25, 2023 (“ESPP”), granted under various stock incentive plans that, upon exercise and vesting, would increase shares outstanding. The Company has also issued a warrant to purchase shares of Common Stock.CHARGES

~~The~~During ~~dilutive~~the ~~impact~~quarters ~~related~~ended toDecember 31, ~~shares~~2025 ~~of Common Stock from incentive plans~~ and 2024, the ~~outstanding~~Company ~~warrant~~had iscertain ~~determined~~approved byrestructuring ~~applying~~plans ~~the treasury stock method~~ to ~~the~~improve ~~assumed~~operational ~~vesting~~efficiencies ofand ~~outstanding~~rationalize ~~performance~~its ~~share~~cost ~~units~~structure. ~~and~~During ~~restricted~~the ~~stock~~quarter ~~units~~ended ~~and~~December 31, 2025, the ~~exercise~~Company ofrecognized ~~outstanding options and warrants~~$1.5 million ~~The~~of ~~dilutive~~restructuring ~~impact~~charges primarily related to ~~shares~~employee ofseverance ~~Common~~and ~~Stock~~other ~~from~~termination ~~contingently~~benefits. ~~issuable~~These ~~performance~~charges ~~share~~are ~~units~~presented iswithin ~~determined~~restructuring bycharges ~~applying~~in ~~a two-step approach using both~~ the ~~contingently~~condensed ~~issuable~~consolidated ~~share~~statements ~~guidance~~of operations and ~~the~~comprehensive ~~treasury stock method~~loss. InThe ~~periods~~Company ofexpects ato ~~net~~recognize ~~loss,~~additional ~~all~~restructuring ~~potentially~~charges ~~dilutive~~in ~~weighted-average~~future ~~outstanding~~periods, ~~shares~~primarily ofrelated ~~Common~~to ~~Stock~~severance ~~equivalents~~and ~~were~~termination ~~excluded~~benefits, ~~from~~and ~~the~~is ~~computation~~expected ~~of diluted net income (loss) per share attributable~~ to ~~common~~be ~~stockholders~~substantially ~~for~~complete by the ~~periods~~end ~~presented~~of ~~because~~fiscal ~~including~~year ~~them~~2026, ~~would~~which ~~have~~is ~~been~~subject ~~anti-dilutive~~to change.

The following ~~weighted-average~~tables ~~outstanding~~present ~~shares~~the ofactivity ~~Common~~and ~~Stock equivalents were excluded from~~ the ~~computation~~estimated timing of ~~diluted~~future ~~net~~payouts ~~loss~~for ~~per~~accrued ~~share~~restructuring ~~attributable~~included toin ~~common~~other ~~stockholders~~current ~~for~~liabilities in the ~~periods~~condensed ~~presented~~consolidated ~~because~~balance ~~including~~sheets ~~them would have been anti-dilutive~~ (in thousands):

	Three Months Ended September 30,				Six Months Ended September 30,
		Severance and Benefits
	2025			2024	2025	2024
Balance as of March 31, 2024		$	—
Stock Awards	104			11	91	24
Restructuring charges		2,916
Cash payments		(2,849)
Other non-cash		(67)
Balance as of December 31, 2024		$	—
Balance as of March 31, 2025		$	786
Restructuring charges		7,141
Cash payments		(7,053)
Other non-cash		31
Balance as of December 31, 2025		$	905

~~The~~During ~~Company~~the ~~had~~three ~~outstanding~~and ~~market~~nine ~~based~~months ~~restricted~~ended ~~stock units as of September~~December 3031, 2025, ~~that were eligible to vest into shares of~~ the ~~Common~~Company ~~Stock~~recognized ~~subject~~approximately to$0.8 million ~~the~~and ~~achievement~~$2.0 million ~~of certain stock price targets~~ in ~~addition~~forfeitures ~~to a time-based vesting period. These contingently issuable shares are excluded from the computation~~ of ~~diluted~~unvested ~~earnings~~restricted ~~per~~stock ~~share~~units ~~if,~~(“RSUs”) ~~based~~in onconnection ~~current~~with ~~period~~workforce ~~results,~~reductions ~~the~~and ~~shares~~employee ~~would not be issuable if the end of the reporting period were the end of the contingency period. There were 34~~departures,~~201~~ ~~shares~~which ofreduced ~~contingently issuable market~~stock-based ~~restricted~~compensation ~~stock~~expense ~~units~~in ~~that were excluded from~~ the ~~table~~respective ~~above as the market conditions were not satisfied as of September 30, 2025~~periods.

NOTE 9: INCOME TAXES

The effective tax rate for the three months and six months ended September 30, 2025 and 2024 was (0.4)% and (0.6)%, as compared to (2.3)% and (1.6)% respectively. The effective tax rates differed from the federal statutory tax rate of 21% during each of these periods due primarily to unbenefited losses experienced in jurisdictions with

Table of Contents

~~valuation~~NOTE ~~allowances~~8: onCOMMON ~~deferred tax assets as well as the forecasted mix of earnings in domestic and international jurisdictions.~~ STOCK

As2023 of September 30, 2025, including interest and penalties, the Company had $83.6 million of unrecognized tax benefits, $74.4 million of which, if recognized, would favorably affect the effective tax rate without consideration of the valuation allowance. As of September 30, 2025, the Company had accrued interest and penalties related to these unrecognized tax benefits of $1.3 million. The Company recognizes interest and penalties related to income tax matters in the income tax provision in the condensed consolidated statements of operations. As of September 30, 2025, $76.0 million of unrecognized tax benefits were recorded as a contra deferred tax asset in other longLong-~~term~~Term ~~assets~~Incentive in the condensed consolidated balance sheets and $7.6 million (including interest and penalties) were recorded in other long-term liabilities in the condensed consolidated balance sheets. During the next 12 months, it is reasonably possible that approximately $5.3 million of tax benefits, inclusive of interest and penalties, that are currently unrecognized could be recognized as a result of the expiration of applicable statutes of limitations. Upon recognition of the tax benefit related to the expiring statutes of limitation, $5.2 million will be offset by the establishment of a related valuation allowance. The net tax benefit recognized in the statements of operation is estimated to be $0.1 million.Plan

OnAt ~~July~~the 4,Company’s 2025, ~~President~~annual ~~Trump~~meeting ~~signed~~of ~~into~~shareholders ~~law~~held ~~the~~on ~~legislation~~December ~~commonly~~16, ~~referred~~2025 ~~to as~~ (the ~~One Big Beautiful Bill Act (~~“~~OBBBA~~Annual Meeting”)~~. The OBBBA includes various provisions~~, ~~such as~~ the ~~permanent~~Company’s ~~extension~~shareholders ofapproved ~~certain~~an ~~expiring~~amendment ~~provisions~~and restatement of the ~~Tax~~Quantum ~~Cuts~~Corporation ~~and~~2023 ~~Jobs~~Long-Term ~~Act,~~Incentive ~~modifications~~Plan to (the ~~international~~“2023 ~~tax~~Plan”) ~~framework~~to ~~and~~(i) increase the ~~restoration~~number of ~~favorable~~shares ~~tax~~of treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others being implemented through 2027. While there is no material impact to the Company'’s ~~condensed~~common ~~consolidated~~stock ~~financial~~reserved ~~statements~~ for ~~the~~issuance ~~quarter~~thereunder ~~ended~~by ~~September 30~~1, ~~2025~~400,000 ~~the~~shares ~~Company~~and is(ii) ~~assessing~~remove ~~its impact on~~ the ~~consolidated~~individual ~~financial~~annual ~~statements~~award ~~that~~limits ~~would~~for ~~take~~employees ~~effect~~and ~~beginning in the period in which the OBBBA was signed into law~~consultants.

~~NOTE~~CEO ~~10:~~New ~~COMMITMENTS~~Hire ~~AND CONTINGENCIES~~Awards

During the quarter ended December 31, 2025, the Company granted equity awards to its Chief Executive Officer consisting of (i) an option to purchase 50,000 shares of the Company’s common stock and (ii) 37,500 restricted stock units. The awards vest in four equal annual installments, subject to continued service. The stock option was valued using the Black-Scholes option pricing model on the grant date.

The significant assumptions used by the Company to estimate the fair value of the option awards as of December 31, 2025 are summarized below:

December 31, 2025

Term (years)

7.00 years

Volatility

80.0%

Dividend yield

0.00%

Risk-free interest rate

3.52%

Grant date fair value

$368,038

Standby Equity Purchase Agreement

On January 25, 2025, the Company entered into the SEPA, in which pursuant to and subject to its terms, the Company has the right, but not the obligation, to sell up to $200 million of the Company’s common stock at any time during the three-year period following the date of the SEPA.

Sales of common stock under the SEPA may be made by the Company at its discretion from time to time and will depend upon market conditions and other factors. The purchase price for shares sold under the SEPA is based on a formula tied to the volume-weighted average price of the Company’s common stock.

In addition, in no event may the Company issue more than 1,157,139 shares of common stock under the SEPA, representing 19.99% of the Company’s common stock outstanding immediately prior to execution of the SEPA (the “Exchange Cap”), unless the Company obtains stockholder approval in accordance with applicable Nasdaq rules or otherwise satisfies the conditions under which the Exchange Cap would not apply. The SEPA is also subject to a 4.99% beneficial ownership limitation, which restricts Yorkville from acquiring shares that would result in ownership above that threshold.

As of December 31, 2025, the Company has sold approximately 8.2 million shares of its common stock under the SEPA for net proceeds of approximately $89.6 million. There were 0.7 million and 7.1 million shares of common stock sold for net proceeds of approximately $5.0 million and $72.0 million in the three and nine months ended December 31, 2025.

The amount of additional capital that may be raised under the SEPA will depend on market conditions, trading volumes, the Company’s stock price, and the continued satisfaction of the applicable limitations and conditions under the agreement.

The Company evaluated the contract that includes the right to require Yorkville to purchase shares of common stock in the future (“put right”) considering the guidance in ASC 815-40, Derivatives and Hedging — Contracts on an Entity’s Own Equity and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting. The Company has analyzed the terms of the freestanding put right and has concluded that it has an immaterial value as of December 31, 2025.

Table of Contents

NOTE 9: NET LOSS PER SHARE

The Company has performance share units, restricted stock units and options to purchase shares under its Employee Stock Purchase Plan (“ESPP”), granted under various stock incentive plans that, upon exercise and vesting, would increase shares outstanding. The Company has also issued warrants to purchase shares of common stock.

The dilutive impact related to shares of common stock from incentive plans and outstanding warrants is determined by applying the treasury stock method to the assumed vesting of outstanding performance share units and restricted stock units and the exercise of outstanding options and warrants. The dilutive impact related to shares of common stock from contingently issuable performance share units is determined by applying a two-step approach using both the contingently issuable share guidance and the treasury stock method. In periods of a net loss, all potentially dilutive weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive.

The following weighted-average outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive (in thousands):


	Three Months Ended December 31,		Nine Months Ended December 31,
	2025	2024	2025	2024
Stock Awards	37	181	73	76
Lender Warrants	—	678	—	845
Forbearance Warrant	2,653	—	2,653	—

The Company had outstanding market based restricted stock units as of December 31, 2025 that were eligible to vest into shares of the common stock subject to the achievement of certain stock price targets in addition to a time-based vesting period. These contingently issuable shares are excluded from the computation of diluted earnings per share if, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period. There were 5,743 and 170,750 shares of contingently issuable market-based restricted stock units that were excluded from the table above, as the market conditions were not satisfied as of December 31, 2025 and 2024, respectively.

NOTE 10: INCOME TAXES

The effective tax rate for the three and nine months ended December 31, 2025 and 2024 was (2.2)% and (1.1)%, as compared to (0.1)% and (0.6)%, respectively. The effective tax rates differed from the federal statutory tax rate of 21% during each of these periods due primarily to unbenefited losses experienced in jurisdictions with valuation allowances on deferred tax assets as well as the forecasted mix of earnings in domestic and international jurisdictions.

As of December 31, 2025, including interest and penalties, the Company had $84.0 million of unrecognized tax benefits, $74.8 million of which, if recognized, would favorably affect the effective tax rate without consideration of the valuation allowance. As of December 31, 2025, the Company had accrued interest and penalties related to these unrecognized tax benefits of $1.4 million. The Company recognizes interest and penalties related to income tax matters in the income tax provision in the condensed consolidated statements of operations. As of December 31, 2025, $76.1 million of unrecognized tax benefits were recorded as a contra deferred tax asset in other long-term assets in the condensed consolidated balance sheets and $7.9 million (including interest and penalties) were recorded in other long-term liabilities in the condensed consolidated balance sheets. During the next 12 months, it is reasonably possible that approximately $5.3 million of tax benefits, inclusive of interest and penalties, that are currently unrecognized could be recognized as a result of the expiration of applicable statutes of limitations. Upon recognition of the tax benefit related to the expiring statutes of limitation, $5.2 million will be offset by the establishment of a related valuation allowance. The net tax benefit recognized in the statements of operations is estimated to be $0.1 million.

Table of Contents

On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others being implemented through 2027. While there is no material impact to the Company's condensed consolidated financial statements for the quarter ended December 31, 2025, the Company is assessing its impact on the consolidated financial statements that would take effect beginning in the period in which the OBBBA was signed into law.

NOTE 11: COMMITMENTS AND CONTINGENCIES

Commitments to Purchase Inventory

The Company uses contract manufacturers for its manufacturing operations. Under these arrangements, the contract manufacturer procures inventory to manufacture products based upon the Company’s forecast of customer demand. The Company has similar arrangements with certain other suppliers. The Company ismay be responsible for the financial impact on the supplier or contract manufacturer of any reduction or product mix shift in the forecast relative to materials that the third party had already purchased under a prior forecast. Such a variance in forecasted demand could require a cash payment for inventory in excess of current customer demand or for costs of excess or obsolete inventory. As of ~~September~~December 3031, 2025, the Company had issued non-cancelable commitments for $4547.02 million to purchase inventory from its contract manufacturers and suppliers.

Litigation

On September 4, 2025, a shareholder class action complaint was filed in the United States District Court for the District of Colorado. The complaint identifies Seung Lee as the plaintiff and names Quantum Corporation and James J. Lerner, Kenneth P. Gianella, and Laura Nash as defendants. It alleges certain violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 related to certain disclosures made in the Company’s quarterly and annual reports regarding its financial reporting for the third quarter of the Company’s fiscal year 2025 and its restatement of that financial reporting. The complaint seeks to designate the plaintiff as the lead plaintiff for the class and define a class period of November 15, 2024 through August 18, 2025, and seeks an award of unspecified damages, costs, and expenses. AtThe ~~this~~litigation ~~time, Quantum~~ is ~~not~~currently ~~able~~in toits ~~determine~~early ~~whether~~stages, ~~this~~a ~~lawsuit~~final ~~would~~claim ~~have~~has ~~any~~not ~~material~~yet ~~impact~~been ~~on our business~~served, ~~operating~~and ~~results,~~no ordiscovery ~~financial~~has ~~condition~~taken place.

On October 28, 2025, a shareholder derivative complaint was filed in the United States District Court for the District of Colorado. The complaint was filed by Brent Cullison derivatively on behalf of Quantum Corporation against James J. Lerner, Kenneth P. Gianella, Laura Nash, Don Jaworski, John Fichthorn, Hugues Meyrath, John R. Tracy, Emily White, James C. Clancy, and Tony J. Blevins. The complaint substantially repeats the allegations of the shareholder litigation described above and alleges related breaches of fiduciary duties and other causes of action. The complaint seeks recovery of damages sustained by Quantum arising from the allegations, as well as fees and costs incurred.

Table of Contents

Another shareholder derivative complaint was filed in the same court on November 4, 2025. That complaint names Felicia Marti on behalf of Quantum Corporation as the plaintiff, with James J. Lerner, Kenneth P. Gianella, Laura Nash, John Fichthorn, Donald J. Jaworski, Hugues Meyrath, John R. Tracy, and Emily White named as defendants. The complaint substantially repeats the allegations of the Cullison derivative litigation and seeks relief of recovery of damages sustained by Quantum arising from the allegations, certain corporate governance reforms, and fees and costs incurred.

AtOn ~~this~~January ~~time~~22, ~~Quantum~~2026, isthe ~~not~~court ~~able~~ordered ~~to determine whether~~ the ~~derivative~~separate ~~lawsuits~~Cullison ~~would~~and ~~have~~Marti ~~any~~shareholder ~~material~~derivative ~~impact~~complaints onto ~~our~~be ~~business, operating results, or financial condition~~consolidated.

~~Additionally,~~At ~~from~~this time ~~to time~~, ~~the~~Quantum ~~Company~~ is ~~party~~not able to ~~various~~determine ~~legal~~whether ~~proceedings~~the ~~and~~shareholder ~~claims~~class ~~arising~~action ~~from~~or ~~the~~derivative ~~normal~~lawsuits ~~course~~would ofhave ~~business~~any ~~activities.~~material ~~Based~~impact on ~~current~~our ~~available information~~business, ~~the~~operating ~~Company~~results, ~~does~~or ~~not~~financial ~~expect~~condition. ~~that~~Quantum ~~the~~expects ~~ultimate~~to ~~outcome~~be ofable ~~any~~to ~~currently~~utilize ~~pending~~its ~~matters,~~directors’ ~~individually~~and orofficers’ inliability ~~the~~insurance ~~aggregate,~~to ~~will~~cover ~~have a material adverse effect on~~ the ~~Company’s~~insurable ~~results~~costs offor ~~operations~~these litigations, ~~cash~~to ~~flows~~the orextent ~~financial position~~applicable.

~~NOTE~~Additionally, ~~11:~~from ~~SEGMENT~~time ~~INFORMATION~~to time, the Company is party to various legal proceedings and claims arising from the normal course of business activities. Based on current available information, the Company does not expect that the

Our chief operating decision maker (“CODM”), the Chief Executive Officer, manages business activities as a single operating and reportable segment at the consolidated level. The CODM reviews and utilizes consolidated financial information, including revenue, gross profit, operating loss and net loss as reported on the condensed consolidated statements of operations, to assess performance and allocate resources to support strategic priorities. Condensed consolidated net loss is our segment’s primary measure of profit or loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets.20

Our CODM reviews the following significant segment expenses, which are each separately disclosed and presented in the condensed consolidated statements of operations: cost of revenue for product, cost of revenue for subscription services, research and development expenses, sales and marketing expenses, and general and administrative expenses. Other segment items within condensed consolidated net loss include restructuring and impairment expenses, other income (expense), net and income tax provision. Other significant noncash segment expenses include stock-based compensation, depreciation and amortization and fair value adjustments on warrant liabilities.

Table of Contents

ultimate outcome of any currently pending matters, individually or in the aggregate, will have a material adverse effect on the Company’s results of operations, cash flows or financial position.

NOTE 12: SEGMENT INFORMATION

Our chief operating decision maker (“CODM”), the Chief Executive Officer, manages business activities as a single operating and reportable segment at the consolidated level. The CODM reviews and utilizes consolidated financial information, including revenue, gross profit, operating loss and net loss as reported on the condensed consolidated statements of operations and comprehensive loss, to assess performance and allocate resources to support strategic priorities. Condensed consolidated net loss is our segment’s primary measure of profit or loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets.

Our CODM reviews the following significant segment expenses, which are each separately disclosed and presented in the condensed consolidated statements of operations and comprehensive loss: cost of revenue for product, cost of revenue for subscription services, research and development expenses, sales and marketing expenses, and general and administrative expenses. Other segment items within condensed consolidated net loss include restructuring and impairment expenses, other income (expense), net and income tax provision. Other significant noncash segment expenses include stock-based compensation, depreciation and amortization and fair value adjustments on warrant liabilities and convertible debt.

Disaggregation of Revenue

The following table depicts the disaggregation of revenue by geographic areas and major product offerings and geographies and is consistent with how the CODM evaluates its financial performance (in thousands):

	Three Months Ended September 30,								Six Months Ended September 30,
	Three Months Ended December 31,								Nine Months Ended December 31,
	2025				2024				2025				2024
Americas1
Product revenue	$	2026,~~937~~605			$	2119,~~845~~245			$	4370,~~689~~292			$	4665,~~424~~671
Service and subscription	1415,~~988~~540				1614,~~680~~639				2944,~~347~~887				3146,~~389~~029
Total revenue	3542,~~925~~145		57	%	3833,~~525~~884		5450	%	73115,~~036~~179		5756	%	77111,~~813~~700		5452	%
EMEA
Product revenue	1014,~~849~~930				1214,~~455~~423				2035,~~832~~763				2540,~~974~~396
Service and subscription	8,~~423~~906				1110,~~299~~544				1625,~~905~~811				2031,~~701~~245
Total revenue	1923,~~272~~836		3132	%	2324,~~754~~967		3336	%	3761,~~737~~574		3031	%	4671,~~675~~641		3234	%
APAC
Product revenue	34,~~582~~936				4,~~978~~966				813,~~384~~320				914,~~533~~498
Service and subscription	2,~~209~~074				2,~~226~~541				46,~~311~~384				47,~~825~~366
Total revenue	57,~~791~~010		9	%	7,~~204~~507		1011	%	1219,~~695~~704		10	%	1421,~~358~~864		10	%
Consolidated
Product revenue	3546,~~368~~471				3938,~~278~~634				72119,~~905~~375				81120,~~931~~565
Service and subscription	2526,~~620~~520				3027,~~205~~724				5077,~~563~~082				5684,~~915~~640
Royalty2	1,~~727~~595		32	%	2,~~363~~326		3	%	35,~~534~~130		3	%	57,~~265~~592		4	%
Total revenue	$	6274,~~715~~586	100	%	$	7168,~~846~~684	100	%	$	~~127~~201,~~002~~587	100	%	$	~~144~~212,~~111~~797	100	%

1 Revenue for the Americas geographic region outside of the United States is not significant.

2 Royalty revenue is not allocatable to geographic regions.

Revenue by Solution

	Three Months Ended September 30,								Six Months Ended September 30,
	2025		%		2024		%		2025		%		2024		%
Primary storage systems	$	10,968	17	%	$	12,204	17	%	$	23,497	18	%	$	29,798	21	%
Secondary storage systems	19,778		32	%	23,333		33	%	38,285		30	%	39,744		27	%
Device and media	7,550		12	%	7,827		11	%	17,492		14	%	17,428		12	%
Service	22,692		36	%	26,119		36	%	44,194		35	%	51,876		36	%
Royalty	1,727		3	%	2,363		3	%	3,534		3	%	5,265		4	%
Total revenue1	$	62,715	100	%	$	71,846	100	%	$	127,002	100	%	$	144,111	100	%

1Table ~~Subscription revenue~~ of $6.4 million and $5.0 million was allocated to primary and secondary storage systems for the three months ended September 30, 2025 and 2024, respectively. Subscription revenue of $2.9 million and $4.1 million was allocated to primary and secondary storage systems for the six months ended September 30, 2025 and 2024, respectively. Contents


	Three Months Ended December 31,								Nine Months Ended December 31,
	2025		%		2024		%		2025		%		2024		%
Primary storage systems	$	10,085	14	%	$	14,123	21	%	$	33,582	17	%	$	43,921	21	%
Secondary storage systems	30,644		40	%	20,349		30	%	68,928		33	%	60,095		27	%
Device and media	10,122		14	%	7,671		11	%	27,614		14	%	25,099		12	%
Service	22,140		30	%	24,215		35	%	66,333		33	%	76,090		36	%
Royalty	1,595		2	%	2,326		3	%	5,130		3	%	7,592		4	%
Total revenue1	$	74,586	100	%	$	68,684	100	%	$	201,587	100	%	$	212,797	100	%

1 Subscription revenue of $4.4 million and $3.5 million was allocated to primary and secondary storage systems for the three months ended December 31, 2025 and 2024, respectively. Subscription revenue of $10.7 million and $8.6 million was allocated to primary and secondary storage systems for the nine months ended December 31, 2025 and 2024, respectively.

Net Loss

The following table shows reported segment revenue, segment profit or loss, and significant segment expenses were as follows: (in thousands):


	Three Months Ended December 31,						Nine Months Ended December 31,
	2025			2024			2025			2024
Total revenue	$	74,586		$	68,684		$	201,587		$	212,797
Total cost of revenue	45,654			40,796			126,391			127,205
Gross profit	28,932			27,888			75,196			85,592
Gross margin	38.8		%	40.6		%	37.3		%	40.2		%
Operating expenses
Salaries & fringe1	16,437			19,359			51,170			62,026
Outside services2	3,531			7,129			15,970			28,013
Infrastructure3	2,086			2,438			6,938			8,229
Operational costs4	2,260			2,429			6,652			7,225
Restructuring	1,525			1,342			7,141			2,916
Other5	4,281			2,918			9,268			7,269
Total operating expenses	30,120			35,615			97,139			115,678
Income (loss) from operations	(1,188)			(7,727)			(21,943)			(30,086)
Other income (expense), net	(387)			960			(1,261)			(429)
Interest income	42			7			301			21
Interest expense	(5,933)			(6,840)			(18,675)			(16,761)
Change in fair value of warrant liabilities	7,560			(61,630)			9,085			(56,414)
Change in fair value of Convertible Note	1,599			—			1,599			—
Loss on debt extinguishment	(28,946)			—			(59,641)			(3,003)
Loss before income taxes	(27,253)			(75,230)			(90,535)			(106,672)
Income tax provision	590			70			970			675
Net loss	$	(27,843)		$	(75,300)		$	(91,505)		$	(107,347)

Table of Contents

	Three Months Ended September 30,						Six Months Ended September 30,
	2025			2024			2025			2024
Total revenue	$	62,715		$	71,846		$	127,002		$	144,111
Total cost of revenue	39,163			41,201			80,736			86,410
Gross profit	23,552			30,645			46,266			57,701
Gross margin	37.6		%	42.7		%	36.4		%	40.0		%
Operating expenses
Salaries & fringe1	16,731			21,244			34,733			42,667
Outside services2	4,763			7,690			12,439			20,884
Infrastructure3	2,330			2,882			4,852			5,790
Operational costs4	2,060			2,440			4,392			4,796
Restructuring	3,193			383			5,616			1,574
Other5	2,633			1,563			4,987			4,350
Total operating expenses	31,710			36,202			67,019			80,061
Loss from operations	(8,158)			(5,557)			(20,753)			(22,360)
Other income (expense), net	(185)			(1,334)			(616)			(1,375)
Interest expense	(6,227)			(6,131)			(12,743)			(9,921)
Change in fair value of warrant liabilities	1,525			3,550			1,525			5,216
Loss on debt extinguishment	(33,254)			(2,308)			(30,695)			(3,003)
Loss before income taxes	(46,299)			(11,780)			(63,282)			(31,443)
Income tax provision	157			370			380			605
Net loss	$	(46,456)		$	(12,150)		$	(63,662)		$	(32,048)

1 Salaries & fringe includes spend on contractors.

2 Outside services includes ~~contractor~~professional service, recruiting and legal expenses.

3 Infrastructure includes property related expenses, including fixed and variable lease expense, telecommunications and depreciation.

4 Operational costs include dues and subscriptions, computer expenses, office supplies and other miscellaneous items.

5 Other segment items includes travel related spend, marketing expense, taxes, fees and other miscellaneous items.

NOTE 12: REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The unaudited condensed consolidated financial statements for the three and six months ended September 30, 2024 have been revised.

The nature of the revisions is as follows:

a.Service contract term - The Company identified that there were inconsistencies in the period used to recognize service and subscription revenue, which is deferred under Topic 606 and recognized ratably over the contractual term of the contract. The Company’s management reviewed and updated the periods over which revenue was being recognized to ensure consistent application for all service contracts invoiced in the fiscal year ended March 31, 2025, and the results have been applied to revenue.

b.Application of Topic 606 related to standalone selling price - The Company also determined that the standalone selling price that was being used for the fiscal year ended March 31, 2025 needed to be updated resulting in an adjustment to revenue. Standalone selling price has now been refreshed for all goods and services sold in a bundled contract under Topic 606, maximizing the use of observable inputs.

The following tables present the impact of the revisions to the unaudited condensed consolidated financial statements as of and for the three and six months ended September 30, 2024 (in thousands, unaudited):

Table of Contents

CONDENSED CONSOLIDATED BALANCE SHEET

	September 30, 2024
	As previously reported		Revisions		Reference	As revised
Liabilities and Stockholders’ Deficit
Deferred revenue, current portion	$	69,369	$	(3,868)	a, b	$	65,501
Total current liabilities	134,601		(3,868)			130,733
Deferred revenue, net of current portion	37,164		1,569		a, b	38,733
Total liabilities	316,549		(2,299)			314,250
Stockholders' deficit
Accumulated deficit	(861,727)		2,299		a, b	(859,428)
Total stockholders’ deficit	(153,403)		2,299			(151,104)
Total liabilities and stockholders’ deficit	$	163,146	$	—		$	163,146

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	Three Months Ended September 30, 2024							Six Months Ended September 30, 2024
	As previously reported		Revisions		Reference	As revised		As previously reported		Revisions		Reference	As revised
Revenue:
Product	$	36,785	$	2,493	b	$	39,278	$	77,779	$	4,152	b	$	81,931
Service and subscription	31,321		(1,116)		a, b	30,205		58,768		(1,853)		a, b	56,915
Gross profit	29,268		1,377			30,645		55,402		2,299			57,701
Gain (loss) from operations	(6,934)		1,377			(5,557)		(24,659)		2,299			(22,360)
Net gain (loss) before income taxes	(13,157)		1,377			(11,780)		(33,742)		2,299			(31,443)
Net loss	$	(13,527)	$	1,377		$	(12,150)	$	(34,347)	$	2,299		$	(32,048)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended September 30, 2024
	As previously reported		Revisions		Reference	As revised
Operating activities
Net loss	$	(34,347)	$	2,299	a, b	$	(32,048)
Adjustments to reconcile net loss to net cash used in operating activities
Deferred revenue	(10,153)		(2,299)		a, b	(12,452)
Net cash used in operating activities	$	(17,194)	$	—		$	(17,194)

Table of Contents

~~CONDENSED~~NOTE ~~CONSOLIDATED~~13: ~~STATEMENTS~~SUBSEQUENT ~~OF CHANGES IN STOCKHOLDERS' DEFICIT~~EVENTS

	Common Stock			AdditionalPaid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Deficit
Three Months Ended	Shares	Amount
Balance, June 30, 2024, as revised	4,792	$	48	$	708,952	$	(847,278)	$	(2,051)	$	(140,329)
Net loss	—	—		—		(12,150)		—		(12,150)
Foreign currency translation adjustments, net	—	—		—		—		659		659
Stock-based compensation	—	—		716		—		—		716
Balance, September 30, 2024, as revised	4,792	$	48	$	709,668	$	(859,428)	$	(1,392)	$	(151,104)

During the period from January 1, 2026 through February 12, 2026, the Company issued approximately 503,000 shares of common stock under the SEPA for net proceeds of approximately $3.2 million.

	Common Stock			AdditionalPaid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Deficit
Six Months Ended	Shares	Amount
Balance, March 31, 2024	4,792	$	48	$	708,027	$	(827,380)	$	(2,193)	$	(121,498)
Net loss	—	—		—		(32,048)		—		(32,048)
Foreign currency translation adjustments, net	—	—		—		—		801		801
Stock-based compensation	—	—		1,641		—		—		1,641
Balance, September 30, 2024, as revised	4,792	$	48	$	709,668	$	(859,428)	$	(1,392)	$	(151,104)

Table of Contents

NOTE 13: SUBSEQUENT EVENTS

During the period from October 1, 2025 through November 10, 2025, the Company issued approximately 0.3 million shares of Common Stock under the SEPA for net proceeds of approximately $2.8 million.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis compares the change in the condensed consolidated financial statements for quarters and ~~six~~nine months ended ~~September~~December 3031, 2025 and ~~September~~December 3031, 2024, and should be read together with our condensed consolidated financial statements and the related notes thereto included in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (the “Annual Report”). In particular, the risk factors contained in Part I, Item 1A of the Annual Report under the heading “Risk Factors” may reflect trends, demands, commitments, events, or uncertainties that could materially impact our results of operations and liquidity and capital resources. For comparisons of quarters and ~~six~~nine months ended ~~September~~December 3031, 2024 and ~~September~~December 3031, 2023, see our Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 27 of our ~~Quarterly~~Annual Report on Form 10-QK for the ~~quarter~~year ended ~~September 30~~March 31, ~~2024~~2025, filed with the SEC on ~~November~~August 1426, ~~2024,~~2025 and incorporated herein by reference. Our fiscal year ends on March 31 of each calendar year. "Fiscal 2025" refers to the fiscal year ended March 31, 2025.

The following discussion contains forward-looking statements, such as statements regarding anticipated impacts on our business, our future operating results and financial position, our business strategy and plans, our market growth and trends, and our objectives for future operations. Please see "Note Regarding Forward-Looking Statements" for more information about relying on these forward-looking statements.

OVERVIEW

We are a technology company whose mission is to deliver innovative solutions to organizations across the world. We design, manufacture and sell technology and services that help customers capture, create and share digital content, and protect it for decades. We emphasize innovative technology in the design and manufacture of our products to help our customers unlock the value in their video and unstructured data in new ways to solve their most pressing business challenges.

We generate revenue by designing, manufacturing, and selling technology and services. Our most significant expenses are related to compensating employees; designing, manufacturing, marketing, and selling our products and services; data center costs in support of our cloud-based services; and interest associated with our long-term debt and income taxes.

Macroeconomic Conditions

We continue to actively monitor, evaluate and respond to the current uncertain macro environment, including the impact of changing interest rates, inflation, tariffs, lingering supply chain challenges, and fluctuation in the U.S. dollar. During the quarter we continued to experience longer sales ~~cycle~~cycles for opportunities with our enterprise as well as commercial customers.

The macro environment remains unpredictable and our past results may not be indicative of future performance.

2524

Table of Contents

RESULTS OF OPERATIONS

	Three Months Ended September 30,				Six Months Ended September 30,
	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands)	2025		2024		2025		2024
Total revenue	$	6274,~~715~~586	$	7168,~~846~~684	$	~~127~~201,~~002~~587	$	~~144~~212,~~111~~797
Total cost of revenue (1)	3945,~~163~~654		4140,~~201~~796		80126,~~736~~391		86127,~~410~~205
Gross profit	2328,~~552~~932		3027,~~645~~888		4675,~~266~~196		5785,~~701~~592
Operating expenses
Sales and marketing (1)	1112,~~819~~977		1312,~~578~~448		2437,~~474~~451		2639,~~873~~321
General and administrative (1)	1110,~~006~~045		1314,~~977~~142		2434,~~576~~621		3549,~~042~~186
Research and development (1)	5,~~692~~573		87,~~264~~683		1217,~~353~~926		1624,~~572~~255
Restructuring charges (1)	31,~~193~~525		~~383~~1,342		57,~~616~~141		12,~~574~~916
Total operating expenses	3130,~~710~~120		3635,~~202~~615		6797,~~019~~139		80115,~~061~~678
Loss from operations	(8,158)		(5,557)		(20,753)		(22,360)
Income (loss) from operations	(1,188)		(7,727)		(21,943)		(30,086)
Other income (expense), net	(~~185~~387)		~~(1,334)~~960		(~~616~~1,261)		(~~1,375~~429)
Interest expense	(6,227)		(6,131)		(12,743)		(9,921)
Interest income	42		7		301		21
Change in fair value of warrant liabilities	1,525		3,550		1,525		5,216
Interest expense	(5,933)		(6,840)		(18,675)		(16,761)
Loss on debt extinguishment	(33,254)		(2,308)		(30,695)		(3,003)
Change in fair value of warrant liabilities	7,560		(61,630)		9,085		(56,414)
Loss before income taxes	(46,299)		(11,780)		(63,282)		(31,443)
Change in fair value of Convertible Note	1,599		—		1,599		—
Income tax provision	157		370		380		605
Loss on debt extinguishment	(28,946)		—		(59,641)		(3,003)
Net loss	$	(46,456)	$	(12,150)	$	(63,662)	$	(32,048)
Loss before income taxes	(27,253)		(75,230)		(90,535)		(106,672)
Income tax provision	590		70		970		675
Net loss	$	(27,843)	$	(75,300)	$	(91,505)	$	(107,347)

(1) Includes stock-based compensation as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands)	2025		2024		2025		2024
Cost of revenue	$	41(58)	$	7695	$	(~~567~~38)	$	~~266~~361
Research and development	1927		~~161~~105		87114		~~349~~454
Sales and marketing	(8266)		8546		(672)		~~173~~219
General and administrative	~~346~~(872)		~~394~~490		~~281~~(1,178)		~~853~~1,342
Total	$	~~324~~(969)	$	~~716~~736	$	(~~205~~1,174)	$	12,~~641~~376

Comparison of the Three Months Ended ~~September~~December 3031, 2025 and 2024

Revenue

	Three Months Ended September 30,
	Three Months Ended December 31,
(dollars in thousands)	2025		% ~~ofrevenue~~of revenue		2024		% ~~ofrevenue~~of revenue		$ Change		% Change
Product revenue	$	3546,~~368~~471	5662	%	$	3938,~~278~~634	5557	%	$	(37,~~910)~~837	~~(10)~~20	%
Service and subscription	2526,~~620~~520		4136	%	3027,~~205~~724		4240	%	(41,~~585~~204)		(154)	%
Royalty	1,~~727~~595		32	%	2,~~363~~326		3	%	(~~636~~731)		(2731)	%
Total revenue	$	6274,~~715~~586	100	%	$	7168,~~846~~684	100	%	$	(95,~~131)~~902	~~(13)~~9	%

Product Revenue

In the three months ended September 30, 2025, product revenue decreased $3.9 million, or 10%, as compared to the same period in fiscal 2025. The primary driver of the decrease was due to large orders in the prior period across secondary and primary storage.25

Table of Contents

In the three months ended December 31, 2025, product revenue increased $7.8 million, or 20%, as compared to the same period in fiscal 2025. The primary driver of the increase was due to higher sales across secondary storage, devices and media product lines.

Service and Subscription Revenue

Service and subscription revenue decreased $41.62 million, or 154%, in the three months ended ~~September~~December 3031, 2025 compared to the same period in fiscal 2025. This decrease was due to ~~certain~~a ~~long-lived~~strong ~~products~~quarter ~~reaching~~for ~~their~~support ~~end-of-service-life~~renewals and related revenue recognition.

Royalty Revenue

We receive royalties from third parties that license our linear-tape open media patents through our membership in the linear-tape open consortium. Royalty revenue decreased $0.67 million, or 2731%, in the three months ended ~~September~~December 3031, 2025 compared to the same period in fiscal 2025 due to both lower market volume and a mix weighted towards linear-tape-open (“LTO”) types with lower royalty rates.

Gross Profit and Margin

	Three Months Ended September 30,
	Three Months Ended December 31,
(dollars in thousands)	2025		~~Grossmargin~~Gross margin %		2024		~~Grossmargin~~Gross margin %		$ Change		Basis point change
Product	$	610,~~620~~860	1823.74	%	$	97,~~504~~712	2420.20	%	$	(23,~~884)~~148	~~(550)~~340
Service and subscription	1516,~~205~~477		5962.31	%	1817,~~778~~850		6264.24	%	(31,~~573~~373)		(~~290~~230)
Royalty	1,~~727~~595		100.0	%	2,~~363~~326		100.0	%	(~~636~~731)		—
Gross profit	$	2328,~~552~~932	3738.68	%	$	3027,~~645~~888	4240.76	%	$	(71,~~093)~~044	(~~510~~180)

Gross profit and margin percentages are key metrics that management monitors to assess the performance onof the business.

Product Gross Margin

Product gross margin ~~decreased~~increased by $23.91 million, or by ~~550~~340 basis points, for the three months ended ~~September~~December 3031, 2025, as compared with the same period in fiscal 2025. This ~~decrease~~increase was primarily due to ansales ~~inventory~~during ~~provision~~the ~~accrued~~quarter ~~for~~more ~~certain~~heavily ~~end-of-life products, as well as an overall mix~~ weighted towards ~~lower~~higher margin products.

Service and Subscription Gross Margin

Service and subscription gross margins decreased ~~290~~by $1.4 million, or by 230 basis points, for the three months ended ~~September~~December 3031, 2025, as compared with the same period in fiscal 2025. This decrease was primarily driven by ~~reduced~~higher ~~revenue as many long-lived products reach their end-of-~~service ~~life.~~inventory Toand ~~mitigate~~logistics ~~these declines,~~ costs ofas ~~service~~we ~~has~~rebalance ~~been~~spare ~~reduced~~parts ~~across~~supply ~~the organization, including logistics, repair, and labor~~worldwide.

Royalty Gross Margin

Royalties do not have significant related cost of sales.

Operating Expenses

	Three Months Ended September 30,
	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Sales and marketing	$	1112,~~819~~977	1917	%	$	1312,~~578~~448	1918	%	$	~~(1,759)~~529	~~(13)~~4	%
General and administrative	1110,~~006~~045		1813	%	1314,~~977~~142		1921	%	(24,~~971~~097)		(2129)	%
Research and development	5,~~692~~573		98	%	87,~~264~~683		1211	%	(2,~~572~~110)		(3127)	%
Restructuring charges	31,~~193~~525		52	%	~~383~~1,342		12	%	~~2,810~~183		~~734~~14	%
Total operating expenses	$	3130,~~710~~120	5140	%	$	3635,~~202~~615	5052	%	$	(45,~~492~~495)	(1215)	%

In the three months ended ~~September~~December 3031, 2025, sales and marketing expenses ~~decreased~~increased $10.85 million, or 134%, as compared with the same period in fiscal 2025. This ~~decrease~~increase was primarily driven by ~~improved~~higher ~~operational~~commission ~~efficiency~~expense ~~and~~related ~~increased~~to ~~leverage~~product ofand ~~our~~service ~~channel~~sales.

In the three months ended September 30, 2025, general and administrative expenses decreased $3.0 million, or 21%, as compared with the same period in fiscal 2025. This decrease was primarily driven by higher expense in the prior year related to compliance focused outside services. 26

Table of Contents

In the three months ended ~~September~~December 3031, 2025, ~~research~~general and ~~development~~administrative expenses decreased $24.61 million, or 3129%, as compared with the same period in fiscal 2025. This decrease was ~~the~~primarily ~~result~~driven ofby ~~efficiencies~~higher ~~realized~~expense ~~through~~in ~~improved organization design, including~~ the ~~consolidation~~prior ofyear ~~common~~related ~~functions~~to ~~and~~compliance ~~increased~~focused ~~weighting~~outside ~~of resources in lower-cost regions~~services.

In the three months ended ~~September~~December 3031, 2025, ~~restructuring~~research and development expenses ~~increased~~decreased $2.81 million, or ~~734~~27%, as compared with the same period in fiscal 2025. This ~~increase~~decrease inwas ~~restructuring~~the ~~expenses~~result ~~primarily~~of ~~involves~~efficiencies ~~workforce~~realized ~~reductions~~through ~~and~~improved ~~related~~organization ~~severance~~design, ~~and~~including ~~termination~~the ~~benefits.These~~consolidation ~~actions are part~~ of ~~management’s~~common ~~ongoing efforts to align the Company’s organizational structure and resources with its strategic priorities and to streamline operations across business units~~functions.

~~The~~In ~~Company~~the ~~expects~~three ~~these~~months ~~initiatives~~ended toDecember 31, ~~result~~2025, inrestructuring ~~future~~expenses ~~cost~~increased ~~savings~~$0.2 ~~and~~million, ~~productivity~~or ~~improvements~~14%, ~~beginning~~as compared with the same period in fiscal ~~2026~~2025. ~~The~~This increase in restructuring ~~activities~~expenses ~~are~~primarily ~~expected~~involves toworkforce bereductions ~~substantially~~and ~~completed~~related byseverance ~~the~~and ~~end~~termination ofbenefits. ~~the~~These ~~fourth~~actions ~~quarter~~are part of ~~fiscal~~management’s ~~year~~ongoing ~~2026;~~efforts ~~however,~~to align the ~~timing~~Company’s organizational structure and ~~total~~resources ~~amount~~with ofits ~~charges~~strategic ~~are~~priorities ~~subject~~and to ~~change~~streamline asoperations ~~implementation~~across ~~progresses~~business units.

The Company expects these initiatives to result in future cost savings and productivity improvements beginning in fiscal 2026. The restructuring activities are expected to be substantially completed by the end of fiscal year 2026; however, the timing and total amount of charges are subject to change as implementation progresses.

Other Income (Expense), net

	Three Months Ended September 30,
	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Other income (expense),net	$	(~~185~~387)	0(1)	%	$	~~(1,334)~~960	~~(2)~~1	%	$	(1,~~149~~347)	86(140)	%

The change in other income (expense), net during the three months ended ~~September~~December 3031, 2025 compared with the same period in fiscal 2025 was related primarily to fluctuations in foreign currency exchange rates during the three months ended ~~September~~December 3031, 2025.

Interest Income



	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Interest income	$	42	0	%	$	7	—	%	$	35	500	%

The change in interest income during the three months ended December 31, 2025 compared with the same period in fiscal 2025 was related primarily to higher average cash balances and prevailing interest rates during the three months ended December 31, 2025.

Interest Expense

	Three Months Ended September 30,
	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Interest expense	$	(65,~~227~~933)	(108)	%	$	(6,~~131~~840)	(910)	%	$	~~(96)~~907	2(13)	%

In the three months ended ~~September~~December 3031, 2025, interest expense ~~increased~~decreased $0.19 million, or 213%, as compared with the same period in fiscal 2025, primarily due to athe ~~higher~~exchange ~~effective~~of ~~interest~~Dialectic’s ~~rate~~portion of the Term Loan for the Convertible Note on ~~our~~December 18, 2025, which reduced the amount of Term Loan principal outstanding during the quarter.

Table of Contents

Warrant Liabilities

	Three Months Ended September 30,
	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Change in fair value of warrant liabilities	$	1,525	2	%	$	3,550	6	%	$	(2,025)	(57)	%
Change in fair value of warrant liabilities - Lender Warrants	$	—	—	%	$	(61,630)	(90)	%	$	61,630	100	%
Change in fair value of warrant liabilities - Forbearance Warrant	$	7,560	10	%	$	—	—	%	$	7,560	100	%

In the three months ended ~~September~~December 3031, 2025, we recorded a non-cash gain of $17.56 million related to the change in fair value of our Forbearance Warrant liabilities. In the three months ended ~~September~~December 3031, 2024, we recorded a non-cash ~~gain~~loss of $361.6 million related to the change in fair value of our Lender Warrant liabilities. These changes were primarily driven by fluctuations in our stock price.

Convertible Note



	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change

Change in fair value of Convertible Note	$	1,599	2	%	$	—	—	%	$	1,599	100	%

In the three months ended December 31, 2025, we recorded a non-cash gain of $1.6 million related to the change in fair value of our Convertible Note, primarily driven by changes in market inputs, including a lower stock price and updated volatility assumptions, and the December 31 exchange price reset based on the 30-day VWAP.

Loss on Debt Extinguishment

	Three Months Ended June 30,
	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Loss on debt extinguishment	$	(3328,~~254~~946)	(4842)	%	$	~~(2,308)~~—	~~(3)~~—	%	$	(3028,946)	~~1,341~~100	%

In the three months ended December 31, 2025, loss on debt extinguishment was related to the exchange of Dialectic’s portion of the Term Loan for the Convertible Note.

Income Taxes


	Three Months Ended December 31,
(dollars in thousands)	2025		% of pretax income		2024		% of pretax income		$ Change		% Change
Income tax provision	$	590	(2)	%	$	70	—	%	$	520	743	%

The income tax provision for the three months ended December 31, 2025 and 2024 is primarily influenced by foreign and state income taxes. Due to our history of net losses in the United States, the protracted period for utilizing tax attributes in certain foreign jurisdictions, and the difficulty in predicting future results, we believe that we cannot rely on projections of future taxable income to realize most of our deferred tax assets. Accordingly, we have established a full valuation allowance against our U.S. and certain foreign net deferred tax assets. Significant management judgment is required in assessing our ability to realize any future benefit from our net deferred tax assets. We intend to maintain this valuation allowance until sufficient positive evidence exists to support its reversal. Our income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, our valuation allowance.

Table of Contents

InComparison ~~September 30,~~of ~~2025, loss on debt extinguishment was related to~~ the ~~net~~Nine ofMonths ~~discount~~Ended onDecember ~~issuance~~31, ~~of term loans to a new lender~~ 2025 and ~~write-off of all unamortized debt issuance costs and fees. In September~~ ~~30,~~ 2024, ~~loss on debt extinguishment was related to prepayment of our long-term debt.~~

Income Taxes

	Three Months Ended September 30,
(dollars in thousands)	2025		% of pretax income		2024		% of pretax income		$ Change		% Change
Income tax provision	$	157	—	%	$	370	(3)	%	$	(213)	(58)	%

The income tax provision for the three months ended September 30, 2025 and 2024 is primarily influenced by foreign and state income taxes. Due to our history of net losses in the United States, the protracted period for utilizing tax attributes in certain foreign jurisdictions, and the difficulty in predicting future results, we believe that we cannot rely on projections of future taxable income to realize most of our deferred tax assets. Accordingly, we have established a full valuation allowance against our U.S. and certain foreign net deferred tax assets. Significant management judgment is required in assessing our ability to realize any future benefit from our net deferred tax assets. We intend to maintain this valuation allowance until sufficient positive evidence exists to support its reversal. Our income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, our valuation allowance.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA), which includes various tax law changes effective beginning in 2025; while the Act had no material impact on the Company’s third-quarter 2025 results, the Company is evaluating its future effects.

Comparison of the Six Months Ended September 30, 2025 and 2024

Revenue

	Six Months Ended September 30,
	Nine Months Ended December 31,
(dollars in thousands)	2025		% ~~ofrevenue~~of revenue		2024		% ~~ofrevenue~~of revenue		$ Change		% Change
Product revenue	$	72119,~~905~~375	5759	%	$	81120,~~931~~565	5756	%	$	(91,~~026~~190)	(111)	%
Service and subscription	5077,~~563~~082		4038	%	5684,~~915~~640		3940	%	(67,~~352~~558)		(119)	%
Royalty	35,~~534~~130		3	%	57,~~265~~592		4	%	(12,~~731~~462)		(3332)	%
Total revenue	$	~~127~~201,~~002~~587	100	%	$	~~144~~212,~~111~~797	100	%	$	(1711,~~109~~210)	(125)	%

Product Revenue

In the ~~six~~nine months ended ~~September~~December 3031, 2025, product revenue decreased $$91.02 million, or 111%, as compared to the same period in fiscal 2025. The primary driver of the decrease was in ~~Primary~~primary storage systems with a large video surveillance order in the prior period.

Service and Subscription Revenue

Service and subscription revenue decreased $67.46 million, or 119%, in the ~~six~~nine months ended ~~September~~December 3031, 2025 compared to the same period in fiscal 2025. This decrease was due to certain long-lived products reaching their end-of-service-life.

Royalty Revenue

We receive royalties from third parties that license our linear-tape open media patents through our membership in the linear-tape open consortium. Royalty revenue saw a decrease of $12.75 million, or 3332%, in the ~~six~~nine months ended ~~September~~December 3031, 2025 compared to the same period in fiscal 2025 due to both lower market volume and a mix weighted towards LTO types with lower royalty rates.

Table of Contents

Gross Profit and Margin

	Six Months Ended September 30,
	Nine Months Ended December 31,
(dollars in thousands)	2025		~~Grossmargin~~Gross margin %		2024		~~Grossmargin~~Gross margin %		$ Change		Basis point change
Product	$	1324,~~412~~271	1823.74	%	$	1927,~~601~~314	2422.27	%	$	(63,~~189~~043)	~~(550)~~70
Service and subscription	2945,~~320~~795		5962.31	%	3250,~~835~~686		6259.29	%	(34,~~515~~891)		~~(290)~~220
Royalty	35,~~534~~130		100.0	%	57,~~265~~592		100.0	%	(12,~~731~~462)		—
Gross profit	$	4675,~~266~~196	3738.68	%	$	5785,~~701~~592	4240.72	%	$	(1110,~~435~~396)	(~~510~~140)

Gross profit and margin percentages are key metrics that management monitors to assess the performance on the business.

Product Gross Margin

Product gross margin decreased by $63.20 million, or by ~~550~~70 basis points, for the ~~six~~nine months ended ~~September~~December 3031, 2025, as compared with the same period in fiscal 2025. This decrease was primarily due to an inventory provision accrued for certain end-of-life products, as well as supply chain logistics costs including import tariffs.

Service and Subscription Gross Margin

Service and subscription gross margins decreased ~~(290)~~by $4.9 million, or by 220 basis points for the ~~six~~nine months ended ~~September~~December 3031, 2025, as compared with the same period in fiscal 2025. This decrease was primarily driven by ~~reduced~~the ~~revenue~~reduction ~~as many long-lived products reach their end-~~of- service ~~life. To mitigate these declines,~~ costs ~~of service has been reduced~~ across the organization, including logistics, repair, and labor.

Royalty Gross Margin

Royalties do not have significant related cost of sales.

~~Operating Expenses~~29

	Six Months Ended September 30,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Sales and marketing	$	24,474	39	%	$	26,873	37	%	$	(2,399)	(9)	%
General and administrative	24,576		39	%	35,042		49	%	(10,466)		(30)	%
Research and development	12,353		20	%	16,572		23	%	(4,219)		(25)	%
Restructuring charges	5,616		9	%	1,574		2	%	4,042		257	%
Total operating expenses	$	67,019	107	%	$	80,061	111	%	$	(13,042)	(16)	%

In the six months ended September 30, 2025, sales and marketing expenses decreased $2.4 million, or 9%, as compared with the same period in fiscal 2025. This decrease was primarily driven by improved operational efficiency and increased leverage of our channel.

In the six months ended September 30, 2025, general and administrative expenses decreased $10.5 million, or 30%, as compared with the same period in fiscal 2025. This decrease was primarily driven by higher expense in the prior year related to compliance focused outside services.

In the six months ended September 30, 2025, research and development expenses decreased $4.2 million, or 25%, as compared with the same period in fiscal 2025. This decrease was the result of efficiencies realized through improved organization design, including the consolidation of common functions and increased weighting of resources in lower-cost regions.

In the six months ended September 30, 2025, restructuring expenses increased $4.0 million, or 257% as compared with the same period in fiscal 2025. The increase was the result of significant changes in management structure, and overall consolidation of resources designed to improve operational efficiencies and rationalize its cost structure. These actions are part of management’s ongoing efforts to align the Company’s organizational structure and resources with its strategic priorities and to streamline operations across business units. The restructuring plan primarily involves workforce reductions and related severance and termination benefits.

Table of Contents

Operating Expenses



	Nine Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Sales and marketing	$	37,451	19	%	$	39,321	18	%	$	(1,870)	(5)	%
General and administrative	34,621		17	%	49,186		23	%	(14,565)		(30)	%
Research and development	17,926		9	%	24,255		11	%	(6,329)		(26)	%
Restructuring charges	7,141		4	%	2,916		1	%	4,225		145	%
Total operating expenses	$	97,139	49	%	$	115,678	53	%	$	(18,539)	(16)	%

In the nine months ended December 31, 2025, sales and marketing expenses decreased $1.9 million, or 5%, as compared with the same period in fiscal 2025. This decrease was primarily driven by improved operational efficiency and increased leverage of our channel.

In the nine months ended December 31, 2025, general and administrative expenses decreased $14.6 million, or 30%, as compared with the same period in fiscal 2025. This decrease was primarily driven by higher expense in the prior year related to compliance focused outside services.

In the nine months ended December 31, 2025, research and development expenses decreased $6.3 million, or 26%, as compared with the same period in fiscal 2025. This decrease was the result of efficiencies realized through improved organization design, including the consolidation of common functions.

In the nine months ended December 31, 2025, restructuring expenses increased $4.2 million, or 145%, as compared with the same period in fiscal 2025. The increase was the result of significant changes in management structure, and overall consolidation of resources designed to improve operational efficiencies and rationalize its cost structure. These actions are part of management’s ongoing efforts to align the Company’s organizational structure and resources with its strategic priorities and to streamline operations across business units. The restructuring plan primarily involves workforce reductions and related severance and termination benefits.

The Company expects these initiatives to result in future cost savings and productivity improvements beginning in fiscal 2026. The restructuring activities are expected to be substantially completed by the end of the fourth quarter of fiscal year 2026; however, the timing and total amount of charges are subject to change as implementation progresses.

Other Income (Expense), net

	Six Months Ended September 30,
	Nine Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Other income (expense), net	$	(~~616~~1,261)	(1)	%	$	(~~1,375~~429)	(20)	%	$	~~759~~(832)	55(194)	%

The change in other income (expense), net during the ~~six~~nine months ended ~~September~~December 3031, 2025 compared with the same period in fiscal 2025 was related primarily to fluctuations in foreign currency exchange rates during the ~~three~~nine months ended ~~September~~December 3031, 2025.

Interest Income



	Nine Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Interest income	$	301	0	%	$	21	—	%	$	280	(1,333)	%

The change in interest income during the nine months ended December 31, 2025 compared with the same period in fiscal 2025 was related primarily to higher average cash balances and prevailing interest rates during the nine months ended December 31, 2025.

Table of Contents

Interest Expense

	Six Months Ended September 30,
	Nine Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Interest expense	$	(1218,~~743~~675)	(109)	%	$	(916,~~921~~761)	(78)	%	$	(21,~~822~~914)	2811	%

In the ~~six~~nine months ended ~~September~~December 3031, 2025, interest expense increased $0.1.9 million, or 211%, as compared with the same period in fiscal 2025 due to a higher effective interest rate on our Term Loan as well as increased amortization of deferred debt issuance costs.

Warrant Liabilities

	Six Months Ended September 30,
	Nine Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Change in fair value of warrant liabilities	$	1,525	1	%	$	5,216	4	%	$	(3,691)	(71)	%
Change in fair value of warrant liabilities - Lender Warrants	$	—	—	%	$	(56,414)	(27)	%	$	56,414	(100)	%
Change in fair value of warrant liabilities - Forbearance Warrant	$	9,085	5	%	$	—	—	%	$	9,085	100	%

In the ~~six~~nine months ended ~~September~~December 3031, 2025, we recorded a non-cash gain of $19.51 million related to the change in fair value of our ~~Forebearance~~Forbearance Warrant liabilities. In the ~~six~~nine months ended ~~September~~December 3031, 2024, we recorded a non-cash ~~gain~~loss of $556.24 million related to the change in fair value of our Lender Warrant liabilities. These changes were primarily driven by fluctuations in our stock price.

Convertible Note



	Nine Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change

Change in fair value of Convertible Note	$	1,599	1	%	$	—	—	%	$	1,599	100	%

In the nine months ended December 31, 2025, we recorded a non-cash gain of $1.6 million related to the change in fair value of our Convertible Note, primarily driven by changes in market inputs, including a lower stock price and updated volatility assumptions, and the December 31 exchange price reset based on the 30-day VWAP.

Loss on Debt Extinguishment

	Six Months Ended September 30,
	Nine Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Loss on debt extinguishment	$	(3059,~~695~~641)	(2430)	%	$	(3,003)	(21)	%	$	(2756,~~692~~638)	~~922~~1,886	%

In ~~September~~the nine months ended December 3031, 2025, loss on debt extinguishment was related to the ~~net~~exchange of ~~discount~~Dialectic’s onportion ~~issuance~~ of ~~term~~the ~~loans~~Term toLoan afor ~~new~~the ~~lender~~Convertible ~~and~~Note ~~write-off~~as ofwell ~~all~~as ~~unamortized~~the ~~debt~~loss which was recorded for the issuance ~~costs~~of ~~and~~new ~~fees~~term loans in September 2025. In ~~September~~the nine months ended December 3031, 2024, loss on debt extinguishment was related to prepayment of our long-term debt.

Income Taxes

	Six Months Ended September 30,
	Nine Months Ended December 31,
(dollars in thousands)	2025		% of pretax income		2024		% of pretax income		$ Change		% Change
Income tax provision	$	~~380~~970	—(2)	%	$	~~605~~675	~~(3)~~—	%	$	~~(225)~~295	~~(37)~~44	%

The income tax provision for the nine months ended December 31, 2025 and 2024 is primarily influenced by foreign and state income taxes. Due to our history of net losses in the United States, the protracted period for utilizing tax

Table of Contents

The income tax provision for the six months ended September 30, 2025 and 2024 is primarily influenced by foreign and state income taxes. Due to our history of net losses in the United States, the protracted period for utilizing tax attributes in certain foreign jurisdictions, and the difficulty in predicting future results, we believe that we cannot rely on projections of future taxable income to realize most of our deferred tax assets. Accordingly, we have established a full valuation allowance against our U.S. and certain foreign net deferred tax assets. Significant management judgment is required in assessing our ability to realize any future benefit from our net deferred tax assets. We intend to maintain this valuation allowance until sufficient positive evidence exists to support its reversal. Our income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, our valuation allowance.

LIQUIDITY AND CAPITAL RESOURCES

We consider liquidity in terms of the sufficiency of internal and external cash resources to fund our operating, investing and financing activities. Our principal sources of liquidity include cash from operating and financing activities, and cash and cash equivalents on our balance sheet. We require significant cash resources to meet obligations to pay principal and interest on our outstanding debt, provide for our research and development activities, fund our working capital needs, and make capital expenditures. Our future liquidity requirements will depend on multiple factors, including our ability to raise additional capital, research and development plans and capital asset needs.

We had cash and cash equivalents of $1413.72 million as of ~~September~~December 3031, 2025, which consisted primarily of bank deposits and money market accounts. As of ~~September~~December 3031, 2025, our total outstanding Term Loan debt was $~~106~~54.16 million.

We generated negative cash flows from operations of approximately $3237.54 million and $1720.23 million for the ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, respectively, and generated net losses of approximately $6391.75 million and $32107.03 million for the ~~six~~nine months ended ~~September~~December 3031, 2025 and 2024, respectively. We have funded operations through the sale of ~~Common~~common ~~Stock~~stock, Term Loan borrowings and PNC Credit Facility borrowings described in Note 4: Debt.

On January 25, 2025, ~~the~~we ~~Company~~ entered into the SEPA, ~~in which~~ pursuant to which, and subject to its terms, ~~the~~we ~~Company~~have ~~has~~ the right, but not the obligation, to sell up to $200 million of ~~Common~~our ~~Stock~~common atstock ~~any time~~ during the three-year period following the date of the SEPA. As of ~~September~~December 3031, 2025, ~~the~~we ~~Company~~sold ~~has issued~~ approximately 78.52 million shares of ~~Common~~common ~~Stock~~stock under the SEPA for net proceeds of approximately $8289.86 million~~, of~~. ~~which~~There ~~6.3~~were 0.7 million and 7.1 million shares of ~~Common~~common ~~Stock~~stock sold for net proceeds of approximately $665.9 0 million ~~were~~and ~~issued in the six months ended September 30, 2025~~$72. No0 ~~shares were issued~~ in the three and nine months ended ~~September 30~~December 31, 2025.

~~Our~~On December 18, 2025, we completed an exchange of Dialectic’s portion of the Term Loan ~~has~~for one or more senior secured Convertible Note with a three-year maturity. ~~date~~This exchange reduced the amount of the Term Loan principal scheduled to mature on August 5, 2026. However, we remain obligated to repay the remaining Term Loan balance at maturity. As discussed in Note 1: Description of Business and Summary of Significant Accounting Policies—Going Concern, we ~~believe~~do wenot ~~will~~expect ~~not~~to be able to ~~make~~repay the ~~required~~Term ~~repayment~~Loan onat ~~that~~maturity ~~date~~ using cash generated from operating activities. WeWhile ~~entered~~we ~~into~~intend ~~the Transaction Agreement that will convert Dialectic’s portion of the Term Loan into a Convertible Note with a three year maturity. We also agreed~~ to use ~~the~~ proceeds from the SEPA toand/or ~~repay~~other ~~the~~financing OCsources ~~III~~to ~~Lenders~~support ~~portion~~repayment of the remaining Term Loan. ~~The~~balance, ~~issuance of the Convertible Note is subject to stockholder approval and~~ there iscan be no assurance that itwe will be ~~approved. Also, we may not be~~ able to access ~~the SEPA to generate~~ sufficient ~~cash~~proceeds tounder ~~repay OC III Lenders by~~ the ~~maturity~~SEPA, ~~date.~~obtain Weadditional ~~may~~financing beon ~~unable~~acceptable toterms, ~~obtain~~or ~~additional~~at ~~funding from other sources~~all.

Cash Flows

The following table summarizes our condensed consolidated cash flows for the periods indicated.


	Nine Months Ended December 31,
(in thousands)	2025		2024

Cash provided by (used in):
Operating activities	$	(37,438)	$	(20,345)
Investing activities	(925)		(4,324)
Financing activities	35,569		19,415
Effect of exchange rate changes	32		(3)
Net decrease in cash, cash equivalents and restricted cash	$	(2,762)	$	(5,257)

Table of Contents

	Six Months Ended September 30,
(in thousands)	2025		2024
Cash provided by (used in):
Operating activities	$	(32,489)	$	(17,194)
Investing activities	(1,606)		(3,228)
Financing activities	32,791		11,525
Effect of exchange rate changes	30		(3)
Net decrease in cash, cash equivalents and restricted cash	$	(1,274)	$	(8,900)

Cash Used In Operating Activities

Net cash used in operating activities was $3237.54 million for the ~~six~~nine months ended ~~September~~December 3031, 2025. This use of cash was primarily attributed to ~~lower~~the ~~earnings~~net loss and changes in working capital, partially offset by non-cash charges including loss on debt extinguishment, paid-in-kind interest, and changes in the fair value of warrant liabilities and the Convertible Note.

Net cash used in operating activities was $1720.23 million for the ~~six~~nine months ended ~~September~~December 3031, 2024. This use of cash was primarily attributed to ~~lower~~net ~~earnings~~loss offset by non-cash charges, including a $56.4 million change in fair value of warrant liabilities, depreciation and amortization, stock-based compensation, paid-in-kind interest, and a loss on debt extinguishment. Working capital changes provided cash, including decreases in accounts receivable, inventories and prepaid expenses, partially offset by decreases in deferred revenue and accrued compensation.

Cash Used in Investing Activities

Net cash used in investing activities was $10.69 million in the ~~six~~nine months ended ~~September~~December 3031, 2025, which was attributable to capital expenditures.

Net cash used in investing activities was $34.23 million in the ~~six~~nine months ended ~~September~~December 3031, 2024, which was attributable to capital expenditures.

Cash Provided by Financing Activities

Net cash provided by financing activities was $3235.86 million for the ~~six~~nine months ended ~~September~~December 3031, 2025, which was related primarily to net borrowings, onthe ~~our~~issuance ~~Term~~of ~~Loan~~the Convertible Note, and proceeds from the SEPA, partially offset by repayments of long-term debt and credit facility borrowings.

Net cash provided by financing activities was $1119.54 million for the ~~six~~nine months ended ~~September~~December 3031, 2024, ~~which~~primarily ~~was~~reflecting ~~related~~borrowings ~~primarily~~under tothe ~~proceeds~~revolving ~~from~~credit ~~shares~~facility ~~issued~~and ~~under~~issuance ~~the~~of ~~SEPA~~long-term debt, partially offset by repayments of long-term debt and revolver borrowings.

Commitments and Contingencies

Our contingent liabilities consist primarily of certain financial guarantees, both express and implied, related to product liability and potential infringement of intellectual property. We have little history of costs associated with such indemnification requirements and contingent liabilities associated with product liability may be mitigated by our insurance coverage. In the normal course of business to facilitate transactions of our services and products, we indemnify certain parties with respect to certain matters, such as intellectual property infringement or other claims. We also have indemnification agreements with our current and former officers and directors. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of our indemnification claims, and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these agreements have not had a material impact on our operating results, financial position or cash flows.

We are also subject to ordinary course litigation. See Note ~~10:~~11, Commitments and Contingencies to the unaudited condensed consolidated financial statements for a discussion of our legal matters.

Off Balance Sheet Arrangements

Except for the indemnification commitments described under “Commitments and Contingencies” above, we do not currently have any other off-balance sheet arrangements and do not have any holdings in variable interest entities.

Table of Contents

Contractual Obligations

We have contractual obligations and commercial commitments, some of which, such as purchase obligations, are not recognized as liabilities in our condensed consolidated financial statements. There have not been any material changes to the contractual obligations disclosed in the Annual Report.

Table of Contents

Critical Accounting Estimates and Policies

The preparation of our condensed consolidated financial statements in accordance with generally accepted accounting principles requires management to make judgments, estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report. On an ongoing basis, we evaluate estimates, which are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. We consider certain accounting policies to be critical to understanding our financial statements because the application of these policies requires significant judgment on the part of management, which could have a material impact on our financial statements if actual performance should differ from historical experience or if our assumptions were to change. Our accounting policies that include estimates that require management’s subjective or complex judgments about the effects of matters that are inherently uncertain are summarized in the Annual Report under the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates and Policies.” For additional information on our significant accounting policies, see Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

Recently Issued and Adopted Accounting Pronouncements

See Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our quantitative and qualitative disclosures about market risk from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Annual Report, which such section is incorporated herein by reference.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive and principal financial officers, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report. Based on such evaluation, our principal executive and principal financial officers have concluded that as of such date, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

Notwithstanding the identified material weaknesses, management, including our chief executive officer and principal financial officer have determined, that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, for the periods presented in accordance with U.S. generally accepted accounting principles.

Material Weaknesses in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

Management did not adequately design and implement effective control activities resulting in the identification of the following material weaknesses:

Table of Contents

Revenue Recognition

The Company did not maintain effective internal controls related to revenue recognition for the following:

•Controls related to the Company’s accounting practices and procedures for application of standalone selling price under Accounting Standards Codification Topic 606 Revenue from Contracts with Customers (“Topic 606”). Specifically, the Company did not have adequate controls in place to conclude on the application of standalone selling price consistent with the generally accepted application of the guidance in Topic 606.

Table of Contents

606”). Specifically, the Company did not have adequate controls in place to conclude on the application of standalone selling price consistent with the generally accepted application of the guidance in Topic 606.

•Controls over the accuracy of the inputs in the sales order entry process. Specifically, the Company did not sufficiently execute controls over the review of data inputs in the sales order entry process to ensure accuracy of the price, quantity, and related customer data.

•Controls for reviewing and updating deferral schedules, which drives the timing of service revenue recognition. Specifically, the start and end dates in the deferral schedules were not consistently aligned with the contractual service periods.

Manufacturing Inventory

The Company did not maintain effective internal controls related to manufacturing inventory. Specifically, controls to assess the accuracy of inventory held at third-party locations were not adequately executed.

Control Environment

Based on the material weaknesses identified in revenue recognition and manufacturing inventory, management concluded that the Company did not maintain effective entity-level controls within the control environment to prevent or detect material misstatements to the condensed consolidated financial statements. Specifically, the Company (i) lacked sufficiently qualified staff or resources to perform control activities and (ii) conducted inadequate risk assessment and monitoring activities resulting in untimely or ineffective identification of internal control risks to support the design implementation and evaluation of the internal controls necessary to provide effective oversight over financial reporting.

Remediation Plan

The Company has implemented and is continuing to implement enhancements to address the identified material weaknesses. Actions include:

•Reviewing and updating relevant policies, procedures, and controls; this may include automation of certain controls within the ERP system where appropriate.

•Providing additional training to personnel responsible for executing and reviewing key controls.

•Enhancing efforts to assess risk and monitor the effectiveness of control design and operation over time.

•Engaging third-party specialists to assist the Company in assessing and establishing standalone selling price. While this has been completed, efforts are ongoing to increase automation in the calculation of standalone selling price.

•Engaging third-party specialists to help design and implement a control that reviews draft invoices above specified thresholds against customer purchase orders to assess the accuracy of the inputs in the sales order entry process prior to invoicing.

The Company is committed to maintaining a strong internal control environment and believes the remediation efforts will represent significant improvements in its controls over the control environment. These steps will take time to be fully implemented and confirmed to be effective and sustainable. Additional controls may also be required over time. While the Company believes that these efforts will improve its internal control over financial reporting, the Company will not be able to conclude whether the steps the Company is taking will remediate the material weaknesses in internal control over financial reporting until a sufficient period has passed to allow management to test the design and operational effectiveness of the new and enhanced controls. Until the remediation steps set forth above are fully implemented and tested, the material weaknesses will continue to exist.

Changes in Internal Control

~~During the quarter ended September 30, 2025, Lewis Moorehead resigned as CFO effective August 18, 2025 and Laura Nash was appointed principal financial officer in his place.~~ Except for the ongoing remediation measures to address the material weaknesses, in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act, there were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September~~December 3031, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Subsequent to December 31, 2025, the Company appointed a new Chief Financial Officer. Management believes this appointment enhances the Company’s financial leadership and supports the continued remediation of the material weaknesses described above. The appointment did not result in any changes to the design or operation of internal control over financial reporting during the quarter ended December 31, 2025.

Limitations on Effectiveness of Controls

Table of Contents

Limitations on Effectiveness of Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note ~~10:~~11, Commitments and Contingencies to the unaudited condensed consolidated financial statements for a discussion of our legal matters.

ITEM 1A. RISK FACTORS

There have been no material changes to the previously disclosed risk factors discussed in “Part I, Item 1A, Risk Factors” in the Annual Report. You should consider carefully these factors, together with all of the other information in this Quarterly Report, including our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report, before making an investment decision.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangement

During the period covered by this Quarterly Report, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Table of Contents

ITEM 6. EXHIBITS

The exhibits required to be filed or furnished as part of this Quarterly Report are listed below. Notwithstanding any language to the contrary, exhibits 32.1 and 32.2 shall not be deemed to be filed as part of this Quarterly Report for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act of 1933, except to the extent that the Company specifically incorporates it by reference.

Incorporated by Reference

ExhibitNumber

Exhibit Description

Form

Filing Date

Exhibit

Filed or Furnished Herewith

3.1

Amended and Restated Certificate of Incorporation of the Company, as amended through August 26, 2024

S-1

1/27/25

3.1

3.2

Amended and Restated Bylaws, as amended through June 12, 2025

8-K

6/18/25

3.1

4.1

~~Warrant~~Indenture to(including ~~Purchase~~form ~~Common~~of ~~Stock~~10.00% PIK Senior Secured Convertible Note due 2028) dated ~~September~~December 2318, 2025, ~~issued~~by toand ~~Dialectic~~among ~~Technology~~the ~~SPV~~Company, ~~LLC~~the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent

8-K

912/2318/25

4.1

4.2

Registration Rights Agreement dated ~~September~~December 2318, 2025, by and between the Company and Dialectic Technology SPV LLC

8-K

912/2318/25

4.2

10.1#

~~Offer~~Quantum ~~Letter~~Corporation ~~dated~~2023 ~~August~~Long-Term 27Incentive Plan, ~~2025~~as byamended and ~~between~~restated ~~the~~through ~~Company~~October ~~and~~20, ~~James C. Clancy~~2025

~~8-K~~

~~8/28/25~~

~~10.1~~

10.2#

~~Offer~~Amendment ~~Letter~~No. ~~dated~~2 ~~August~~to ~~27,~~Quantum ~~2025~~Corporation by2021 ~~and~~Inducement ~~between~~Plan, ~~the~~dated ~~Company~~January ~~and~~8, ~~Tony J. Blevins~~2026

~~8-K~~

~~8/28/25~~

~~10.2~~

10.3*

Transaction Agreement dated September 23, 2025 by and among the Company, Dialectic Technology SPV LLC, OC III LVS XXXIII LP., and OC III LVS XL LP

8-K

9/23/25

10.1

10.4*

Fifteenth Amendment to Term Loan Credit and Security Agreement dated September 23, 2025 by and among the Company, Quantum LTO Holdings, LLC, the borrowers and guarantors party thereto, the lenders party thereto, and Alter Domus (US) LLC, as disbursing agent and collateral agent

8-K

9/23/25

10.2

10.5#

Settlement Agreement dated July 16, 2025 by and between Quantum Storage UK Ltd and H.J.W. Spanjaard

10.6#

Separation Agreement and General Release of Claims dated August 20, 2025, by and between the Company and Lewis W. Moorehead

31.1

Certification of the Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002

32.1^

Certification of Principal Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

32.2^

Certification of Principal Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover page interactive data file, submitted using inline XBRL (contained in Exhibit 101)

* Schedules and attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules and attachments upon request by the Securities and Exchange Commission.

# Indicates management contract or compensatory plan or arrangement.

^ This exhibit is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after date hereof and irrespective of any general incorporation language contained in such filing.

Table of Contents

SIGNATURES

Pursuant to the requirements 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.

Quantum Corporation

(Registrant)

November 13, 2025

/s/ Hugues Meyrath

February 17, 2026

/s/ Hugues Meyrath

(Date)

Hugues Meyrath

President and Chief Executive Officer

(Principal Executive Officer)

November 13, 2025

/s/ Laura A. Nash

February 17, 2026

/s/ William H. White

(Date)

~~Laura~~William AH. ~~Nash~~White

Chief Accounting Officer

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

(Principal Financial Officer)

Filing Compare · QUANTUM CORP /DE/