UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


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

For the fiscal year ended March 31, ~~2025~~2026


☐			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

~~224 Airport Parkway, Suite 550, San Jose, CA 95110~~ (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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes

☒

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

o☒

Non-accelerated filer

☒o

Smaller reporting company

☒

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

o☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

☒o

Indicate by check mark whether any of those errors corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

☒o

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 last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant's common stock held by its non-affiliates, computed by reference to the price at which the common stock was last sold, was $12116,~~780~~791,~~611~~817.

As of ~~August~~June 2524, ~~2025~~2026, there were 1339,~~319~~374,~~249~~500 shares of Quantum Corporation’s common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The portions of the registrant's proxy statement to be filed in connection with the Annual Meeting of Stockholders to be held in 2026 have been incorporated by reference into Part III of this Annual Report on Form 10-K.

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QUANTUM CORPORATION

ANNUAL REPORT ON FORM 10-K

For the Year Ended March 31, ~~2025~~2026

Table of Contents

		PageNumber
Explanatory Note		3
Note Regarding Forward-Looking Statements		3
Summary of Risk Factors		4
Note Regarding Forward-Looking Statements		5
	PART I
Item 1.	Business	65
Item 1A.	Risk Factors	1211
Item 1B.	Unresolved Staff Comments	3026
Item 1C.	Cybersecurity	3026
Item 2.	Properties	3127
Item 3.	Legal Proceedings	3127
Item 4.	Mine Safety Disclosures	3127
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3228
Item 6.	[Reserved]	3329
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3430
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4741
Item 8.	Financial Statements and Supplementary Data	4942
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8985
Item 9A.	Controls and Procedures	8985
Item 9B.	Other Information	9087
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	9187
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	9287
Item 11.	Executive Compensation	9488
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~102~~88
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~104~~88
Item 14.	Principal Accounting Fees and Services	~~105~~88
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	~~107~~89
Item 16.	Form 10-K Summary	~~113~~96
	Signatures	~~114~~97
	Power of Attorney	~~114~~97

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Note Regarding Forward-Looking Statements

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

~~EXPLANATORY~~This ~~NOTE~~Annual 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; 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 claims and disputes; the ability to meet stock exchange continued listing standards; the possibility that the Nasdaq may delist our securities; our ability to remediate the material weaknesses in our internal control over financial reporting and to maintain effective internal control over financial reporting following remediation; risks related to changes in our management; and those risks described under 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.

As disclosed in the Current Report on Form 8-K filed on August 8, 2025, in June 2025, the Company determined that it recognized service and subscription revenue inconsistently during the fiscal year ended March 31, 2025. Under Accounting Standards Codification Topic 606 (“Topic 606”), this revenue should be deferred and recognized ratably over the term of the contract. The Company’s management recalculated 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. It was determined that no contracts entered into prior to fiscal year ended March 31, 2025 were impacted. The Company also determined that the standalone selling price that is used to allocate revenue under Topic 606 needed to be updated for the fiscal year ended March 31, 2025 resulting in an adjustment to revenue. As a result of these errors and as noted in the Current Report on Form 8-K filed on August 8, 2025, the Company is restating the financial statements for the periods referenced below (the “Restatement”).

This Annual Report for the year ended March 31, 2025 includes the following information:

a.Restated unaudited interim Condensed Consolidated Financial Information for the three and nine months ended December 31, 2024; and

b.Amended Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) related to the three and nine months ended December 31, 2024.

For more information, see Note 14: Restatement of Unaudited Quarterly Financial Statements in Item 8. Financial Statements and Supplementary Data of this Annual Report.

In connection with the restatement, the Audit Committee of the Company's Board of Directors concluded, with concurrence of management, that there were deficiencies in the Company’s internal control over financial reporting and the Company’s disclosure controls and procedures that constituted material weaknesses as of December 31, 2024 and March 31, 2025. As further discussed in Item 9A. Controls and Procedures of this Annual Report, management has concluded that the Company did not maintain effective disclosure controls and procedures, and internal control over financial reporting resulting in material weaknesses as of March 31, 2025, and further concluded that the material weaknesses applied to the Quarterly Report on Form 10-Q for the quarter ended December 31, 2024.

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Summary of Risk Factors

Our business is subject to numerous risks and uncertainties, many of which are beyond our control. Some of the principal risks associated with our business include the following:

•Cost increases, supply disruptions, or raw material shortages, including in single source components, could harm our business.

•We outsource our component supply, manufacturing, and service repair operations to third parties. Our business, financial condition, and operating results could face material adverse impacts if we cannot obtain parts, products, and services in a cost effective and timely manner that meets our customers’ expectations.

•Cost increases, supply disruptions, or raw material shortages, including in single source components, could harm our business.

•As a result of our global manufacturing and sales operations, we are subject to a variety of risks related to our business outside of the U.S., any of which could, individually or in the aggregate, have a material adverse effect on our business.

•Our stock price has experienced significant volatility in the past, and continued volatility may cause our common stock trading price to remain volatile or decline.

•Significant changes to our leadership team and management transitions might harm our future operating results.

•If we do not continue to meet all of the continued listing requirements of Nasdaq, we may be delisted.

•Our quarterly operating results have fluctuated significantly, and past results should not be used to predict future performance.

•We have significant indebtedness, which imposes upon us debt service obligations, and our term loan and revolving credit facilities contain various operating and financial covenants that limit our discretion in operating our business. If we are unable to generate sufficient cash flows from operations and overall operating results to meet these debt obligations or remain in compliance with the covenants, our business, financial condition and operating results could be materially and adversely affected.

•We must maintain compliance with the terms of our existing credit facilities or receive a waiver for any non-compliance. The failure to do so could have a material adverse effect on our ability to finance our ongoing operations and we may not be able to find an alternative lending source if a default occurs.

•If we do not successfully manage the changes that we have made and may continue to make to our business model, infrastructure, and management, our business could be disrupted, and that could adversely impact our operating results and financial condition.

•We have taken considerable steps towards reducing our cost structure. The steps we have taken may not reduce our cost structure to a level appropriate in relation to our future sales and therefore, these cost reductions may be insufficient to achieve profitability.

•Some of our products contain licensed, third-party technology that provides important product functionality and features. The loss or inability to obtain any such license could have a material adverse effect on our business.

•We have restated certain of our prior consolidated financial statements, which has resulted in unanticipated costs and may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on our stock price.

•We have identified material weaknesses in our internal control over financial reporting, which could, if not properly remediated, result in additional material misstatements in our interim or annual consolidated financial statements, could impair our ability to produce accurate and timely financial statements and could adversely affect investor confidence in our financial reports, which could negatively affect our business.

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Note Regarding Forward-Looking Statements

This Annual 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; 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 claims and disputes; the ability to meet stock exchange continued listing standards; the possibility that the Nasdaq may delist our securities; 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 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.

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PART I

ITEM 1. BUSINESS

Overview

Quantum delivers end-to-end data management solutions designed for unstructured data in the artificial intelligence ("AI") era. From high-performance ingest that powers AI applications and demanding data-intensive workloads to massive, durable data lakes to fuel AI models, Quantum delivers one of the most comprehensive and cost-efficient solutions for the entire data lifecycle. We specialize in solutions for video, images, audio, and other large files because this unstructured data represents more than 80% of all data being created according to leading industry analyst firms. Unstructured data poses both immense potential and significant challenges for organizations looking to retain and analyze their data for AI and other initiatives. Effectively managing and leveraging this data with an intelligent data management platform is not just an option but a necessity for businesses aiming to uncover hidden insights and create value. Unstructured data is exponentially larger than traditional corporate data, contains tremendous value, and must be captured, protected, and stored for many years, decades, and longer. It is no longer just about storing data— organizations need to extract value from their unique data to gain a competitive advantage. Locked inside video, imagery, security camera footage, scientific data sets, and other sensor-derived data is a wealth of information for informed decision-making.

Products and Services

Our portfolio of products includes primary storage software and systems, secondary storage software and systems, as well as devices and media.

Highly ~~Performant~~Performance Primary Storage Software and Systems include:

•Myriad All-Flash Software-Defined Storage: All-flash scale-out file and object storage for high performance enterprise unstructured data applications such as AI, machine learning, and data analytics.

•StorNext Hybrid Flash/Disk File Storage Software: For video editing, post-production, and streaming applications, as well as large digital file archives.

•Unified Surveillance Platform Software: Unified compute and storage for video surveillance recording, storage, and analytics.

Highly Efficient Cost-per-Terabyte Secondary Storage Software and Systems include:

•ActiveScale Object Storage Software: Extremely scalable and durable storage for building massive data lakes, storage clouds, and cold archives.

•DXi Backup Appliances: Purpose-built backup appliances for high-speed backup and recovery and multisite data protection.

•Scalar Tape Storage: Low-cost, secure storage for long-term data archiving and offline data protection. Scalar tape storage systems are used by the world’s largest hyperscalers as well as thousands of enterprises worldwide.

CatDV Asset Management Software: For indexing, cataloging, AI data enrichment, and workflow orchestration, making data easily searchable and accessible so it can contribute to business insights.

Devices and Media includes the sale of standalone linear-tape open tape drives for small business data protection and archiving, and linear-tape open media for use in tape storage systems.

We also offer a broad portfolio of services including 24x7x365 global support, deployment and consulting services, education services, and Quantum-as-a-Service. Our services are delivered with a combination of expertise and technology, including the MyQuantum Service Delivery Platform, and Cloud-Based Analytics ("CBA") AIOps software for proactive remote monitoring.

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Global Support and Services, and Warranty

Our global services strategy is an integral component of our total customer solution. Service is typically a significant purchase factor for customers considering long-term storage for archiving and retention or data protection storage solutions. Consequently, our ability to provide comprehensive installation and integration services as well as maintenance services can be a noteworthy competitive advantage to attract new customers and retain existing customers. In addition, we believe that our ability to retain long-term customer relationships and secure repeat business is frequently tied directly to our comprehensive service capabilities and performance.

Our extensive use of technology and innovative product intelligence allows us to scale our global services operations to meet the needs of our customers. We are currently able to provide service to customers in more than 100 countries, supported by 24-hour, multi-language technical support centers located in North America, Europe, and Asia. We provide our customers with warranty coverage on our products. Customers with high availability requirements may also purchase additional services to obtain faster response times on our high-performance shared storage systems, tape systems, and disk backup systems. We offer this additional support coverage at a variety of response levels up to 24-hours a day, seven-days-a-week, 365-days-a-year, for customers with stringent high-availability needs. We provide support ranging from repair and replacement to 24-hour rapid exchange to on-site service support for our midrange and enterprise-class products. In addition to these traditional installation and maintenance services, we also provide project management, managed services, and other value-added services to enhance our customer’s experience and engagement. These incremental services create a deeper relationship with customers that enables them to maximize the value of our solution and better positions us to retain our customers through technology transitions.

We generally warrant our hardware products against defects for periods ranging from one to three years from the date of sale. We provide warranty and non-warranty repair services through our service team and third-party service providers. In addition, we utilize various other third-party service providers throughout the world to perform repair and warranty services for us to reach additional geographic areas and industries to provide quality services in a cost-effective manner.

Research and Development

We are a solutions company that relies on technology advancements to compete in an industry characterized by rapid change and evolving customer requirements. Our success depends, in part, on our ability to introduce new products and features to meet end user needs. Our research and development teams are focused on technology and services to make our end-to-end solution of storage systems and data management software easier to manage at scale, software enhancements to make our storage more searchable and accessible, software-defined hyperconverged storage technology, next generation solid-state and hard-drive storage system software, data deduplication and other data reduction technologies, and making tape and other mediums even more efficient as a solution for medium for long term archival storage.

Sales and Distribution Channels

Product Sales Channels

We utilize distributors, value-added resellers ("VARs") and direct market resellers ("DMRs") in our sales process. Our reseller program provides our channel partners the option of purchasing products directly or through distribution channels and provides them access to a more comprehensive product line. Additionally, we sell directly to multiple large corporate entities and government agencies.

OEM Relationships

We sell our products to several original equipment manufacturer ("OEM") customers that resell our hardware products under their own brand names and typically assume responsibility for product sales, end user service and support. We also license our software to certain OEM customers that include this software in their own brand name products. These OEM relationships enable us to reach end users not served by our branded distribution channels or our direct sales force. They also allow us to sell to select geographic or vertical markets where specific OEMs have exceptional strength.

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Customers

We provide solutions to multiple industries globally. Historically, our primary customers are in hyperscale, technology and industrial, media and entertainment, federal government, life sciences and healthcare, and financial industries. In addition, we sell to OEMs, distributors, VARs and DMRs to reach end user customers. Sales to our top five customers represented 21% and 26% of revenue in fiscal 2025 and fiscal 2024, respectively, of which none of our customers represented 10% or more of our total fiscal 2025 revenue.6

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We provide solutions to multiple industries globally. Historically, our primary customers are in hyperscale, technology and industrial, media and entertainment, federal government, life sciences and healthcare, and financial industries. In addition, we sell to OEMs, distributors, VARs and DMRs to reach end user customers. Sales to our top five customers represented 27% and 21% of revenue in fiscal 2026 and fiscal 2025, respectively, of which one customer represented more than 10% of total fiscal 2026 revenue and none of our customers represented 10% or more of our total fiscal 2025 revenue.

Competition

The markets in which we participate are highly competitive, characterized by rapid technological change and changing customer requirements. In some cases, our competitors in one market area are customers or suppliers in another. Our competitors often have greater financial, technical, manufacturing, marketing, or other resources than we do. Additionally, the competitive landscape continues to change due to merger and acquisition activity as well as new entrants into the market.

As our customers look to use ~~more~~both public and private cloud storage services, these ~~providers~~options offer a competitive alternative, as well as new platforms and new ways to deploy our software. We expect that the data storage infrastructures of the future will be both hybrid-cloud and multi-cloud, meaning our customers will store their data in the various large public cloud environments, and also want to use services from multiple public cloud vendors, and also evaluate private cloud solutions.

Our primary storage solutions, including object storage systems, primarily face competition from the EMC business unit of Dell Inc. (“Dell”), International Business Machines Corporation, (“IBM”), NetApp, Inc., and other enterprise storage vendors in the markets we serve.

Our secondary storage solutions, primarily tape storage systems, compete in the midrange and enterprise reseller and end user markets with IBM and other tape library vendors. Competitors for entry-level and OEM tape systems include BDT Products, Inc. and several others that supply or manufacture similar products. In addition, disk backup products and cloud storage are an indirect competitive alternative to tape storage. Our backup storage systems primarily compete with products sold by Dell, Hewlett Packard Enterprise Company and Veritas Technologies LLC.

Manufacturing and Supply Chain

Quantum has a global supply chain and operations organization, with contract manufacturers located in the U.S. and Mexico along with supporting third-party logistics companies in the Europe, Middle East, and Africa region (“EMEA”), and the Asia-Pacific region, or (“APAC”). Our supply chain and manufacturing strategy minimizes geo-political and environmental causal risks and provides flexibility to support demand fluctuations by region.

Quantum primary storage and secondary disk-based storage systems are sold as appliances that combine Quantum software with servers that are procured from various server vendors. Quantum sources these servers from various vendors, then uses contract manufacturers for final integration and shipment to customers. Quantum's tape storage systems are designed by Quantum and manufactured by a global contract manufacturer.

Tape media is manufactured in Japan and distributed globally.

The global supply chain and logistics have been severely constrained and impacted by inflationary pricing for the past couple of years as well as import tariffs in the current year. While we are cautiously optimistic and see signs of improvement over the past year with supply of both server and tape automation components, we continue to ~~see~~experience some constraints. While some components continue to have extended lead times and often non-cancellable purchase orders are required, Quantum continues to work with suppliers to minimize lead times and associated liabilities. We continue to focus on a number of actions including alternate component qualifications, more aggressive management of contract manufacturers, and model changes for better logistics performance and visibility.

Intellectual Property and Technology

8We generally rely on patent, copyright, trademark and trade secret laws and contract rights to establish and maintain our proprietary rights in our technology and products. As of March 31, 2026, we hold 166 U.S. patents. In general, these patents have a 20-year term from the first effective filing date for each patent. We may also hold

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We generally rely on patent, copyright, trademark and trade secret laws and contract rights to establish and maintain our proprietary rights in our technology and products. As of March 31, 2025, we hold over 198 U.S. patents. In general, these patents have a 20-year term from the first effective filing date for each patent. We may also hold foreign patents and patent applications for certain of our products and technologies. Although we believe that our patents and applications have significant value, rapidly changing technology in our industry means that our future success may also depend heavily on the technical competence and creative skills of our employees.

From time to time, third parties have asserted that the manufacture and sale of our products have infringed on their patents. We are not knowingly infringing any third-party patents. Should it ultimately be determined that licenses for third-party patents are required, we will undertake best efforts to obtain such licenses on commercially reasonable terms. See Note 10: Commitments and Contingencies for additional disclosures regarding lawsuits alleging patent infringement.

On occasion, we have entered into various patent licensing and cross-licensing agreements with other companies. We may enter into patent cross-licensing agreements with other third parties in the future as part of our normal business activities. These agreements, when and if entered into, would enable these third parties to use certain patents we own and enable us to use certain patents owned by these third parties. We have also sold certain patents, retaining a royalty-free license for these patents.

We are a member of the consortium that develops, patents, and licenses linear-tape open, technology to media manufacturing companies. We receive royalty payments for linear-tape open media technology sold under licensing agreements. We have also entered into various licensing agreements with respect to our technology, patents and similar intellectual property which provide licensing revenues in certain cases and may expand the market for products and solutions using these technologies.

Segment Information

We operate as a single reporting unit and operating segment for business and operating purposes. Information about revenue attributable to each of our product groups is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and information about revenue and long-lived assets attributable to certain geographic regions is included in Note 12 : Segment Information and Note 3 : Balance Sheet Information, respectively, to the consolidated financial statements and risks attendant to our foreign operations is set forth below in Item 1A. Risk Factors.

Seasonality

We generally have the greatest demand for our products and services in the fourth quarter of each calendar year, or our fiscal third quarter. We usually experience the lowest demand for our products and services in the second quarter of each calendar year, or our fiscal first quarter.

Information About Our Executive Officers

Following are the names and positions of our management team as of ~~August~~June 1, ~~2025~~2026, including a brief account of the business experience of each.

Name Position with Quantum Hugues Meyrath President and Chief Executive Officer ~~Lewis~~William WH. ~~Moorehead~~White Chief Financial Officer Anthony Craythorne Chief Revenue Officer Laura A. Nash Chief Accounting Officer

Hugues Meyrath, 5556, was appointed as President and Chief Executive Officer of the Company, effective June 2, 2025. Mr. Meyrath has served on the Board of Directors ("Board") since September 2022, and serves as an advisor to startup companies. Mr. Meyrath served as ~~chief~~Chief ~~product~~Product ~~officer~~Officer of ServiceChannel from January 2017 through December 2021, a provider of SaaS-based multi-site solutions, which was acquired by Fortive Corporation, a provider of connected workflow solutions, in 2021. Following the acquisition, Mr. Meyrath continued to serve as an advisor to ServiceChannel until August 2022. Prior to that, he served as ~~vice~~Vice ~~president~~President at Dell Technologies Capital, a venture capital arm of Dell Technologies that invests in enterprise and cloud infrastructure, where he was responsible for driving venture funding and mergers and acquisitions, while also holding advisory roles for portfolio companies. Prior to its acquisition by Dell Technologies Capital, he served as Vice President of Product Management and Business Development for EMC Corporation’s backup and recovery services, which offers data protection and business continuity products. Mr. Meyrath previously held senior leadership roles at Juniper Networks, Brocade Communications and SBS Corp, and was an employee of the Company from January 2002 to

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driving venture funding and mergers and acquisitions, while also holding advisory roles for portfolio companies. Prior to its acquisition by Dell Technologies Capital, he served as vice president of product management and business development for EMC Corporation’s backup and recovery services, which offers data protection and business continuity products. Mr. Meyrath previously held senior leadership roles at Juniper Networks, Brocade Communications and SBS Corp, and was an employee of the Company from January 2002 to September 2003. Mr. Meyrath holds a ~~bachelor~~Bachelor’s degree in ~~engineering~~Engineering from the University of Louvain in Belgium and an MBA from the University of California, Berkeley.

~~Lewis~~William ~~Moorehead~~H. White, 5344, has served as our Chief Financial Officer ~~from~~since ~~April~~February ~~2025~~2026. Prior to ~~August~~that, ~~2025.~~he Heserved ~~previously~~in ~~served~~various capacities at Emotive, a software development company, including as ~~Vice-President~~Chief ofFinancial ~~Finance~~Officer and ~~Treasurer~~Head of Revenue Operations, from ~~June~~January ~~2023~~2024 to ~~April~~August 2025, and ~~Chief~~as ~~Accounting~~Vice ~~Officer~~President of Finance and Head of Revenue Operations, from ~~October~~June ~~2018~~2022 to ~~June~~December 2023. ~~Prior~~From April 2021 to ~~joining~~June ~~Quantum~~2022, Mr. ~~Moorehead~~White ~~was~~served ~~the~~as ~~Director~~Fractional ofCFO ~~Finance,~~and ~~Accounting~~Strategic ~~and~~Finance ~~Tax~~Consultant at ~~Carvana~~VUCA Strategies, ~~Co.~~a ~~(NYSE:~~business ~~CVNA),~~consulting aand ~~publicly~~services ~~traded~~company. ~~on-line~~He ~~retailer,~~served ~~from~~as ~~November~~Head ~~2016~~of toRevenue ~~October~~at ~~2018.~~Human ~~From~~AI ~~September~~Labs ~~2004~~Inc. to(dba ~~October~~Personal ~~2016~~AI), hean ~~served~~artificial asintelligence ~~Managing~~technology ~~Partner~~company, atfrom ~~Quassey,~~September an2020 ~~investment~~to ~~firm~~April 2021. ~~While~~Prior atto ~~Quassey~~that, heMr. ~~also~~White served as ~~Vice~~Director ~~President~~ of ~~Finance~~Corporate ~~and~~Development ~~Principal~~& ~~Accounting~~Finance ~~Officer~~ at ~~Edgio,~~Affordify Inc., ~~(f/k/~~a ~~Limelight~~financial ~~Networks)~~services ~~(Nasdaq: EGIO)~~company, afrom ~~NASDAQ-listed~~2017 ~~global~~to ~~content~~2020. ~~delivery~~From ~~network~~2009 ~~and~~to ~~SaaS provider~~2020, ~~from~~he ~~March~~held ~~2010~~various toroles ~~August~~at ~~2013.~~Goldbum HeLentz ~~has~~& ~~also~~Co., ~~held~~an ~~finance~~investment banking and ~~accounting~~business ~~positions~~brokerage atfirm, ~~eTelecare~~including ~~Global~~Investment ~~Solutions,~~Banking ~~Rivers~~Partner ~~and~~from ~~Moorehead~~2015 ~~PLLC,~~to ~~Intelligentias,~~2020. ~~Inc~~Mr., ~~American~~White ~~Express~~holds ~~and~~an ~~PricewaterhouseCoopers.~~MBA Hefrom ~~holds~~the aUniversity ~~Bachelor~~ of ~~Business~~Denver ~~Administration~~and (a B.B.A.), ~~in Accounting~~ from the University of ~~Wisconsin~~Colorado Boulder. He currently serves as Board Member for Destination Imagination Colorado, a 501(c)(3) non-~~Whitewater~~profit.

Anthony Craythorne, 5657, ~~was~~has ~~appointed~~served as our Chief Revenue Officer insince July 2025. Prior to that, he held various positions at leading technology companies in the U.S., Europe, and Asia. He joined Quantum following ~~two~~his ~~years~~service as a contract Chief Revenue Officer from March 2024 to May 2025, where he helped startups launch and growth-stage companies optimize their go-to-market strategies in SaaS, cybersecurity, and data storage. ~~Tony~~Mr. Craythorne has held senior leadership roles including Chief Revenue Officer at Index Engines, a software company, from August 2023 to March 2024 and Zadara, a cloud computing company, from December 2021 to March 2023; ~~CEO~~Chief Executive Officer of Bamboo Systems, a technology company, from April 2019 to December 2021; Senior Vice President of Worldwide Sales at Komprise, a software company, from November 2017 to April 2019; and executive positions at Brocade, Hitachi Data Systems, Nexsan, among others.

Laura A. Nash, 4546, has served as Chief Accounting Officer of the Company since June 2023. ~~Prior~~She topreviously ~~her appointment as Chief Accounting Officer, Ms. Nash~~ served as Controller from June 2019 to June 2023. Prior to that, from September 2005 to June 2019, ~~Ms.~~she ~~Nash~~ held various positions in Audit and Financial Accounting Advisory Services at Ernst & Young, an accounting firm, in both the U.S. and the U.K. Ms. Nash holds a Bachelor of Laws from University of Aberdeen and a Certificate in Accounting from University of Washington – Michael G. Foster School of Business. She is a member of the Institute of Chartered Accountants of Scotland.

Human Capital

In the fiscal year ended March 31, ~~2025~~2026, our ~~Chief~~Vice ~~Administrative~~President ~~Officer~~of Corporate Affairs lead our human capital initiatives, which include the design and execution of all people strategies. The ~~Chief~~Vice ~~Administrative~~President ~~Officer~~of Corporate Affairs worked directly with the Board of Directors, the Leadership and Compensation Committee, and Senior Management on the design, cost, and effectiveness of our people programs to ensure they are competitive and reward our teams for driving company performance.

Our workforce is currently distributed across 1918 countries, with approximately ~~635~~490 employees globally as of March 31, ~~2025~~2026, including ~~305~~231 in North America, ~~180~~133 in APAC, and ~~150~~126 in EMEA. We engage with contractors, consultants, or temporary employees as needs for special projects occur.

Work Environment

~~While~~We weintend ~~believe competition for talent in the technology industry in certain geographies may be beginning~~ to ~~soften, we continue to~~ design, evaluate, and expand our total rewards programs so they ~~remain~~are competitive in attracting, motivating, rewarding, and retaining key talent.

We ~~offer~~have ~~flexible~~a ~~and~~mix ~~hybrid~~of ~~working~~office-based ~~arrangements that allow our employees to choose where~~ and ~~how~~remote ~~they work~~employees. We work to ensure our office environments, whether at a primary location or remote, are safe, professional, and inclusive so our employees can be successful.

To build high performing products and services, we aim to build high performing teams that are inclusive, diverse, and respected regardless of gender, race, color, religion, age, sexual orientation, or disability. We invest in ~~diverse~~multiple hiring and training initiatives, performance and professional development opportunities, and candidates ranging from interns to experienced leaders. This past year, we partnered with an outside firm for our training on compliance and preventing harassment and discrimination. We believe that fostering an inclusive work environment is a critical component for our culture of excellence.

10Culture of Integrity, Ownership, and Urgency

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~~from~~Our ~~interns~~company togoals ~~experienced~~and ~~leaders.~~leadership ~~This~~attributes ~~past~~set ~~year,~~the wetone ~~partnered with an outside firm~~ for our ~~training~~culture onof ~~compliance~~integrity, ownership, and ~~preventing~~urgency. ~~harassment~~Employees ~~and~~are ~~discrimination.~~empowered Weto ~~believe~~ask ~~that~~questions ~~fostering~~and anencouraged ~~inclusive~~to ~~work~~report ~~environment~~concerns iswithout afear ~~critical~~of ~~component~~retaliation, ~~for~~including ~~our~~reporting ~~culture~~anonymously ofif ~~excellence~~preferred.

~~Culture~~During ofthe ~~Excellence~~fiscal year ended March 31, ~~Accountability~~2026, we redesigned our internal employee recognition program to encourage exemplifying integrity, ownership, and ~~Innovation~~urgency and provided training focused on those expectations. We also continued our practice of “no internal meeting days” so employees can have more time for focused work, training, or personal development.

Our company goals and leadership attributes set the tone for our culture of excellence and accountability. Employees are empowered to ask questions and encouraged to report concerns without fear of retaliation, including reporting anonymously if preferred.

During the fiscal year ended March 31, 2023, we redesigned our internal employee recognition program to encourage driving innovation, promoting teamwork, and leading by example. We also continued our practice of “no internal meeting days” so employees can have more time for focused work, training, or personal development.

Talent Development

Our talent is our greatest asset. We seek to actively grow our employees’ skills and leadership perspective while retaining our most critical talent. Our managers and employees participate in ~~regular~~periodic performance discussions that help facilitate conversations on employee contributions, goals, and expectations.

Available Information

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge on our website at https://www.quantum.com generally when such reports are available on the Securities and Exchange Commission (“SEC”) website. The contents of our website are not incorporated into this Annual Report on Form 10-K.

The SEC maintains an internet site that contains reports, proxy, and information statements and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

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ITEM 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. Before you make a decision to buy our common stock, in addition to the risks and uncertainties discussed above under “Note Regarding Forward-Looking Statements,” you should carefully consider the risks set forth herein. If any of these risks actually occur, it may materially harm our business, financial condition, liquidity and results of operations. As a result, the market price of our common stock could decline, and you could lose all or part of your investment. Additionally, the risks and uncertainties described in this Annual Report are not the only risks and uncertainties that we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may become material and adversely affect our business.

Risks Related to Our Supply Chain, Customers and Sales Strategy

Cost increases, supply disruptions, or raw material shortages, including in single source components, could harm our business.

We have and may continue to experience cost increases or supply interruptions in raw materials and components necessary for our products, as well as increased freight charges and reduced capacity from our freight forwarders. Any such increases or interruptions could materially negatively impact our business, prospects, financial condition and operating results, including delays in manufacturing and shipments of our products and in some cases, result in canceled orders. While we have implemented price increases intended to offset rising costs, we cannot provide assurance that these increases will have the desired effects on our business model in the expected timeframe.

We outsource our component supply, manufacturing, and service repair operations to third parties. Our business, financial condition, and operating results could face material adverse impacts if we cannot obtain parts, products, and services in a cost effective and timely manner that meets our customers’ expectations.

Many aspects of our supply chain and operational results are dependent on the performance of third-party business partners, including contract manufacturers, service providers, and product integrators. We face a number of risks as a result of these relationships, any or all of which could have a material adverse effect on our business and harm our operating results and financial condition. For the years ended March 31, 2026 and 2025, the same two vendors represented more than 10% of total expenses.

Dependence on a single contract manufacturer and logistics provider

We currently rely on a single contract manufacturer to manufacture our products and to provide warehousing and logistics services for our spare parts. As a result, we are exposed to risks associated with concentrating these functions with a single provider, including potential disruptions in manufacturing, inventory management, warehousing and product delivery.

If our contract manufacturer is unable or fails to meet our production, quality, delivery, warehousing or logistics requirements, or otherwise experiences operational or financial difficulties, capacity constraints, natural disasters, severe weather events, fires, power outages or other disruptions affecting its manufacturing, warehousing or logistics operations, our ability to manufacture and deliver products, provide spare parts and support our customers could be adversely affected. If it becomes necessary to transition to a different contract manufacturer or logistics provider, such transition could be time-consuming and costly and could result in delays, increased expenses and operational disruptions. Any such events could adversely affect our business, results of operations and financial condition.

Sole source of product supply

In many cases, our business partners are the sole source of supply for the products or parts they manufacture, or the services they provide to us, and we do not have executed long-term purchase agreements with these partners. Our reliance on a limited number of suppliers and the lack of any guaranteed sources of supply exposes us to several risks, including:

•the inability to obtain an adequate supply of key components;

•the inability to control delivery schedules;

•price volatility for the components of our products;

•failure of a supplier to meet our quality or production requirements;

•failure of a supplier of key components to remain in business or adjust to market conditions; and

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•consolidation among suppliers, resulting in some suppliers exiting the industry, discontinuing the manufacture of components or increasing the price of components.

We cannot assure investors that we will be able to obtain a sufficient supply of these key components or that their costs will not increase. If our component supply is disrupted or delayed, or if we need to replace our existing suppliers or redesign a product to accept different components, we cannot guarantee that additional components will be available when required, on terms that are favorable to us, or at reasonable prices, which could extend our lead times and increase our component costs.

Cost and purchase commitments and processes

We may not be able to control the costs of products or services we obtain from our business partners. We provide a customer demand forecast used to procure inventory to build our products. We could be responsible for the financial impact from any forecast reduction or product mix shift relative to materials already purchased under a prior forecast, including the cost of finished goods in excess of current customer demand or for excess or obsolete inventory.

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impact from any forecast reduction or product mix shift relative to materials already purchased under a prior forecast, including the cost of finished goods in excess of current customer demand or for excess or obsolete inventory.

In some cases, we may retain the responsibility to purchase component inventory to support third-party manufacturing activities, which presents a number of risks that could materially and adversely affect our financial condition. For instance, as part of our component planning, we may place orders with or pay certain suppliers for components in advance of receiving customer purchase orders. We may occasionally enter into large orders with vendors to ensure that we have sufficient components for our products to meet anticipated customer demand. It is possible that we could experience a design or manufacturing flaw that could delay or even prevent the production of the components for which we previously committed to pay.

In addition, in order to reduce manufacturing lead times and plan for adequate component supply, from time to time we may issue non-cancelable and non-returnable component or product orders. Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to make accurate forecasts and effectively manage our component and product supply. If we ultimately determine that we have excess supply, we may have to reduce our prices and write down or write off excess or obsolete inventory. Alternatively, insufficient supply levels may lead to shortages resulting in delayed or lost revenue or reduced product margins. We could experience operating losses based on any of these conditions.

We also maintain service parts inventories to satisfy future warranty obligations and to earn service revenue by providing enhanced and extended technical support and product service during and beyond the warranty period. We estimate service parts inventory needs based on historical usage and forecasts of future warranty and service contract requirements, including estimates of failure rates, costs to repair, and out of warranty revenue. Given the significant levels of judgment inherently involved in the process, we cannot provide assurance that we will be able to maintain service parts inventories appropriate to satisfy customer needs or to avoid inventory purchases that later prove to be unnecessary. If we are unable to maintain appropriate levels of service parts inventories, our business, financial condition and results of operations may be materially and adversely impacted.

Although we have contracts for most of our third-party repair service vendors, the contract period may not be the same as the underlying customer service contract. In such cases, we face risks that the third-party service provider may increase the cost of providing services in later periods already under contract to our customers at a fixed price.

Financial condition and stability

Our third-party business partners may suffer adverse financial or operating results or be negatively impacted by economic conditions. We may face interrupted component, product, or service supply as a result of financial or other volatility affecting our supply chain. As a result, we could suffer production downtime or increased costs to procure alternate products or services.

Quality and supplier conduct

We have limited control over the quality of products and components produced and services provided by our third-party business partners and their supply chains. The quality of the products, parts or services may not be acceptable to our customers and could result in customer dissatisfaction, lost revenue, and increased warranty costs. In addition, we have limited control over the manner in which our business partners conduct their business. We may face negative consequences or publicity as a result of a third-party’s failure to comply with applicable compliance, trade, environmental, or employment regulations.

As a result of our global manufacturing and sales operations, we are subject to a variety of risks related to our business outside of the U.S., any of which could, individually or in the aggregate, have a material adverse effect on our business.12

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~~Mexico,~~As ~~the~~a ~~Philippines,~~result ~~Thailand,~~of ~~and~~our ~~Ukraine.~~global ~~Because~~manufacturing ofand ~~these~~sales ~~global~~ operations, we are subject to a ~~number~~variety of risks inrelated ~~addition~~ to ~~those~~our ~~already~~business ~~described~~outside of the U.S., ~~including:~~any of which could, individually or in the aggregate, have a material adverse effect on our business.

A significant portion of our manufacturing, sales, and supply chain operations occur in countries other than the U.S. We utilize third-party business partners to engineer, produce, sell, and fulfill orders for our products, several of which have operations located in foreign countries including China, Hungary, India, Japan, Malaysia, Singapore, Mexico, the Philippines, Thailand, and Ukraine. Because of these global operations, we are subject to a number of risks in addition to those already described, including:

•increasing import and export duties and value-added taxes, or trade regulation changes, including tariffs, that could erode our profit margins or delay or restrict our ability to transport our products;

•war, military conflict, and geopolitical unrest, including the conflicts in Iran and the Middle East and between Russia- and Ukraine and ~~Hamas-~~Israel ~~conflicts~~and Hamas, may affect our engineering and support teams outside the U.S. and their ability to perform as well as our sales and services delivery with sanctioned entities and countries;

•reduced or limited protection of our intellectual property;

•difficulty complying with multiple and potentially conflicting regulatory requirements and practices, including laws governing corporate conduct outside the U.S., such as the Foreign Corrupt Practices Act, United Kingdom Bribery Act, and similar regulations;

•commercial laws that favor local businesses and cultural differences that affect how we conduct business;

•differing technology standards or customer requirements;

•exposure to economic uncertainty and fluctuations including inflation, adverse movement of foreign currencies against the U.S. dollar (the currency in which we report our results), restrictions on transferring funds between countries, and continuing sovereign debt risks;

•fluctuations in freight costs, limitations on shipping and receiving capacity, and other disruptions in the transportation and shipping infrastructure at important geographic points for our products and shipments;

•inflexible employee contracts and employment laws that may make it difficult to terminate or change the compensation structure for employees in the event of business downturns;

•difficulties attracting and recruiting employees and wage inflation in highly competitive markets;

•political instability, military, social and infrastructure risks, especially in emerging or developing economies;

•political or nationalist sentiment impacting global trade, including the willingness of non-U.S. consumers to purchase goods or services from U.S. corporations;

•natural disasters, including earthquakes, flooding, typhoons and tsunamis; and

•pandemics and epidemics, and varying and potentially inconsistent governmental restrictions on the operation of businesses, travel and other restrictions.

Any or all of these risks could have a material adverse effect on our business.

We rely on indirect sales channels to market and sell our branded products. The loss of or deterioration in our relationship with one or more of our resellers or distributors, or our inability to establish new indirect sales channels to drive growth of our branded revenue, could negatively affect our operating results.

We sell most of our branded products to distributors, value added resellers, and direct market resellers, who in turn sell our products to end users. We use different distribution channel partners in different countries and regions in the world. The success of these sales channels is hard to predict, particularly over time, and we have no purchase commitments or long-term orders from them that assure us of any baseline sales. Several of our channel partners carry competing product lines, which they may promote over ours. A channel partner might discontinue our products or fail to effectively market them, and each partner determines the type and amount of our products that it will purchase and the price at which it sells to end users. Establishing new indirect sales channels is an important part of our strategy to drive growth of our branded revenue. Our results of operations could be adversely affected by any number of factors related to our channel partners, including:

•a change in competitive strategy that adversely affects a partner’s willingness or ability to distribute our products;

•the reduction, delay, or cancellation of orders or the return of significant products volume;

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•our inability to gain traction in developing new indirect sales channels for our branded products, or the loss of one or more existing partners; or

•changes in requirements or programs that allow our products to be sold by third parties to government or other customers.

Because we rely heavily on channel partners to market and sell our products, if one or more of them were to experience a significant deterioration in its financial condition or its relationship with us, this could disrupt our product distribution and reduce our revenue, which could materially and adversely affect our business, financial condition, and operating results.

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disrupt our product distribution and reduce our revenue, which could materially and adversely affect our business, financial condition, and operating results.

We heavily utilize channel partners to perform the functions necessary to market and sell our products in certain product and geographic segments. To fulfill this role, partners must maintain an acceptable level of financial stability, creditworthiness, and the ability to successfully manage business relationships with the customers they serve directly. If partners are unable to perform in an acceptable manner, we may be required to reduce sales to the partner or terminate the relationship. We may also incur financial losses for product returns from partners or for the failure or refusal of distributors to pay obligations owed to us. Either scenario could result in fewer of our products being available to the affected market segments, reduced levels of customer satisfaction and increased expenses, which could in turn have a material and adverse impact on our business, results of operations and financial condition.

A certain percentage of our sales are to a few customers, some of which are also competitors, and these customers generally have no minimum or long-term purchase commitments. The loss of, or a significant reduction in demand from, one or more key customers could materially and adversely affect our business, financial condition and results of operations.

Our product sales have been and continue to be concentrated among a small number of channel partners, direct end- users, and original equipment manufacturers. We sell to many end- user customers and channel partners on purchase orders, not under the terms of a binding long-term procurement agreement. Accordingly, they generally are not obligated to purchase any minimum product volume, and our relationships with them are terminable at will. In addition, we have focused our direct-sales business on the largest users of hierarchical storage architectures, the so-called “hyperscalers”; there are very few of these extremely large storage customers, but their order activity has a significant impact on our results from quarter to quarter.

Some of our tape and disk products are incorporated into larger storage systems or solutions that are marketed and sold to end users by third parties. Because of this, we may have limited market access to those end users, limiting our ability to influence and forecast their future purchasing decisions. In addition, revenue from OEM customers has decreased in recent years. Certain of our large OEM customers are also our competitors, and could decide to reduce or terminate purchasing our products for competitive reasons.

In addition, our sales efforts may involve long sales cycles during which we incur expenses to educate our customers about product use and benefits and support customer-driven product evaluations. These cycles may make it difficult for us to predict when, or if, future sales will occur.

During the fiscal year ended March 31, ~~2025~~2026, one customer represented more than 10% of our total revenue and ~~2024~~during the fiscal year ended March 31, 2025, no customer represented 10% or more of our total revenue. If any of our large customers should significantly decrease or stop purchasing our solutions, we would see a significant reduction in revenue that may result in a material adverse effect on our operating results.

The U.S. federal government is an important customer, and our business may be materially and adversely harmed by changes in government purchasing activity.

A portion of our sales are to various agencies and departments of the U.S. federal government, and federal spending funding cuts and temporary government shutdowns have previously impacted and may continue to impact our revenue in the future. Future spending cuts by the U.S. federal government, temporary shutdowns of the U.S. federal government, or changes in its procurement processes or criteria could decrease our sales to the federal government and materially and adversely affect our operating results. In addition, changes in government certification requirements applicable to our products could impact our ability to sell to U.S. federal customers.

Risks Related to Our Operating Results, Financial Condition, or Stock Price

~~We continue to face risks related to inflation, economic uncertainty, and slow economic growth.~~14

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~~risks~~We ~~related~~continue to ~~uncertain~~face ~~tariff~~risks ~~levels~~related ~~between~~to ~~countries where our products are manufactured and sold~~inflation, ~~unstable political and~~ economic ~~conditions~~uncertainty, ~~including the war between Russia~~ and ~~Ukraine~~slow and the Hamas-Israel conflict, and concerns about sovereign debt, which could negatively impact the U.S. and global economies and adversely affect our financial results. In addition, our ability to access capital markets may be restricted or result in unfavorable financing terms, impacting our ability to react to changing economic ~~and business conditions and could also materially and adversely affect our ability to sustain our operations at their current levels~~growth.

Uncertainty about economic conditions poses risks as businesses may further reduce or postpone spending in response to reduced budgets, tightening of credit markets, increases in inflation and interest rates, negative financial news, and declines in income or asset values which could adversely affect our business, financial condition and operating results. Recent inflationary increases have driven up the prices at which we are able to purchase necessary components, products, and services, as well as the cost of contract labor. In addition, we continue to face risks related to uncertain tariff levels between countries where our products are manufactured and sold, unstable political and economic conditions, including conflicts in Iran and the Middle East, the war between Russia and Ukraine, and the Hamas-Israel conflict, and concerns about sovereign debt, which could negatively impact the U.S. and global economies and adversely affect our financial results. In addition, our ability to access capital markets may be restricted or result in unfavorable financing terms, impacting our ability to react to changing economic and business conditions and could also materially and adversely affect our ability to sustain our operations at their current levels.

Our stock price has experienced significant volatility in the past, and continued volatility may cause our common stock trading price to remain volatile or decline.

Our stock price has been extremely volatile in the past. For example, the closing price of our common stock on the Nasdaq Global Market ranged from $24.2231 to $9013.6435 from June 1, ~~2024~~2025 through May 31, ~~2025~~2026. During this time, we did not experience any material changes in our financial condition or results of operations that would explain such price volatility. The trading price of our common stock may continue to fluctuate in response to a number of events and factors, many of which may be beyond our control, such as:

•quarterly variations in our operating results;

•failure to meet our financial guidance or the expectations of securities analysts and investors;

•new products, services, innovations, strategic developments, or business combinations and investments by our competitors or us;

•changes in our capital structure, including incurring new debt, issuing additional debt or equity to the public, and issuing common stock upon exercise of our outstanding warrants or subscribing to our recent rights offering;

•large or sudden purchases or sales of stock by investors;

•changes in interest and exchange rates;

•market volatility resulting from a public health emergency;

•fluctuations in the stock market in general and market prices for technology companies in particular;

•tariffs imposed by the U.S. government on sales originating in or being shipped to countries with which we have on-going trade or other political conflicts;

•investigations or enforcement actions related to a potential or actual failure to comply with applicable regulations;

•costs of new or ongoing commercial litigation; and

•significant changes in our brand or reputation.

Any of these events and factors may cause our stock price to rise or fall and may adversely affect our business and financing opportunities.

Significant changes to our leadership team and management transitions might harm our future operating results.

We ~~have~~ experienced significant changes to our leadership team in ~~2025~~fiscal 2026, including changes to our Chief Executive Officer, Chief Financial Officer, Chief Revenue Officer and Chief Administrative Officer. Although we believe these leadership transitions are in the best interest of our stockholders, these transitions may result in the loss of personnel with deep institutional knowledge. Further, the transition could potentially disrupt our operations and relationships with employees, suppliers, partners, and customers due to added costs, operational inefficiencies, decreased employee morale and productivity and increased turnover. We must successfully recruit and integrate our new leadership team members within our organization to achieve our operating objectives. As such, the leadership transition may temporarily affect our business performance and results of operations while the new members of our leadership team become familiar with our business and acclimate into their new roles. Furthermore, these changes increase our dependency on the other members of our leadership team that remain with us, who are not contractually obligated to remain employed with us and may leave at any time. Any such departure could be particularly disruptive given that we are already experiencing leadership transitions and, to the extent we experience additional management turnover, competition for top management is high such that it may take some time to find candidates that meet our requirements. Our future operating results may depend upon the continued service of our key personnel and in significant part upon our ability to attract and retain qualified management personnel. If we are unable to mitigate these or other similar risks, our business, results of operations and financial condition may be materially and adversely affected.

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not contractually obligated to remain employed with us and may leave at any time. Any such departure could be particularly disruptive given that we are already experiencing leadership transitions and, to the extent we experience additional management turnover, competition for top management is high such that it may take some time to find candidates that meet our requirements. Our future operating results may depend upon the continued service of our key personnel and in significant part upon our ability to attract and retain qualified management personnel. If we are unable to mitigate these or other similar risks, our business, results of operations and financial condition may be materially and adversely affected.

We may be unable to attract and retain key talent necessary to effectively meet our business objectives.

The market for skilled engineering, sales, and administrative talent is competitive and we have seen delays in recruiting and hiring timeframes. We believe our ability to recruit and hire new talent, and retain existing key personnel, may be negatively impacted by prior and ongoing fluctuations in our operating results, stock price, and ability to offer competitive benefits and total compensation programs. Our business results may be harmed if we are unable to attract and retain key talent in the future.

Our quarterly operating results have fluctuated significantly, and past results should not be used to predict future performance.

Our quarterly operating results have fluctuated significantly in the past and could fluctuate significantly in the future. As a result, our quarterly operating results should not be used to predict future performance. Quarterly results could be materially and adversely affected by a number of factors, including, but not limited to:

•IT spending fluctuations resulting from economic conditions or changes in U.S. federal government spending;

•supply chain constraints or other failures by our contract manufacturers to complete shipments in a timely manner;

•new product announcements by us or our competitors which may cause purchasing delays or cancellations;

•customers canceling, reducing, deferring, or rescheduling significant orders as a result of excess inventory levels, weak economic conditions, reduced demand, or other factors;

•IT spending fluctuations resulting from economic conditions or changes in U.S. federal government spending;

•new product announcements by us or our competitors which may cause purchasing delays or cancellations;

•seasonality, including customer and government fiscal year-ends and budget availability impacting demand for our products;

•reduced demand, declines in large orders, royalty, or software revenues, or other changes in product mix;

•product development and ramp cycle delays or product performance or quality issues;

•poor execution of and performance against expected sales and marketing plans and strategies;

•increased competition which may, among other things, increase pricing pressure or reduce sales;

•restructuring actions or unexpected costs; and

•foreign currency exchange fluctuations.

Our operating results depend on continuing and increasing market acceptance of our existing products and on new product introductions, which may be unsuccessful, in which case our business, financial condition and results of operations may be materially and adversely affected.

A limited number of products comprise a significant majority of our sales, and due to rapid technological change in our industry, our future operating results depend on our ability to improve existing products and develop and successfully introduce new products. We have devoted and expect to continue to devote considerable management and financial resources to these efforts.

When we introduce new products to the market, they may not achieve market acceptance or significant market share. In addition, the target markets for our new products may not continue or grow as we anticipate. Our new products may not be successfully or timely qualified by new customers, and if they are qualified, we may not achieve high volume production in a timely manner, if at all. In addition, we may experience technical, quality, performance-related, or other difficulties that could prevent or delay the introduction and market acceptance of new products.

If we are not successful in timely completing our new product qualifications and ramping sales to our key customers, our revenue and operating results could be adversely impacted. In addition, if the quality of our products is not ~~acceptable to our customers, customer dissatisfaction, lost revenue, and increased warranty and repair costs could result.~~

We derive significant revenue from products incorporating tape technology. Our future operating results depend in part on continued market acceptance and use of tape products; in the past, decreases in the tape products market have materially and adversely impacted our business, financial condition and operating results. 16

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acceptable to our customers, customer dissatisfaction, lost revenue, and increased warranty and repair costs could result.

We currently derive significant revenue from products that incorporate some form of tape technology, and we expect to continue to do so in the next several years. As a result, our future operating results depend in part on continued market acceptance and use of tape products. Decreased market acceptance or use of products employing tape technology has materially and adversely impacted our business, financial condition, and operating results, and we expect that our revenues from certain types of tape products could continue to decline in the future.

Disk, solid-state, and flash storage products, as well as various software solutions and alternative technologies, have eroded the demand for tape products. We expect that, over time, many of our tape customers could migrate toward these other products and solutions and their proportionate contribution to our revenue will increase in the future. While we are making targeted investments in software, disk backup and flash storage systems, and other alternative technologies, these markets are characterized by rapid innovation, evolving customer demands, and strong competition, including competition with companies who are also significant customers. If we are not successful in our efforts, we may not be able to attract or retain customers, and our business, financial condition and results of operations could be materially and adversely affected.

A significant decline in our media royalty or branded software revenues could materially and adversely affect our business, financial condition and operating results.

Our media royalties and branded software revenues generate relatively greater profit margins than some of our other products and can significantly impact our overall profitability. We receive media royalty revenue based on tape media cartridges sold by various tape media manufacturers and resellers. Under our patent and technology license agreements with these companies, each of the licensees determines the pricing and number of units of tape media cartridges that it sells. Our media royalty revenue varies based on the licensees’ media sales and other factors, including:

•our customers’ continued use of storage tape media, including the size of the installed base of devices and similar products that use tape media cartridges;

•the relative growth in units of newer device products, since the associated media cartridges for newer products typically sell at higher prices compared with the media cartridges associated with older products;

•media consumption habits and rates of end users and pattern of device retirements;

•the level of channel inventories; and

•agreement on standards for newer generations of the tape media that generates our royalty revenue.

Risks Related to Our Indebtedness and Liquidity

We have significant indebtedness, which imposes upon us debt service obligations, and our term loan and revolving credit facilities contain various operating and financial covenants that limit our discretion in operating our business. If we are unable to generate sufficient cash flows from operations and overall operating results to meet these debt obligations or remain in compliance with the covenants, our business, financial condition and operating results could be materially and adversely affected.

Our level of indebtedness presents significant risks to our business and investors, both in terms of the constraints that it places on our ability to operate our business and because of the possibility that we may not generate sufficient cash and operating results to remain in compliance with our covenants and pay the principal and interest on our indebtedness as it becomes due. As recently as December 2024, we fell out of compliance with certain financial covenants in our credit agreements, which resulted in defaults for which we received waivers of noncompliance from our lenders. For further description of our outstanding debt, see the section captioned “Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As a result of our indebtedness:

•Our ability to invest in growing our business is constrained by the financial covenants contained in our credit facilities, which require us to maintain certain maximum total net leverage ratio levels, a minimum fixed charge coverage ratio, and liquidity levels and restrict our ability to:

•Incur debt and liens;

•Acquire businesses or entities or sell certain assets;

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•Make investments, including loans, guarantees, and advances;

•Engage in transactions with affiliates;

•Pay dividends or repurchase stock; and

•Enter into certain restrictive agreements;

•We must dedicate a significant portion of our cash flow from operations and other capital resources to debt service, thereby reducing our ability to fund working capital, capital expenditures, research and development, mergers and acquisitions, and other cash-based activities, all of which may place us at a competitive disadvantage;

•If we are not able to generate sufficient cash flows to meet our substantial debt service obligations or to fund our other liquidity needs, we may have to take actions such as selling assets or raising additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and joint ventures, restructuring our debt and other capital-intensive activities;

•We are subject to mandatory field audits and control of cash receipts by the lenders if we do not maintain liquidity above certain thresholds;

•We may be more vulnerable to adverse economic and industry conditions;

•We may not be able to fund future working capital, capital investments and other business activities; and

•We may be unable to make payments on other indebtedness or obligations.

Our ability to make scheduled payments of the principal, to pay interest on, or refinance our debt, or to make cash payments in connection with our credit facilities, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Further, as our debt reaches maturity, we will be required to make large cash payments or adopt one or more alternatives, such as restructuring indebtedness or obtaining additional debt or equity financing on terms that may be highly dilutive. Our ability to restructure or refinance our debt will depend on the capital markets and our financial condition at such time. We may be unable to incur additional debt or refinance our existing debt on acceptable terms, if at all, which could result in a default on our debt obligations.

We continue to review and discuss potential financial transactions, including with our current lenders, in an effort to restructure our currently outstanding debt and to improve our balance sheet. If we proceed with any of these potential financial transactions, they could be highly dilutive to our stockholders. If a potential financial transaction does not occur or we are unable to repay all our outstanding debt from the proceeds of this offering, then we intend to continue to explore one or more alternatives, such as restructuring remaining indebtedness or obtaining additional debt or equity financing on terms that may be highly dilutive.

Our credit facilities are collateralized by a pledge of all our assets. If we were to default and be unable to cure it within any applicable grace periods or obtain a waiver of such default, the lenders would have a right to foreclose on our assets to satisfy our obligations under these agreements. Any such action on the part of the lenders could have a materially adverse impact on our business, financial condition and results of operations.

In connection with entering into our prior credit facilities and certain amendments to our prior credit facilities, we were required to issue to our lenders thereunder, certain warrants to purchase our common stock. These warrants were exercised in December 2024 and January 2025 and resulted in significant dilution to our stockholders. Future sales of common stock issued upon the exercise of these warrants may cause our stock price to decline.

We must maintain compliance with the terms of our existing credit facilities or receive a waiver for any non-compliance. The failure to do so could have a material adverse effect on our ability to finance our ongoing operations and we may not be able to find an alternative lending source if a default occurs.

In March 2024, June 2024, July 2024, August 2024 and again in December 2024, we fell out of compliance with certain financial covenants in our credit agreements, which resulted in defaults for which we received waivers of noncompliance from our lenders. Our credit agreements contain negative covenants and customary events of default provisions, including for payment default, covenant default, cross default to other material indebtedness, and judgment default. Each of these limitations are subject to certain liquidity levels, thresholds, or grace periods. In addition, the credit agreement contains affirmative covenants, including certain financial covenants that require us to maintain minimum fixed charge coverage ratios. The applicable interest rate on the facility may increase if our total leverage ratio increases to specified amounts that would result in our interest expenses rising.

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These covenants could materially adversely affect our ability to finance our future operations or capital needs. Furthermore, they may restrict our ability to expand and pursue our business strategies and otherwise conduct our business. There are no assurances that we can continue to maintain compliance with these covenants. Our ability to comply with these covenants may be affected by circumstances and events beyond our control, such as prevailing economic conditions and changes in regulations. The restrictions limit our ability to obtain future financings or to withstand a future downturn in our business or the economy in general, which may affect our ability to make the payments required of us under the waiver. Complying with these covenants may also cause us to take actions that may make it more difficult for us to successfully execute our business strategy and compete against companies that are not subject to such restrictions.

If we do not maintain compliance with all of the continuing covenants imposed by the credit agreements and other terms and conditions of the credit facility, we could be required to repay outstanding borrowings on an accelerated basis, which could subject us to decreased liquidity and other negative impacts on our business, results of operations and financial condition. There is no assurance that we will be able to negotiate an amendment that will provide for modified financial covenant levels that we can satisfy, or that we will be able to obtain an additional waiver to the credit agreement in the case of future events of default (including but not limited to those related to financial covenants). Any additional amendment or waiver will likely require concessions from the Company, such as prepayments, the imposition of other covenants or restrictions, limitations on future borrowing, or the payment of lender expenses. Furthermore, if the debt is accelerated, we may not be able to make all of the required payments or borrow sufficient funds to refinance such debt. We continue to review and discuss potential financial transactions, including with our current lenders, if an effort to restructure our currently outstanding debt and to improve our balance sheet. If we proceed with any of these potential financial transactions, they could be highly dilutive to our stockholders. If a potential financing transaction does not occur or we are unable to repay all our outstanding debt from the proceeds of this offering, then we intend to continue to explore one or more alternatives to restructure or repay our remaining debt. Without a sufficient credit facility, we would be adversely affected by a lack of access to liquidity needed to operate our business.

It is not possible to predict the actual number of shares we will sell under the Standby Equity Purchase Agreement (the “SEPA”), or the actual gross proceeds resulting from those sales.

On January 25, 2025, we entered into the SEPA with YA II PN, Ltd., a Cayman Islands exempt limited partnership (“YA”), pursuant to which YA committed to purchase up to $200.0 million in shares of our common stock, subject to certain limitations and conditions.

We generally have the right to control the timing and amount of any sales of our shares of common stock to YA under the SEPA. Because the purchase price per share to be paid by YA for the shares of common stock that we may elect to sell to YA under the SEPA will fluctuate based on the market prices of our common stock during the applicable purchase valuation period for each purchase made pursuant to the SEPA, it is not possible for us to predict the total number of shares of common stock that we will sell to YA under the SEPA, the purchase price per share that YA will pay for shares purchased from us in the future under the SEPA, or the aggregate gross proceeds that we will receive from those purchases by YA under the SEPA. Sales of shares of our common stock pursuant to the SEPA will be dilutive to stockholders.

Moreover, although the SEPA provides that we may sell up to an aggregate of $200.0 million of our common stock to YA, only an aggregate of 19,811,201 shares of our common stock under the SEPA have been registered for resale by YA. If it becomes necessary for us to issue and sell to YA under the SEPA more than the shares that were registered for resale under the Registration Statement in order to receive aggregate gross proceeds equal to the total commitment of aggregate of $200.0 million under the SEPA, we must file with the SEC one or more additional registration statements to register under the Securities Act of 1933 the resale by YA of any such additional shares of our common stock we wish to sell from time to time under the SEPA, which the SEC must declare effective.

Risks Related to Our Business and Industry

If we do not successfully manage the changes that we have made and may continue to make to our business model, infrastructure, and management, our business could be disrupted, and that could adversely impact our operating results and financial condition.

Managing change is an important focus for us. In recent years, we have implemented several significant initiatives involving our sales and marketing, product engineering, and operations organizations, aimed at transitioning our revenue model from discrete hardware sales to recurring software revenue, increasing our efficiency, and better aligning internal operations with our corporate strategy. In addition, we have reduced headcount to streamline and consolidate our supporting functions as appropriate following recent acquisitions and in response to market or competitive conditions, and have increased our reliance on certain third-party business relationships. If we are unable to successfully manage the changes that we implement and detect and address issues as they arise, our business could be disrupted, and our results of operations and financial condition could be materially and adversely impacted.

20In addition, given that we are relatively new to offering products and services on a subscription basis, and those models in the storage industry continue to evolve, we may not be able to effectively compete, drive expected

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~~aligning~~revenue ~~internal~~and ~~operations~~margin ~~with our corporate strategy. In addition~~growth, ~~we have reduced headcount to streamline and consolidate our supporting functions as appropriate following recent acquisitions and in response to market~~ or ~~competitive~~obtain ~~conditions,~~profitability ~~and~~for ~~have~~the ~~increased~~foreseeable ~~our~~future. ~~reliance~~Demand onfor ~~certain third~~subscription-~~party~~based ~~business~~products ~~relationships.~~could Ifalso weerode ~~are~~one-time ~~unable~~sales toof ~~successfully~~our ~~manage~~hardware ~~the~~products ~~changes~~ that wemight ~~implement~~not ~~and detect and address issues as they arise, our business could~~ be ~~disrupted,~~immediately ~~and~~offset ~~our~~by ~~results~~increased ofrecurring ~~operations and financial condition could be materially and adversely impacted~~revenue.

In addition, given that we are relatively new to offering products and services on a subscription basis, and those models in the storage industry continue to evolve, we may not be able to effectively compete, drive expected revenue and margin growth, or obtain profitability for the foreseeable future. Demand for subscription-based products could also erode one-time sales of our hardware products that might not be immediately offset by increased recurring revenue.

We have taken considerable steps towards reducing our cost structure. The steps we have taken may not reduce our cost structure to a level appropriate in relation to our future sales and therefore, these cost reductions may be insufficient to achieve profitability.

In the last several years, we have recorded significant restructuring charges and made cash payments to reduce our cost of sales and operating expenses to respond to adverse economic and industry conditions, to execute strategic management decisions, and to rationalize our operations following acquisitions. These restructuring plans may result in decreases to our revenues or adversely affect our ability to grow our business in the future. Workforce reductions may also adversely affect employee morale and our ability to retain our employees, and may result in increased legal proceedings by terminated employees. We may take future steps to further reduce our operating costs, including additional restructurings in response to strategic decisions, increased operating and product costs due to inflation, supply chain constraints, and other external factors, adverse changes in our business or industry, or future acquisitions. We may be unable to reduce our cost of sales and operating expenses at a rate and to a level appropriate in relation to our future sales, which may materially and adversely affect our business, financial condition and results of operations.Conversely, if our cost-reduction initiatives are more extensive than necessary or result in the reduction of critical personnel or resources, they could impair our ability to execute our business strategy, support customers, develop products, respond to market opportunities, or otherwise operate effectively, which could adversely affect our business, financial condition and results of operations.

In addition, our ability to achieve the anticipated cost savings and other benefits from these restructuring plans within the expected time frame is subject to many estimates and assumptions which may be adversely impacted by significant economic, competitive and other uncertainties, some of which are beyond our control. If these estimates and assumptions are incorrect, if we experience delays, or if other unforeseen events occur, our business, financial condition, and operating results could be adversely affected.

The failure to successfully integrate future acquired businesses, products or technologies could harm our business, financial condition, and operating results.

As a part of our business strategy, we have in the past and may make acquisitions in the future. We may also make significant investments in complementary companies, products or technologies. If we fail to successfully integrate such acquisitions or significant investments, it could harm our business, financial condition, and operating results. Risks that we may face in our efforts to integrate any recent or future acquisitions include, among others:

•failure to realize anticipated synergies or return on investment from the acquisition;

•difficulties assimilating and retaining employees, business culture incompatibility, or resistance to change;

•diverting management’s attention from ongoing business concerns;

•coordinating geographically separate organizations and infrastructure operations in a rapid and efficient manner;

•the potential inability to maximize our financial and strategic position through the successful incorporation of acquired technology and rights into our products and services;

•failure of acquired technology or products to provide anticipated revenue or margin contribution;

•insufficient revenues to offset increased expenses associated with the acquisition;

•costs and delays in implementing or integrating common systems and procedures;

•reduction or loss of customer orders due to the potential for market confusion, hesitation and delay;

•impairment of existing customer, supplier and strategic relationships of either company;

•insufficient cash flows from operations to fund the working capital and investment requirements;

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•difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions;

•dissatisfaction or performance problems with the acquired company;

•the assumption of risks, unknown liabilities, or other unanticipated adverse circumstances of the acquired company that are difficult to quantify; and

•the cost associated with the acquisition, including restructuring actions, which may require cash payments that, if large enough, could materially and adversely affect our liquidity.

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A cybersecurity breach could adversely affect our ability to conduct our business, harm our reputation, expose us to significant liability, or otherwise damage our financial results.

We maintain sensitive data on our own systems related to our employees, strategic partners, and customers, including personally identifiable information, intellectual property, and proprietary business information ~~on our own systems~~. In addition, many of our customers and partners store sensitive data on our products.

It is critical to our business that our employees’, strategic partners’ and customers’ sensitive information remains and is perceived as secure. While we employ sophisticated security measures in our own environment and our product features, we may face internal and external threats including unauthorized access, ransomware attacks, security breaches, and other system disruptions. A cybersecurity breach of our own IT infrastructure or products sold to our customers could result in unauthorized access to, loss of, or unauthorized disclosure of such information and expose us to litigation, indemnity obligations, government investigations, and other possible liabilities. Additionally, a cyber-attack, whether actual or perceived, could result in negative publicity which could harm our reputation and reduce our customers’ confidence in the effectiveness of our solutions, which could materially and adversely affect our business and operating results. A breach could also expose us to increased costs from remediation, disruption of operations, or increased cybersecurity protection costs that may have a material adverse effect on our business. Although we maintain cybersecurity liability insurance, our insurance may not cover all or any portion of claims of these types, or may not be adequate to indemnify us for inability that may be imposed. Any imposition or liability or litigation costs that are not covered by insurance could harm our business.

If our products fail to meet our or our customers’ specifications for quality and reliability, we may face liability and reputational or financial harm which may adversely impact our operating results and our competitive position may suffer.

We may from time to time experience problems with the performance of our products, which could result in one or more of the following:

•increased costs related to fulfilling our warranty obligations;

•reduced, delayed, or cancelled orders or the return of a significant amount of products; or

•the loss of reputation in the market and customer goodwill.

These factors could cause our business, financial condition and results of operations to be materially and adversely affected.

In addition, we face potential liability for product performance problems because our end users employ our technologies to store and backup important data and to satisfy regulatory requirements. Loss of this data could cost our customers significant amounts of money, directly and indirectly as a result of lost revenues, intellectual property, proprietary business information, or other harm to their business. In some cases, the failure of our products may be caused by third-party technology that we incorporate into them. Even if failures are caused by third-party technology, we may be required to expend resources to address the failure and preserve customer relationships.

We could also potentially face claims for product liability from our customers if our products cause property damage or bodily injury. Although there are limitations of liability in our commercial agreements and we maintain technology errors and omissions liability and general liability insurance, our insurance may not cover potential claims of these types, or may not be adequate to indemnify us for all liability that may be imposed. Any imposition of liability or litigation costs that are not covered by insurance or could harm our business.

Competition is intense in the data storage and protection market in which we operate.

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Our competitors in the data storage and protection market are aggressively trying to advance and develop new technologies and products to compete against us. Consequently, we face the risk that customers could choose competitor products over ours. As a result of competition and new technology standards, our sales or gross margins could decline, which could materially and adversely affect our business, financial condition, and operating results.

Some of those competitors are much larger and financially stronger, have more diverse product offerings, and aggressively compete based on their reputations and greater size.

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Technological developments, industry consolidation, and storage market competition over the years have resulted in decreased prices and increased commoditization for tape device and automation products and our other product offerings. Pricing pressure is more pronounced for entry-level products and less pronounced for enterprise products.

Over time, the prices of our and competitor products have decreased, but such products often incorporate new or different features and technologies from what we offered in prior years. We face risks that customers could choose competitors’ products over ours due to these features and technologies or pricing differences. If competition further intensifies, our product sales and gross margins could decline, which could materially and adversely affect our business, financial condition and results of operations.

Additional industry consolidation may further result in:

•competitors consolidating, having greater resources and becoming more competitive with us;

•new entrants into one or more of our primary markets increasing competition;

•customers that are also competitors becoming more competitive with us and/or reducing their purchase of our products;

•competitors acquiring our current suppliers or business partners and negatively impacting our business model; and

•market uncertainty and disruption due to the impact and timing of announced and completed transactions.

Risks Related to Intellectual Property

Some of our products contain licensed, third-party technology that provides important product functionality and features. The loss or inability to obtain any such license could have a material adverse effect on our business.

Certain of our products contain technology licensed from third parties that provides important product functionality and features. We cannot provide assurance that we will have continued access to this technology in the future. In some cases, we may seek to enforce our technology access via litigation against the licensing company itself, which may cause us to incur significant legal or other costs and may not be resolved in our favor. Other legal actions against the licensing company, such as for intellectual property infringement, could also impact our future access to the technology. We also have limited visibility or control of the technology roadmap at the licensing company and cannot ensure that the licensing company will advance the roadmap of the licensed technology in the manner best for us. We also face the risk of not being able to quickly implement a replacement technology or otherwise mitigate the risks associated with not having access to this licensed technology. Any of these actions could negatively impact our available technology portfolio, thereby reducing the functionality or features of our products, and could materially and adversely affect our business, financial condition, and operating results.

Third-party intellectual property infringement claims could result in substantial liability and significant costs, and, as a result, our business, financial condition and results of operations may be materially and adversely affected.

From time to time, third parties allege that our products infringe their patented or proprietary technology and demand that we purchase a license from them. The ultimate outcome of any license discussion or litigation is uncertain. Adverse resolution of any third-party infringement claim could subject us to substantial liabilities and require us to refrain from manufacturing and selling certain products. In addition, the costs incurred in intellectual property litigation can be substantial, regardless of the outcome. As a result, our business, financial condition, and operating result could be materially and adversely affected.

If we fail to protect our intellectual property or if others use our proprietary technology without authorization, our competitive position may suffer.

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Our future success and ability to compete depends in part on our proprietary technology. We rely on a combination of copyright, patent, trademark, and trade secrets laws and nondisclosure agreements to establish and protect our proprietary technology. However, we cannot provide assurance that patents will be issued with respect to pending or future patent applications that we have filed or plan to file, that our patents will be upheld as valid, or that our patents will prevent the development of competitive products, or that any actions we have taken will adequately protect our intellectual property rights.

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Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain or use our products or technology. Enforcing our intellectual property rights can sometimes only be accomplished through litigation, which is expensive and can divert management’s attention away from our business. In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as the laws of the U.S.

We license certain of our software under “open source” licenses. Because of the characteristics of open source software licenses, it may be relatively easy for competitors, some of whom have greater resources than we have, to enter our markets and compete with us. In addition, our failure to comply with the terms of open source licenses could have a material adverse effect on our competitive position and financial results.

One of the characteristics of open source software is that the source code is typically publicly available at no charge, and anyone who obtains copies has a license under certain of our intellectual property rights. Depending on the license, that may include access to certain of our patents, to modify and redistribute the software, and use it to compete in the marketplace. Certain open source software licenses require users to license to other any software that is based on, incorporates, or interacts with the open source software. Although we endeavor to comply fully with those requirements, third parties could claim we are required to license larger portions of our software than we intended. If such claims were successful, they could adversely impact our competitive position and financial results by providing our competitors with access to sensitive information that may help them develop competitive products without the degree of overhead and lead time required by traditional proprietary software development.

It is possible for competitors to use our open source project software to develop their own software, potentially reducing the demand for our solution and putting price pressure on our subscription offerings. We cannot guarantee that competitive pressure or the availability of new open source software will not result in price reductions, reduced operating margins and loss of market share, any one of which could harm our business, financial condition, operating results, and cash flows.

In addition, we use our own open source project software in our proprietary products. As a result, there is a risk that we may inadvertently release as an open source certain code that was intended to be kept as proprietary, that reveals confidential information regarding the inner workings of our proprietary products, or that could enable competitors to more readily reverse engineer or replicate aspects of our proprietary technology that we would otherwise protect as trade secrets. We may also accept contributions from third parties to our open source projects, and it may be difficult for us to accurately determine the origin of the contributions and whether their use, including in our proprietary products, infringes, misappropriates, or violates third-party intellectual property or other rights. The availability of certain of our own software in source code form may also enable others to detect and exploit security vulnerabilities in our products. In addition, our use of open source software may harm our business and subject us to intellectual property claims, litigation, or proceedings in the future.

Risks Related to Regulatory Matters

We are subject to many laws and regulations, and violation of or changes in those requirements could materially and adversely affect our business.

We are subject to numerous U.S. and international laws and requirements regarding corporate conduct, fair competition, corruption prevention, data protection and security, import and export practices, and hazardous or restricted material use, storage, discharge, and disposal, including laws applicable to U.S. government contractors. We have incurred, and will continue to incur, costs and business process changes to comply with such regulations. While we maintain a rigorous corporate ethics and compliance program, we may be subject to increased regulatory scrutiny, significant monetary fines or penalties, suspension of business opportunities, loss of jurisdictional operating rights, and increased litigation and investigation costs as a result of any failure to comply with those requirements. If we identify that we have fallen out of compliance, we may proactively take corrective actions, including the filing of voluntary self-disclosure statements with applicable agencies, which could cause us to incur additional expenses and subject us to penalties and other consequences that could adversely affect our business, financial condition, and operating results. Our supply and distribution models may be reliant upon the actions of our third-party business partners and we may also be exposed to potential liability resulting from their violation of these or other compliance requirements. Further, our U.S. and international business models are based on currently applicable regulatory requirements and exceptions. Changes in those requirements or exceptions could necessitate changes to our business model. Any of these consequences could materially and adversely impact our business and results of operations.

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we may also be exposed to potential liability resulting from their violation of these or other compliance requirements. Further, our U.S. and international business models are based on currently applicable regulatory requirements and exceptions. Changes in those requirements or exceptions could necessitate changes to our business model. Any of these consequences could materially and adversely impact our business and results of operations.

Our actual or perceived failure to adequately protect personally identifiable information could adversely affect our business, financial condition, and operating results.

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A variety of state, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer, deletion, and other processing of personally identifiable information. These privacy- and data protection-related laws and regulations are evolving, with new or modified laws and regulations proposed and implemented frequently and existing laws and regulations subject to new or different interpretations.

Compliance with these laws and regulations can be costly and can delay or impede the development or implementation of new products or internal systems. Failure to comply could result in enforcement actions and significant penalties against us, which could result in negative publicity, increase our operating costs, and have a material adverse effect on our business, financial condition, and operating results.

Risks Related to Being a Public Company

We incur significant costs as a result of operating as a public company, and our management devotes substantial time to complying with public company regulations.

As a public company, we are obligated to file with the SEC annual and quarterly reports and other reports that are specified in Section 13 and other sections of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We are also required to ensure that we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis. In addition, we are and will continue to become subject to other reporting and corporate governance requirements, including certain requirements of Nasdaq, and certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX Act”) and the regulations promulgated thereunder, which will impose significant compliance obligations upon us.

Section 404 of the SOX Act, as well as rules subsequently implemented by the SEC and Nasdaq, have imposed increased regulation and disclosure and required enhanced corporate governance practices of public companies. We are committed to maintaining high standards of corporate governance and public disclosure, and our efforts to comply with evolving laws, regulations and standards in this regard are likely to result in increased selling, general, and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. These changes will require a significant commitment of additional resources. We may not be successful in implementing these requirements and implementing them could materially and adversely affect our business, results of operations and financial condition. In addition, if we fail to implement the requirements with respect to our internal accounting and audit functions, our ability to report our operating results on a timely and accurate basis could be impaired. If we do not implement such requirements in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC and Nasdaq. Any such action could harm our reputation and the confidence of investors and customers in us and could materially and adversely affect our business and cause our share price to fall.

If we do not continue to meet all of the continued listing requirements of Nasdaq, we may be delisted.

The listing of our common stock on the Nasdaq Global Market is contingent on our compliance with the Nasdaq Global Market’s rules for continued listing.

On September 20, 2023, we received a deficiency notice from the Nasdaq Listing Qualifications Department (the “Nasdaq Staff”) notifying us that we were not in compliance with Nasdaq’s minimum closing bid price requirement of $1.00 per share for 30 consecutive business days, as set forth in Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”). We did not regain compliance with the Minimum Bid Price Requirement within 180 days from the initial deficiency notice, and on March 19, 2024, we were notified by the Nasdaq Staff that we would be delisted unless we timely request a hearing before a Nasdaq hearings panel (the “Panel”).

We were also notified on November 14, 2023 and February 13, 2024 that we were not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Filings Requirement”) as a result of our failure to timely file the Quarterly Reports on Form 10-Q for the fiscal quarters ended September 30, 2023 and December 31, 2023. The Nasdaq Staff initially gave us until May 7, 2024 to regain compliance with the Filings Requirement.

25On May 14, 2024, we had a hearing before the Panel to address the deficiencies in complying with the Minimum Bid Price Requirement and the Filings Requirement and to present a plan to regain compliance. On June 6, 2024, the Panel issued a ruling granting us an extension period for (i) the Minimum Bid Price Requirement until September 16, 2024 and (ii) the Filings Requirement until July 1, 2024. As a result of the filing of the Annual Report on Form 10-K for the fiscal year ended March 31, 2024 on June 28, 2024, which included the financial statements and other information required in the Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 2023 and

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~~Form~~September ~~10-Q~~30, 2023, we complied with the Filings Requirement. In addition, on August 26, 2024, we effected a 1-for-20 reverse stock split of our common stock following stockholder approval at our annual meeting of stockholders in order to comply with the ~~fiscal~~Minimum ~~quarters~~Bid ~~ended~~Price Requirement. On September 3017, ~~2023~~2024, ~~and~~we ~~December~~received ~~31,~~a ~~2023.~~letter ~~The~~from the Nasdaq Staff ~~initially~~confirming ~~provided~~that uswe ~~until~~regained ~~May~~compliance 7,and ~~2024~~that toour ~~regain~~securities ~~compliance~~will ~~with~~continue ~~the~~to ~~Filings~~be ~~Requirement~~listed on Nasdaq.

On May 14, 2024, we had a hearing before the Panel to address the deficiencies in complying with the Minimum Bid Price Requirement and the Filings Requirement and to present a plan to regain compliance. On June 6, 2024, the Panel issued a ruling granting us an extension period for (i) the Minimum Bid Price Requirement until September 16, 2024 and (ii) the Filings Requirement until July 1, 2024. As a result of the filing of the Annual Report on Form 10-K for the fiscal year ended March 31, 2024 on June 28, 2024, which included the financial statements and other information required in the Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31, 2023 and September 30, 2023, we complied with the Filings Requirement. In addition, on August 26, 2024, we effected a 1-for-20 reverse stock split of our common stock following stockholder approval at our annual meeting of stockholders in order to comply with the Minimum Bid Price Requirement.

On September 17, 2024, we received a letter from the Nasdaq Staff confirming that we regained compliance and that our securities will continue to be listed on Nasdaq.

On October 4, 2024, we received written notice from Nasdaq that we were not in compliance with Nasdaq Listing Rule 5450(b)(3)(C) (the "Market Value Requirement") as a result of our failure to maintain a minimum market value of publicly held shares of $15,000,000. On December 9, 2024, we received a letter from the Nasdaq Staff confirming that we had regained compliance with the Market Value Requirement and that the matter would be closed.

On July 17, 2025, we received written notice from Nasdaq that we were not in compliance with the Filings Requirement as a result of our failure to timely file the Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (the "2025 10-K"). We regained compliance with the Filings Requirement with respect to the 2025 10-K on August 26, 2025, within the timeline prescribed by Nasdaq.

While we expect to regain compliance with the Filings Requirement with respect to the 2025 10-K within the timeline prescribed by Nasdaq, there can be no assurance that we will be able to regain compliance within such period. In addition, we have not been able to file our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2025 by August 14, 2025. If we ~~fail~~lose ~~to regain~~ compliance again and Nasdaq determines to delist our common stock, our common stock would be traded on the over-the-counter market, and the value and liquidity of our stockholders’ investments would be materially impacted. Furthermore, there can be no assurance that we will maintain compliance with ~~the~~all other Nasdaq listing requirements.

We have restated certain of our prior consolidated financial statements, which has resulted in unanticipated costs and may lead to additional risks and uncertainties, including loss of investor confidence and negative impacts on our stock price.

In this Annual Report on Form 10-K, we restated certain of our financial statements. Also, in the Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “2024 Annual Report”), we restated certain of our financial statements. The determination to restate the financial statements was made by our Audit Committee of the Board of Directors upon management’s recommendation. Our management concluded that certain of our previously issued financial statements should no longer be relied upon.

The restatement of our previously issued financial statements is time-consuming and expensive and could expose us to additional risks that could materially adversely affect our financial position, results of operations and cash flows, including unanticipated costs for accounting and legal fees in connection with or related to the restatement and the risk of potential stockholder litigation. If lawsuits are filed, we may incur additional substantial defense costs regardless of the outcome of such litigation. Likewise, such events might cause a diversion of our management’s time and attention. If we do not prevail in any such litigation, we could be required to pay substantial damages or settlement costs. In addition, the restatement may lead to a loss of investor confidence and have negative impacts on the trading price of our common stock.

We have identified material weaknesses in our internal control over financial reporting, which could, if not properly remediated, result in additional material misstatements in our interim or annual consolidated financial statements, could impair our ability to produce accurate and timely financial statements and could adversely affect investor confidence in our financial reports, which could negatively affect our business.

26We have concluded that our internal control over financial reporting and disclosure controls and procedures were not effective as of March 31, 2026 and 2025 due to the existence of material weaknesses in our internal control over financial reporting, as described in Item 9A. Controls and Procedures of this Annual Report on Form 10-K.

~~Table~~We ofcannot ~~Contents~~provide assurance that the material weaknesses and deficiencies described in this Annual Report on Form 10-K will not recur, or that additional material weaknesses in our internal control over financial reporting will not arise or be identified in the future. We intend to continue our control remediation activities and to continue to improve our financial reporting process, and our operational, information technology, financial systems, compliance and infrastructure procedures and controls. We also intend to continue to expand, train, retain and manage our personnel who are essential to effective internal control and compliance. In doing so, we will continue to incur expenses and expend management time and resources.

WeIf ~~have~~our ~~concluded~~remediation ~~that~~measures are insufficient to address the identified deficiencies, or if additional deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and ~~disclosure~~we ~~controls~~could be required to restate our financial results in the future. We have previously restated our financial statements, including in August 2025 with respect to the fiscal quarter ended December 31, 2024 and ~~procedures~~in ~~were~~May ~~not~~2024 ~~effective~~with asrespect ofto the fiscal years ended March 31, ~~2025~~2023 ~~due~~and to2022 and the ~~existence~~fiscal quarter ended June 30, 2023. Moreover, because of the inherent limitations of any control system, material ~~weaknesses~~misstatements due to error or fraud may not be prevented or detected on a timely basis, or at all. If we are unable to provide reliable and timely financial reports in the future, our business and reputation may be further harmed. Restated financial statements and failures in internal control ~~over~~may ~~financial~~also cause us to fail to timely meet reporting obligations, asnegatively ~~described~~affect investor confidence in ~~Item~~our ~~9A.~~management ~~Controls~~and the accuracy of our financial statements and ~~Procedures~~disclosures, or result in adverse publicity, any of ~~the~~which ~~this~~could ~~Annual~~have ~~Report~~a negative effect on ~~Form~~the ~~10-K.~~price of our common stock, subject us to further regulatory investigations and penalties or stockholder litigation, and materially and adversely impact our business and financial condition.

Some of these material weaknesses resulted in the restatement of the unaudited condensed quarterly financial information for the quarterly period ended December 31, 2024.

We cannot provide assurance that the material weaknesses and deficiencies identified in the 2025 Annual Report and the consolidated financial statements appearing elsewhere in this Annual Report will not recur, or that additional material weaknesses in our internal control over financial reporting will not arise or be identified in the future. We intend to continue our control remediation activities and to continue to improve our financial reporting process, and our operational, information technology, financial systems, compliance and infrastructure procedures and controls. We also intend to continue to expand, train, retain and manage our personnel who are essential to effective internal control and compliance. In doing so, we will continue to incur expenses and expend management time.

If our remediation measures are insufficient to address the identified deficiencies, or if additional deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements and we could be required to restate our financial results in the future. Moreover, because of the inherent limitations of any control system, material misstatements due to error or fraud may not be prevented or detected on a timely basis, or at all. If we are unable to provide reliable and timely financial reports in the future, our business and reputation may be further harmed. Restated financial statements and failures in internal control may also cause us to fail to meet reporting obligations or debt covenants, negatively affect investor confidence in our management and the accuracy of our financial statements and disclosures, or result in adverse publicity, any of which could have a negative effect on the price of our common stock, subject us to further regulatory investigations and penalties or stockholder litigation, and materially and adversely impact our business and financial condition.

General Risk Factors

We face risks related to health epidemics, pandemics and other outbreaks, which ~~could~~have had and may in the future have a material adverse effect on our business and results of operations.

We face various risks related to public health issues, including epidemics, pandemics, and other outbreaks~~, including a resurgence of the COVID-19 pandemic~~. For example, the COVID-19 pandemic and efforts to control its spread had an impact on our workforce and operations, and those of our strategic partners, customers, suppliers, and logistics providers. These impacts included increased component, product, transportation, and overhead costs, increased logistics capacity and flexibility needs, decreased workforce availability, component supply, and product output, increased cybersecurity threats from remote work, and general economic downturns. We or our third-party business partners were subject to government restrictions that impacted our ability to continue efficient business operations. Other global health concerns in the future could also result in social, economic and labor instability in the countries in which we or the third parties with whom we engage operate.

Such pandemics adversely affect our business and financial results, they may also have the effect of heightening many of the other risks described in more detail in this “Risk Factors” section, such as those relating to adverse global or regional conditions, our highly competitive industry, supply chain disruption, customer demand conditions and our ability to forecast demand, cost saving initiatives, our indebtedness and liquidity, and cyber-attacks.23

We are exposed to fluctuations in foreign currency exchange rates, and an adverse change in foreign currency exchange rates relative to our position in such currencies could have a material adverse impact on our business, financial condition and results of operations.

We do not currently use derivative financial instruments for speculative purposes. To the extent that we have assets or liabilities denominated in a foreign currency that are inadequately hedged or not hedged at all, we may be subject to foreign currency losses, which could be significant. Our international operations can act as a natural hedge when both operating expenses and sales are denominated in local currencies. In these instances, although an unfavorable change in the exchange rate of a foreign currency against the U.S. dollar would result in lower sales when translated to U.S. dollars, operating expenses would also be lower in these circumstances. The competitive price of our products relative to others could also be negatively impacted by changes in the rate at which a foreign

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~~currency~~remote iswork, ~~exchanged~~and ~~for~~general ~~U.S.~~economic ~~dollars~~downturns. ~~Such~~We ~~fluctuations~~or inour ~~currency~~third-party ~~exchange~~business ~~rates~~partners ~~could~~were ~~materially~~subject ~~and~~to ~~adversely~~government ~~affect~~restrictions that impacted our ability to continue efficient business, ~~financial~~operations. ~~condition~~Other global health concerns in the future could also result in social, economic and ~~results~~labor ofinstability ~~operations~~in the countries in which we or the third parties with whom we engage operate.

Such public health issues have adversely affected and may in the future adversely affect our business and financial results and they may also have the effect of heightening many of the other risks described in more detail in this “Risk Factors” section, such as those relating to adverse global or regional conditions, our highly competitive industry, supply chain disruption, customer demand conditions and our ability to forecast demand, cost saving initiatives, our indebtedness and liquidity, and cyber-attacks.

If the future outcomes related to the estimates used in recording tax liabilities to various taxing authorities result in higher tax liabilities than estimated, then we would have to record tax charges, which could be material.

We have provided amounts and recorded liabilities for probable and estimable tax adjustments required by various taxing authorities in the U.S. and foreign jurisdictions. If events occur that indicate payments of these amounts will be less than estimated, then reversals of these liabilities would create tax benefits recognized in the periods when we determine the liabilities have reduced. Conversely, if events occur which indicate that payments of these amounts will be greater than estimated, then tax charges and additional liabilities would be recorded. In particular, various foreign jurisdictions could challenge the characterization or transfer pricing of certain intercompany transactions. In the event of an unfavorable outcome of such challenge, material tax charges and adverse impacts on operating results could occur in the period in which the matter is resolved or an unfavorable outcome becomes probable and estimable.

Certain changes in stock ownership could result in a limitation on the amount of net operating loss and tax credit carryovers that can be utilized each year. Should we undergo such a change in stock ownership, it would severely limit the usage of these carryover tax attributes against future income, resulting in additional tax charges, which could be material.

We have never paid dividends on our capital stock, and we do not anticipate paying dividends in the foreseeable future.

We have never paid dividends on any of our capital stock and currently intend to retain any future earnings to fund the growth of our business. Any determination to pay dividends in the future will be at the discretion of our Board of Directors, and will depend on our financial condition, operating results, capital requirements, general business conditions and other factors that our Board may deem relevant. As a result, capital appreciation, if any, of our common stock will be the sole source of gain for the foreseeable future.

Anti-takeover provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt.

Our Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), our Amended and Restated Bylaws (the “Bylaws”), and Delaware law, contain provisions that could have the effect of ~~rendering more difficult or discouraging an acquisition deemed undesirable by our Board. Our corporate governance documents include provisions:~~

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rendering more difficult or discouraging an acquisition deemed undesirable by our Board. Our corporate governance documents include provisions:

•authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend, and other rights superior to our common stock;

•limiting the liability of, and providing indemnification to, our directors and officers;

•limiting the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting;

•requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our Board;

•controlling the procedures for the conduct and scheduling of meetings of the Board and stockholders;

•providing our Board with the express power to postpone and cancel previously scheduled special meetings at any time;

•limiting the determination of the number of directors on our Board and the filling of vacancies or newly created seats on the board to our Board then in office; and

•providing that directors may be removed by stockholders only for cause.

While these provisions have the effect of encouraging persons seeking to acquire control of our Company to negotiate with our Board, they could enable the Board to hinder or frustrate a transaction that some, or a majority, of the stockholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors. We are also subject to Delaware laws that could have similar effects. One of these laws prohibits us from engaging in a business combination with a significant stockholder unless specific conditions are met.

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of these laws prohibits us from engaging in a business combination with a significant stockholder unless specific conditions are met.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

~~Item~~ITEM 1C. CYBERSECURITY.

Risk Management and Strategy

The Company recognizes the importance of being able to assess, effectively respond to and manage material cybersecurity threats and incidents that may compromise the confidentiality, integrity or availability of its information systems, data or network resources.

As part of its overall enterprise risk management framework, the Company maintains both a Cyber Incident Evaluation Committee (“CIEC”) and an Incident Response Plan (“IRP”). The Company’s CIEC is managed by its Chief Information Officer (the “CIO”) whose team (the Incident Response Team, or “IRT”) is responsible for leading company-wide cybersecurity strategy, policy, standards, architecture, and processes. The purpose of the ~~IRP~~IRT is to define procedures for reporting and responding to cybersecurity incidents. It creates objectives for actionable procedures that can be measured, evaluated, scaled and revised as necessary for each specific cybersecurity incident. These objectives are designed to maximize the effectiveness of the Company’s response through an established plan of action and assigning responsibilities to appropriate personnel and/or third-party contractors.

If a cybersecurity threat or incident is identified, the IRT will communicate the cybersecurity threat or incident and any damages to the CIEC. The CIEC will assess the materiality of the cybersecurity threat or incident to determine if any public disclosures are required under the SEC’s cybersecurity disclosure rule and make a recommendation to the Board. If deemed necessary, third-party consultants, legal counsel, and assessors will be engaged to evaluate the materiality assessment.

The cybersecurity program of the Company interfaces with other functional areas within the Company, including but not limited to the Company’s brands and information technology, accounting, finance, legal and human resources, as well as external third-party partners, where appropriate, to assess, identify and manage potential cybersecurity threats. The Company regularly assesses and updates its processes, procedures and management techniques in light of ongoing cybersecurity developments.

Recognizing the complexity and evolving nature of cybersecurity threats, the Company also engages with a range of external experts, including cybersecurity assessors and consultants in evaluating and testing its cybersecurity management systems and ~~IRP~~IRT. These partnerships enable the Company to leverage specialized knowledge and insights, to assist in updating its cybersecurity strategies and processes to align with industry best practices. The Company’s collaboration with these third parties includes consultation and review of security enhancements.

To date, we have not identified risks from cybersecurity threats or incidents, including as a result of any previous cybersecurity incidents, that have materially affected the Company or are reasonably likely to materially affect our operations, business strategy, results of operations, of financial condition. However, the sophistication of and risks from cybersecurity threats and incidents continues to increase, and there can be no assurance that our cybersecurity risk management program and processes, including our IRP, and other preventative actions the Company has taken and continues to take to reduce the risk of cybersecurity threats and incidents and protect its systems and information, will be fully implemented, complied with or successful in protecting against all cybersecurity threats and incidents. For more information on how cybersecurity risk could materially affect the Company’s business strategy, results of operations, or financial condition, please refer to “Item 1A Risk Factors—Risks Related to our Business and Industry—A cybersecurity breach could adversely affect our ability to conduct our business, harm our reputation, expose us to significant liability or otherwise damage our financial results.”

Governance

Our Board considers cybersecurity risk as part of its risk oversight function. The Board oversees management’s implementation of our cybersecurity risk management program. The Board receives ~~regular~~periodic reports from the CIEC on our cybersecurity risks and cyber risk management program. In addition, CIEC updates the Board, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. ~~The~~ Board ~~also~~members ~~receives~~receive ~~briefings~~presentations ~~from~~on ~~IRT~~cybersecurity ontopics from our ~~cyber~~CIO, ~~risk~~internal ~~management~~security ~~program.~~staff ~~Board~~or ~~members~~external ~~receive~~experts ~~presentations~~as onpart ~~cybersecurity~~of the Board’s continuing education on topics ~~from~~that ~~our~~impact ~~CIO,~~public companies.

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internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies.

The CIEC is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CIEC’s expertise includes a combined 20 plus years of experience in managing security technologies; designing and implementing security strategies; and risk management and incident response across various industries. Our CIEC supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.

ITEM 2. PROPERTIES

As of March 31, ~~2025~~2026, our headquarters were located in ~~San Jose, California. Effective August 1, 2025, we moved our headquarters to~~ Centennial, Colorado. We lease facilities in North America, Europe, and Asia Pacific. We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate expansion of our operations.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we are involved in legal proceedings and claims arising in the ordinary course of business. See Item 8 of Part II, “Financial Statements and Supplementary Data—Note 10: Commitments and Contingencies.”

ITEM 4. MINE SAFETY DISCLOSURE

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the Nasdaq Global Market under the symbol "QMCO".

Holders of Record

As of June 24 22, ~~2025~~2026, we had ~~200~~204 holders of record of our common stock.

Dividends

We have no intention of paying cash dividends in the foreseeable future. Our ability to pay dividends is restricted by the covenants in our senior secured term loan and amended credit facility agreements. See the section captioned “Liquidity and Capital Resources” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 4: Debt to the consolidated financial statements.

Recent Sales of Unregistered Securities

InThere ~~connection~~have ~~with~~been ~~the~~no ~~execution~~recent ofsales ~~the SEPA, the Company issued 42,158 shares~~ of ~~common~~unregistered ~~stock as commitment~~ shares ~~on January 29, 2025~~.

Pursuant to the SEPA, the Company issued (i) 190,000 shares of common stock on February 18, 2025, (ii) 480,000 shares of common stock on February 20, 2025, (iii) 22,000 shares of common stock on March 3, 2025, (iv) 315,000 shares of common stock on March 14, 2025, and (v) 107,981 on March 18th, 2025.

Issuer Purchases of Equity Securities

During the three months ended March 31, ~~2025~~2026, there were no purchases of our common stock by or on behalf of us or any of our affiliated purchasers, as such term is defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, as amended ("the "Exchange Act").

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ITEM 6. [RESERVED]

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Investors should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in the section titled “Risk Factors” and in other parts of this Annual Report on Form 10-K. See also the section titled “Note Regarding Forward-Looking Statements” in this report.

The following discussion of our financial condition and results of operations covers fiscal 2026 ~~2025~~ and fiscal ~~2024~~2025 items and year-over-year comparisons between fiscal ~~2025~~2026 and fiscal ~~2024~~2025. Discussions of fiscal ~~2023~~2024 items and year-over-year comparisons between fiscal ~~2024~~2025 and ~~2023~~fiscal 2024 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2024~~2025, that was filed with the SEC on ~~June~~August 2826, ~~2024~~2025.

Overview and Highlights

We are a technology company whose mission is to deliver innovative solutions to forward-thinking 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 income taxes.

~~Restatement~~30

The accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the restatement adjustments made to the previously reported consolidated financial statements for the quarter ended December 31, 2024. For additional information related to the quarterly restatement, see Note 14: Restatement of Unaudited Quarterly Financial Statements in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K under the caption Item 8. Financial Statements and Supplementary Data.

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RESULTS OF OPERATIONS

Year Ended March 31,

(in thousands)

~~2025~~2026

~~2024~~2025

Total revenue

~~274~~279,~~058~~581

~~311~~274,~~600~~058

Total cost of revenue (1)

~~164~~176,~~226~~540

~~186~~164,~~711~~226

Gross profit

~~109~~103,~~832~~041

~~124~~109,~~889~~832

Operating expenses

Sales and marketing (1)

52,~~320~~016

6052,~~893~~320

General and administrative (1)

6343,~~961~~917

5163,~~547~~961

Research and development (1)

3123,~~141~~503

3831,~~046~~141

Restructuring charges

48,~~090~~112

34,~~280~~090

Total operating expenses

~~151~~127,~~512~~548

~~153~~151,~~766~~512

Loss from operations

(4124,~~680~~507)

(2841,~~877~~680)

Other expense, net

(~~710~~1,511)

(~~1,746~~710)

Interest expense

(2321,~~607~~575)

(1523,~~089~~607)

Change in fair value of warrant liability

~~(45~~11,~~270)~~315

5(45,~~137~~270)

Loss on debt extinguishment, net

(3,003)

—

Change in fair value of convertible note

(4,119)

—

Net income (loss) before income taxes

(114,270)

(40,575)

Loss on debt extinguishment, net

(59,641)

(3,003)

Income tax provision

821

711

Loss before income taxes

(100,038)

(114,270)

Net income (loss)

(115,091)

(41,286)

Income tax provision

1,008

821

Net loss

(101,046)

(115,091)

(1) Includes stock-based compensation as follows:

Year Ended March 31,

(in thousands)

~~2025~~2026

~~2024~~2025

Cost of revenue

~~373~~(21)

~~774~~373

Research and development

~~495~~73

~~1,091~~495

Sales and marketing

~~317~~(66)

~~669~~317

General and administrative

~~1,643~~(835)

21,~~187~~643

Total

~~2,828~~(849)

42,~~721~~828

Comparison of the Years Ended March 31, ~~2025~~2026 and ~~2024~~2025

Revenue

	Year Ended March 31,
(in thousands)	~~2025~~2026		% ofrevenue		~~2024~~2025		% ofrevenue		$ Change		% Change
Product revenue	$	~~154~~172,~~182~~385	5762	%	$	~~174~~154,~~879~~182	5657	%	$	~~(20~~18,~~697)~~203	(12)	%
Service and subscription revenue	~~110~~99,~~658~~226		4035	%	~~126~~110,~~590~~658		4140	%	(1511,~~932~~432)		(1310)	%
Royalty revenue	97,~~218~~970		3	%	109,~~131~~218		3	%	(~~913~~1,248)		(914)	%
Total revenue	$	~~274~~279,~~058~~581	100	%	$	~~311~~274,~~600~~058	100	%	$	~~(37~~5,~~542)~~523	~~(12)~~2	%

~~Product Revenue~~31

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InProduct fiscal 2025, product revenue decreased $20.7 million, or 12%, as compared to fiscal 2024. The primary driver of the decrease was a drop in demand from our large hyperscale customers in the first quarter of the prior year, as well as more general decreases in the overall tape market. Outside of the Tape and Hyperscale business, our remaining Secondary and Primary storage systems are also offered as a subscription. We anticipate the product revenue portion of our Primary and Secondary storage systems to decrease as we continue to transition to subscription-based offerings.Revenue

In fiscal 2026, product revenue increased $18.2 million, or 12%, as compared to fiscal 2025. The primary driver of this increase was strong demand across all secondary storage product lines including Scalar tape storage products, DXi backup appliances, and ActiveScale object storage appliances. Demand growth increased worldwide with product revenues increasing across all regions. Overall secondary storage revenue increased by $27.1 million, or 36.7% as compared to fiscal 2025. Devices and media revenues also increased by $6.1 million, or 17.7% as compared to fiscal 2025. These increases were partially offset by continuing declines in primary storage.

Service and Subscription Revenue

Service and subscription revenue decreased $1511.94 million, or 1310%, in fiscal ~~2025~~2026 compared to fiscal ~~2024~~2025. This decrease was due in part to certain long-lived products reaching their end-of-service-life, partially offset by new support bookings and the transition towards subscription-based licensing.

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 $01.92 million, or 914%, in fiscal ~~2025~~2026, as compared to fiscal ~~2024~~2025, related to lower overall unit shipments.

Gross Profit and Margin

	Year Ended March 31,
(in thousands)	~~2025~~2026		Grossmargin %		~~2024~~2025		Grossmargin %		$ Change		Basis point change
Product gross profit	$	3436,~~452~~186	2221.30	%	$	3834,~~459~~452	22.03	%	$	(41,~~007)~~734	30(130)
Service and subscription gross profit	6658,~~162~~885		59.83	%	7666,~~299~~162		6059.38	%	(107,~~137~~277)		(50)
Royalty gross profit	97,~~218~~970		100.0	%	109,~~131~~218		100.0	%	(~~913~~1,248)		—
Gross profit	$	~~109~~103,~~832~~041	4036.19	%	$	~~124~~109,~~889~~832	40.1	%	$	(156,~~057~~791)	—(320)

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 30130 basis points for fiscal ~~2025~~2026, as compared to fiscal ~~2024~~2025. This decrease was due primarily to a revenue mix ~~less~~slightly more weighted towards ~~higher~~lower margin ~~tape~~devices and media products. Product costs also fluctuated through the year from external factors such as import tariffs and component material costs.

Service and Subscription Gross Margin

Service and subscription gross margin ~~increased~~decreased 50 basis points for fiscal ~~2025~~2026, as compared to fiscal ~~2024~~2025. This ~~increase~~decrease was due primarily to ~~improved~~higher ~~operational~~shipping and handling costs asand weinventory ~~implemented~~carrying ~~strict~~charges, ~~cost~~partially ~~controls~~offset ~~and~~by ~~improved~~lowered ~~our~~internal ~~organization~~costs from continued improvement in operational design.

Royalty Gross Margin

Royalties do not have significant related cost of sales.

Operating expenses

	Year Ended March 31,
(in thousands)	~~2025~~2026		% ofrevenue		~~2024~~2025		% ofrevenue		$ Change		% Change
Sales and marketing	$	52,~~320~~016	19	%	$	6052,~~893~~320	2019	%	$	(~~8,573~~304)	(141)	%
General and administrative	6343,~~961~~917		2316	%	5163,~~547~~961		1723	%	12(20,~~414~~044)		24(31)	%
Research and development	3123,~~141~~503		118	%	3831,~~046~~141		1211	%	(67,~~905~~638)		(1825)	%
Restructuring charges	48,~~090~~112		23	%	34,~~280~~090		1	%	~~810~~4,022		2598	%
Total operating expenses	$	~~151~~127,~~512~~548	5546	%	$	~~153~~151,~~766~~512	5055	%	$	(223,~~254~~964)	(116)	%

In fiscal ~~2025~~2026, sales and marketing expenses decreased $80.63 million, or 141%, as compared with fiscal ~~2024~~2025. This decrease was primarily driven by an ~~increase~~improved inorganizational ~~operational~~structure ~~cost~~following management, aschanges ~~well~~in asfiscal ~~decreased commission expense on lower revenue~~2026.

3632

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In fiscal ~~2025~~2026, general and administrative expenses ~~increased~~decreased $1220.40 million, or 2431%, as compared with fiscal ~~2024~~2025 This ~~increase~~decrease was primarily driven by large non-recurring ~~costs~~projects ~~related~~not torecurring ~~our~~in ~~re-evaluation~~fiscal 2026 including the launch of ~~Topic~~a ~~606,~~new ~~and~~ERP ~~other~~system ~~non-recurring~~in ~~projects~~the prior year. Expenses also decreased as administrative efficiency gains were realized through more streamlined functions and process automation.

In fiscal ~~2025~~2026, research and development expenses decreased $67.96 million, or 1825%, as compared with fiscal ~~2024~~2025. This decrease was the result of the ~~continued consolidation of acquisition costs, and~~ efficiencies realized through improved organization design, better aligning commonalities between major products.

In fiscal ~~2025~~2026, restructuring ~~expenses~~charges increased $04.80 million, or 2598%, as compared with fiscal ~~2024~~2025. This increase is driven by corporate restructuring activities as we consolidated our physical footprint and operations in certain markets.

Other expense, net

Year Ended March 31,

(in thousands)

~~2025~~2026

% ofrevenue

~~2024~~2025

% ofrevenue

$ Change

% Change

Other income (expense), net

(~~710~~1,511)

0(1)

(~~1,746~~710)

~~(1)~~0

~~(1,036)~~801

~~(59)~~113

In fiscal ~~2025~~2026, ~~other~~the ~~income~~change (in other expense) resulted in a net ~~decrease~~increase of $1.0.8 million or 59113%, compared to fiscal ~~2024~~2025. The ~~decrease~~increase was primarily related to differences in foreign currency gains and losses during each period.

Interest expense

	Year Ended March 31,
(in thousands)	~~2025~~2026		% ofrevenue		~~2024~~2025		% ofrevenue		$ Change	% Change
Interest expense	$	(2321,~~607~~575)	(98)	%	$	(1523,~~089~~607)	(59)	%	(82,~~518)~~032	56(9)	%

In fiscal ~~2025~~2026, interest expense ~~increased~~decreased by $82.50 million, or 569%, as compared to fiscal ~~2024~~2025. This ~~increase~~decrease was primarily due to athe ~~higher~~restructuring ~~principal~~of ~~balance on~~ our Term Loan (as ~~well~~defined asherein) ain ~~higher~~September ~~interest rate~~2025.

Warrant liabilities

Year Ended March 31,

(in thousands)

~~2025~~2026

% ofrevenue

~~2024~~2025

% ofrevenue

$ Change

% Change

Change in fair value of warrant liabilities

~~(45~~11,~~270)~~315

~~(17)~~4

5(45,~~137~~270)

2(17)

~~(50~~56,~~407)~~585

(~~981~~125)

In fiscal ~~2025~~2026, we recorded a non-cash loss of $4511.3 million related to the change in fair value of our forbearance warrant ~~liabilities,~~which ~~compared~~was toissued in September 2025. The loss was primarily driven by fluctuations in our stock price. We recorded a non-cash gain of $545.13 million in the same period in fiscal 2025 related to lender warrants issued to the holders of our Term Loan. These warrants were exercised in December 2024 and January 2025. This ~~change~~gain was primarily driven by fluctuations in our stock price.

Convertible note


	Year Ended March 31,
(in thousands)	2026		% of revenue		2025		% of revenue		$ Change		% Change
Change in fair value of convertible note	$	(4,119)	(1)	%	$	—	—	%	$	(4,119)	100	%

In fiscal 2026, we recorded a non-cash gain of $4.1 million related to the change in fair value of our convertible note issued in December 2025. This change was primarily driven by fluctuations in our stock price.

Loss on debt extinguishment, net

	Year Ended March 31,
(in thousands)	2025		% ofrevenue		2024		% ofrevenue		$ Change		% Change
Loss on debt extinguishment, net	$	(3,003)	(1)	%	$	—	—	%	$	(3,003)	(100)	%

In fiscal 2025, loss on debt extinguishment, net was related to prepayment of our long-term debt.

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	Year Ended March 31,
(in thousands)	2026		% of revenue		2025		% of revenue		$ Change		% Change
Loss on debt extinguishment, net	$	(59,641)	(21)	%	$	(3,003)	(1)	%	$	(56,638)	1,886	%

In fiscal 2026, we recorded a loss of $59.6 million on debt extinguishment primarily related to the September 2025 and December 2025 debt transactions, partially offset by a gain on termination of our revolving credit facility in August 2025. In fiscal 2025, loss on debt extinguishment, net was related to prepayment of our long-term debt.

Income tax provision

	Year Ended March 31,
(in thousands)	~~2025~~2026		% ~~ofrevenue~~of pretax income		~~2024~~2025		% ~~ofrevenue~~of pretax income		$ Change		% Change
Income tax provision	$	~~821~~1,008	—(1)	%	$	~~711~~821	0(1)	%	$	(~~110~~187)	(1523)	%

In fiscal ~~2025~~2026, the income tax provision increased $~~110~~0.2 ~~thousands~~million or 1523%, compared to fiscal ~~2024~~2025. The income tax provision increased in ~~2025~~2026 primarily due to a higher valuation allowance and a significant warrant mark-to-market adjustment, which together offset the federal statutory tax benefit from pre-tax losses. Additionally, the expiration of tax attributes contributed to the increase, as previously available deferred tax assets could no longer be used.

Due to our history of net losses in the U.S., 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.

Comparison of the ~~Three~~Years ~~Months~~ Ended ~~December~~March 31, ~~2024 (Restated)~~2025 and ~~2023~~2024

Revenue

	Three Months Ended December 31,
	Year Ended March 31,
(dollars in thousands)	~~2024~~2025		% ofrevenue		~~2023~~2024		% ofrevenue		$ Change		% Change
	Restated
Product revenue	$	154,182	57	%	$	174,879	55	%	$	(20,697)	(12)	%
Product revenue	$	38,634	57	%	$	37,113	51	%	$	1,521	4	%
Service and subscription	110,658		40	%	126,590		41	%	(15,932)		(13)	%
Service and subscription	27,724		40	%	32,771		46	%	(5,047)		(15)	%
Royalty	9,218		3	%	10,131		3	%	(913)		(9)	%
Royalty	2,326		3	%	2,042		3	%	284		14	%
Total revenue	$	274,058	100	%	$	311,600	99	%	$	(37,542)	(12)	%
Total revenue	$	68,684	100	%	$	71,926	100	%	$	(3,242)	(5)	%

Product Revenue

In ~~the~~fiscal ~~three months ended December 31~~2025, ~~2024,~~ product revenue ~~increased~~decreased $120.57 million, or 412%, as compared to ~~the same period in~~ fiscal 2024. The primary driver of the ~~increase~~decrease was a drop in ~~Primary~~demand ~~storage~~from ~~systems~~our ~~with~~large ~~higher~~hyperscale ~~sales~~customers in the first quarter of the prior year, as well as more general decreases in the overall tape market. Outside of the Tape and Hyperscale business, our ~~StorNext~~remaining ~~based~~Secondary ~~solutions~~and Primary storage systems are also offered as a subscription.

Service and Subscription Revenue

Service and subscription revenue decreased $515.09 million, or 1513%, in ~~the~~fiscal ~~three~~2025 ~~months ended December 31, 2024~~ compared to ~~the same period in~~ fiscal 2024. This decrease was due in part to certain long-lived products reaching their end-of-service-life, partially offset by new support bookings and the transition towards subscription-based licensing.

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~~decreased ~~a small increase of~~ $0.39 million, or 149%, in ~~the~~fiscal ~~three months ended December 31~~2025, ~~2024~~as compared to ~~the same period in~~ fiscal 2024, ~~due~~related to ~~product~~lower ~~mix.~~overall unit shipments.

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Gross Profit and Margin

	Three Months Ended December 31,
(dollars in thousands)	2024		Grossmargin %		2023		Grossmargin %		$ Change		Basis point change
	Restated
Product	$	7,712	20.0	%	$	7,069	19.0	%	$	643	100
Service and subscription	17,850		64.4	%	20,070		61.2	%	(2,220)		320
Royalty	2,326		100.0	%	2,042		100.0	%	284		—
Gross profit	$	27,888	40.6	%	$	29,181	40.6	%	$	(1,293)	—

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

Product Gross Margin

Product gross margin increased by $0.6 million, or by 100 basis points, for the three months ended December 31, 2024, as compared with the same period in fiscal 2024. This increase was primarily due to a more favorable mix of revenues, weighted towards our higher margin product lines, as well as improvements in our operational efficiency and logistics costs.

Service and Subscription Gross Margin

Service and subscription gross margins increased 320 basis points for the three months ended December 31, 2024, as compared with the same period in fiscal 2024. This increase was primarily driven by improvements in our operations efficiency.

Royalty Gross Margin

Royalties do not have significant related cost of sales.

Operating Expenses

	Three Months Ended December 31,
(dollars in thousands)	2024		% of revenue		2023		% of revenue		$ Change		% Change
Sales and marketing	$	12,448	18	%	$	14,244	20	%	$	(1,796)	(13)	%
General and administrative	14,142		21	%	11,893		17	%	2,249		19	%
Research and development	7,683		11	%	8,763		12	%	(1,080)		(12)	%
Restructuring charges	1,342		2	%	497		1	%	845		170	%
Total operating expenses	$	35,615	52	%	$	35,397	49	%	$	218	1	%

In the three months ended December 31, 2024, sales and marketing expenses decreased $1.8 million, or 13%, as compared with the same period in fiscal 2024. This decrease was primarily driven by improved operational efficiency and increased leverage of our channel.

In the three months ended December 31, 2024, general and administrative expenses increased $2.2 million, or 19%, as compared with the same period in fiscal 2024 This increase was primarily driven by higher expense in compliance focused outside services related to ongoing projects.

In the three months ended December 31, 2024, research and development expenses decreased $1.1 million, or 12%, as compared with the same period in fiscal 2024 This decrease was the result of the continued consolidation of acquisition costs, and efficiencies realized through improved organization design.

In the three months ended December 31, 2024, restructuring expenses increased $0.8 million, or 170% as compared with the same period in fiscal 2024 The increase was the result of cost reduction initiatives in the current year.

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Other Income (Expense)


	Year Ended March 31,
(dollars in thousands)	2025		Gross margin %		2024		Gross margin %		$ Change		Basis point change
Product	$	34,452	22.3	%	$	38,460	22.0	%	$	(4,008)	30
Service and subscription	66,162		59.8	%	76,298		60.3	%	(10,136)		(50)
Royalty	9,218		100.0	%	10,131		100.0	%	(913)		—
Gross profit	$	109,832	40.1	%	$	124,889	40.1	%	$	(15,057)	—

	Three Months Ended December 31,
(dollars in thousands)	2024		% of revenue		2023		% of revenue		$ Change		% Change
Other income (expense)	$	967	1	%	$	(1,419)	(2)	%	$	2,386	168	%

The change in other income (expense), net during the three months ended December 31, 2024 compared with the same period in fiscal 2024 was related primarily to fluctuations in foreign currency exchange rates during the three months ended December 31, 2024.

Interest Expense

	Three Months Ended December 31,
(dollars in thousands)	2024		% of revenue		2023		% of revenue		$ Change		% Change
Interest expense	$	(6,840)	(10)	%	$	(3,937)	(5)	%	$	(2,903)	74	%

In the three months ended December 31, 2024, interest expense increased $2.9 million, or 74%, as compared with the same period in fiscal 2024 due to a higher effective interest rate on our Term Loan.

Warrant liabilities

	Three Months Ended December 31,
(dollars in thousands)	2024		% of revenue		2023		% of revenue		$ Change		% Change
Change in fair value of warrant liabilities	$	(61,630)	(90)	%	$	4,402	6	%	$	(66,032)	(1,500)	%

In December 31, 2024, we recorded a non-cash loss of $61.6 million related to the change in fair value of our warrant liabilities, compared to a non-cash gain of $4.4 million in the same period in fiscal 2024. This change was primarily driven by fluctuations in our stock price.

Income Taxes

	Three Months Ended December 31,
(dollars in thousands)	2024		% of pretax income		2023		% of pretax income		$ Change		% Change
Income tax provision	$	70	—	%	$	510	(5)	%	$	(440)	(86)	%

The income tax provision for the three months ended December 31, 2024 and 2023 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.

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Comparison of the Nine Months Ended December 31, 2024 (Restated) and 2023

Revenue

	Nine Months Ended December 31,
(dollars in thousands)	2024		% of revenue		2023		% of revenue		$ Change		% Change
	Restated
Product revenue	$	120,565	56	%	$	138,635	58	%	$	(18,070)	(13)	%
Service and subscription	84,640		40	%	94,229		39	%	(9,589)		(10)	%
Royalty	7,592		4	%	7,235		3	%	357		5	%
Total revenue	$	212,797	100	%	$	240,099	100	%	$	(27,302)	(11)	%

Product Revenue

In the nine months ended December 31, 2024, product revenue decreased $18.1 million, or 13%, as compared to the same period in fiscal 2024. The primary driver of the decrease was a $20 million decrease in demand from our large hyperscale customers, as well as more general decreases in the overall tape market with declines in media and devices revenue. Outside of the Tape and Hyperscale business, our remaining Secondary and Primary storage systems are also offered as a subscription. We expect the product revenue portion of our Primary and Secondary storage systems to decrease as we continue to transition to subscription-based offerings.

Service and Subscription Revenue

We offer a broad range of services including product maintenance, implementation, and training as well as software subscriptions. Service revenue is primarily comprised of customer field support contracts which provide standard support services for our hardware. Standard service contracts may be extended or include enhanced service, such as faster service response times.

Service and subscription revenue decreased $9.6 million, or 10%, in the nine months ended December 31, 2024 compared to the same period in fiscal 2024. This decrease was primarily driven by certain long-lived products reaching their end-of-service-life, partially offset by increases in subscription-based revenue.

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 small increase of $0.4 million, or 5%, in the nine months ended December 31, 2024 compared to the same period in fiscal 2024 due to product mix.

Gross Profit and Margin

	Nine Months Ended December 31,
(dollars in thousands)	2024		Grossmargin %		2023		Grossmargin %		$ Change		Basis point change
	Restated
Product	$	27,314	22.7	%	$	33,421	24.1	%	$	(6,107)	(141)
Service and subscription	50,686		59.9	%	56,900		60.4	%	(6,214)		(48)
Royalty	7,592		100.0	%	7,235		100.0	%	357		—
Gross profit	$	85,592	40.2	%	$	97,556	40.6	%	$	(11,964)	(43)

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 ~~140~~30 basis points, for ~~the~~fiscal ~~nine months ended December 31~~2025, ~~2024,~~ as compared ~~with~~to ~~the same period in~~ fiscal 2024. This decrease was ~~primarily~~ due primarily to a ~~less~~revenue ~~favorable~~ mix ofless ~~revenues,~~ weighted towards ~~our~~higher ~~lower~~ margin ~~product~~tape ~~lines, which were partially offset from improvements in our operational efficiency and logistics costs~~products.

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Service and Subscription Gross Margin

Service and subscription gross margin ~~decreased~~increased 50 basis points for ~~the~~fiscal ~~nine months ended December 31~~2025, ~~2024,~~ as compared ~~with~~to ~~the same period in~~ fiscal 2024. This ~~decrease~~increase was due primarily ~~driven~~to byimproved ~~lower~~operational ~~service~~costs ~~revenues~~as we implemented strict cost controls and improved our organization design.

Royalty Gross Margin

Royalties do not have significant related cost of sales.

Operating Expenses

	Nine Months Ended December 31,
	Year Ended March 31,
(dollars in thousands)	~~2024~~2025		% of revenue		~~2023~~2024		% of revenue		$ Change		% Change
Sales and marketing	$	3952,~~321~~320	1819	%	$	4560,~~800~~893	1920	%	$	(68,~~479~~573)	(14)	%
General and administrative	4963,~~186~~961		23	%	3451,~~833~~547		1517	%	1412,~~353~~414		4124	%
Research and development	2431,~~255~~141		11	%	2838,~~828~~046		12	%	(46,~~573~~905)		(1618)	%
Restructuring charges	24,~~916~~090		1	%	3,~~164~~280		1	%	~~(248)~~810		~~(8)~~25	%
Total operating expenses	$	~~115~~151,~~678~~512	5455	%	$	~~112~~153,~~625~~766	4749	%	$	3(2,~~053~~254)	3(1)	%

In ~~the~~fiscal ~~nine months ended December 31~~2025, ~~2024,~~ sales and marketing ~~expense~~expenses decreased $68.56 million, or 14%, as compared with ~~the same period in~~ fiscal 2024. This decrease was primarily driven by ~~improved~~an increase in operational ~~efficiency~~cost ~~and~~management, ~~increased~~as ~~leverage~~well ofas ~~our~~decreased ~~channel~~commission expense on lower revenue.

In ~~the~~fiscal ~~nine months ended December 31~~2025, ~~2024,~~ general and administrative ~~expense~~expenses increased $1412.4 million, or 4124%, as compared with ~~the same period in~~ fiscal 2024. This increase was primarily driven by large non-recurring costs related to our ~~previously~~re-evaluation ~~announced restatement~~ of ~~our~~revenue ~~historical financial statements~~recognition, and other ~~related~~non-recurring projects.

In ~~the~~fiscal ~~nine months ended December 31~~2025, ~~2024,~~ research and development expenses decreased $4.6.9 million, or 1618%, as compared with ~~the same period in~~ fiscal 2024. This decrease was the result of the continued consolidation of acquisition costs, and efficiencies realized through improved organization design.

In ~~the~~fiscal ~~nine months ended December 31~~2025, ~~2024,~~ restructuring expenses ~~decreased~~increased $0.28 million, or 825%, as compared with ~~the~~fiscal ~~same~~2024. ~~period~~This inincrease ~~fiscal~~is ~~2024.~~driven ~~The~~by ~~decrease~~corporate ~~was~~restructuring ~~the~~activities ~~result~~as ofwe ~~cost~~consolidated ~~reduction~~our ~~initiatives~~physical infootprint ~~the~~and ~~prior~~operations ~~year~~in certain markets.

Other Income (Expense)

	Nine Months Ended December 31,
	Year Ended March 31,
(dollars in thousands)	~~2024~~2025		% of revenue		~~2023~~2024		% of revenue		$ Change		% Change
Other income (expense)	$	(~~408~~710)	0	%	$	(21,~~049~~746)	(1)	%	$	1,~~641~~036	8059	%

~~The~~In ~~change~~fiscal in2025, other income (expense), resulted in a net ~~during~~decrease ~~the~~of ~~nine~~$1.0 ~~months~~million ~~ended~~or ~~December 31~~59%, ~~2024~~ compared ~~with~~to ~~the same period in~~ fiscal 2024. ~~was~~The ~~related~~decrease was primarily related to ~~fluctuations~~differences in foreign currency ~~exchange~~gains ~~rates~~and losses during ~~the~~each ~~nine months ended December 31, 2024~~period.

~~Interest Expense~~35

	Nine Months Ended December 31,
(dollars in thousands)	2024		% of revenue		2023		% of revenue		$ Change		% Change
Interest expense	$	(16,761)	(8)	%	$	(10,992)	(5)	%	$	(5,769)	52	%

In the nine months ended December 31, 2024, interest expense increased $5.8 million, or 52%, as compared with the same period in fiscal 2024 due to a higher effective interest rate on our Term Loan.

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Interest Expense


	Year Ended March 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Interest expense	$	(23,607)	(9)	%	$	(15,089)	(5)	%	$	(8,518)	56	%

In fiscal 2025, interest expense increased $8.5 million, or 56%, as compared to fiscal 2024. This increase was primarily due to a higher principal balance on our Term Loan as well as a higher interest rate.

Warrant liabilities

Nine Months Ended December 31,

Year Ended March 31,

(dollars in thousands)

~~2024~~2025

% of revenue

~~2023~~2024

% of revenue

$ Change

% Change

Change in fair value of warrant liabilities

(5645,~~414~~270)

(2717)

75,~~341~~137

(6350,~~755~~407)

(~~868~~981)

In ~~December 31,~~fiscal ~~2024~~2025, we recorded a non-cash loss of $5645.43 million related to the change in fair value of our warrant liabilities, compared to a non-cash gain of $75.31 million in the same period in fiscal 2024. This change was primarily driven by fluctuations in our stock price.

Loss on ~~Debt~~debt ~~Extinguishment~~extinguishment

	Nine Months Ended December 31,
	Year Ended March 31,
(dollars in thousands)	~~2024~~2025		% of revenue		~~2023~~2024		% of revenue		$ Change		% Change
Loss on debt extinguishment	$	(3,003)	(1)	%	$	—	—	%	$	(3,003)	100	%

In ~~the~~fiscal ~~nine months ended December 31~~2025, ~~2024,~~ loss on debt extinguishment, net was related to a prepayment of our ~~Term~~long-term ~~Loan~~debt.

Income Taxes

Nine Months Ended December 31,

Year Ended March 31,

(dollars in thousands)

~~2024~~2025

% of pretax income

~~2023~~2024

% of pretax income

$ Change

% Change

Income tax provision

~~675~~821

(1)

~~1,573~~711

(82)

~~(898)~~110

~~(57)~~15

~~The~~In ~~income~~fiscal ~~tax~~2025, ~~provision for~~ the ~~nine months ended December 31, 2024 and 2023 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~~provision inincreased ~~certain~~$0.1 ~~foreign jurisdictions~~million, ~~and~~or ~~the difficulty in predicting future results~~15%, wecompared ~~believe~~to ~~that~~fiscal we2024. ~~cannot~~The ~~rely on projections of future taxable~~ income totax ~~realize~~provision ~~most~~increased ofin ~~our~~2025 ~~deferred~~primarily ~~tax~~due ~~assets.~~to ~~Accordingly, we have established~~ a ~~full~~higher valuation allowance ~~against our U.S.~~ and ~~certain~~a ~~foreign~~warrant ~~net~~mark-to-market ~~deferred~~adjustment, ~~tax~~which ~~assets.~~together ~~Significant~~offset ~~management~~the ~~judgment~~federal isstatutory ~~required~~tax ~~in assessing our ability to realize any future~~ benefit from ~~our net deferred~~ pre-tax ~~assets~~losses. WeAdditionally, ~~intend~~the toexpiration ~~maintain~~of ~~this valuation allowance until sufficient positive evidence exists to support its reversal. Our income~~ tax ~~expense~~attributes ~~recorded~~contributed ~~in the future will be reduced~~ to the ~~extent~~increase, ~~that~~as ~~sufficient~~previously ~~positive~~available ~~evidence~~deferred ~~materializes~~tax toassets ~~support~~could ano ~~reversal~~longer ~~of,~~be ~~or decrease in, our valuation allowance~~used.

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 activities, cash and cash equivalents on our balance sheet and proceeds from the sale of Common Stock under the SEPA (as defined herein). In fiscal 2025, there were also amounts available under our revolving credit facility agreement with PNC Bank, National Association, as amended from time to time (the “PNC Credit Facility”). Wehowever, ~~require~~this ~~significant~~agreement ~~cash~~was ~~resources~~terminated toin ~~meet~~August ~~obligations~~2025. toWe ~~pay~~require ~~principal~~significant ~~and~~cash ~~interest~~resources onto ~~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 research and development plans and capital asset needs.

We had cash and cash equivalents of $1615.56 million as of March 31, ~~2025~~2026, which excludes $0.17 million of short-term restricted cash. Our total outstanding Term Loan debt was $~~102~~55.59 million, and wethe ~~had~~fair ~~$0.4 million~~value ~~available~~of ~~to borrow under~~ the ~~PNC~~Convertible ~~Credit~~Note ~~Facility~~ (as ofdefined ~~March 31,~~herein) ~~2025~~was $90.0 million.

We generated negative cash flows from operations of approximately $23.6 million and $10.2 million for the fiscal years ended March 31, 2025 and 2024, respectively, and generated net losses of approximately $115.1 million and $41.3 million for the fiscal years ended March 31, 2025 and 2024, respectively. We have funded operations through the sale of common stock, term debt borrowings and PNC Credit Facility borrowings described in Note 4: Debt.36

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OnWe ~~January~~generated ~~25,~~negative ~~2025,~~cash ~~the~~flows ~~Company~~from ~~entered~~operations ~~into~~of aapproximately ~~SEPA~~$37.9 inmillion ~~which pursuant to~~ and ~~subject~~$23.6 tomillion ~~its~~for ~~terms,~~ the ~~Company~~fiscal ~~has~~years ~~the~~ended ~~right~~March 31, ~~but~~2026 ~~not~~and ~~the~~2025, ~~obligation~~respectively, toand ~~sell~~generated upnet tolosses ~~$200 million~~ of ~~Common~~approximately ~~Stock at any time during the three-year period following the date of the SEPA~~$101.0 Asmillion ofand ~~March 31, 2025, the Company has sold 1~~$115.2 1 million ~~shares~~for ~~of Common Stock under~~ the ~~SEPA~~fiscal ~~with~~years ~~net~~ended ~~proceeds of approximately $16.4 million. Subsequent to~~ March 31, ~~2025~~2026 ~~through~~and ~~July 31,~~ 2025, ~~the~~respectively. ~~Company~~We ~~sold~~have anfunded ~~additional~~operations ~~6.3~~through ~~million~~the ~~shares~~sale of ~~Common~~common ~~Stock~~stock under the SEPA ~~with~~ ~~net proceeds of $66.6 million. As of July 31, 2025, the Company had cash~~ and ~~cash~~debt ~~equivalents~~borrowings ~~of approximately $28.1 million~~ as ~~well~~described asin ~~$0.0 borrowed. See~~ Note 74: ~~Common Stock for additional information related to the SEPA~~Debt. ~~On August 13, 2025, the Company terminated the PNC Credit Facility.~~

WeOn ~~are~~January ~~subject~~25, to2025, ~~various~~the ~~debt~~Company ~~covenants~~entered ~~under~~into ~~our~~a ~~credit~~Standby ~~agreements.~~Equity ~~Our~~Purchase ~~failure~~Agreement to(the ~~comply~~"SEPA") with ~~our~~YA ~~debt~~II ~~covenants~~PN, ~~could~~Ltd., ~~materially~~a ~~and~~Cayman ~~adversely~~Islands ~~affect~~exempt ~~our~~limited ~~financial~~partnership ~~condition~~("YA"), ~~and ability to service our obligations. As discussed~~ in ~~Note~~which 1:pursuant ~~Description~~to ~~of Business~~ and ~~Significant~~subject ~~Accounting~~to ~~Policies—Going~~its ~~Concern~~terms, wethe ~~believe~~Company wehas ~~will be in violation of our net leverage covenant as of~~ the ~~September 30~~right, ~~2025~~but ~~testing~~not ~~date and~~ the ~~violation~~obligation, ~~will~~to ~~cause~~sell ~~the~~up ~~Term Loan outstanding balance~~ to ~~become~~$200.0 ~~due~~million ~~as an event~~ of ~~default.~~Common AsStock aat ~~result,~~any wetime ~~classified~~during the ~~Term~~three-year ~~Loan~~period asfollowing ~~current liabilities in~~ the ~~accompanying~~date ~~consolidated~~of ~~balance sheet. Additionally,~~ the ~~Company is evaluating strategies to restructure or refinance our debt, including potential covenant waivers~~SEPA. ~~We may be unable to obtain additional funding.~~ As ~~such,~~of ~~there~~March ~~can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms~~31, ~~if at all. For additional information about our debt~~2026, ~~see~~ the ~~sections~~Company ~~entitled~~has ~~“Risk~~sold ~~Factors—Risks Related to Our Indebtedness and Liquidity” in Item 1A~~8.7 million ~~Risk~~shares ~~Factors~~of ~~and~~Common ~~“Management’s~~Stock ~~Discussion~~under ~~and~~the ~~Analysis~~SEPA ofwith ~~Financial~~net ~~Condition~~proceeds ~~and Results~~ of ~~Operations—Liquidity~~approximately ~~and~~$91.0 ~~Capital Resources” in this Annual Report~~million.

Subsequent to March 31, 2026, we completed several transactions which have significantly impacted our future liquidity. On June 1, 2026, the Company entered into Securities Purchase Agreements to issue and sell to certain accredited investors an aggregate of 10,615,712 shares of the Company’s Common Stock. After deducting placement agent fees and other offering expenses payable by the Company, the Company received net proceeds of $94.7 million. On June 4, 2026, the Company paid an aggregate of $57.8 million in connection with the termination of the Term Loan Credit Agreement. This fully paid down and extinguished our Term Loans (as defined herein). Also on June 4, 2026, the Company provided a notice to YA regarding its termination of the SEPA, effective June 11, 2026. There were no amounts owed to YA under the SEPA at the time the termination notice was provided. See Note 13: Subsequent Events, for further details. With the cash proceeds, after repayment of the Term Loans, we forecast that operating performance, cash and current working capital will provide us with sufficient capital to fund operations for at least one year from the financial statement issuance date.

Cash Flows

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

Year Ended March 31,

( in thousands)

2025

2024

(in thousands)

2026

2025

Cash provided by (used in):

Operating activities

(2337,~~613~~856)

(1023,~~156~~613)

Investing activities

(41,~~947~~706)

(54,~~869~~947)

Financing activities

1939,~~306~~168

1519,~~713~~306

Effect of exchange rate changes

~~(3)~~25

(3)

Net change in cash, cash equivalents, and restricted cash

(~~9,257~~369)

(~~315~~9,257)

Net Cash Used in Operating Activities

Net cash used in operating activities increased by $1314.52 million to $2337.69 million for the year ended March 31, ~~2025~~2026 compared to $1023.26 million for the year ended March 31, ~~2024,~~2025. The increase was primarily attributable ~~the~~increase ~~decrease~~ in ~~revenue~~product costs and associated decrease gross profit in addition to ~~an increase in~~ large non-recurring costs related to our re-evaluation of Topic 606, and other non-recurring projects.

Net Cash Used in Investing Activities

Net cash used in investing activities was $1.7 million and $4.9 million for the ~~year~~years ended March 31, 2026 and 2025, respectively, primarily attributable to capital expenditures.

Net cash used in investing activities was $5.9 million for the year ended March 31, 2024, primarily attributable to the implementation costs of a new Enterprise Resource Planning system.

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Net Cash Provided by Financing Activities

Net cash provided by financing activities was $1939.32 million for the year ended March 31, ~~2025~~2026 due primarily to ~~borrowings~~cash ~~under~~proceeds ~~our~~from ~~Term~~the ~~Loan~~SEPA, ~~credit~~partially ~~facility~~offset by the repayment of the revolver in the first quarter of fiscal 2026.

~~Net cash provided by financing activities was $15.7 million for the year ended March 31, 2024 due primarily to borrowings under our Term Loan credit facility.~~37

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Net cash provided by financing activities was $19.3 million for the year ended March 31, 2025 due primarily to cash proceeds from the SEPA, partially offset by the repayment of the PNC Credit Facility in August 2025.

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 of business litigation, See Note 10: Commitments and Contingencies, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Contractual Obligations

Contractual obligations are cash amounts that we are obligated to pay as part of certain contracts that we have entered into during the normal course of business. Below is a table that shows our contractual obligations as of March 31, ~~2025~~2026 (in thousands):

Payments Due by Period

(in thousands)

Total

1 year or less

1 – 3 Years

3 –5 Years

More than5 years

Debt obligations (1)

~~129~~128,~~107~~767

~~129~~55,~~107~~906

—72,861

—

Future lease commitments (2)

1916,~~111~~895

21,~~346~~964

32,~~429~~840

2,~~481~~522

109,~~855~~569

Purchase obligations (3)

4876,~~612~~758

—

Total

~~196~~222,~~830~~420

~~180~~134,~~065~~628

375,~~429~~701

2,~~481~~522

109,~~855~~569

(1) Consists of principal on our Term Loan and ~~PNC~~Convertible ~~Credit Facility~~Note.

(2) Represents aggregate future minimum lease payments under non-cancelable operating leases.

(3) Includes primarily non-cancelable inventory purchase commitments.

Off-Balance Sheet Arrangements

We do not currently have any other off-balance sheet arrangements and do not have any holdings in variable interest entities.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

The preparation of our consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make judgments, estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K. 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 the following 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. The following accounting policies include estimates that require management’s subjective or complex judgments about the effects of matters that are inherently uncertain. For information on our

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~~circumstances. We consider the following 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. The following accounting policies ~~include estimates that require management’s subjective or complex judgments about the effects of matters that are inherently uncertain. For information on our significant accounting policies~~, including the policies discussed below, see Note 1: Description of Business and Significant Accounting Policies, to our consolidated financial statements.

Revenue Recognition

Our revenue is derived from three main sources: (a) products, (b) service and subscription, and (c) royalties. Our performance obligations are satisfied at a point in time or over time as stand ready obligations. Product revenue is recognized at the point in time when the customer takes control of the product, which typically occurs at the point of shipment. Service and subscription revenue consists of customer support agreements, software subscriptions, installation, and consulting &and training. Our software subscriptions include term licenses which are recognized as revenue when the license has been delivered to the customer and related customer support, which is recognized ratably over the service period. Revenue from customer support agreements is recognized ratably over the contractual term of the agreement. Installation services are typically completed within a short period of time and revenue from these services ~~are~~is recognized at the point when installation is complete. A majority of our consulting and training revenue does not take significant time to complete therefore these obligations are satisfied upon completion of such services over time as each day is completed. We license certain products under royalty arrangements, pursuant to which our licensees periodically provide us with reports containing units sold to end users subject to the royalties. The reports substantiate that our performance obligation has been satisfied and we recognize royalty revenue based on the reports or when amounts can be reasonably estimated.

There are significant judgments used when applying Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers ("Topic 606"), to contracts with customers. Most of our contracts contain multiple goods and services designed to meet each customer's unique storage needs. For contracts with multiple performance obligations, we allocate the transaction price to each performance obligation based on the relative standalone selling price of the good or service underlying each performance obligation. Where standalone selling price may not be directly observable (e.g., the performance obligation is not sold separately), we maximize the use of observable inputs by using information including internal discounting practices, competitor pricing, competitor margins, performance obligations with similar customers and product groupings. Determining the observable inputs and applying them to our performance obligations requires significant judgment. We reassess standalone selling price determination periodically.

Product revenue may be impacted by a variety of price adjustments or other factors, including rebates, returns and stock rotation. We use the expected value method to estimate the net consideration expected to be returned by the customer. We use historical data and current trends to drive our estimates. We record a reduction to revenue to account for these items that may result in variable consideration. We initially measure a returned asset at the carrying amount of the inventory, less any expected costs to recover the goods including potential decreases in value of the returned goods.

Income Taxes

Deferred tax assets and liabilities are recognized based on temporary differences between the financial reporting and tax bases of assets and liabilities, measured at the enacted tax rates expected to apply to taxable income in the years in which those tax assets or liabilities are expected to be realized or settled. Based on the evaluation of available evidence, both positive and negative, we recognize future tax benefits, such as net operating loss carryforwards and tax credit carryforwards, to the extent that realizing these benefits is considered to be more likely than not.

A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. An increase or decrease in the valuation allowance, if any, that results from a change in circumstances, and which causes a change in our judgment about the realizability of the related deferred tax asset, is included in the tax provision.

We recognize the financial statement effects of an uncertain income tax position when it is more likely than not, based on technical merits, that the position will be sustained upon examination. We reevaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances and changes in tax law. We recognize penalties and tax-related interest expense as a component of income tax expense in our consolidated statements of operations and comprehensive loss. See Note 9: Income Taxes, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

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circumstances and changes in tax law. We recognize penalties and tax-related interest expense as a component of income tax expense in our consolidated statements of operations. See Note 9: Income Taxes, to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Inventories

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Manufacturing Inventories

Our manufacturing ~~inventory~~inventories isare recorded at the lower of cost or net realizable value, with cost being determined on a first-in, first-out (“FIFO”) basis. Costs include material, direct labor, and an allocation of overhead. Adjustments to reduce the cost of manufacturing inventory to its net realizable value, if required, are made for estimated excess, obsolete or impaired balances. Factors influencing these adjustments include declines in demand, rapid technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from our estimates.

Service Parts Inventories

Our service parts inventories are recorded at the lower of cost or net realizable value, with cost being determined on a FIFO basis. Service parts inventories consist of both component parts, which are primarily used to repair defective units, and finished units, which are provided for customer use permanently or on a temporary basis while the defective unit is being repaired. We record adjustments to reduce the carrying value of service parts inventory to its net realizable value and dispose of parts with no use and a net realizable value of zero. Factors influencing these adjustments include product life cycles, end of service life plans and the volume of enhanced or extended warranty service contracts. Estimates of net realizable value involve significant estimates and judgments about the future, and revisions would be required if these factors differ from our estimates.

Warrant Accounting

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance: ASC 480, Distinguishing Liabilities from Equity (“Topic 480”) and ASC 815, Derivatives and Hedging (“Topic 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to Topic 480, meet the definition of a liability pursuant to Topic 480, and whether the warrants meet all of the requirements for equity classification under Topic 815, including whether the warrants are indexed to the Company’s own shares of common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance or modification. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statement of operations.

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 year ended March 31, 2026, the Company determined that the change attributable to instrument-specific credit risk was immaterial. See Note 11: Fair Value of Financial Instruments, with respect to the fair value option election, and Note 4: Debt, for a discussion of the Convertible Note.

Recently Issued and Adopted Accounting Pronouncements

For recently issued and adopted accounting pronouncements, see Note 1: Description of Business and Significant Accounting Policies, to our consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of exposure due to potential changes in inflation or interest rates. We do not hold financial instruments for trading purposes.

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Interest Rate Risk

We are subject to interest rate risk on borrowings under our variable interest rate term debt ~~and PNC Credit Facility~~. See Note 4: Debt to our consolidated financial statements for a description of our long-term debt. Changes in the market interest rate will increase or decrease our interest expense. Assuming no change in the outstanding borrowings under the term debt ~~and the PNC Credit Facility~~ during fiscal ~~2025~~2026, a hypothetical 100-basis point increase or decrease in market interest rates sustained throughout the year would not result in a material change to our annual interest expense. Our other long-term debt related to lease obligations have fixed interest rates and terms, and as such, we consider the associated risk to our results of operations from changes in market rates of interest applied to our lease obligations to be minimal.

Foreign Exchange Risk

We conduct business in certain international markets. Because we operate in international markets, we have exposure to different economic climates, political arenas, tax systems and regulations that could affect foreign exchange rates. Our primary exposure to foreign currency risk relates to transacting in foreign currency and recording the activity in U.S. dollars. Changes in exchange rates between the U.S. dollar and these other currencies will result in transaction gains or losses, which we recognize in our consolidated statements of operations and comprehensive loss.

To the extent practicable, we minimize our foreign currency exposures by maintaining natural hedges between our assets and liabilities and revenues and expenses denominated in foreign currencies. We may enter into foreign exchange derivative contracts or other economic hedges in the future. Our goal in managing our foreign exchange risk is to reduce to the extent practicable our potential exposure to the changes that exchange rates might have on our earnings.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 248)			5043
Consolidated Balance Sheets			52
Report of Independent Registered Public Accounting Firm (PCAOB ID: 32)
Consolidated Statements of Operations and Comprehensive Loss			53
Consolidated Balance Sheets			48
Consolidated Statements of Cash Flows			54
Consolidated Statements of Operations and Comprehensive Loss			49
Consolidated Statements of Stockholders’ Deficit			55
Consolidated Statements of Cash Flows			50
Index to Notes to Consolidated Financial Statements			56
Consolidated Statements of Stockholders’ Deficit			51
Index to Notes to Consolidated Financial Statements			52

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Quantum Corporation

Opinion on the ~~financial~~Financial ~~statements~~ Statements

We have audited the accompanying consolidated balance ~~sheets~~sheet of Quantum Corporation ~~(a Delaware corporation)~~ and subsidiaries (the “Company”) as of March 31, ~~2025~~2026, and ~~2024,~~ the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for ~~each of~~ the ~~two~~year ~~years~~then ~~in the period~~ ended ~~March 31~~, ~~2025,~~ and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, ~~2025 and 2024~~2026, and the results of ~~its~~their operations and ~~its~~their cash flows for ~~each of~~ the ~~two~~year ~~years~~then ~~in the period~~ ended ~~March 31, 2025,~~ in conformity with accounting principles generally accepted in the United States of America.

~~Going~~The ~~concern~~consolidated financial statements of the Company as of March 31, 2025, were audited by other auditors whose report dated August 26, 2025, expressed an unqualified opinion on those statements.

~~The~~We ~~accompanying~~also ~~consolidated financial statements~~ have ~~been~~audited, ~~prepared~~in ~~assuming~~accordance ~~that~~with the ~~Company~~standards ~~will~~of ~~continue~~the asPublic aCompany ~~going~~Accounting ~~concern.~~Oversight AsBoard ~~discussed~~(United inStates) ~~Note 1 to the consolidated financial statements~~(“PCAOB”), the Company’s ~~believes~~internal itcontrol ~~will~~over befinancial inreporting ~~violation~~as of ~~the~~March ~~net~~31, ~~leverage~~2026, ~~coverage~~based ~~covenant~~on ~~for~~criteria ~~the~~established ~~quarter~~in ~~ended~~2013 ~~September~~Internal ~~30,~~Control—Integrated ~~2025.~~Framework ~~The~~issued ~~Company’s~~by ~~plan~~the ~~which~~Committee isof ~~also~~Sponsoring ~~described~~Organizations inof ~~Note 1, contemplates~~ the ~~Company~~Treadway ~~negotiating~~Commission ~~waivers~~(COSO) ~~to these covenants~~ and isour ~~evaluating~~report ~~strategies~~dated toJune ~~restructure~~25, or2026, ~~refinance~~expressed ~~the~~an ~~existing~~adverse ~~term debt~~opinion. ~~If the Company is unable to obtain additional~~

~~waivers,~~Basis ~~the~~for term debt will become immediately due, and additional liquidity will be required to satisfy the obligations. The Company’s ability to achieve the foregoing elements of its business, which may be necessary to permit the realization of assets and satisfaction of liabilities in the ordinary course of business, is uncertain and raises substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Opinion

~~Basis~~These ~~for~~consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

~~These~~We ~~consolidated~~conducted ~~financial~~our ~~statements~~audit ~~are~~in accordance with the ~~responsibility~~standards of the ~~Company’s management~~PCAOB. ~~Our~~Those ~~responsibility~~standards isrequire tothat ~~express~~we anplan ~~opinion~~and onperform the ~~Company’s~~audit to obtain reasonable assurance about whether the consolidated financial statements ~~based~~are onfree ~~our~~of ~~audits~~material misstatement, whether due to error or fraud. WeOur ~~are~~audit aincluded ~~public~~performing ~~accounting~~procedures ~~firm~~to ~~registered~~assess ~~with~~the risks of material misstatement of the ~~Public~~consolidated ~~Company~~financial ~~Accounting~~statements, ~~Oversight~~whether ~~Board~~due ~~(United~~to ~~States)~~error ~~(“PCAOB”)~~or fraud, and ~~are~~performing ~~required~~procedures that respond to bethose ~~independent~~risks. ~~with~~Such ~~respect~~procedures toincluded examining, on a test basis, evidence regarding the ~~Company~~amounts inand ~~accordance~~disclosures ~~with~~in the Uconsolidated financial statements.S. ~~federal~~Our ~~securities~~audit ~~laws~~also ~~and~~included evaluating the ~~applicable~~accounting ~~rules~~principles used and ~~regulations~~significant estimates made by management, as well as evaluating the overall presentation of the ~~Securities~~consolidated ~~and~~financial ~~Exchange~~statements. ~~Commission~~We ~~and~~believe ~~the~~that ~~PCAOB~~our audit provides a reasonable basis for our opinion.

WeCritical ~~conducted~~Audit our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Matters

~~Our~~The ~~audits~~critical ~~included~~audit ~~performing~~matters ~~procedures~~communicated tobelow ~~assess~~are ~~the~~matters ~~risks~~arising offrom ~~material~~the ~~misstatement~~current period audit of the consolidated financial statements, ~~whether~~that ~~due~~were communicated or required to ~~error~~be orcommunicated ~~fraud,~~to the audit committee and ~~performing~~that: ~~procedures~~(1) relate to accounts or disclosures that ~~respond~~are material to ~~those~~the ~~risks.~~consolidated ~~Such~~financial ~~procedures~~statements ~~included~~and ~~examining,~~(2) oninvolved aour ~~test~~especially ~~basis~~challenging, ~~evidence~~subjective, ~~regarding~~or ~~the~~complex ~~amounts~~judgments. ~~and~~The ~~disclosures~~communication inof ~~the~~critical ~~financial~~audit ~~statements.~~matters ~~Our~~does ~~audits~~not ~~also~~alter ~~included~~in ~~evaluating~~any way our opinion on the ~~accounting~~consolidated ~~principles~~financial ~~used~~statements, taken as a whole, and ~~significant~~we ~~estimates~~are ~~made~~not, by ~~management,~~communicating asthe ~~well~~critical asaudit ~~evaluating~~matters ~~the~~below, ~~overall~~providing ~~presentation~~separate ofopinions on the ~~financial~~critical ~~statements.~~audit Wematters ~~believe~~or ~~that~~on ~~our~~the ~~audits~~accounts ~~provide~~or adisclosures ~~reasonable~~to ~~basis~~which ~~for~~they ~~our opinion~~relate.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Determination of Standalone Selling Price

50As described further in Note 1 to the consolidated financial statements, the Company’s contracts with customers often include multiple performance obligations. The transaction price of each contract is allocated to individual performance obligations based upon relative stand-alone selling price (“SSP”). The SSP of performance obligations is determined based on observable prices at which the Company separately sells the products and services or alternative methods. If the SSP is not directly observable, the Company will estimate the SSP considering historical and current selling prices, internal discounting practices, and competitor information for similar products/services, which can require significant judgment and are subject to change based on continuous reevaluation.

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AsSignificant ~~described~~judgment ~~further~~is inexercised ~~Note~~by ~~1 to~~ the ~~consolidated financial statements, the~~ Company’s ~~contracts~~in ~~with~~determination ~~customers~~and ~~often~~allocation ~~include multiple performance obligations. The transaction price~~ of ~~each contract is allocated to individual performance obligations based upon relative~~ stand-alone selling ~~price~~prices ~~(“SSP”).~~for ~~The~~each ~~SSP~~distinct of performance ~~obligations~~obligation, isfor ~~determined based on observable prices at which the Company separately sells the~~ products and services orthat ~~alternative~~are ~~methods. If the SSP is~~ not ~~directly~~sold observable, the Company will estimate the SSP considering historical and current selling prices, internal discounting practices, and competitor information for similar products/services, which can require significant judgment and are subject to change based on continuous reevaluationseparately. ~~We identified the determination of the SSP of performance obligations as a critical audit matter.~~

~~The~~Given ~~principal~~these ~~considerations~~factors, ~~for our assessment that~~ the ~~determination~~related ~~of the SSP of performance obligations represents a critical~~ audit ~~matter~~effort ~~are~~in ~~the~~evaluating ~~high~~management’s ~~degree~~judgments ofin ~~auditor~~determining ~~judgment~~ and anallocating ~~increased~~the ~~extent of effort related to evaluating~~ SSP ~~due to the absence~~ of ~~directly~~performance ~~observable~~obligations ~~data~~was ~~which~~challenging, ~~requires the Company to make~~ subjective, ~~assumptions~~and ~~used~~complex toand ~~estimate~~required ~~the~~a ~~SSP~~high ~~for~~degree ~~each~~of ~~performance~~auditor ~~obligation~~judgment.

~~Our~~How our audit ~~procedures~~addressed ~~related to~~ the ~~determination~~Critical ofAudit ~~the SSP of performance obligations included the following primary procedures, among others:~~Matter

Our principal audit procedures related to the determination and allocation of the SSP of performance obligations included the following:

•We gained an understanding of and evaluated the design and implementation of the Company’s controls that address the risk of material misstatement related to the determination and allocation of SSP to performance obligations.

•We evaluated management’s significant accounting policies related to revenue recognition for reasonableness.

•We evaluated the appropriateness of the overall methodology used by management to develop the estimates, including considering whether the methodology maximized the use of observable outputs.

•We ~~tested~~evaluated the reasonableness of management’s ~~process~~estimate byof ~~evaluating~~stand-alone ~~key~~selling ~~assumptions~~prices for ~~performance~~products ~~obligations~~and ~~that~~services ~~do not include directly observable sales or for performance obligations~~ that doare not ~~include~~sold ~~sufficient directly observable sales~~separately. ~~Specifically, we:~~

~~◦considered~~•We ~~the~~tested ~~consistency~~management’s ~~with~~process, ~~external~~including ~~market~~by ~~and~~evaluating ~~competitor~~key ~~margin~~assumptions ~~data~~ for ~~products~~performance ~~and~~obligations ~~services~~that do not include directly observable sales. Specifically, included in our procedures we:

◦~~determined~~considered the ~~appropriateness~~consistency ofwith ~~the~~external ~~categorization~~market and ~~classification~~competitor ofmargin data for products and services;

◦~~recalculated~~evaluated ~~and validated~~ the ~~inputs~~appropriateness ~~used~~of ~~in management’s calculations, including selling prices and discounts. Since~~ the ~~inputs~~categorization ~~were derived from multiple sources~~ and ~~were~~classification ~~dependent on the type~~ of ~~revenue~~products ~~for~~and ~~each performance obligation, our audit procedures needed to be tailored accordingly.~~services;

◦~~tested~~recalculated ~~the~~and ~~completeness~~evaluated ~~and~~the ~~accuracy~~inputs ofused in management’s calculations, ofincluding ~~estimated~~ selling prices, ~~including the allocation between products~~ and ~~services~~discounts;

◦evaluated the completeness and accuracy of management’s calculations of estimated selling prices, including the allocation between products and services.

/s/ CohnReznick LLP

We have served as the Company's auditor since 2025.

Melville, New York

June 25, 2026

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Quantum Corporation

Adverse Opinion on Internal Control over Financial Reporting

We have audited Quantum Corporation and subsidiaries (the "Company") internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). In our opinion, because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

A material weakness is a control 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 consolidated financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment:

Revenue Recognition — The Company did not maintain effective internal control related to revenue recognition for the following: (i) internal control for reviewing and updating deferred revenue schedules; (ii) internal control over the accuracy of the inputs into the sales order entry process; and (iii) internal control over the allocation of revenue to performance obligations on a stand-alone selling price basis.

Inventories — The Company did not maintain effective internal control related to inventories. Specifically, internal control over the reconciliation of physical inventories with the Company’s underlying system records.

Income taxes – The Company did not maintain effective internal control related to income taxes. Specifically, the Company did not document and review relevant facts and apply the appropriate tax accounting under accounting standards generally accepted in the United States of America.

Control Environment — The Company did not maintain effective entity-level internal control within the control environment to prevent or detect material misstatements to the consolidated financial statements. Specifically, the Company (i) did not maintain a sufficient complement of trained, knowledgeable resources to execute their responsibilities with respect to internal control over financial reporting for certain financial statements accounts and disclosures; and (ii) conducted inadequate monitoring activities resulting in untimely or ineffective identification of internal control risks to support the design implementation and evaluation of the internal control necessary to provide effective oversight over financial reporting.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the consolidated balance sheet and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows of the Company as of and for the year ended March 31, 2026, and our report dated June 25, 2026 expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting

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was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ CohnReznick LLP

Melville, New York

June 25, 2026

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Quantum Corporation.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Quantum Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of March 31, 2025, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the year in the period ended March 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025, and the results of its operations and its cash flows for the year in the period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

We ~~have~~ served as the Company'’s auditor ~~since~~from 2023 to 2025.

Bellevue, Washington

August 26, 2025

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QUANTUM CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	March 31,
	2025		2024
	2026		2025
Assets
Current assets:
Cash and cash equivalents	$	1615,~~464~~572	$	2516,~~692~~464
Restricted cash	~~139~~662		~~168~~139
Accounts receivable, net of allowance for credit losses of $99 and $22, respectively	52,502		67,788
Accounts receivable, net of allowance for credit losses of $3,234 and $99, respectively	69,650		52,502
Manufacturing inventories	20,336		17,753
Inventories	16,103		22,434
Service parts inventories	2,098		9,783
Prepaid expenses	2,431		2,738
Prepaid expenses	2,738		2,186
Other current assets	8,068		8,529
Other current assets	8,529		8,414
Total current assets	112,486		102,806
Total current assets	102,806		131,784
Property and equipment, net	9,284		11,378
Property and equipment, net	11,378		12,028
Intangible assets, net	—		281
Intangible assets, net	281		1,669
Goodwill	12,969		12,969
Goodwill	12,969		12,969
Right-of-use assets, net	7,416		8,580
Right-of-use assets, net	8,580		9,425
Other long-term assets	14,737		19,388
Other long-term assets	19,388		19,740
Total assets	$	156,892	$	155,402
Total assets	$	155,402	$	187,615
Liabilities and Stockholders’ Deficit
Liabilities and Stockholders’ Deficit
Current liabilities:
Current liabilities:
Accounts payable	$	29,342	$	31,463
Accounts payable	$	31,463	$	26,087
Accrued compensation	11,862		9,214
Accrued compensation	9,214		18,214
Deferred revenue, current portion	75,654		75,076
Deferred revenue, current portion	75,076		78,511
Accrued restructuring charges	566		786
Accrued restructuring charges	786		—
Term debt	54,811		96,486
Term debt	96,486		82,496
Revolving credit facility	—		26,600
Revolving credit facility	26,600		26,604
Warrant liabilities	14,105		—
Warrant liabilities	—		4,046
Other accrued liabilities	19,457		17,982
Other accrued liabilities	17,982		13,986
Total current liabilities	205,797		257,607
Total current liabilities	257,607		249,944
Deferred revenue, net of current portion	39,030		38,847
Deferred revenue, net of current portion	38,847		38,176
Convertible note	90,034		—
Operating lease liabilities	8,~~934~~172		98,~~621~~934
Other long-term liabilities	1412,~~380~~716		1114,~~372~~380
Total liabilities	~~319~~355,~~768~~749		~~309~~319,~~113~~768
Commitments and Contingencies (Note 10)
Commitments and contingencies (Note 10)
Stockholders’ deficit
Preferred stock:
Preferred stock, 20,000 shares authorized; no shares issued as of March 31, 2025 and 2024, respectively	—		—
Preferred stock, 20,000 shares authorized; no shares issued as of March 31, 2026 and 2025, respectively	—		—
Common stock:
Common stock, $0.01 par value; 225,000 shares authorized; 6,962 and 4,792 shares issued and outstanding at March 31, 2025 and 2024, respectively	70		48
Common stock, $0.01 par value; 225,000 shares authorized; 14,638 and 6,962 shares issued and outstanding at March 31, 2026 and 2025, respectively	146		70
Additional paid-in capital	~~779~~853,~~645~~974		~~708~~779,~~027~~645
Accumulated deficit	(~~942~~1,~~471~~043,517)		(~~827~~942,~~380~~471)
Accumulated other comprehensive loss	(19,~~610~~460)		(21,~~193~~610)
Total stockholders' deficit	(~~164~~198,~~366~~857)		(~~121~~164,~~498~~366)
Total liabilities and stockholders' deficit	$	~~155~~156,~~402~~892	$	~~187~~155,~~615~~402

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

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QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

	Year Ended March 31,
	2025		2024
	2026		2025
Revenue
Product	$	~~154~~172,~~182~~385	$	~~174~~154,~~879~~182
Service and subscription	~~110~~99,~~658~~226		~~126~~110,~~590~~658
Royalty	97,~~218~~970		109,~~131~~218
Total revenue	~~274~~279,~~058~~581		~~311~~274,~~600~~058
Cost of revenue
Product	~~119~~136,~~730~~199		~~136~~119,~~419~~730
Service and subscription	4440,~~496~~341		5044,~~292~~496
Total cost of revenue	~~164~~176,~~226~~540		~~186~~164,~~711~~226
Gross profit	~~109~~103,~~832~~041		~~124~~109,~~889~~832
Operating expenses
Sales and marketing	52,~~320~~016		6052,~~893~~320
General and administrative	6343,~~961~~917		5163,~~547~~961
Research and development	3123,~~141~~503		3831,~~046~~141
Restructuring charges	48,~~090~~112		34,~~280~~090
Total operating expenses	~~151~~127,~~512~~548		~~153~~151,~~766~~512
Loss from operations	(4124,~~680~~507)		(2841,~~877~~680)
Other expense, net	(~~710~~1,511)		(~~1,746~~710)
Interest expense	(2321,~~607~~575)		(1523,~~089~~607)
Change in fair value of warrant liability	~~(45~~11,~~270)~~315		5(45,~~137~~270)
Loss on debt extinguishment, net	(3,003)		—
Change in fair value of convertible note	(4,119)		—
Net loss before income taxes	(114,270)		(40,575)
Loss on debt extinguishment, net	(59,641)		(3,003)
Income tax provision	821		711
Loss before income taxes	(100,038)		(114,270)
Net loss	$	(115,091)	$	(41,286)
Income tax provision	1,008		821
Net loss per share - basic and diluted	$	(22.35)	$	(8.68)
Net loss	$	(101,046)	$	(115,091)
Weighted average shares - basic and diluted	5,150		4,754
Net loss per share - basic and diluted	$	(7.97)	$	(22.35)
Net loss	$	(115,091)	$	(41,286)
Weighted average shares - basic and diluted	12,674		5,150
Foreign currency translation adjustments, net	583		(612)
Net loss	$	(101,046)	$	(115,091)
Total comprehensive loss	$	(114,508)	$	(41,898)
Change in fair value of convertible note	(8,444)		—
Foreign currency translation adjustments, net	594		583
Total comprehensive loss	$	(108,896)	$	(114,508)

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

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QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended March 31,
	2025		2024
	2026		2025
Operating activities
Net loss	$	(~~115~~101,~~091~~046)	$	(41115,~~286~~091)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,~~598~~282		95,~~313~~598
Amortization of debt issuance costs	56,~~475~~613		25,~~735~~475
Non-cash lease expense	1,~~606~~277		1,~~453~~606
Paid-in-kind interest	56,~~179~~598		25,~~314~~179
Provision for manufacturing and service inventories	45,~~877~~333		64,~~490~~877
Stock-based compensation	2,828		4,721
Bad debt expense	2,733		77
Change in fair value of warrant liabilities	45,270		(3,943)
Stock-based compensation	(849)		2,828
Non-cash loss on debt extinguishment	3,003		—
Warrants issued in connection with debt amendments	25,420		—
Other non-cash	93		990
Change in fair value of warrant liabilities	(11,315)		45,270
Changes in assets and liabilities, net of effect of acquisitions:
Change in fair value of convertible note	4,119		—
Accounts receivable	15,209		4,846
Non-cash loss on debt extinguishment	34,221		3,003
Manufacturing inventories	(5,879)		(1,396)
Other non-cash	(331)		16
Service parts inventories	6,680		11,852
Changes in assets and liabilities:
Accounts payable	6,154		(11,193)
Accounts receivable	(19,881)		15,209
Prepaid expenses	(552)		1,971
Inventories	944		801
Operating lease liabilities	(1,490)		(1,536)
Accounts payable	(793)		6,154
Deferred revenue	(2,764)		1,386
Prepaid expenses	307		(552)
Accrued restructuring charges	786		—
Operating lease liabilities	(931)		(1,490)
Accrued compensation	(9,000)		2,504
Deferred revenue	760		(2,764)
Other assets	2,110		(2,198)
Accrued restructuring charges	(220)		786
Other liabilities	6,295		821
Accrued compensation	2,647		(9,000)
Net cash used in operating activities	(23,613)		(10,156)
Other assets	686		2,110
Other liabilities	570		6,295
Net cash used in operating activities	(37,856)		(23,613)
Investing activities
Purchases of property and equipment	(41,~~947~~706)		(54,~~869~~947)
Net cash used in investing activities	(41,~~947~~706)		(54,~~869~~947)
Financing activities
Borrowings of long-term debt, net of debt issuance costs	2545,~~000~~045		1225,~~541~~000
Repayments of long-term debt	(19,129)		(5,747)
Borrowing of convertible note	54,718		—
Borrowings of credit facility	416,418		421,623
Repayment of long-term debt	—		(19,129)
Repayments of credit facility	(418,811)		(412,704)
Repayments of long-term debt on Assignment	(52,270)		—
Proceeds from shares issued related to the SEPA, net	15,828		—
Repayments of long-term debt on Exchange	(56,979)		—
Net cash provided by financing activities	19,306		15,713
Borrowings of credit facility	102,914		416,418
Effect of exchange rate changes on cash and cash equivalents	(3)		(3)
Repayments of credit facility and payment of amendment fees	(129,514)		(418,811)
Net change in cash, cash equivalents, and restricted cash	(9,257)		(315)
Proceeds from shares related to the SEPA, net	75,174		15,828
Cash, cash equivalents, and restricted cash at beginning of period	25,860		26,175
Proceeds from issuance of common stock, net	80		—
Cash, cash equivalents, and restricted cash at end of period	$	16,603	$	25,860
Net cash provided by financing activities	39,168		19,306
Effect of exchange rate changes on cash and cash equivalents	25		(3)
Net change in cash, cash equivalents, and restricted cash	(369)		(9,257)
Cash, cash equivalents, and restricted cash at beginning of year	16,603		25,860
Cash, cash equivalents, and restricted cash at end of year	$	16,234	$	16,603
Supplemental disclosure of cash flow information
Cash paid for interest	$	115,~~927~~170	$	1211,~~314~~927
Cash paid for income taxes, net of refunds	$	1,~~814~~194	$	1,~~776~~814
Non-cash transactions
Purchases of property and equipment included in accounts payable	$	~~850~~116	$	~~661~~850
Right-of-use assets obtained in exchange for new lease liabilities	$	~~678~~112	$	~~594~~678
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 statement of cash flows:
Warrants issued	$	25,420	$	—
Cash and cash equivalents	$	16,464	$	25,692
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:
Restricted cash, current	139		168
Cash and cash equivalents	$	15,572	$	16,464
Total cash, cash equivalents and restricted cash at the end of period	$	16,603	$	25,860
Restricted cash	662		139
Total cash, cash equivalents and restricted cash at the end of year	$	16,234	$	16,603

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

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QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands)

	Common Stock			AdditionalPaid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Deficit
	Shares	Amount
March 31, 2023	4,678	$	47	$	703,259	$	(786,094)	$	(1,581)	$	(84,369)
Net loss	—	—		—		(41,286)		—		(41,286)
Foreign currency translation adjustments, net of income taxes	—	—		—		—		(612)		(612)
Shares issued under employee incentive plans, net	114	1		(1)		—		—		—
Warrants issued related to long-term debt	—	—		49		—		—		49
Stock-based compensation	—	—		4,720		—		—		4,720
March 31, 2024	4,792	$	48	$	708,027	$	(827,380)	$	(2,193)	$	(121,498)
Net loss	—	—		—		(115,091)		—		(115,091)
Foreign currency translation adjustments, net of income taxes	—	—		—		—		583		583
Shares issued under employee incentive plans, net	157	2		(2)		—		—		—
Warrants exercised related to long-term debt	856	9		52,975		—		—		52,984
Shares issued related to the SEPA, net	1,157	11		15,817		—		—		15,828
Stock-based compensation	—	—		2,828		—		—		2,828
March 31, 2025	6,962	$	70	$	779,645	$	(942,471)	$	(1,610)	$	(164,366)
Net loss	—	$	—	—		(101,046)		$	—	(101,046)
Foreign currency translation adjustments, net of income taxes	—	—		—		—		594		594
Change in fair value of convertible note	—	—		—		—		(8,444)		(8,444)
Shares issued under employee incentive plans, net	121	1		79		—		—		80
Shares issued related to the SEPA, net	7,555	75		75,099		—		—		75,174
Stock-based compensation	—	—		(849)		—		—		(849)
March 31, 2026	14,638	$	146	$	853,974	$	(1,043,517)	$	(9,460)	$	(198,857)

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

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INDEX TO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Note 1:	Description of Business and Significant Accounting Policies	5652
Note 2:	Revenue	6562
Note 3:	Balance Sheet Information	6663
Note 4:	Debt	6864
Note 5:	Leases	7168
Note 6:	Restructuring Charges	7269
Note 7:	Common Stock	7269
Note 8:	Net Loss Per Share	7774
Note 9:	Income Taxes	7875
Note 10:	Commitments and Contingencies	8078
Note 11:	Fair Value of Financial Instruments	8179
Note 12:	Segment Information	81
Note 13:	Subsequent Events	83
Note 14:	Restatement of Unaudited Quarterly Financial Statements	84

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Quantum Corporation, together with its consolidated subsidiaries (“Quantum”, or the “Company”, "our" or "we"), 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-violate memory express (“NVMe”), to solid state drives, (“SSD”), hard disk drives, (“HDD”), 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 (“VARs”), direct marketing resellers (“DMRs”), original equipment manufacturers (“OEMs”) and other suppliers to meet customers’ evolving needs.

Basis of Presentation

The consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated. The Company reviews subsidiaries and affiliates, as well as other entities, to determine if they should be considered variable interest entities (“VIE”), and whether it should change the consolidation determinations based on changes in their characteristics. The Company considers an entity a VIE if its equity investors own an interest therein that lacks the characteristics of a controlling financial interest, or if such investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support, or if the entity is structured with non-substantive voting interests. To determine whether or not the entity is consolidated with the Company’s results, the Company also evaluates which interests are variable interests in the VIE and which party is the primary beneficiary of the VIE. There were no VIEs for the years ended March 31, 2026 or 2025.

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. Also, due to the size of the Balance, we have aggregated Manufacturing and Service Inventory into a single line called Inventories on the Consolidated Balance Sheets. Details of the balances in the Inventories line item has been included in Note 3: Balance Sheet Information.

Reverse Stock Split

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 ~~(“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~~Board and set forth in a public announcement. On August 15, 2024, the Board approved a 1-for-20 reverse stock split (the “Reverse Stock Split”) of ~~directors~~the common stock. The Reverse Stock Split became effective as of August 26, 2024 at 4:01 p.m., Eastern Time (the “~~Board~~Effective Time”). ~~and~~At ~~set~~the ~~forth~~Effective inTime, aevery 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.

56All share and per share amounts for common stock in these consolidated financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to the Reverse Stock Split.

Liquidity

These consolidated financial statements have been prepared in accordance with 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.

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~~public~~The ~~announcement~~Company generated negative cash flows from operations of approximately $37.9 Onmillion ~~August~~and ~~15,~~$23.6 ~~2024,~~million for the ~~Board~~fiscal ~~approved~~years aended ~~1-for-20~~March ~~reverse~~31, ~~stock~~2026 ~~split~~and ~~(the~~2025, ~~“Reverse~~respectively, ~~Stock~~and ~~Split”)~~generated ofnet ~~the~~losses ~~Common~~of ~~Stock~~approximately $101.0 ~~The~~million ~~Reverse~~and ~~Stock~~$115.1 ~~Split~~million ~~became~~for ~~effective~~the asfiscal ofyears ~~August~~ended 26March 31, ~~2024~~2026 atand ~~4:01~~2025, prespectively.~~m.,~~ ~~Eastern~~The ~~Time~~Company ~~(the~~has ~~“Effective~~funded ~~Time”).~~operations Atthrough the ~~Effective~~sale ~~Time,~~of ~~every~~common ~~twenty~~stock ~~issued~~and ~~shares~~term ofdebt borrowings in Note 4: Debt and Note 7: Common Stock. ~~were~~Management ~~automatically~~believes ~~reclassified~~that ~~into~~it ~~one~~has ~~issued~~the ~~share~~ability ofto ~~Common~~obtain ~~Stock~~additional debt or equity financing, ~~with~~if ~~any~~required, ~~fractional~~and ~~shares~~has ~~resulting~~historically ~~from~~been ~~the~~able ~~Reverse~~to ~~Stock~~do ~~Split~~so. ~~rounded~~Management upalso tobelieves ~~the~~that ~~nearest~~current ~~whole~~working ~~share.~~capital ~~The~~will ~~number~~provide ofthe ~~outstanding~~Company ~~shares~~with ofsufficient ~~common~~capital ~~stock~~to ~~was~~fund ~~reduced~~operations for at least one year from ~~approximately~~the ~~95.9 million~~consolidated ~~shares~~financial tostatement ~~approximately~~issuance 4date.~~8 million shares.~~

~~All~~As ~~share~~previously disclosed, the Company identified that there was substantial doubt about the Company’s ability to continue as a going concern. This was due to the requirement to repay the Term Loans (as defined herein) on August 5, 2026. Subsequent to March 31, 2026, the Company completed several transactions which resulted in the repayment of the Term Loans and ~~per~~removed ~~share~~the ~~amounts~~substantial ~~for~~doubt ~~Common~~noted ~~Stock~~above. On June 1, 2026, the Company entered into Securities Purchase Agreements to issue and sell to certain accredited investors an aggregate of 10,615,712 shares of the Company’s common stock. After deducting placement agent fees and other offering expenses payable by the Company, the Company received net proceeds of $94.7 million. On June 4, 2026, the Company paid an aggregate of $57.8 million in ~~these~~connection ~~consolidated~~with ~~financial~~the ~~statements~~termination of the Term Loan Credit Agreement. This fully paid down and ~~notes~~extinguished ~~thereto~~the ~~have~~Company's ~~been~~Term ~~retroactively~~Loans. ~~adjusted~~Also ~~for~~on ~~all~~June ~~periods~~4, ~~presented~~2026, the Company provided a notice to ~~give~~YA ~~effect~~II PN, Ltd. ("YA") regarding its termination of the Standby Equity Purchase Agreement (the "SEPA"), effective June 11, 2026. There were no amounts owed to YA under the ~~Reverse~~SEPA ~~Stock~~at ~~Split~~the time the termination notice was provided. See Note 13: Subsequent Events, for further details. With the cash proceeds, after repayment of the Term Loans, the Company forecasts that operating performance, cash and current working capital will provide sufficient capital to fund operations for at least one year from the financial statement issuance date.

Going Concern

The Company believes it will be in violation of the net leverage covenant under the Term Loan for the quarter ended September 30, 2025. Additionally, under the terms of the Term Loan, the Company is required to use certain proceeds of the SEPA to pay down the Term Loan. The Company is currently negotiating waivers to these covenants and is evaluating strategies to restructure or refinance the existing term debt. On August 13, 2025, the Company terminated the PNC Credit Facility. If the Company is unable to obtain additional waivers, the term debt will become immediately due, and additional liquidity will be required to satisfy the obligations. Due to the fact that a violation of the debt covenants results in the debt becoming currently payable, the long-term portion of the term debt and PNC Credit Facility have been classified as a current liability in the accompanying consolidated balance sheet as of March 31, 2025. See Note 4: Debt for additional information related to the Company’s credit agreements.

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

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated 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, fair value of the convertible note 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 reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Cash and Cash Equivalents

The Company has cash deposits and cash equivalents deposited in or managed by major financial institutions. Cash equivalents include all highly liquid investment instruments with an original maturity of three months or less and consist primarily of money market accounts. At times the related amounts are in excess of amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses with these financial institutions and does not believe such balances are exposed to significant credit risk.

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.

Accounts Receivable and Allowance for Credit Losses

57Accounts receivable are recorded at the invoiced amount, and stated at realizable value, net of an allowance for credit losses. The Company maintains an allowance for credit losses for estimated losses based on historical experience and expected collectability of outstanding accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, and for the majority of its customers require no collateral. For customers that do not meet the Company’s credit standards, the Company may require a form of collateral, such as cash deposits or letters of credit, prior to the completion of a transaction. These credit evaluations require significant judgment and are based on multiple sources of information. The Company analyzes such factors as its historical bad debt experience, industry and geographic concentrations of credit risk, current economic trends and changes in

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Accounts receivable are recorded at the invoiced amount, and stated at realizable value, net of an allowance for credit losses. The Company maintains an allowance for credit losses for estimated losses based on historical experience and expected collectability of outstanding accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, and for the majority of its customers require no collateral. For customers that do not meet the Company’s credit standards, the Company may require a form of collateral, such as cash deposits or letters of credit, prior to the completion of a transaction. These credit evaluations require significant judgment and are based on multiple sources of information. The Company analyzes such factors as its historical bad debt experience, industry and geographic concentrations of credit risk, current economic trends and changes in customer payment terms. The Company will write-off customer balances in full to the reserve when it has determined that the balance is not recoverable. Changes in the allowance for credit losses are recorded in general and administrative expenses.

Fair Value of Financial Instruments

The carrying value of our financial instruments, ~~excluding debt and warrants,~~ approximates fair value.

~~Manufacturing~~ Inventories

Manufacturing ~~inventory~~inventories isare recorded at the lower of cost or net realizable value, with cost being determined on a first-in, first-out (“FIFO”) basis. Costs include material, direct labor, and an allocation of overhead in the case of work in process. Adjustments to reduce the cost of manufacturing inventory to its net realizable value, if required, are made for estimated excess, obsolete or impaired balances. Factors influencing these adjustments include declines in demand, rapid technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration and quality issues. Revisions to these adjustments would be required if these factors differ from the Company’s estimates.

Service Parts Inventories

Service parts inventories are recorded at the lower of cost or net realizable value, with cost being determined on a FIFO basis. The Company carries service parts because it generally provides product warranty for one to three years and earns revenue by providing enhanced and extended warranty and repair services during and beyond this warranty period. Service parts inventories consist of both component parts, which are primarily used to repair defective units, and finished units, which are provided for customer use permanently or on a temporary basis while the defective unit is being repaired. The Company records adjustments to reduce the carrying value of service parts inventory to its net realizable value and disposes of parts with no use and a net realizable value of zero. Factors influencing these adjustments include product life cycles, end of service life plans and volume of enhanced or extended warranty service contracts. Estimates of net realizable value involve significant estimates and judgments about the future, and revisions would be required if these factors differ from the Company’s estimates.

Property and Equipment

Property and equipment are carried at cost, less accumulated depreciation and amortization, computed on a straight-line basis over the estimated useful lives of the assets as follows:

Machinery and equipment			3 to 5 years
Computer equipment			3 to 5 years
Other software			3 years
Furniture and fixtures			5 years
Other office equipment			5 years
Leasehold improvements			Shorter of useful life or life of lease

When assets are retired or otherwise disposed of, the related costs and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in the consolidated statements of operations and comprehensive loss in the period realized.

The Company evaluates the recoverability of the carrying amount of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be fully recoverable. A potential impairment charge is evaluated when the undiscounted expected cash flows derived from an asset group are less than its carrying amount. Impairment losses, if applicable, are measured as the amount by which the carrying value of an asset group exceeds its fair value and are recognized in operating results. Judgment is used when applying these impairment rules to determine the timing of impairment testing, the undiscounted cash flows used to assess impairments and the fair value of the asset group.

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when applying these impairment rules to determine the timing of impairment testing, the undiscounted cash flows used to assess impairments and the fair value of the asset group.

In fiscal 2022, we entered into a new lease in Centennial, Colorado and we incurred material leasehold improvements which are being amortized over the term of the lease. At the time of inception, this term was 15.5 years and as at March 31, 2025 there are 12.4 years remaining.

Goodwill

Goodwill represents the excess of the purchase price consideration over the estimated fair value of the tangible and intangible assets acquired and liabilities assumed in a business combination. Goodwill is evaluated for impairment annually in the third quarter of the Company's fiscal year as a single reporting unit, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company may elect to qualitatively assess whether it is more likely than not that the fair value of its reporting unit is less than its carrying value. If the Company opts not to qualitatively assess, a quantitative goodwill impairment test is performed. The quantitative test compares its reporting unit's carrying amount, including goodwill, to its fair value calculated based on its enterprise value. If the carrying amount exceeds its fair value, an impairment loss is recognized for the ~~excess. The Company did not recognize any impairment of goodwill in any of the periods presented in the consolidated financial statements.~~

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excess. The Company did not recognize any impairment of goodwill in any of the periods presented in the consolidated financial statements.

Purchased Intangible Assets

Purchased intangible assets with finite lives are stated at cost, net of accumulated amortization. The Company amortizes its intangible assets on a straight-line basis over an estimated useful life of two to four years.

Impairment of Long-Lived Assets

The Company reviews its long-lived asset group, including property and equipment and finite-lived intangible assets, for impairment annually, or whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company measures the recoverability of this asset group by comparing the carrying amounts to the future undiscounted cash flows the asset group is expected to generate. If the total of the future undiscounted cash flows is less than the carrying amount of an asset group, the Company records an impairment charge for the amount by which the carrying amount of the asset group exceeds its fair market value.

Operating Leases

The Company determines if an arrangement contains a lease at inception. Lease liabilities are recognized at the present value of the future lease payments at commencement date. The interest ~~rate~~rates implicit in the Company's operating leases are not readily determinable, and therefore, an incremental borrowing rate is estimated to determine the present value of future payments. The estimated incremental borrowing rate factors in a hypothetical interest rate on a collateralized basis with similar terms, payments, and economic environments. The operating lease right-of-use ("ROU") asset is determined based on the lease liability initially established and reduced for any prepaid lease payments and any lease incentives. The Company accounts for the lease and non-lease components of operating lease contract consideration as a single lease component.

Certain of the operating lease agreements contain rent concession, rent escalation, and option to renew provisions. Rent concession and rent escalation provisions are considered in determining the lease cost. Lease cost is recognized on a straight-line basis over the lease term commencing on the date the Company has the right to use the leased property. The Company generally uses the base, non-cancelable, lease term when recognizing the lease assets and liabilities, unless it is reasonably certain that an extension or termination option will be exercised.

Certain operating leases require the Company to pay taxes, insurance, maintenance, and other operating expenses associated with the leased asset. Such amounts are not included in the measurement of the lease liability to the extent they are variable in nature. These variable lease costs are recognized as a variable lease expense when incurred.

In addition, certain operating lease agreements contain tenant improvement allowances from the Company's landlords. These allowances are accounted for as lease incentives and reduce its ROU asset and lease cost over the lease term.

59The Company has applied the practical expedient for short-term leases which have a lease term of less than 12 months and do not include an option to purchase the underlying asset that is reasonably certain to be exercised. The Company recognizes rent expense in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term and record variable lease payments as incurred.

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The Company has applied the practical expedient for short-term leases which have a lease term of less than twelve months and do not include an option to purchase the underlying asset that is reasonably certain to be exercised, the Company recognizes rent expense in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term and record variable lease payments as incurred.

Revenue Recognition

The Company generates revenue from three main sources: (1) product, (2) service and subscription, and (3) royalties. Sales tax collected on sales is netted against government remittances and thus, recorded on a net basis. The Company's performance obligations are satisfied at a point in time or over time as stand ready obligations. The majority of revenue is recognized at a point in time when products are accepted or based upon shipping terms when control transfers.

Product Revenue

The Company's product revenue is comprised of multiple storage solution hardware and software offerings targeted towards consumer and enterprise customers. Revenue from product sales is recognized at the point in time when the customer takes control of the product. If there are significant post-delivery obligations, the related revenue is ~~deferred until such obligations are fulfilled. Revenue from contracts with customer acceptance criteria are recognized upon end user acceptance.~~

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deferred until such obligations are fulfilled. Revenue from contracts with customer acceptance criteria are recognized upon end user acceptance.

Service and Subscription Revenue

Service and subscription revenue consists of four components: (a) post-contract customer support agreements,

(b) software subscriptions, (c) installation, and (d) consulting &and training.

Customers have the option to choose between different levels of hardware and software support. The Company's support plans include various stand-ready obligations such as technical assistance hot-lines, replacement parts maintenance, and remote monitoring that are delivered whenever called upon by its customers. Support plans provide additional services and assurance outside the scope of the Company's primary product warranties. Revenue from support plans is recognized ratably over the contractual term of the service contract as this aligns with delivery to the customer.

The Company also sells software subscriptions that include term licenses, which are recognized as revenue when the license is delivered to the customer, and related customer support, which is recognized ratably over the service period.

The Company offers installation services on all its products. Customers can opt to either have Quantum or a Quantum-approved third-party service provider install its products. Installation services are typically completed within a short period of time and revenue from these services are recognized at the point when installation is complete.

A majority of the Company's consulting and training revenue does not take significant time to complete therefore these obligations are satisfied over time as each day is completed.

Royalty Revenue

The Company licenses certain intellectual property to third -party manufacturers which gives the manufacturers rights to intellectual property including the right to either manufacture or include the intellectual property in their products for resale. Licensees pay the Company a per-unit royalty for sales of their products that incorporate its intellectual property. On a periodic and timely basis, the licensees provide the Company with reports containing units sold to end users subject to the royalties. The reports substantiate that the performance obligation has been satisfied therefore revenue is recognized based on the reports or when amounts can be reasonably estimated.

Deferred Revenue

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 which have not been satisfied as of the year end. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet dates.

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subscription contracts. The current portion of deferred revenue represents the amounts that are expected to be recognized as revenue within one year of the consolidated balance sheet dates.

Significant Judgments

The Company generally enters into contracts with customers to provide storage solutions to meet their individual needs. Most of the Company’s contracts contain multiple goods and services designed to meet each customer's unique storage needs. Contracts with multiple goods and services have multiple distinct performance obligations as the promise to transfer hardware, installation services, and support services are capable of being distinct and provide economic benefit to customers on their own.

~~Stand-alone~~Standalone selling price

For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price (“SSP”) of the good or service underlying each performance obligation. The SSP represents the amount for which the Company would sell the good or service to a customer on a standalone basis (i.e., not sold as a bundle with any other products or services). Where SSP may not be directly observable (e.g., the performance obligation is not sold separately), the Company maximized the use of observable inputs by using information including historical and current selling prices, internal discounting practices, competitor information for similar customers and similar products/services, and other observable inputs.

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Variable consideration

Product revenue includes multiple types of variable consideration, such as rebates, returns, or stock rotations. All contracts with variable consideration require payment upon satisfaction of the performance obligation typically with net 45-day payment terms. The Company does not include significant financing components in its contracts. The Company constrains estimates of variable consideration to amounts that are not expected to result in a significant revenue reversal in the future, primarily based on the expected value of consideration to be returned to the customer under the specific terms of the underlying programs.

The expected value method is used to estimate the consideration expected to be returned to the customer. The Company uses historical data and current trends to drive the estimates. The Company records a reduction to revenue to account for these programs. For inventory returns, the Company initially measures this asset at the carrying amount of the inventory, less any expected costs to recover the goods including potential decreases in the value of the returned goods.

Costs of Obtaining Contracts with Customers

The Company’s primary cost to obtain contracts is sales commissions earned by sales representatives. These costs are incremental and expected to be recovered indirectly through the margin inherent within the contract. A large portion of the Company’s contracts are completed within a one-year performance period, and for contracts with a specified term of one year or less, the Company has elected to apply a practical expedient available in Topic 340-40: Other Assets and Deferred Costs – Contracts with Customers, which allows the Company to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company would otherwise have recognized is one year or less.

Sales commissions earned on contracts exceeding one year qualify for capitalization after application of the practical expedient. The duration of these contracts ranges from 1-7 years. Total capitalized costs were $2.3 million~~, $2.7 million~~ and $2.0 3 million for fiscal ~~2025,~~2026 ~~2024~~ and ~~2023~~2025, respectively. Total amortization of capitalized costs of obtaining revenue contracts were $1.3 ~~million,~~ ~~$0.9~~ million and $01.5 3 million for fiscal ~~2025,~~2026 ~~2024~~ and ~~2023~~2025, respectively. These costs are recognized ~~straight~~on a straight-line basis over the associated sales contract term.

Cost of Service and Subscription Revenue

The Company classifies expenses as service cost of revenue by estimating the portion of its total cost of revenue that relates to providing field support to its customers under contract. These estimates are based upon a variety of factors, including the nature of the support activity and the level of infrastructure required to support the activities from which it earns service and subscription revenue. In the event its service business changes, its estimates of cost of service and subscription revenue may be impacted.

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Research and Development Costs

Expenditures relating to the development of new products and processes are expensed as incurred. These costs include expenditures for employee compensation, materials used in the development effort, other internal costs, as well as expenditures for third -party professional services. The Company has determined that technological feasibility for its software products is reached shortly before the products are released to manufacturing. Costs incurred after technological feasibility is established have not been material., ~~The~~therefore, the Company expenses software-related research and development costs as incurred.

Internal-use Software Costs

The Company capitalizes costs incurred to implement software solely for its internal use, including (i) hosted applications used to deliver the Company's support services, and (ii) certain implementation costs incurred in a hosting arrangement that is a service contract when the preliminary project stage is complete, management with the relevant authority authorizes and commits to the funding of the software project, and it is probable the project will be completed and used to perform the intended function.

Software implementation costs are capitalized to either other current assets or other long-term assets on the Company's consolidated balance ~~sheet~~sheets and amortized over 10 years starting when the software is ready for its intended use. Software implementation costs capitalized were $10.0 million and $51.0 million in fiscal ~~2025~~2026 and ~~2024~~2025, respectively. Related amortization expense for software implementation costs was $1.8 9 million and $0.1 .8 million during fiscal ~~2025~~2026 and ~~2024~~2025, respectively.

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Advertising Expense

Advertising expense is recorded as incurred and was $21.09 million and $2.50 million in fiscal ~~2025~~2026 and ~~2024~~2025, respectively.

Shipping and Handling Fees

Shipping and handling fees are included in cost of revenue as incurred and were $611.89 million and $96.78 million in fiscal ~~2025~~2026 and ~~2024~~2025, respectively.

Accrued Restructuring ~~Reserves~~Charges

~~Restructuring~~Accrued ~~reserves~~restructuring charges include charges related to the realignment and restructuring of the Company’s business operations. These charges represent judgments and estimates of the Company’s costs of severance, closure and consolidation of facilities and settlement of contractual obligations under its operating leases, including sublease rental rates, asset write-offs and other related costs. The Company reassesses the ~~reserve~~restructuring liability requirements to complete each individual plan under the restructuring programs at the end of each reporting period. If these estimates change in the future or actual results differ from the Company’s estimates, additional charges may be required. See Note 6: Restructuring Charges, for more information.

Foreign Currency Translation

The Company's international operations generally use their local currency as their functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are translated at the average monthly exchange rates during the year. Resulting translation adjustments are reported as a component of other comprehensive loss and recorded in accumulated other comprehensive loss in the accompanying consolidated balance sheets.

Warrant Accounting

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance ASC Topic 480, Distinguishing Liabilities from Equity (“Topic 480”) and ASC Topic 815, Derivatives and Hedging (“Topic 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to Topic 480, meet the definition of a liability pursuant to Topic 480, and whether the warrants meet all of the requirements for equity classification under Topic 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

62For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance or modification. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statements of operations and comprehensive loss. All Lender Warrants were exercised as of March 31, 2025. Quantum issued a Forbearance Warrant in September 2025. See Note 4: Debt and Note 7: Common Stock, for further details.

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is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes, in which deferred tax ~~asset~~assets and liabilities are recognized based on differences between the financial reporting carrying values of assets and liabilities and the tax basis of those assets and liabilities, measured at the enacted tax rates expected to apply to taxable income in the years in which those tax assets or liabilities are expected to be realized or settled.

A valuation allowance is provided if the Company believes it is more likely than not that all or some portion of the deferred tax asset will not be realized. An increase or decrease in the valuation allowance, if any, that results from a change in circumstances, and which causes a change in the Company’s judgment about the realizability of the related deferred tax asset, is included in the tax provision.

The Company assesses whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized in the consolidated financial statements from such a position is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances and changes in tax law. The Company recognizes penalties and tax-related interest expense as a component of income tax expense in the consolidated statements of operations.59

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The Company assesses whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized in the consolidated financial statements from such a position is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company reevaluates these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances and changes in tax law. The Company recognizes penalties and tax-related interest expense as a component of income tax expense in the consolidated statements of operations and comprehensive loss.

Asset Retirement Obligations

The Company records an asset retirement obligation for the fair value of legal obligations associated with the retirement of tangible long-lived assets and a corresponding increase in the carrying amount of the related asset in the period in which the obligation is incurred. In periods subsequent to initial measurement, the Company recognizes changes in the liability resulting from the passage of time and revisions to either the timing or the amount of the original estimate. Over time, the liability is accreted to its present value and the capitalized cost is depreciated over the estimated useful life of the asset. The Company’s obligations relate primarily to certain legal obligations to remediate leased property on which certain assets are located. The liability is recorded in Other accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

Warranty Expense

The Company warranties its products against certain defects and the terms range from one to three years. The Company provides for the estimated costs of fulfilling its obligations under hardware warranties at the time the related revenue is recognized. The Company estimates the provision based on historical and projected product failure rates, historical and projected repair costs, and knowledge of specific product failures (if any). The Company regularly reassess its estimates to determine the adequacy of the recorded warranty liability and adjusts the provision, as necessary. See Note 3: Balance Sheet Information, for further information.

Debt Issuance Costs

Debt issuance costs for the PNC Credit Facility are capitalized and amortized over the term of the underlying agreements on a straight-line basis. Amortization of these debt issuance costs is included in interest expense while the unamortized debt issuance cost balance is included in other current assets or other assets. Debt issuance costs for the Term Loans are recorded as a reduction to the carrying amount and are amortized over their terms using the effective interest method. Amortization of these debt issuance costs is included in interest expense. See Note 4: Debt, for further information.

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Stock-Based Compensation

The Company classifies stock-based awards granted in exchange for services as either equity awards or liability awards. The classification of an award as either an equity award or a liability award is generally based upon cash settlement options. Equity awards are measured based on the fair value of the award at the grant date. ~~Liability awards are re-measured to fair value each reporting period.~~ The Company recognizes stock-based compensation on a straight-line basis over the award’s requisite service period, which is generally the vesting period of the award, less actual forfeitures. No compensation expense is recognized for awards for which participants do not render the requisite services. For equity and liability awards earned based on performance or upon occurrence of a contingent event, when and if the awards will be earned is estimated. If an award is not considered probable of being earned, no amount of stock-based compensation is recognized. If the award is deemed probable of being earned, related compensation expense is recorded over the estimated service period. To the extent the estimate of awards considered probable of being earned changes, the amount of stock-based compensation recognized will also change. We account for forfeitures as they occur for all stock-based awards.

Concentration of Credit Risk

The Company sells products to customers in a wide variety of industries on a worldwide basis. In countries or industries where the Company is exposed to material credit risk, the Company may require collateral, including cash deposits and letters of credit, prior to the completion of a transaction. The Company does not believe it has significant credit risk beyond that provided for in the consolidated financial statements in the ordinary course of business.

~~In fiscal 2025 and 2024, no customer represented more than 10% of the Company's total revenue.~~ 60

NoTable ~~customer comprised over 10%~~ of ~~accounts receivable as of March 31, 2025. One customer comprised approximately 23% of accounts receivable as of March 31, 2024.~~Contents

In fiscal 2026, one customer represented more than 10% of total revenues and in fiscal 2025 no customer represented more than 10% of the Company's total revenue.

No customer comprised over 10% of accounts receivable as of March 31, 2026 and March 31, 2025.

If the Company is unable to obtain adequate quantities of the inventory needed to sell its products, the Company could face cost increases or delays or discontinuations in product shipments, which could have a material adverse effect on the Company’s results of operations. In many cases, the Company’s chosen vendor may be the sole source of supply for the products or parts they manufacture, or services they provide, for the Company. Some of the products the Company purchases from these sources are proprietary or complex in nature, and therefore cannot be readily or easily replaced by alternative sources.

In fiscal 2026 two vendors represented more than 10% of total expenses and in fiscal 2025 two vendors represented more than 10% of our total expenses.

Segment Reporting

The Company’s chief operating decision-maker ("CODM") is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis. The CODM reviews and utilizes consolidated financial information, including revenue, gross profit, operating income and net income as reported on the consolidated statements of operations and comprehensive loss, to assess performance and allocate resources to support strategic priorities. Consolidated net loss is our segment's primary measure of profit or loss. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. There are no segment managers who are held accountable by the CODM, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level. Accordingly, the Company has one reportable segment and operates in three geographic regions: (a) Americas; (b) Europe, Middle East, and Africa (“EMEA”); and (c) Asia Pacific (“APAC”). See Note 12: Segment Information, for more information.

Defined Contribution Plan

The Company sponsors a qualified 401(k) retirement plan for its U.S. employees. The plan covers substantially all employees who have attained the age of 18. Participants may voluntarily contribute to the plan up to the maximum limits established by Internal Revenue Service regulations. For the years ended March 31, ~~2025~~2026 and ~~2024~~2025, the Company incurred $0.3 1 million and $10.~~4 million~~3 in matching contributions, respectively. The Company suspended its program of matching contributions under the 401(k) retirement plan as of July 2024.

~~Recently~~The ~~Adopted~~Company ~~Accounting~~has ~~Pronouncement~~other defined contribution plans at its international subsidiaries, as required by local law.

64Recently Adopted Accounting Pronouncements

In December 2023, the Financial Account Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning on or after December 15, 2024, and may be applied either prospectively or retrospectively.

In fiscal 2026, Quantum revised its tax footnote disclosures upon the adoption of ASU 2023-09. The Company now applies a consistent approach to categorizing and presenting the information and provides enhanced disaggregation within the rate reconciliation. Additionally, the footnote disclosure provides further disaggregation of income taxes paid in foreign jurisdictions. The adoption of ASU 2023-09 did not have a material impact on the Company's consolidated financial statements for the fiscal year ended March 31, 2026. The Company adopted the standard on a prospective basis.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic220-40): 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

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Inbeginning ~~November~~April ~~2023~~1, ~~the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07~~2028, ~~Segment~~with ~~Reporting~~early ~~(Topic~~adoption ~~280):~~permitted. ~~Improvements~~The toCompany ~~Reportable~~is ~~Segment~~currently ~~Disclosures,~~evaluating ~~which~~the ~~requires~~impact ~~disclosure~~ of ~~incremental segment information on an annual and interim basis. We adopted~~ this new standard ~~for our annual period beginning fiscal year 2025~~ on aits ~~retrospective basis to all periods presented. The adoption of this standard did not result in a significant change to our consolidated~~ financial statement disclosures.

~~Recent~~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. 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 ~~Pronouncement~~Standards ~~Not~~Codification ~~Yet~~606. ~~Adopted~~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 ~~December~~September ~~2023~~2025, the FASB issued ASU ~~2023~~2025-0906, ~~Income~~Targeted ~~Taxes~~Improvements to the Accounting for Internal-Use Software” (Topic ~~740~~350):. ~~Improvements~~The toupdates ~~Income~~eliminate ~~Tax~~references ~~Disclosures,~~to ~~which~~software ~~requires~~development ~~greater~~project ~~disaggregation~~stages ofand ~~tax~~revises ~~information~~the incriteria ~~rate~~that ~~reconciliation~~must ~~and~~be ~~income~~met ~~taxes~~to ~~paid~~begin bycapitalizing ~~jurisdiction~~internal-use software costs. ~~ASU~~The ~~2023-09~~standard ~~will~~permits beentities to adopt the guidance using a prospective, retrospective, or modified transition approach and becomes effective for ~~our~~the ~~fiscal~~Company ~~year~~ beginning ~~April~~January 1, ~~2025~~2028, with early adoption permitted. WeThe ~~are~~Company is currently ~~evaluating~~assessing the potential impact ofthat ~~this~~ASU ~~standard~~2025-06 will have on ~~our~~its financial ~~statement~~statements disclosures.

In ~~November~~December ~~2024~~2025, the FASB issued ASU ~~2024~~2025-0311, ~~Income~~Interim ~~Statement~~Reporting (Topic 270): Narrow-Scope ~~Reporting~~Improvements, ~~Comprehensive~~which ~~Income~~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.

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. We are currently evaluating the impact of this new standard

on our financial statement disclosures.

NOTE 2: REVENUE

Contract Balances

The following table presents the Company’s contract ~~liabilities~~assets and liabilities together with certain information related to this balance as of March 31, ~~2025~~2026 (in thousands):

	March 31, 2025		March 31, 2024		March 31, 2023
	March 31, 2026		March 31, 2025		March 31, 2024
Accounts receivable, net	$	5269,~~502~~650	$	6752,~~788~~502	$	7267,~~464~~788
Deferred revenue	$	113,923	$	116,687	$	115,302
Contract assets (in Other current assets)	$	351	$	278	$	501
Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period	$	74,048	$	76,304	$	83,113
Deferred revenue	$	114,684	$	113,923	$	116,687
Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period	$	77,996	$	74,048	$	76,304

Remaining Performance Obligations

Total remaining performance obligations (“RPO”) which isare contracted but not recognized into revenue was $~~138~~163.0 2 million as of March 31, ~~2025~~2026. RPO consists of both deferred revenue, which is included in the consolidated balance sheets, and non-cancelable amounts ~~that~~from ~~are~~contracts ~~expected~~that towill be invoiced and ~~recognized~~are asnot ~~revenue~~included in ~~future~~the ~~periods~~consolidated ~~and~~balance ~~excludes~~sheets. These amounts exclude variable consideration related to sales-based royalties.

Remaining performance obligations consisted of the following (in thousands):

	Current		Non-Current		Total
As of March 31, 2025	$	97,013	$	41,010	$	138,023
As of March 31, 2026	$	123,962	$	39,271	$	163,233

Deferred revenue primarily consists of amounts invoiced and paid but not recognized as revenue including performance obligations pertaining to subscription services. The table below reflects our deferred revenue as of March 31, ~~2025~~2026 (in thousands):

6562

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	~~Deferred revenue by period~~		Deferred revenue by period
(in thousands)	Total			1 year or less		1 – 3 Years		3 year or greater
				Current		Non-current		Total
Service revenue	$	~~94,462~~		$	6562,~~498~~897	$	2329,~~342~~252	$	592,~~622~~149
Subscription revenue	~~19,461~~			912,~~578~~161		79,~~918~~778		121,~~965~~939
Total	$	113,923		$	75,076	$	31,260	$	7,587
Product revenue				$	596	$	—	$	596
Total				$	75,654	$	39,030	$	114,684

NOTE 3: BALANCE SHEET INFORMATION

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

Manufacturing inventories	March 31,
	2025		2024
	2026		2025
Manufactured finished goods	$	105,~~471~~887	$	710,~~074~~471
Work in progress	~~380~~990		~~769~~380
Raw materials	98,~~485~~508		9,~~910~~485
Total manufacturing inventories	$	20,336	$	17,753
Service parts Inventories	718		2,098
Total manufacturing inventories	$	16,103	$	22,434

Service inventories	March 31,
Property and equipment, net	March 31,
	2025		2024
	2026		2025
Finished goods	$	1,189	$	3,660
Machinery and equipment, and software	$	48,298	$	47,385
Component parts	909		6,123
Leasehold improvements	13,645		13,529
Total service inventories	$	2,098	$	9,783
Furniture and fixtures	1,169		1,095
	63,112		62,009
Less: accumulated depreciation	(53,828)		(50,631)
Total property, plant and equipment, net	$	9,284	$	11,378

Property and equipment, net	March 31,
	2025		2024
Machinery and equipment, and software	$	47,385	$	49,095
Leasehold improvements	13,529		12,473
Furniture and fixtures	1,095		1,109
	62,009		62,677
Less: accumulated depreciation	(50,631)		(50,649)
Total property, plant and equipment, net	$	11,378	$	12,028

Depreciation expense for property and equipment was $3.1 million and $4.2 million for the years ended March 31, 2026 and 2025, respectively.

Depreciation expense for property and equipment was $4.2 million and $6.0 million for the years ended March 31, 2025 and 2024, respectively.


Intangible assets, net	March 31, 2026						March 31, 2025
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net

Developed technology	$	9,013	$	(9,013)	$	—	$	9,013	$	(9,013)	$	—
Customer lists	4,398		(4,398)		—		4,398		(4,117)		281

Intangible assets, net	$	13,411	$	(13,411)	$	—	$	13,411	$	(13,130)	$	281

Intangibles, net	March 31, 2025						March 31, 2024
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Developed technology	$	9,013	$	(9,013)	$	—	$	9,013	$	(8,550)	$	463
Customer lists	4,398		(4,117)		281		4,398		(3,192)		1,206
Intangible assets, net	$	13,411	$	(13,130)	$	281	$	13,411	$	(11,742)	$	1,669

Intangible assets amortization expense was $0.3 million and $1.4 million for the years ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the intangible assets were fully amortized. The Company recorded amortization of developed technology in cost of product revenue, and customer lists in sales and marketing expenses in the consolidated statements of operations and comprehensive loss.

Intangible assets amortization expense was $1.4 million and $3.3 million for the years ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the remaining weighted-average amortization period for definite-lived intangible assets was approximately 0.3 years. The Company recorded amortization of developed technology in cost of product revenue, and customer lists in sales and marketing expenses in the consolidated statements of operations. 63

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As of March 31, 2025, the future expected amortization expense for intangible assets is as follows (in thousands):


Goodwill
	Amount
Balance at March 31, 2024	$	12,969
Goodwill acquired	—
Balance at March 31, 2025	12,969
Goodwill acquired	—
Balance at March 31, 2026	$	12,969

Fiscal year ending			Estimated future amortization expense
Other long-term assets	March 31,
Fiscal year 2026			$	281
	2026				2025
Total			$	281
Capitalized SaaS implementation costs for internal use	$	12,063			$	13,910
Capitalized debt costs	—				2,871
Deferred taxes	1,062				705
Contract cost asset	994				1,144
Other	618				758
Total other long-term assets	$	14,737			$	19,388

Goodwill			Amount
Other accrued liabilities	March 31,
Balance at March 31, 2024			$	12,969
	2026				2025
Goodwill acquired			—
Accrued expenses	$	7,456			$	7,947
Balance at March 31, 2025			$	12,969
Accrued interest	2,827				350
Accrued supplier owned inventory obsolescence	2,057				1,302
Accrued income taxes	1,153				528
Accrued warranty	772				1,032
Lease liability	799				856
Accrued product returns	783				818
Other	3,610				5,149
Total other accrued liabilities	$	19,457			$	17,982

Other long-term assets	March 31,
	2025		2024
Capitalized SaaS implementation costs for internal use	$	13,910	$	15,349
Capitalized debt costs	2,871		1,923
Contract cost asset	1,144		1,477
Other	1,463		991
Total other long-term assets	$	19,388	$	19,740

Other accrued liabilities	March 31,
	2025		2024
Accrued expenses	$	7,558	$	4,251
Asset retirement obligation	3,497		2,069
Accrued income taxes	528		1,044
Accrued warranty	1,032		1,545
Accrued interest	350		524
Lease liability	856		1,256
Other	4,161		3,297
Total other accrued liabilities	$	17,982	$	13,986

The following table details the change in the accrued warranty balance (in thousands):

Year Ended March 31,

2025

2024

2026

2025

Balance as of April 1

1,~~545~~032

21,~~094~~545

Current period accruals

2,~~333~~645

2,~~563~~333

Adjustments to prior estimates

46(23)

~~(141)~~46

Charges incurred

(2,~~735~~758)

(2,~~971~~735)

Reclassification to long-term warranty

(~~157~~124)

$(157)

—

Balance as of March 31

~~1,032~~772

1,~~545~~032

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NOTE 4: DEBT

The following table summarizes the Company's borrowing as of the dates presented (in thousands):

	Year Ended March 31,
	2025		2024
	2026		2025
Term Loan	$	~~102~~55,~~507~~906	$	87102,~~942~~507
PNC Credit Facility	26,600		26,604
Convertible Note	90,034		—
Less: current portion	(123,086)		(109,100)
PNC Credit Facility	—		26,600
Less unamortized debt issuance costs(1)	(6,021)		(5,446)
Less: current portion	(54,811)		(123,086)
Long-term debt, net	$	—	$	—
Less unamortized debt issuance costs(1)	(1,095)		(6,021)
Long-term debt, net	$	90,034	$	—

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(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 consolidated balance sheets. Unamortized debt issuance costs related to the PNC Credit Facility are presented within other assets on the accompanying consolidated balance sheets.

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 ~~(as~~was ~~amended,~~issued (the “2021 Term Loan”), maturing on August 5, 2026. The Company also ~~has~~entered ainto ~~revolving~~an ~~credit~~Amended ~~facility~~and ~~agreement~~Restated ~~with~~Revolving ~~PNC~~Credit ~~Bank~~and ~~(as~~Security ~~amended~~Agreement on December 27, 2018 (the “PNC Credit Facility” and, together with the Term Loan ~~(as~~Credit ~~defined below)~~Agreement, the “Credit Agreements”), which, per its terms, was maturing on August 5, 2026 and ~~providing~~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 (~~as amended,~~ 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 ~~loan~~ 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.

~~The~~On ~~June~~July ~~2023~~11, ~~Amendment~~2024, to the ~~2021~~Company ~~Term~~entered ~~Loan~~into ~~was~~amendments ~~accounted~~to ~~for as a modification. The value of~~ the ~~June~~Credit ~~2023~~Agreements ~~Warrants in addition to $0.7 million of fees paid to~~ (the ~~lenders~~“July ~~have~~2024 ~~been~~Amendments”) ~~reflected~~which, asamong aother ~~reduction~~things, todelayed the ~~carrying~~testing ~~amount~~ of the ~~Term~~Company’s ~~Loan~~June ~~and~~30, ~~amortized~~2024 tonet ~~interest~~leverage ~~expense~~ratio ~~over~~financial ~~the~~covenant ~~remaining~~until ~~loan~~July ~~term.~~31, ~~The Company incurred $0~~2024.~~9 million~~ ofIn ~~legal~~connection ~~and~~with ~~financial~~the ~~advisory~~amendments, ~~fees~~the ~~which~~Company ~~were~~issued ~~included~~the inTerm ~~general~~Loan ~~and~~lenders ~~administrated~~warrants ~~expenses~~to inpurchase ~~the~~an ~~condensed~~aggregate ~~consolidated statement~~ of ~~operations~~50,000 ~~and~~shares ~~comprehensive~~of ~~loss. The June 2023 Amendment to~~ the ~~PNC~~common ~~Credit~~stock ~~Facility~~at ~~was accounted for as~~ a ~~modification~~purchase ~~and~~price of $08.~~7 million~~20 ~~in related fees and expenses were recorded to other assets and are amortized to interest expense over~~ (the ~~remaining~~“July ~~term~~2024 ~~of the agreement~~Warrants”).

The ~~June~~July ~~2023~~2024 ~~Amendment~~Amendments ~~and~~to the ~~June~~2021 ~~2023~~Term ~~Warrants~~Loan were ~~entered~~accounted ~~into~~for ~~with~~as ~~and~~a ~~issued~~modification. toThe ~~certain~~fair ~~entities~~value ~~managed~~of bythe ~~Pacific~~July ~~Investment~~2024 ~~Management~~Warrants ~~Company,~~of ~~LLC~~$0.4 million ~~("PIMCO") which~~ is ~~considered~~reflected as a ~~related~~reduction ~~party~~to ~~due~~the tocarrying amount of the ~~fact~~2021 ~~that~~Term ~~Christopher~~Loan D.and ~~Neumeyer~~amortized isto ainterest ~~member~~expense ofover the ~~Company's~~remaining ~~Board~~term of ~~Directors~~the ~~and~~loan. ~~also~~The anJuly ~~executive~~2024 ~~vice~~Amendments ~~president~~to ~~and~~the ~~portfolio~~PNC ~~manager~~Credit atFacility ~~PIMCO.~~were ~~The~~accounted ~~principal~~for as a modification and ~~PIK~~the ~~interest~~$0.1 million in related tofees ~~the~~and ~~June~~expenses ~~2023~~were ~~Amendment~~recorded ~~which~~to ~~totaled~~other ~~$17.3 million~~assets asand ofare ~~March~~amortized ~~31,~~to ~~2024~~interest ~~are~~expense ~~payable~~over atthe ~~maturity~~remaining term of the agreement.

On ~~February~~August 1413, 2024, the Company entered into amendments to the Credit Agreements (the “~~February~~August 2024 Amendments”) which, among other things, (i) waived ~~testing~~compliance ofwith the ~~total~~June 30, 2024 net leverage ratio financial covenant; ~~for~~(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 ~~December~~September 3130, ~~2023.~~2025; In(iv) ~~connection~~waived ~~with~~ the ~~amendment,~~testing requirement for the ~~Company~~net ~~incurred~~leverage ~~fees~~ratio ~~related~~financial tocovenant for the ~~Term~~fiscal ~~Loan~~quarter ~~that~~ended ~~was~~September ~~paid-in-kind~~30, of2024; ~~$1.2 million~~(v) ~~and~~replaced anthe ~~amendment~~net ~~fee~~leverage ofratio ~~$0.1 million~~financial ~~that~~covenant ~~was~~with ~~paid~~a inminimum ~~cash.~~EBITDA Asfinancial covenant for the ~~February~~fiscal ~~2024~~quarters ~~Amendments~~ended ~~were~~December ~~accounted~~31, ~~for~~2024 asand aMarch ~~modification~~31, 2025; (vi) reset the ~~fees~~net ~~were~~leverage ~~reflected~~ratio asfinancial acovenant ~~reduction~~requirements tofor the ~~carrying~~fiscal ~~amount~~quarters ofended ~~the~~June ~~Term~~30, ~~Loan~~2025 and ~~are~~September ~~amortized~~30, 2025; (vii) reduced the minimum liquidity covenant to ~~interest~~$10 million ~~expense~~through ~~over~~September ~~the~~30, ~~remaining~~2025; ~~loan~~(viii) ~~term.~~adjusted Inthe ~~connection~~applicable ~~with~~interest rates on the ~~related~~Term Loan and PNC Credit Facility; ~~amendment,~~(ix) removed required 2021 Term Loan principal amortization until the ~~Company~~fiscal ~~incurred~~quarter ~~$0.2 million~~ended inSeptember ~~fees~~30, 2025; and ~~expenses~~(x) repriced certain lender warrants.

68In connection with the August 2024 Amendments, the Company entered into a new senior secured delayed draw term loan facility with a borrowing capacity of up to $26.3 million ($25.0 million after original issuance discount) and a commitment period expiring on October 31, 2024 (each draw, an “August 2024 Term Loan”). The Company borrowed $10.5 million at closing (“Initial August 2024 Term Loan”). Borrowings under the August 2024 Term Loan have an August 5, 2026 maturity date, which aligns with the 2021 Term Loan. The principal is payable quarterly beginning September 30, 2025, at a rate per annum equal to 5% of the original principal balance. The August 2024 Term Loan’s interest rate margin is (a) until March 31, 2025 (i) for any August 2024 Term Loan designated as a ‘SOFR Loan’, 12.00% per annum and (ii) for any August 2024 Term Loan designated an ‘ABR Loan’, 11.00% per annum, in each case, with 6.00% of such interest rate margin paid-in-kind, and (b) from April 1, 2025, (i) for any

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OnAugust ~~March 22,~~ 2024, ~~the~~Term ~~Company~~Loan ~~entered~~designated ~~into~~as ~~further~~a ~~amendments~~‘SOFR toLoan’, ~~the~~14.00% ~~Credit~~per ~~Agreements~~annum and (~~the~~ii) ~~"March~~for any August 2024 ~~Amendments").~~Term ~~The~~Loan ~~March~~designated ~~2024~~an ~~Amendments~~‘ABR Loan’, ~~among~~13.00% ~~other~~per ~~things~~annum, ~~(i)~~in ~~permit~~each ~~the~~case, ~~sale~~with 8.00% of ~~certain~~such ~~assets~~interest byrate ~~the~~margin ~~Company~~paid-in-kind. ~~and~~The ~~(ii)~~August ~~require~~2024 ~~that~~Term ~~certain~~Loan ~~proceeds~~also ~~from~~includes ~~the~~a ~~sale~~multiple ofon ~~such~~invested ~~assets~~capital bepayable ~~applied~~ to ~~partially prepay~~ the ~~outstanding~~August ~~term~~2024 ~~loans under the~~ Term Loan ~~credit facility~~lenders. ~~The~~Subsequently, the Company ~~did~~borrowed ~~not~~the ~~incur~~remaining ~~any~~$15.8 million ~~amendment~~of ~~fees related to~~ the ~~March~~August 2024 ~~Amendments~~Term ~~and~~Loan’s ~~the~~borrowing ~~financial~~capacity ~~terms~~before ofSeptember ~~the~~30, ~~Credit Agreements were not impacted~~2024.

~~During~~Subsequent to the ~~quarter~~August ~~ended~~2024 ~~June~~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 ~~Company~~2021 ~~prepaid~~Term ~~$12~~Loan designated as 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 (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 ~~million~~.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%, Inand ~~connection~~(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 ~~this~~3.75% ~~prepayment~~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 ~~recorded~~total anet ~~loss~~leverage onratio ~~debt~~is ~~extinguishment~~greater than 4.00x, and a step-down of $01.~~7 million~~00% ~~related~~per toannum if the ~~write~~Company’s total net leverage ratio is less than 3.50x (which shall reduce the paid-~~off~~in-kind component of the applicable margin). The SOFR Rate is subject to a ~~portion~~floor of ~~unamortized~~2.00%. ~~debt~~The ~~issuance~~Company ~~costs~~can designate a loan as an ABR Rate Loan or SOFR Rate Loan in its discretion.

OnSubsequent ~~May 24, 2024, the Company entered into amendments~~ to the ~~Credit~~August ~~Agreements (the “May~~ 2024 Amendments~~”) which~~, ~~among~~PNC ~~other~~Credit ~~things,~~Facility ~~(i)~~loans ~~waived~~designated ~~compliance with the Company’s net leverage covenant~~ as ~~of March 31, 2024; and~~ (iix) ~~reduced~~PNC ~~the~~SOFR ~~daily~~Loans ~~minimum~~bear ~~liquidity~~interest ~~covenant~~at ~~below~~a ~~$15.0 million~~rate ~~until~~per ~~June~~annum ~~16,~~equal ~~2024~~to ~~and~~a ~~waived~~SOFR ~~any~~based ~~default~~rate, ~~that~~plus ~~might~~an ~~arise~~applicable asmargin ~~a result~~ of ~~the~~4.75% ~~restatement~~and of(y) ~~certain~~PNC ofDomestic ~~the~~Rate ~~Company’s~~Loans ~~historical~~and ~~financial~~Swing ~~statements.~~Loans Inbear ~~connection~~interest ~~with~~at ~~the~~a ~~May~~rate ~~2024~~per ~~Amendments,~~annum ~~the~~equal ~~Company issued~~ to the ~~Term~~greatest ~~Loan lenders warrants to purchase an aggregate~~ of ~~100,000~~(i) ~~shares of~~ the ~~Common~~base ~~Stock~~commercial atlending arate ~~purchase price~~ of ~~$9.20~~PNC ~~(the~~Bank; ~~“May 2024 Warrants”~~(ii). ~~Additionally, in connection with~~ the ~~May~~Overnight ~~2024~~Bank ~~Amendment~~Funding toRate ~~the~~plus ~~Term Loan, the Company incurred an amendment fee that was paid-in-kind of $~~0.~~8 million~~5%; and ~~issued~~(iii) the ~~May~~daily ~~2024~~SOFR ~~Warrants~~rate ~~with~~plus a1.0%, ~~fair~~plus ~~market~~an ~~value~~applicable margin of $03.~~8 million~~75%. InThe ~~connection~~Company ~~with~~can ~~the~~designate ~~May~~a ~~2024~~loan ~~Amendment~~as toa ~~the~~ PNC ~~Credit~~SOFR ~~Facility~~Loan ~~Amendment,~~or ~~the~~PNC ~~Company~~Domestic ~~incurred~~Rate $Loan ~~0.5 million~~in ofits ~~fees and expenses paid to the lender~~discretion.

~~The~~In ~~May~~connection ~~2024~~with ~~Amendment to~~ the ~~Term~~August ~~Loan was accounted for as a modification. The value of the May~~ 2024 ~~Warrants~~Amendments, ~~in addition to $0.8 million of amendment fees paid to~~ the ~~lenders,~~Company ~~have~~issued ~~been~~warrants ~~reflected as a reduction~~ to ~~the~~purchase ~~carrying~~an ~~amount~~aggregate of ~~the~~380,310 ~~Term~~shares ~~Loan~~of ~~and~~common ~~amortized~~stock, toat ~~interest~~an ~~expense~~exercise ~~over~~price ~~the~~of ~~remaining loan term~~$6.20 ~~The~~per ~~May~~share ~~2024 Amendment to~~ (the ~~PNC~~“August ~~Credit~~2024 ~~Facility~~Warrants”) ~~was~~and ~~accounted~~which ~~for~~had as a ~~modification~~fair ~~and~~value ~~the~~of $02.50 million ~~in related fees and expenses were recorded to other assets and are amortized to interest expense over the remaining term of the agreement~~.

OnThe ~~July~~August ~~11,~~ 2024, Amendments to the ~~Company~~2021 ~~entered~~Term ~~into~~Loan ~~amendments~~held toby ~~the~~one ~~Credit~~lender ~~Agreements~~was (accounted for as a modification. The $1.2 million fair value of the ~~“July~~August 2024 ~~Amendments”)~~Warrants ~~which,~~issued ~~among~~to ~~other~~this ~~things,~~lender ~~delayed~~and the ~~testing~~$0.5 million of PIK fees paid to this lender are reflected as a reduction to the ~~Company’s~~carrying ~~June~~amount ~~30,~~of ~~2024~~their ~~net~~Term ~~leverage~~Loan ~~ratio~~and ~~financial~~their ~~covenant~~initial ~~until~~delayed ~~July~~draw ~~31,~~term ~~2024.~~loan Inand ~~connection~~amortized ~~with~~to interest expense over the ~~amendments,~~remaining term of the ~~Company~~loan. ~~issued~~The August 2024 Amendments to the 2021 Term Loan ~~lenders~~held ~~warrants~~by toanother ~~purchase~~lender anwas ~~aggregate~~accounted offor ~~50,000~~as ~~shares~~a ofdebt ~~the~~extinguishment. ~~Common~~The ~~Stock~~Company atrecorded a ~~purchase~~loss ~~price~~on debt extinguishment of $83.200 million (related to the ~~“July~~write-off of a portion of unamortized debt issuance costs and fees and expenses incurred with the August 2024 ~~Warrants”)~~Amendments.

~~The~~On ~~July~~April ~~2024~~2, ~~Amendments~~2025, to the ~~2021~~Company ~~Term~~consented ~~Loan~~to ~~were~~an ~~accounted~~assignment ~~for~~(the as“Master aAssignment ~~modification.~~Agreement”) ~~The~~of ~~fair~~the ~~value~~2021 ofTerm ~~the~~Loan ~~July~~and 2024 ~~Warrants~~Term Loans. One of the lenders sold $051.4 million isof ~~reflected~~Term asLoan aand ~~reduction~~assigned toall ~~the~~of ~~carrying~~its ~~amount~~interests ofto ~~the~~Dialectic ~~2021~~Technology ~~Term~~SPV, ~~Loan~~LLC ~~and~~(“Dialectic”). ~~amortized~~The toMaster ~~interest~~Assignment ~~expense~~Agreement ~~over~~was ~~the~~accounted ~~remaining~~for ~~loan~~as ~~term~~a debt extinguishment. The ~~July~~Company ~~2024~~recorded ~~Amendments~~a gain on debt extinguishment of $2.4 million related to the ~~PNC~~net ~~Credit~~of ~~Facility~~discount ~~were~~on ~~accounted~~issuance ~~for~~of asterm loans to a ~~modification~~new lender and write-off of all unamortized debt issuance costs and fees related to the previous lender. The $0.14 million in ~~related~~new lender fees ~~and expenses~~ were recorded as a reduction to ~~other~~the ~~assets~~carrying ~~and~~amounts ~~are~~of the term loans and amortized to interest expense over the remaining term of the ~~agreement~~loan.

On ~~August~~May 135, ~~2024~~2025, the Company entered into ~~amendments~~an toamendment ~~the Credit Agreements~~ (the “~~August~~May ~~2024~~2025 ~~Amendments”)~~Term ~~which,~~Loan ~~among other things, (i~~Amendment”) ~~waived~~to ~~compliance with~~ the ~~June~~Term ~~30,~~Loan. ~~2024~~The ~~net~~May ~~leverage~~2025 ~~ratio~~Term ~~financial~~Loan ~~covenant;~~Amendment, ~~(ii)~~among ~~waived~~other 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 ending September 30things, ~~2025;~~revised ~~(iv) waived~~ the ~~testing~~prepayment ~~requirement~~requirements ~~for~~under the ~~net~~Term ~~leverage~~Loan ~~financial~~Credit ~~covenant~~Agreement ~~for~~in ~~the~~connection ~~fiscal~~with ~~quarter ending September 30, 2024; (v) replaced~~ the net ~~leverage~~cash ~~financial~~proceeds ~~covenant~~received ~~with~~from ~~a minimum EBITDA financial covenant for~~ the ~~fiscal~~SEPA. ~~quarters~~The ~~ending~~May ~~December 31, 2024 and March 31,~~ 2025; ~~(vi)~~Term ~~reset~~Loan ~~the~~Amendment ~~net~~was ~~leverage~~accounted ~~financial covenant requirements~~ for ~~the~~as ~~fiscal~~a ~~quarters~~modification ~~ending June 30, 2025~~ and ~~September 30, 2025; (vii) reduced~~ the ~~minimum liquidity covenant to~~ $100.1 million ~~through~~in ~~September~~lender ~~30,~~amendment ~~2025;~~fees ~~(viii)~~were ~~adjusted~~recorded ~~the~~as ~~applicable~~a ~~interest~~reduction ~~rates~~to on the ~~Term~~carrying ~~Loan~~amounts ~~and~~of ~~PNC~~the ~~Credit~~term ~~Facility;~~loans ~~(ix)~~and ~~removed~~amortized ~~required~~to ~~2021~~interest ~~Term~~expense ~~Loan~~over ~~principal amortization until~~ the ~~fiscal~~remaining ~~quarter~~term ~~ending~~of ~~September~~the ~~30, 2025; and (x) repriced certain Lender Warrants~~loan.

InOn ~~connection with the~~ August ~~2024~~13, ~~Amendments~~2025, the Company ~~received~~terminated aits ~~new~~PNC ~~senior~~Credit ~~secured~~Facility. ~~delayed~~As ~~draw~~of ~~term~~the ~~loan~~date ~~facility with a borrowing capacity~~ of ~~up to $26.3 million ($25.0 million after original issuance discount) and a commitment period expiring on October 31~~termination, ~~2024~~there ~~(each~~were ~~draw,~~no anamounts ~~“August~~outstanding ~~2024 Term Loan”). The Company borrowed $10.5 million at closing (“Initial August 2024 Term Loan”). Borrowings~~ under the ~~August~~facility. ~~2024~~In ~~Term~~connection ~~Loan have an August 5, 2026 maturity date, which aligns~~ with the ~~2021 Term Loan. The principal is payable quarterly beginning September 30~~termination, ~~2025,~~the atCompany apaid ~~rate~~an ~~per~~exit ~~annum~~fee ~~equal to 5%~~ of ~~the original principal balance. The August 2024 Term Loan’s interest rate margin is (a) until March 31, 2025 (i) for any August 2024 Term Loan designated as a~~

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‘SOFR Loan’, 12.00% per annum and (ii) for any August 2024 Term Loan designated an ‘ABR Loan’, 11.00% per annum, in each case, with 6.00% of such interest rate margin paid-in-kind, and (b) from April $1~~, 2025, (i) for any August 2024 Term Loan designated as a ‘SOFR Loan’, 14~~.~~00% per annum~~2 million, ~~and~~which ~~(ii)~~was ~~for~~recorded ~~any~~within ~~August~~Loss ~~2024~~on ~~Term~~Debt ~~Loan~~Extinguishment ~~designated an ‘ABR Loan’, 13.00% per annum, in each case, with 8.00% of such interest rate margin paid-in-kind. The August 2024 Term Loan also includes a multiple~~ on ~~invested capital payable to~~ the ~~August~~consolidated ~~2024~~statement ~~Term Loan lenders. Subsequently, the Company borrowed the remaining $15.8 million~~ of ~~the~~operations ~~August~~and ~~2024~~comprehensive ~~Term Loan’s borrowing capacity before September 30, 2024~~loss.

~~Subsequent~~On ~~to the~~ August ~~2024 Amendments~~13, ~~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~~Company ~~Term~~obtained ~~Loan~~waivers ~~designated as (x) ABR Loans bear interest at a rate per annum equal~~ to ~~the~~certain ~~“ABR~~covenants ~~Rate”~~including ~~(calculated as~~ the ~~greatest~~net ofleverage ~~(i)~~covenant 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~~Credit asAgreement ~~(x)~~for ~~ABR Loans bear interest at a rate per annum equal to~~ the ~~ABR~~quarter ~~Rate,~~ended ~~plus~~June ~~an applicable margin of 8.75%~~30, ~~and (y) SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 9~~2025.~~75%,~~ ~~in each case~~Additionally, ~~with~~the ~~3.75%~~requirement ofto ~~such~~use ~~applicable~~certain ~~margin~~proceeds ~~paid-in-kind, with a step-up~~ of ~~1.00% per annum (which shall be paid-in-kind) if~~ the ~~Company’s~~SEPA ~~total~~to ~~net~~pay ~~leverage ratio is greater than 4.00x, and a step-~~down ~~of 1.00% per annum if~~ the ~~Company’s~~Term 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 orwas ~~SOFR Rate Loan in its discretion~~waived.

~~Subsequent~~On September 23, 2025, the Company entered into the Fifteenth Amendment to the ~~August~~Term ~~2024~~Loan ~~Amendments~~Credit Agreement with Quantum LTO Holdings, ~~PNC~~LLC, ~~Credit~~Dialectic, ~~Facility~~OC ~~loans~~III ~~designated~~LVS XXXIII LP (“LVS XXXIII”), OC III LVS XL LP (“LVS XL” and together with LVS XXXIII, the “OC III Lenders”), and Alter Domus (US) LLC, as disbursing agent and collateral agent (xthe “Fifteenth Amendment”). ~~PNC~~The ~~SOFR~~Fifteenth ~~Loans~~Amendment, ~~bear~~among ~~interest~~other atthings, a(i) ~~rate~~permits ~~per~~the ~~annum~~Company ~~equal~~to retain up to a$15.0 million ~~SOFR~~of ~~based~~net ~~rate,~~cash ~~plus~~proceeds anfrom ~~applicable~~the ~~margin~~SEPA received on or after the date of ~~4.75%~~the Fifteenth Amendment for working capital and general corporate purposes, (yii) ~~PNC~~converts ~~Domestic~~certain ~~Rate~~tranches of Term Loans held by the OC III Lenders into new and ~~Swing~~separate ~~Loans~~tranches, ~~bear~~(iii) defers payment of cash interest aton aTerm ~~rate~~Loans ~~per~~held ~~annum~~by ~~equal~~Dialectic toaccruing during the ~~greatest~~quarters ended September 30, 2025 and December 31, 2025, until the earliest of (ia) the ~~base~~date ~~commercial~~the ~~lending~~Company ~~rate~~elects ofto ~~PNC~~pay ~~Bank;~~such deferred cash interest, (iib) the ~~Overnight~~maturity ~~Bank~~of ~~Funding~~such ~~Rate~~term ~~plus~~loans, ~~0.5%;~~or ~~and~~(c) the date the Debt Exchange (~~iii~~as defined below) occurs, at which point such deferred interest will be subject to the ~~daily~~terms ~~SOFR~~of ~~rate~~the ~~plus~~Convertible ~~1.0%~~Note indenture, ~~plus~~and anincreases the interest rate applicable ~~margin~~to ofsuch 3term loans by 2.7500%. ~~The~~during ~~Company~~the ~~can~~period ~~designate~~that asuch ~~loan~~cash interest is being deferred, (iv) eliminates the existing maximum total net leverage ratio covenant and minimum daily liquidity covenant (noting that, following the Debt Exchange (as defined below), the Convertible Note will be subject to a ~~PNC~~minimum ~~SOFR~~liquidity ~~Loan~~covenant), orand ~~PNC~~(v) ~~Domestic~~amends ~~Rate~~certain ~~Loan~~other inprovisions, ~~its~~including ~~discretion~~mandatory prepayment events, payment of fees and expenses, and reporting requirements.

In connection with the ~~August~~Fifteenth ~~2024 Amendments~~Amendment, the Company issued ~~warrants~~a warrant (the “Forbearance Warrant”) to ~~purchase~~Dialectic anto ~~aggregate~~purchase ofup ~~380~~to 2,~~510~~653,308 shares of ~~the~~its ~~Common~~common ~~Stock~~stock, atrepresenting an19.9% ~~exercise~~of ~~price~~the Company’s outstanding shares as of ~~$6.20~~the ~~per~~date ~~share~~of (the ~~“August~~Transaction ~~2024~~Agreement ~~Warrants”~~(as defined below) ~~and~~as ~~which~~consideration ~~had~~for athe ~~fair~~forbearance, ~~value~~waivers, ofand $2amendments granted under the Fifteenth Amendment.~~0 million.~~ See Note 7: Common Stock, for additional information.

~~The~~With ~~August~~respect ~~2024 Amendments~~ to the ~~2021~~ Term ~~Loan~~Loans held by ~~one~~Dialectic, ~~lender~~the Fifteenth Amendment was accounted for as aan ~~modification.~~extinguishment ~~The~~under ~~$1.2 million~~ASC ~~fair~~470-50, ~~value~~resulting ofin the ~~August~~recognition ~~2024~~of ~~Warrants~~a ~~issued~~new todebt ~~this~~instrument, ~~lender and~~ the ~~$0.5 million~~derecognition of ~~PIK~~the ~~fees~~original ~~paid~~term toloans, ~~this~~and ~~lender~~a ~~are~~loss ~~reflected~~on asextinguishment aof ~~reduction~~$31.0 million, towhich ~~the~~is ~~carrying~~included ~~amount~~in ofloss ~~their~~on ~~Term~~debt ~~Loan~~extinguishment ~~and~~on ~~their~~the ~~initial~~consolidated ~~delayed~~statement ~~draw~~of ~~term~~operations ~~loan~~ and ~~amortized~~comprehensive toloss ~~interest~~for ~~expense~~fiscal ~~over~~year ~~the~~ended ~~remaining~~March ~~loan~~31, ~~terms~~2026. The ~~August~~fair ~~2024~~value ~~Amendments~~of to the ~~2021~~Forbearance ~~Term~~Warrant ~~Loan~~was ~~held~~treated byas ~~another~~a lender ~~was~~fee ~~accounted~~and ~~for~~included asin athe ~~debt~~ extinguishment loss calculation. The ~~Company~~Fifteenth ~~recorded~~Amendment ato ~~loss~~the onTerm ~~debt~~Loans ~~extinguishment~~held ofby ~~$3.0 million~~OC ~~related~~III toLenders ~~the~~was ~~write-off~~accounted offor as a ~~portion~~modification. ofSee ~~unamortized~~Note ~~debt~~11: ~~issuance~~Fair ~~costs~~Value ~~and~~of ~~fees~~Financial ~~and~~Instruments, ~~expenses~~for ~~incurred~~additional ~~with the August 2024 Amendments~~information.

~~The~~On ~~August~~September ~~2024~~23, ~~Amendments~~2025, the Company entered into an agreement with Dialectic and the OC III Lenders (the “Transaction Agreement”). Pursuant to the ~~PNC~~Transaction ~~Credit~~Agreement, ~~Facility~~the ~~were~~Company ~~accounted~~agreed ~~for~~to asissue to Dialectic, on a ~~modification~~dollar-for-dollar basis, ~~and~~one or more 10.00% PIK Senior Secured Convertible Notes due 2028 ("Convertible Note") 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 and extinguishing $054.7 million inof ~~related~~Term Debt. Associated lender fees ~~and~~of ~~expenses~~$2.2 million were ~~recorded~~also toincurred. ~~other~~The ~~assets~~Closing ~~and~~was ~~amortized~~conditioned toupon, ~~interest~~among ~~expense~~other ~~over~~things, approval of the ~~remaining~~Debt ~~term~~Exchange ofby the ~~agreement~~Company’s stockholders, which approval was obtained on December 16, 2025.

OnThe ~~January~~Convertible ~~27,~~Note ~~2025~~has a three-year maturity and bears interest at 10% per annum, ~~the~~payable ~~Company~~in ~~entered~~kind ~~into~~and ancompounded ~~amendment~~annually. (The Convertible Note is secured by substantially all of the ~~“January~~assets ~~2025~~of ~~Term~~the ~~Loan~~Company ~~Amendment”)~~that tosecure the Term Loan. The ~~January~~initial ~~2025~~conversion ~~Term~~price ~~Loan~~equals ~~Amendment,~~$10.00 ~~among~~per ~~other~~share ~~things,~~of ~~(i)~~the ~~amends~~Company’s ~~the~~common ~~minimum~~stock ~~EBITDA~~(the ~~covenant~~“Conversion soPrice”). ~~that~~The ~~such~~Conversion ~~covenant~~Price is ~~not~~subject ~~tested~~to four quarterly resets on ~~December~~the ~~31,~~last ~~2024~~day orof ~~March~~each 31calendar quarter immediately following September 15, 2025, (iieach, a “Reset Price Date”) ~~amends~~to ~~certain~~the ~~mandatory~~greater ~~prepayment~~of ~~events,~~(a) $4.00 per share and (~~iii~~b) ~~waives~~the ~~certain~~lesser ~~events~~ of ~~default,~~(i) inthe ~~each~~then-current ~~case,~~Conversion asPrice ~~set~~and ~~forth~~(ii) inthe 30-day Volume-Weighted Average Price (VWAP) of the ~~January~~Company’s ~~2025~~common ~~Term~~stock ~~Loan~~immediately ~~Amendment~~preceding the Reset Price Date.

70The Lender may, 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 the Lender 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

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OnExchange, ~~January~~if 27triggered, ~~2025,~~occurs ~~the~~in ~~Company~~tranches ~~entered~~of ~~into~~20%, an20%, ~~amendment~~30%, (and the ~~“January~~remaining ~~2025~~balance. ~~Revolver~~If ~~Amendment”)~~certain toconditions are met, at the ~~PNC~~Company’s ~~Credit~~option, ~~Facility.~~on ~~The~~the ~~January~~maturity ~~2025~~date, ~~Revolver~~any ~~Amendment~~outstanding principal, ~~among~~accrued ~~other~~and ~~things~~unpaid interest, and premium (iif any) ~~amends~~may ~~the~~be ~~minimum~~exchanged ~~EBITDA~~for ~~covenant~~shares soof ~~that~~the ~~such~~Company’s ~~covenant~~common isstock ~~not~~at ~~tested~~80% onof ~~December~~the ~~31,~~average ~~2024~~of orthe ~~March~~Daily ~~31,~~VWAP ~~2025,~~for ~~(ii)~~each ~~amends~~of ~~certain~~the ~~mandatory~~five ~~prepayment~~lowest ~~events,~~consecutive ~~and~~trading ~~(iii)~~days ~~waives~~during ~~certain~~the ~~events~~20 ofconsecutive ~~default,~~trading indays ~~each~~ending ~~case,~~on as(and ~~set~~including) ~~forth~~the intrading ~~the~~day ~~January~~immediately ~~2025~~prior ~~Revolver~~to ~~Amendment~~the maturity date.

AsThe ofCompany ~~March 31,~~accounted ~~2025,~~for the ~~interest~~exchange ~~rate~~of onDialectic’s term loans for the ~~2021~~Convertible ~~Term~~Note ~~Loan,~~as ~~2023~~an ~~Term~~extinguishment ~~Loan,~~of the term loans and ~~2024~~recognized ~~Term~~a ~~Loans~~loss ~~were~~on ~~14.34%,~~debt ~~14.59%~~extinguishment ~~and~~of 16$28.~~59%,~~9 million ~~respectively.~~on Asthe consolidated statement of operations and comprehensive loss for the fiscal year ended March 31, ~~2025,~~2026. ~~the~~The ~~interest~~Company ~~rate~~elected on the ~~PNC~~fair ~~Credit~~value ~~Facility~~option ~~for~~under ~~Domestic~~ASC ~~Rate~~825 ~~Loans~~for ~~and~~the ~~Swing~~Convertible ~~Loans~~Note. ~~was~~See Note 11~~.25%~~: ~~and~~Fair ~~for~~Value ~~PNC~~of ~~SOFR~~Financial ~~Loans~~Instruments, ~~was~~for 9additional information.~~17%.~~

AsRelated ofParty March 31, 2025, the PNC Credit Facility had a borrowing base of $27.0 million which includes a reduction of $0.7 million related to outstanding letters of credit issued on the Company's behalf. As of March 31, 2025, there was $0.4 million available to borrow under the PNC Credit Facility. Transactions

OnThe ~~January~~Forbearance 27Warrant and Convertible Note issued to Dialectic constitute related party transactions, ~~2025~~as John Fichthorn, a member of the Company's ~~filed~~Board, ais ~~registration~~also ~~statement~~Managing onPartner ~~Form~~of ~~S-1~~Dialectic ~~related~~Capital toManagement, the ~~resale,~~investment ~~from~~adviser ~~time~~ to ~~time,~~Dialectic. On issuance of upthe toConvertible 2Note,~~302,733~~ ~~shares~~Quantum ofpaid ~~Common~~$1.1 million ~~Stock~~to inDialectic ~~connection~~for ~~with~~consulting ~~the SEPA~~services. The ~~Registration~~fair ~~Statement~~values onof ~~Form~~the ~~S-1~~Forbearance ~~was~~Warrant ~~declared~~and ~~effective~~Convertible ~~February~~Note 11as of March 31, ~~2025~~2026 are included in Note 11: Fair Value of Financial Instruments.

NOTE 5: LEASES

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

	Year Ended March 31,
Operating leases	~~2025~~2026		~~2024~~2025
Operating lease right-of-use assets	$	87,~~580~~416	$	98,~~425~~580
Other current liabilities	$	856	$	1,256
Operating lease liability, current - included in other accrued liabilities	$	799	$	856
Operating lease liability	8,~~934~~172		98,~~621~~934
Total operating lease liabilities	$	98,~~790~~971	$	109,~~877~~790

The components of lease expense were as follows (in thousands):

Year Ended March 31,

Lease expense

~~2025~~2026

~~2024~~2025

Operating lease expense

2,~~895~~190

32,~~007~~895

Variable lease expense

~~263~~251

~~291~~263

Short-term lease expense

48426

—48

Total lease expense

32,~~206~~867

3,~~298~~206

Maturity of Lease Liabilities	Operating Leases
Fiscal year ending 2026	$	2,346
Fiscal year ending March 31, 2027	$	1,964
2027	1,832
2028	1,606
2028	1,597
2029	1,234
2029	1,240
2030	1,237
2030	1,241
2031	1,285
Thereafter	109,~~855~~569
Total lease payments	$16,895	~~19,111~~
Less: Imputed interest	(97,~~321~~924)
Present value of lease liabilities	$	98,~~790~~971

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Lease Term and Discount Rate	March 31,
	2025		2024
	2026		2025
Weighted average remaining operating lease term (years)	10.1916		10.53
Weighted average discount rate for operating leases	12.5967	%	12.64	%

Operating cash outflows related to operating leases totaled $2.82 million and $2.98 million for the fiscal years ended March 31, ~~2025~~2026 and March 31, ~~2024~~2025, respectively.

NOTE 6: RESTRUCTURING CHARGES

During fiscal years ~~2025~~2026 and ~~2024~~2025, the Company approved certain restructuring plans to improve operational efficiencies and rationalize its cost structure. All restructuring activities from ~~2024~~2025 fiscal year were completed by the fourth quarter of fiscal ~~2024~~2026. During fiscal year ~~2025~~2026, all employees were notified; however, due to local requirements, not all employees had left employment by the end of the fiscal year. No asset impairments occurred in fiscal year ~~2025~~2026 or in fiscal year ~~2024~~2025.

The following tables show the activity ~~and the estimated timing of future payouts~~ for accrued restructuring (in thousands):

	Severance andbenefits
Balance as of March 31, 2023	$	—
Balance as of March 31, 2024	$	—
Restructuring costs	3,280
Restructuring charges	4,090
Cash payments	(3,280)
Balance as of March 31, 2024	—
Restructuring costs	4,090
Cash payments	(3,266)
Other non-cash	(38)
Balance as of March 31, 2025	$786	~~786~~
Restructuring charges	8,112
Cash payments	(8,363)
Other non-cash	31
Balance as of March 31, 2026	$	566

NOTE 7: COMMON STOCK

In the fiscal year ended March 31, 2023, the Company’s stockholders approved an increase in its authorized shares of common stock from 125 million to 225 million.

Long-Term Incentive Plan

The Company maintains ~~two stockholder-approved incentive plans,~~ the ~~2012 Long-Term Incentive Plan (the "2012 Plan") and the~~ 2023 Long-Term Incentive Plan (the “2023 LTIP”). ~~The~~which ~~2023 LTIP serves as the successor to the Company’s 2012 Plan and~~ provides for grants of performance share units, restricted stock units and stock options. On August 15, 2024, the stockholders of the Company approved an additional 250,000 shares of Common Stock under the 2023 LTIP for future issuance and on December 16, 2025, the Company’s stockholders approved an amendment to (i) increase the number of shares of the Company’s common stock reserved for issuance thereunder by 1,400,000 shares and (ii) remove the individual annual award limits for employees and consultants.

Equity awards typically vest between one and ~~three~~four years. Stock options, performance shares and restricted stock grants to non-employee directors typically vest over one year. The term of each stock option under the 2023 Plan will not exceed seven years. Stock options, performance share units and restricted stock units granted under the 2023 Plan are subject to forfeiture if employment terminates.

The 2023 Plan has 02.7 2 million shares authorized for issuance of new shares, with 0.5 million performance shares and restricted shares outstanding, ~~and~~ 0.1 million stock options outstanding, and 1.6 million shares available for future issuance under the Plan as of March 31, ~~2025~~2026.

2021 Inducement Plan

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The Company's 2021 Inducement Plan (the "2021 Inducement Plan") became effective on February 1, 2021 and provides for issuance of inducement equity awards to individuals who were not previously an employee or non-employee director of the Company as an inducement ~~material~~ to such individual's entering into employment with the Company. The term of each stock option and restricted stock unit under the plan will not exceed seven years, and each award generally vests between two and three years.

On December 30, 2022, the Leadership and Compensation Committee of the Board of Directors approved an amendment to the 2021 Inducement Plan to increase the number of shares of common stock of the Company authorized for issuance thereunder from 38,500 to 0.1 million. In addition, the committee approved increasing the number of shares of common stock of the Company authorized for issuance under the 2021 Inducement Plan to 0.2 million. There were ~~38,380~~0.1 million shares available for future issuance as of March 31, ~~2025~~2026.

The Company accounts for all forfeitures of stock-based awards when they occur.

Employee Stock Purchase Plan

The Company's has an Employee Stock Purchase Plan (the "ESPP") which enables eligible employees to purchase shares of its common stock at a discount. Purchases will be accomplished through participation in discrete offering periods. On each purchase date, eligible employees will purchase the Company's common stock at a price per share equal to 85% of the lesser of (i) the fair market value of the Company's common stock on the first trading day of the offering period, and (ii) the fair market value of the Company's common stock on the purchase date.

The Company has reserved shares of common stock for future issuance under its ESPP as follows (in thousands):

	March 31,
	2025	2024
	2026	2025
Shares available for issuance at beginning of period	4.4	4.4
Shares available for issuance at beginning of year	204.4	4.4
Shares issued during the period	200	—
Additional shares authorized for issuance during the period	—	200
Total shares available for future issuance at end of period	204.4	4.4
Total shares available for future issuance at end of year	204.4	204.4

Performance Stock Units

The Company granted 0120,000 and 6180,~~000~~126 ~~shares~~units of performance ~~share~~stock units with ~~market~~financial performance conditions (“~~Market~~Performance PSUs”) in the fiscal ~~2025~~years ended March 31, 2026 and ~~2024~~2025, respectively. ~~Market~~Performance PSUs ~~vest one to three years from the issuance date and~~ become eligible for vesting based on the Company achieving certain ~~stock~~financial ~~price~~performance targets, and are contingent upon continued service of the holder of the award during the vesting period. ~~The~~Performance ~~estimated~~PSUs ~~fair~~are ~~value~~valued at the market closing share price on the date of ~~these~~grant ~~Market~~and compensation expense for Performance PSUs is ~~determined~~recognized atwhen it is probable that the ~~issuance~~performance ~~date~~conditions ~~using~~will abe ~~Monte~~achieved. ~~Carlo~~Compensation ~~simulation~~expense ~~model~~recognized related to Performance PSUs is reversed if the Company determines that it is no longer probable that the performance conditions will be achieved.

~~Assumptions~~The ~~used~~following intable ~~the~~summarizes ~~Monte~~activity ~~Carlo~~for ~~model~~the tounvested ~~calculate~~Market ~~fair~~PSUs ~~values~~and ofPerformance ~~market~~PSUs ~~PSU’s~~for ~~during~~the ~~each~~year ~~fiscal~~ended ~~period~~March 31, ~~are~~2026 as(shares ~~follows~~in thousands):

Weighted-Average		2025			2024
	Shares		Weighted-AverageGrant Date Fair Value per Share
Discount period (years)		n/a			3.00
Unvested as of March 31, 2025	213		$	6.87
Risk-free interest rate		n/a			3.53%
Granted	120		$	6.11
Stock price volatility		n/a			80.50%
Vested	(4)		$	19.53
Grant date fair value		n/a			$18.20
Forfeited or cancelled	(200)		$	7.23
Unvested as of March 31, 2026	129		$	6.87

~~The~~As ~~Company granted 180,126 and 46,000 units~~ of ~~performance share units with financial performance conditions (“Performance PSUs”) in the fiscal years ended~~ March 31, ~~2025~~2026, ~~and~~there ~~2024,~~was ~~respectively~~$0.7 ~~Performance~~million ~~PSUs~~of ~~become~~unrecognized ~~eligible for vesting~~ stock-based oncompensation ~~the~~related ~~Company~~to ~~achieving~~Market ~~certain financial performance targets, and are contingent upon continued service of the holder of the award during the vesting period. Performance~~ PSUs ~~are valued at the market closing share price on the date of grant~~ and ~~compensation expense for~~ Performance PSUs, iswhich ~~recognized when it~~ is ~~probable~~expected ~~that~~to ~~the performance conditions will~~ be ~~achieved. Compensation expense~~ recognized ~~related~~over toa ~~Performance~~weighted-average ~~PSUs~~period isof ~~reversed~~1.6 ~~if the Company determines that it is no longer probable that the performance conditions will be achieved~~years.

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The ~~following~~total ~~table~~grant ~~summarizes~~date ~~activity~~fair ~~for~~value ~~Market~~of ~~PSUs~~shares ~~and~~granted ~~Performance~~during ~~PSUs~~fiscal ~~for~~years ~~the year~~ ended March 31, 2026 and 2025 ~~(shares~~was in$0.7 ~~thousands):~~million and $0.4 million, respectively.

	Shares	Weighted-AverageGrant Date Fair Value per Share
Outstanding as of March 31, 2024	59	$	18.59
Granted	180	$	4.71
Vested	(13)	$	28.90
Forfeited or cancelled	(13)	$	8.82
Outstanding as of March 31, 2025	213	$	6.87

As of March 31, 2025, there was $0.8 million of unrecognized stock-based compensation related to Market PSUs and Performance PSUs, which is expected to be recognized over a weighted-average period of 1.5 years.

The total grant date fair value of shares vested during fiscal years ended March 31, 2025 and 2024 was $0.4 million and $1.0 million, respectively.

Restricted Stock Units

The Company granted ~~312~~370,~~250~~905 and 60312,~~000~~250 of service-based restricted stock units (“RSUs”) in the fiscal years ended March 31, ~~2025~~2026 and ~~2024~~2025, respectively, which generally vest ratably over a three-year service period. RSUs are valued at the market closing share price on the date of grant and compensation expense for RSUs is recognized ratably over the applicable vesting period.

The following table summarizes activity for ~~restricted~~the ~~stock~~unvested ~~units~~RSUs for the year ended March 31, ~~2025~~2026 (shares in thousands):

	Shares	Weighted-AverageGrant Date Fair Value per Share
Outstanding as of March 31, 2024	152	$	41.06
Unvested as of March 31, 2025	327	$	11.32
Granted	~~312~~371	$	46.9993
Vested	(~~118~~117)	$	318.9858
Forfeited or cancelled	(19170)	$	1713.3994
Outstanding as of March 31, 2025	327	$	11.32
Unvested as of March 31, 2026	411	$	7.06

The total grant date fair value of RSUs ~~vested~~granted during fiscal years ended March 31, ~~2025~~2026 and ~~2024~~2025 was $32.86 million and $63.48 million, respectively.

As of March 31, ~~2025~~2026, there was $12.58 million of total unrecognized stock-based compensation related to RSUs, which is expected to bevest ~~recognized~~ over a weighted-average period of 1.37 years.

74Stock Options

During fiscal 2026, the Company granted equity awards to its Chief Executive Officer including options to purchase 100,000 shares of the Company’s common stock, one award for 50,000 in November 2025 with a grant date fair value of $7.39 per share and the other award for 50,000 in January 2026 which had a grant date fair value if $5.02 per share. Both 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 March 31, 2026 are summarized below:


	November 1, 2025	January 1, 2026
Term (years)	7.00 years	7.00 years
Volatility 1	100.2%	98.8%
Dividend yield 2	0.00%	0.00%
Risk-free interest rate 3	3.66%	3.79%
Grant date fair value	$7.39	$5.02

1 Volatility is based of the Company's historical stock price over a period of the expected term of the options.

2 Dividend yield is set to —% as the Company has not historically paid dividends.

3 Risk-free interest rate is based on the Treasury yield for the expected term of the options.

Stock-based Compensation Expense

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Compensation Expense

The following table details the Company's stock-based compensation expense (in thousands):

Year Ended March 31,

2025

2024

2026

2025

Cost of revenue

~~373~~(21)

~~774~~373

Research and development

~~495~~73

~~1,091~~495

Sales and marketing

~~317~~(66)

~~669~~317

General and administrative

~~1,643~~(835)

21,~~187~~643

Total stock-based compensation

~~2,828~~(849)

42,~~721~~828

	Year Ended March 31,
	2025		2024
	2026		2025
Restricted stock units	$	~~2,515~~693	$	42,~~551~~515
Performance share units	~~313~~(1,635)		~~170~~313
Total stock-based compensation	$	2,828	$	4,721
Stock options	93		—
Total stock-based compensation	$	(849)	$	2,828

The negative stock compensation expense in fiscal 2026 is largely driven by separations during the period.

Warrants

In connection with various debt refinancing and debt amendment activities detailed in Note 4: Debt, the Company issued warrants to purchase shares of the Company common stock. (As of March 31, 2026, there was a Forbearance Warrant issued in September 2025 which are exercisable until the ~~"Lender~~seventh ~~Warrants")~~anniversary of its issuance. As of March 31, 2024, there were Lender Warrants that were issued in December 2018 which were exercisable until December 27, 2028 ~~(the "December 2018 Warrants)~~, issued in June 2020 which were exercisable until June 16, 2030 ~~(the "June 2020 Warrants")~~ and issued in June 2023 which were exercisable until June 1, 2033 (collectively the "~~June~~Lender ~~2023~~ Warrants"). The Lender Warrants were fully exercised in fiscal 2025.

~~The exercise price and the number of shares underlying the~~ Lender Warrants were subject to adjustment in the event of specified events, including dilutive issuances of equity instruments at a price lower than the exercise price of the respective warrants (the "Down Round Feature"), repricing of existing equity-linked instruments at a price lower than the exercise price of the respective warrants (the "Warrant Repricing Feature"), a subdivision or combination of the common stock, a reclassification of the common stock or specified dividend payments. Upon exercise, the aggregate exercise price was paid, at each warrant holder’s election, in cash or on a net issuance basis, based upon the fair market value of the common stock at the time of exercise. The Company's warrants also had a provision that determines the potential stock price used when applying the Black-Scholes valuation model to determine the settlement price of the warrants in Successor Major Transactions ("SMT"), as defined in the respective warrant agreements, which include a change in control or liquidation (the "Warrant Settlement Price Provision"). The Warrant Settlement Price Provision required the use of the greater of the closing price of the Company's common stock on the trading day immediately preceding the date on which an SMT is consummated, the closing market price of the Company's common stock following the first public announcement of an SMT or the closing market of the Company's common stock immediately preceding the announcement of an SMT. Because of these terms, equity classification was precluded, and these warrants were carried as liabilities at fair value.

The Company uses Level 2 inputs for its valuation methodology for the warrant liabilities as their fair values were determined by using the Black-Scholes model based on various assumptions. The assumptions used in calculating fair values of the Lender Warrants are as follows:

	December 2018 Warrants	June 2020 Warrants	June 2023 Warrants
March 31, 2024:
Discount period (years)	4.7 years	6.2 years	9.2 years
Risk-free interest rate	4.19%	4.16%	4.16%
Stock price volatility	87.00%	86.00%	81.00%
Exercise price	$6.60	$6.00	$9.00

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The Company has adopted ASC 2017-11, Earnings per share (Topic 260) ; Distinguishing liabilities from equity (Topic 480); and Derivatives and hedging (Topic 718) ("ASC 2017-11") which provides guidance that the inclusion of certain anti-dilution provisions including down-round provisions in which the exercise price and number of shares underlying an equity-linked instrument are adjusted based on certain specified events does not preclude an instrument from being equity classified. The Company has concluded the Warrant Repricing Feature does not meet the definition of a down-round provision that would provide a scope exception allowing equity classification; therefore, the Company's warrants are required to be classified as liabilities. In addition, the Company has concluded that the use of the greater of three share price inputs to the Black-Scholes valuation model in the Warrant Settlement Price Provision precludes the warrants from being indexed to the Company's own common stock under Topic 815 therefore requiring the Company to classify the warrants as liabilities with changes in fair value being recognized in the Company’s consolidated statement of operations.

On December 30, 2024, 467,248 warrants were exercised in a cashless exercise whereby 61,270 shares with a value of $6.20 per share were used to settle the exercise price and the remaining 405,978 shares were issued to the warrant holders.

On January 3, 2025, certain PIMCO-managed entities exercised 677,905 warrants in a cashless exercise whereby 228,195 shares with a weighted-average value of $35.42 per share were used to settle the exercise price and the remaining 449,710 shares were issued to the warrant holders. As PIMCO was a related party, this transaction was reviewed and approved in accordance with the Company’s related party transaction policy.

The table below sets forth a summary of changes in the fair value of the Company’s Level 2 ~~warrant~~Lender Warrant liabilities for the years ended March 31, 2024 and March 31, 2025:. The Company did not issue any Lender Warrants during the year ended March 31, 2026 and had no outstanding Lender Warrants as of March 31, 2026.

Balance at March 31, 2023	$	7,989
Issuance of warrants	1,194
Change in fair value of warrant liabilities	(5,137)
Balance at March 31, 2024	$	4,046
Issuance of warrants	3,157
Exercise of warrants	(52,985)
Repricing adjustment	512
Change in fair value of warrant liabilities	45,270
Balance at March 31, 2025	$	—

~~The~~Forbearance ~~Company had no outstanding Lender Warrants as at March 31, 2025. The following table summarizes the Company's outstanding Lender Warrants as at March 31, 2024 (in thousands, except exercise price):~~ Warrant

	December 2018 Warrants		June 2020 Warrants		June 2023 Warrants		Total
March 31, 2024:
Exercise price	$	26.60	$	55.40	$	20.00
Number shares under warrant(s)	357		184		63		604
Fair value	$	2,320	$	1,135	$	591	$	4,046

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

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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 consolidated statements of operations and comprehensive loss under “Change in fair value of warrant liabilities.” See Note 11: Fair Value of Financial Instruments, for additional information.

The table below sets forth a summary of changes in the fair value of the Company’s Level 2 Forbearance Warrant liabilities for the years ended March 31, 2026 and March 31, 2025:


Balance at March 31, 2025	$	—
Issuance of warrants	25,420
Change in fair value of warrant liabilities	(11,315)
Balance at March 31, 2026	$	14,105

Other Warrants

The Company also issued 2,500 warrants to purchase the Company's common stock in June 2020 and June 2023 to advisors of the Company at an exercise price of $60.00 and $20.00, respectively (collectively the "Other Warrants"). The Company has concluded that the Other Warrants do not contain provisions that would require liability classification under Topic 480 or Topic 718 and have been equity classified.

Standby Equity Purchase Agreement

On January 25, 2025, ~~the~~we ~~Company~~ entered into athe SEPA with YA in which pursuant to and subject to its terms, the Company has the right, but not the obligation, to sell up to $200 .0 million of ~~Common~~common ~~Stock~~stock at any time during the three-year period following the date of the SEPA. On January 27, 2025, the Company filed a registration statement on Form S-1 in connection with the SEPA. The Registration Statement on Form S-1 was declared effective February 11, 2025.

76Sales 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.

~~Table~~In addition, in no event may the Company issue more than 1,157,139 shares of ~~Contents~~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 YA from acquiring shares that would result in ownership above that threshold.

As of March 31, ~~2025~~2026, the Company has issued approximately 18.2 7 million shares of ~~Common~~common ~~Stock~~stock under the SEPA for net proceeds of approximately $1691.4 0 million with 7.6 million shares sold in fiscal 2026 for net proceeds of $75.2 million.

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 SEPA that includes the right to require YA 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 March 31, 2026 and 2025.

Registration Rights Agreements

~~The~~Pursuant to the registration rights agreements applicable to the Lender Warrants, ~~grant~~ the holders have certain registration rights for the shares of common stock issuable upon ~~the~~ exercise of the applicable warrants, including (a) the ability of a holder to request that the Company file a Form S-1 registration statement with respect to at least 40% of the registrable securities held by such holder as of the issuance date of the applicable warrants; (b) the ability of a holder to request that the Company file a Form S-3 registration statement with respect to outstanding registrable securities if at any time the Company is eligible to use a Form S-3 registration statement; and (c) certain piggyback registration rights related to potential future equity offerings of the Company, subject to certain limitations.

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40% of the registrable securities held by such holder as of the issuance date of the applicable warrants; (b) the ability of a holder to request that the Company file a Form S-3 registration statement with respect to outstanding registrable securities if at any time the Company is eligible to use a Form S-3 registration statement; and (c) certain piggyback registration rights related to potential future equity offerings of the Company, subject to certain limitations.

The registration rights agreement dated September 23, 2025, by and between the Company and Dialectic, grants Dialectic certain registration rights with respect to the shares of common stock issuable upon exercise of the Forbearance Warrant, including certain mandatory resale registration and piggyback registration rights, subject to certain limitations.

In addition, the registration rights agreement dated December 18, 2025, by and between the Company and Dialectic, grants Dialectic certain registration rights with respect to the shares of common stock issuable upon conversion of the Convertible Note, including certain mandatory resale registration and piggyback registration rights, subject to certain limitations.

NOTE 8: NET LOSS PER SHARE

Equity Instruments Outstanding

The Company has stock options, warrants, performance share units and restricted stock units granted under various stock incentive plans that, upon exercise and vesting, would increase shares outstanding.

The following table sets forth the computation of basic and diluted net loss (in thousands, except per share data):

	Year Ended March 31,
	2025		2024
	2026		2025
Numerator:
Net loss used in basic and diluted earnings per share	$	(~~115~~101,~~091~~046)	$	(41115,~~286~~091)
Denominator:
Weighted average common shares outstanding used in basic and diluted earnings per share	512,~~150~~674		45,~~754~~150
Net income loss per share - basic and diluted	$	(227.3597)	$	(822.6835)

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.

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

	Year Ended March 31,
	2025	2024
	2026	2025
Stock awards	127	17
Stock awards1	62	127
Warrants	~~634~~2,653	~~608~~634
Total	~~761~~2,715	~~625~~761

~~The~~1 ~~Company~~Stock ~~had~~awards ~~outstanding~~include ~~market based restricted~~ stock ~~units as of March 31~~options, ~~2025 that~~performance were eligible to vest into shares of 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,~~units ~~based~~and ~~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 186,616 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 March 31, 2025.~~

77The Company had outstanding market based restricted stock units as of March 31, 2026 and 2025 that were eligible to vest into shares of 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 30,517 and 186,616 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 March 31, 2026 and 2025, respectively.

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NOTE 9: INCOME TAXES

Pre-tax loss reflected in the consolidated statements of operations and comprehensive loss for the years ended March 31, ~~2025~~2026 and ~~2024~~2025 is as follows (in thousands):

	Year Ended March 31,
	2025		2024
	2026		2025
U.S.	$	(~~112~~98,~~416~~392)	$	(40112,~~555~~416)
Foreign	(1,~~854~~646)		(201,854)
Total	$	(~~114~~100,~~270~~038)	$	(40114,~~575~~270)

Income tax provision consists of the following (in thousands):

	Year Ended March 31,
	2025		2024
	2026		2025
Current tax expense
Federal	$	—	$	—
State	3619		1436
Foreign	~~741~~1,312		~~919~~741
Total current tax expense	~~777~~1,331		~~933~~777
Deferred tax expense
Deferred tax expense (benefit)
Federal	2019		1820
State	377		2137
Foreign	(13349)		(~~261~~13)
Total deferred tax expense (benefit)	44(323)		~~(222)~~44
Income tax provision	$	~~821~~1,008	$	~~711~~821

Income taxes paid, net of refunds received (in thousands):


	For the year ended March 31,
	2026
Federal	$	—
State	(52)
Foreign
Belgium	116
France	77
India	149
Israel	449
Italy	93
Malaysia	79
Mexico	80
United Kingdom	103
Other Foreign Jurisdictions	100
Total Foreign	1,246
Total Income Taxes paid, net of refunds received	$	1,194

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Beginning with 2026 annual reporting, the Company adopted ASU 2023-09, Improvements to Income Tax Disclosures, prospectively as described in Note 9. In FY26, state and local income taxes in California, South Carolina, Minnesota, and New Jersey comprise the majority of the state and local income taxes, net of federal effect category.

A reconciliation of the federal statutory income tax rate of 21% to the effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended March 31, 2026 was as follows (in thousands, except percentages):


	For the year ended March 31,
	2026
At Statutory Rate	$	(21,008)	21.0	%
State Income Taxes, net of Federal Effect	1,733		(1.7)	%
Change in Valuation Allowance	(7,131)		7.1	%
Nontaxable or Nondeductible Items
Loss on Debt Extinguishment	12,526		(12.5)	%
Warrants Mark-to-Market	(2,376)		2.4	%
Legal Services	2,368		(2.4)	%
Other Nondeductible Items	1,477		(1.5)	%
Changes in Tax Laws or Rates	—		—	%
Tax Credits
R&D Credits	4,614		(4.6)	%
Foreign Tax Credit	11,915		(11.9)	%
Cross-Border Tax Laws
Subpart F Inclusion	281		(0.3)	%
Worldwide Changes in UTB	(4,683)		4.7	%
Other	519		(0.5)	%
Foreign Tax Effects
Other Foreign Jurisdictions	773		(0.8)	%
Total Tax Expense	$	1,008	(1.0)	%

The income tax provision differs from the amount computed by applying the federal statutory rate of 21% to loss before income taxes as follows (in thousands):

	For the year ended March 31,
	2025		2024
	2026					2025
Expense (benefit) at the federal statutory rate	$	(2421,~~122~~008)	$21.0	~~(8,507)~~	%	$	(24,122)	21.1	%
Equity compensation	~~580~~188		~~1,102~~(0.2)		%	580		(0.5)	%
Permanent items	~~309~~17,351		~~768~~(17.3)		%	309		(0.3)	%
Foreign taxes	~~299~~1,135		~~264~~(1.1)		%	299		(0.3)	%
State income taxes	361,733		(~~860~~1.7)		%	36		—	%
Valuation allowance	13(7,~~907~~152)		~~6,313~~7.1		%	13,907		(12.2)	%
Uncertain tax positions	(64,~~672~~722)		~~(8,010)~~4.7		%	(6,672)		5.8	%
Expiration of attributes	816,~~427~~963		~~10,901~~(17.0)		%	8,427		(7.4)	%
Research and development credits	(~~844~~367)		~~(1,169)~~0.4		%	(844)		0.7	%
Warrant fair value adjustments	9(2,~~507~~376)		~~(1,093)~~2.4		%	9,507		(8.3)	%
Other	(~~606~~737)		~~1,002~~0.8		%	(606)		0.5	%
Income tax provision	$	~~821~~1,008	$(1.0)	~~711~~	%	$	821	(0.7)	%

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Significant components of deferred tax assets and liabilities are as follows (in thousands):

As of March 31,

2025

2024

2026

2025

Deferred tax assets

Loss carryforwards

6171,~~466~~533

5461,~~280~~466

Deferred revenue

2523,~~895~~865

2725,~~431~~895

Capitalized research and development

2823,~~824~~094

2728,~~785~~824

Tax credits

152,~~517~~817

15,~~888~~517

Disallowed interest

1922,~~696~~890

1619,~~572~~696

Other accruals and reserves not currently deductible for tax purposes

3,~~913~~651

43,~~685~~913

Lease obligations

21,~~016~~853

2,~~269~~016

Inventory

34,~~779~~537

23,~~426~~779

Acquired intangibles

~~1,285~~989

1,~~344~~285

Accrued warranty expense

~~277~~178

~~365~~277

Depreciation

1,~~755~~491

—1,755

Gross deferred tax assets

~~164~~156,~~423~~898

~~153~~164,~~045~~423

Valuation allowance

(~~161~~154,~~730~~616)

(~~147~~161,~~674~~730)

Total deferred tax assets, net of valuation allowance

$2,282

~~2,693~~

$2,693

~~5,371~~

Deferred tax liabilities

Depreciation

—

(2,038)

Lease assets

(1,529)

(1,711)

Lease assets

(1,711)

(1,929)

Other

290

(323)

Other

(277)

(1,130)

Total deferred tax liabilities

(1,239)

(2,034)

Total deferred tax liabilities

(1,988)

(5,097)

Net deferred tax assets (liabilities)

1,043

659

Net deferred tax assets (liabilities)

705

274

The valuation allowance increased by $146.19 million during the year ended March 31, ~~2025~~2026 and increased by $614.51 million during the year ended March 31, ~~2024~~2025, respectively.

A reconciliation of the gross unrecognized tax benefits is as follows (in thousands):

	For the year ended March 31,
	2025		2024
	2026		2025
Beginning Balance	$	8881,~~341~~678	$	9688,~~343~~341
Increase in balances related to tax positions in current period	1,~~558~~050		21,~~229~~558
Decrease in balances related to tax positions in prior period	(12)		(1,364)
Increase (decrease) in balances related to tax positions in prior period	40		(12)
Decrease in balances due to lapse in statute of limitations	(86,~~209~~179)		(8,~~867~~209)
Ending balance	$	8176,~~678~~589	$	8881,~~341~~678

During fiscal ~~2025~~2026, excluding interest and penalties, there was a $(65.71) million change in the Company's unrecognized tax benefits. Including interest and penalties, the total unrecognized tax benefit at March 31, ~~2025~~2026 was $8277.98 million, of which $7368.78 million, if recognized, would favorably affect the effective tax rate. At March 31, ~~2025~~2026, accrued interest and penalties totaled $1.2 million. The Company's practice is to recognize interest and penalties related to income tax matters in the income tax provision in the consolidated statements of operations and comprehensive loss. As of March 31, ~~2025~~2026, $7570.7 9 million of unrecognized tax benefits were recorded as a contra deferred tax asset in other long-term assets in the consolidated balance sheets and $76.1 9 million (including interest and penalties) were included in other long-term liabilities in the consolidated ~~balances~~balance sheets.

The Company files its tax returns as prescribed by the laws of the jurisdictions in which it operates. The Company's U.S. tax returns have been audited for years through 2002 by the Internal Revenue Service. In other major ~~jurisdictions, the Company is generally open to examination for the most recent three to five fiscal years. During the~~

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jurisdictions, the Company is generally open to examination for the most recent three to five fiscal years. During the next 12 months, it is reasonably possible that approximately $102.46 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, $91.5 7 million will be offset by the establishment of a related valuation allowance. The net tax benefit recognized in the ~~income~~consolidated ~~statement~~statements of operations and comprehensive loss is estimated to be $0.9 million.

As of March 31, ~~2025~~2026, the Company had federal net operating loss and tax credit carryforwards of approximately $~~224~~324.18 million and $4326.37 million, respectively. The net operating loss and tax credit carryforwards expire in varying amounts in fiscal ~~2025~~2026 if not previously utilized, and $50151.8 5 million are indefinite-lived net operating loss carryforwards. These carryforwards include $5.3 million of acquired net operating losses ~~and $1.0 million of acquired credits~~, the utilization of which is subject to various limitations due to prior changes in ownership.

Certain changes in stock ownership could result in a limitation on the amount of both acquired and self -generated net operating loss and tax credit carryovers that can be utilized each year. If the Company has previously undergone, or should it experience in the future, such a change in stock ownership, it could severely limit the usage of these carryover tax attributes against future income, resulting in additional tax charges.

Due to its history of net losses and the difficulty in predicting future results, Quantum believes that it cannot rely on projections of future taxable income to realize the deferred tax assets. Accordingly, it has established a full valuation allowance against its U.S. and certain foreign net deferred tax assets. Significant management judgment is required in determining the Company's deferred tax assets and liabilities and valuation allowances for purposes of assessing its ability to realize any future benefit from its net deferred tax assets. The Company intends to maintain this valuation allowance until sufficient positive evidence exists to support the reversal of the valuation allowance. The Company's 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, its valuation allowance.

NOTE 10: 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 its forecast of customer demand. The Company has similar arrangements with certain other suppliers. The Company is 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 March 31, ~~2025~~2026, the Company had issued non-cancelable commitments for $4876.68 million to purchase inventory from its contract manufacturers and suppliers.

Litigation

On July 27, 2023, an electronics component distributor filed a lawsuit against Quantum, alleging breach of contract and breach of the covenant of good faith and fair dealing, seeking, among other things, monetary damages. On March 31, 2025, the Court found entirely in favor of Quantum and against the distributor. The Court entered judgment for Quantum on the same day. The deadline for the distributor to file an appeal has passed so that this matter is resolved in Quantum’ favor.

Leases

At the end of fiscal 2025, the Company had various non-cancelable operating leases for office facilities. Refer to Note 5: Leases for additional information regarding lease commitments.

Legal Proceedings

From time to time, we are a party to various legal proceedings and claims arising from the normal course of business activities. Based on current available information, we do not expect that the ultimate outcome of any additional currently pending unresolved matters, individually or in the aggregate, will have a material adverse effect on our results of operations, cash flows or financial position.

80Litigation

Shareholder 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 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 sought to designate the plaintiff as the lead plaintiff for the class and define a class period of November 15, 2024 through August 18, 2025. On January 27, 2026, a revised final complaint named Hunsu Son as the lead plaintiff and reiterated the violations alleged in the original complaint. The revised complaint seeks an award of unspecified damages, costs, and expenses. The Company has filed a motion to dismiss the litigation. Briefing of that motion is underway. At this time, Quantum is not

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able to determine whether this lawsuit would have any material adverse effect on our business, operating results, or financial condition.

Derivative Litigation

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.

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.

The court ordered the separate Cullison and Marti shareholder derivative complaints to be consolidated and stayed pending final resolution of the motion to dismiss the amended complaint in the Lee shareholder class action litigation. At this time, Quantum is not able to determine whether the consolidated lawsuits would have any material impact on our business, operating results, or financial condition.

Leases

At the end of fiscal 2026, the Company had various non-cancelable operating leases for office facilities. Refer to Note 5: Leases, for additional information regarding lease commitments.

NOTE 11: FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company follows the guidance in ASC 820, Fair Value Measurement, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when an impairment is recognized. ~~See Note 7: Common Stock for disclosure related to the Company's asset and liabilities that are revalued at fair value at each reporting period.~~ These assets include property and equipment and amortizable intangible assets. The Company did not record impairments to any non-financial assets in the fiscal years ended March 31, ~~2025~~2026 and ~~2024~~2025.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3: Unobservable inputs based on management’s assessment of the assumptions that market participants would use in pricing the asset or liability.

Information related to the fair value of the Company's warrant liabilities which were determined utilizing Level 2 inputs to determine such fair value are included in Note 7: Common Stock. The following table represents the carrying value and total estimated fair value of the Company's Term Loan and PNC Credit Facility which have been determined utilizing level 2 inputs to determine fair value. 79

	March 31,
	2025				2024
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan	$	102,507	$	91,576	$	87,942	$	75,143
PNC Credit Facility	26,600		24,755		26,604		24,743

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~~The~~Information ~~carrying~~related ~~amounts~~to ~~reported in~~ the ~~accompanying~~fair ~~consolidated~~value ~~financial~~of ~~statements~~the ~~for~~Company's ~~cash~~warrant liabilities and ~~cash~~Convertible ~~equivalents~~Note, ~~restricted~~which ~~cash,~~were ~~accounts~~determined ~~receivable,~~utilizing ~~accounts~~Level ~~payable,~~2 ~~accrued~~inputs ~~expenses~~to ~~and~~determine ~~other~~such ~~current liabilities approximate their respective~~ fair ~~values~~value, ~~because~~are ofincluded ~~the~~in ~~short-term~~Note ~~nature~~4: ~~of these accounts~~Debt.

The following table represents the carrying value and total estimated fair value of the Company's Term Loan which was determined utilizing Level 2 inputs to determine fair value.


	March 31,
	2026				2025
	Carrying Value		Fair Value		Carrying Value		Fair Value

Term Loan	$	55,906	$	51,339	$	102,507	$	91,576

The carrying amounts reported in the accompanying consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and other current liabilities approximate their respective fair values because of the short-term nature of these accounts.

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 March 31, 2026, and the resulting change in fair value was recognized in the consolidated statement of operations and comprehensive loss under “Change in fair value of warrant liability.”

The Forbearance Warrant was valued using a Monte Carlo simulation model in conjunction with a Probability-Weighted Expected Return Model. This model incorporates various assumptions, including the Company’s common 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 March 31, 2026:


	March 31, 2026	September 23, 2025
Discount period (years)	6.48 years	7.0 years
Risk-free interest rate	3.65% - 4.02%	3.52% - 3.83%
Stock price volatility	100.00%	98.00%
Stock price at valuation date	$4.75	$10.69
Probability1	15% - 15% - 70%	35% - 15% - 50%
Fair value (in thousands)	$14,105	$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 were estimated at 50% and were revised at March 31, 2026 to a 15% of a liquidation event occurring; a 15% of a fundamental transaction occurring; and none of the previous events were estimated at 70%.

The table below sets forth a summary of changes in the fair value of the Company’s Forbearance warrant liabilities for the period ended March 31, 2026:


Balance at March 31, 2025	$	—
Issuance of warrants	25,420
Change in fair value of warrant liabilities	(11,315)
Balance at March 31, 2026	$	14,105

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.

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Changes in the fair value of the Convertible Note resulting from updated assumptions and estimates are recognized as a fair value adjustments in the 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 common 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 March 31, 2026 are summarized below:


	March 31, 2026	December 18, 2025
Term (years)	2.7 years	3.0 years
Volatility	85.0%	120.0%
Dividend yield	0.00%	0.00%
Risk-free interest rate	3.77%	3.47%
Probability for maturity	85%	65%
Probability for liquidation event 1	15%	35%

1 See probability discussed under Warrants. Scenario probability was consistently applied.

The table below sets forth a summary of changes in the fair value of the Convertible Note for the period ended March 31, 2026:


Balance at March 31, 2025	$	—
Issuance of Convertible Note	77,471
Change in fair value of Convertible Note recognized in Net Loss	4,119
Change in fair value of Convertible Note recognized in Other Comprehensive Loss	8,444
Balance at March 31, 2026	$	90,034

NOTE 12: SEGMENT INFORMATION

Disaggregation of Revenue

Table of Contents

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 Company evaluates its financial performance (in thousands):

	Year Ended March 31,
	2025		%	2024		%
	2026		%	2025		%
Americas1
Product revenue	$	8290,~~772~~053		$	9282,~~907~~772

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