Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under Exchange Act as of the end of the period covered by this Annual Report on Form 10-K.
Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of March 31, 2023, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management, with the participation of our principal executive and principal financial officers, evaluated the effectiveness of our internal control over financial reporting using the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013) . Based on this assessment, management concluded
that Quantum Corporation maintained effective internal control over financial reporting as of the end of the period covered by this Annual Report. Armanino LLP, our independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting, and this attestation report appears in Item 8.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control performed during the fiscal quarter ended March 31, 2023, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by Item 10 is incorporated by reference from the sections entitled “Board of Directors and Committees,” “Board of Directors and Committees—Board Committees and Leadership Structure,” “Corporate Governance,” and “Compensation Discussion and Analysis—Anti-Hedging and Anti-Pledging Policies” in our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
Certain other information relating to our executive officers appears in Part I of this Annual Report on Form 10-K under the heading “Information About Our Executive Officers.”
Item 405 of Regulation S-K calls for disclosure of any known late filing or failure by an insider to file a report required by Section 16(a) of the Exchange Act. To the extent disclosure for delinquent reports is being made, it can be found under the caption “Delinquent Section 16(a) Reports” in the Proxy Statement for our 2023 annual stockholders’ meeting and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference from the sections entitled “Corporate Governance—Non-Employee Director Compensation,” “Compensation Discussion and Analysis,” “Fiscal 2023 Compensation Tables,” “Report of the Leadership and Compensation Committee of the Board of Directors” and “Corporate Governance—Non-Employee Director Compensation—Compensation Committee Interlocks and Insider Participation” in our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by Item 12 is incorporated by reference from the section entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 13 is incorporated by reference from the section entitled “Board of Directors and Committees—Board Meetings and Independence,” and “Related Party Transactions” in our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by Item 14 is incorporated by reference from the section entitled “Audit and Audit-Related Fees” in our definitive Proxy Statement for our 2023 annual stockholders’ meeting.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Documents filed as part of this report
1. Financial Statements
Reference is made to the Index to Financial Statements of Quantum Corporation included in Item 8 of Part II of this report.
2. Financial Statement Schedules
All schedules have been omitted because they are not required, not applicable, or the required information is included in the financial statements or notes thereto.
3. Exhibits
See Item 15(b) below. Each management contract or compensatory plan or arrangement required to be filed has been identified.
Incorporated by Reference
Exhibit
Number Exhibit Description Form Filing Date Exhibit Filed or Furnished Herewith
2.1 Asset Purchase Agreement dated July 18, 2021 by and between PV3 (an ABC) LLC, as assignee for the benefit of Pivot3, Inc., and the Company.*
8-K 7/22/21 2.1
3.1 Amended and Restated Certificate of Incorporation of the Company, as amended through August 19, 2022
X
3.2 Amended and Restated Bylaws of the Company, as amended through February 8, 2016
X
4.1 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
X
4.2 Certificate of Designation of Rights, Preferences and Privileges of Series B Junior Participating Preferred Stock
S-3 10/9/03 4.7
4.3 Warrant to Purchase Common Stock dated December 27, 2018 issued to OC II FIE V LP
8-K 12/28/18 4.1
4.4 Warrant to Purchase Common Stock dated December 27, 2018 issued to BTC Holdings Fund I, LLC
8-K 12/28/18 4.2
4.5 Warrant Agreement dated June 16, 2020 by and between the Company and Armory Securities, LLC.
8-K 6/17/20 4.4
4.6 Warrant to Purchase Common Stock dated June 16, 2020, Warrant No. B-1 , issued to OC II FIE V LP
8-K 6/17/20 4.1
4.7 Warrant to Purchase Common Stock dated June 16, 2020, Warrant No. B-2 , issued to Blue Torch Credit Opportunities Fund I LP
8-K 6/17/20 4.2
4.8 Warrant to Purchase Common Stock dated June 16, 2020, Warrant No. B-3, issued to BTC Holdings SC Fund LLC
8-K 6/17/20 4.3
4.9 Amended and Restated Registration Rights Agreement dated June 16, 2020 by and among the Company, OC II FIE V LP, Blue Torch Credit Opportunities Fund I LP and BTC Holdings SC Fund LLC
8-K 6/17/20 4.5
4.10 Registration Rights Agreement dated December 12, 2020 by and between the Company and the securityholders of Square Box Systems Limited
8-K 12/14/20 4.1
10.1 Lease Agreement dated February 6, 2006 by and between the Company and CS/Federal Drive AB LLC (For Building A)
8-K 2/10/06 10.2
10.2 Lease Agreement dated February 6, 2006 by and between the Company and Cs/Federal Drive AB LLC (For Building B)
8-K 2/10/06 10.3
10.3# Form of Indemnification Agreement by and between the Company and the Named Executive Officers and Directors
8-K 9/28/22 10.3
10.4# Form of Amended and Restated Director Change of Control Agreement by and between the Company and the Directors (other than the CEO)
8-K 5/10/11 10.2
10.5# Form of Amended and Restated Change of Control Agreement by and between the Company and each of the Company’s Executive Officers
10-Q 11/6/15 10.2
10.6# Offer Letter dated May 1, 2017 by and between the Company and Marc Rothman
8-K 5/4/17 10.1
10.7# Quantum Corporation Executive Officer Incentive Plan, restated as of August 23, 2017
8-K 8/24/17 10.2
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10.8# Offer Letter dated June 22, 2018 by and between the Company and James J. Lerner
8-K 6/27/18 10.1
10.9# Change of Control Agreement dated June 22, 2018 by and between the Company and James J. Lerner
8-K 6/27/18 10.2
10.10 Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO, the lenders party thereto, and PNC Bank, National Association
8-K 12/28/18 10.2
10.11 First Amendment dated April 3, 2020 to Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO Holdings, LLC, the lenders from time to time party thereto, and PNC Bank, National Association
8-K 4/6/20 10.2
10.12 Second Amendment dated April 11, 2020 to the Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO Holdings, LLC, the lenders from time to time party thereto, and PNC Bank, National Association
8-K 4/16/20 10.3
10.13 Third Amendment dated June 16, 2020 to Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO Holdings, LLC, the lenders party thereto, and PNC Bank, National Association
8-K 6/17/20 10.2
10.14 Fourth Amendment dated December 10, 2020 to Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO Holdings, LLC, the lenders party thereto, and PNC Bank, National Association
8-K 12/14/20 10.2
10.15 Fifth Amendment dated February 5, 2021 to Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO Holdings, LLC, the lenders party thereto, and PNC Bank, National Association
10-K 6/8/22 10.3
10.16 Sixth Amendment dated August 5, 2021 to Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018, by and among the Company, Quantum LTO Holdings, LLC, Square Box Systems Limited, the borrowers and guarantors party thereto, the lenders party thereto, and PNC Bank, National Association
10-K 6/8/22 10.31
10.17 Seventh Amendment dated September 30, 2021 to Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO Holdings, LLC, Square Box Systems Limited, the borrowers and guarantors party thereto, the lenders party thereto, and PNC Bank, National Association
8-K 10/06/21 10.1
10.18 Eighth Amendment dated March 15, 2022 to Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO Holdings, LLC, Square Box Systems Limited, the borrowers and guarantors party thereto, the lenders party thereto, and PNC Bank, National Association
8-K 3/17/22 10.3
10.19 Ninth Amendment dated April 25, 2022 to Amended and Restated Revolving Credit and Security Agreement dated December 27, 2018 by and among the Company, Quantum LTO Holdings, LLC, Square Box Systems Limited, the lenders party thereto, and PNC Bank, National Association
8-K 4/27/22 10.1
10.20 Stipulation and Agreement of Settlement entered into on April 11, 2019
8-K 5/31/19 99.2
10.21# Offer Letter dated October 3, 2018 by and between the Company and Lewis W. Moorehead
10-K 8/6/19 10.75
10.22# Quantum Corporation 2012 Long-Term Incentive Plan Agreement, as amended and restated on November 13, 2019
8-K 11/18/19 10.1
10.23# Form of Restricted Stock Unit Agreement (US Employees) under the Quantum Corporation 2012 Long-Term Incentive Plan
10-K 6/24/20 10.2
10.24# Form of Market-Based Restricted Stock Unit Agreement (US Employees) under the Quantum Corporation 2012 Long-Term Incentive Plan
10-K 6/24/20 10.3
10.25# Form of Restricted Stock Unit Agreement (Non-US Employees) under the Quantum Corporation 2012 Long-Term Incentive Plan
10-K 6/24/20 10.4
10.26# Form of Restricted Stock (PSU) Unit Agreement (Non-US Employees) under the Quantum Corporation 2012 Long-Term Incentive Plan
10-K 6/24/20 10.5
10.27# Form of Restricted Stock Unit Agreement (Directors) under the Quantum Corporation 2012 Long-Term Incentive Plan
10-K 6/24/20 10.6
10.28# Quantum Corporation Employee Stock Purchase Plan Agreement, as amended and restated on November 13, 2019
8-K 11/18/19 10.2
10.29# 2021 Inducement Plan
S-8 2/1/21 10.1
10.30# Amendment No. 1 to 2021 Inducement Plan
X
10.31# Offer Letter dated December 16, 2019 by and between the Company and Rebecca Jacoby
10-Q 1/29/2020 10.1
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10.32 Term Loan Credit and Security Agreement dated August 5, 2021 by and among the Company, Quantum LTO, Square Box Systems Limited, the lenders party thereto, and Blue Torch Finance LLC
8-K 8/05/21 10.1
10.33 First Amendment dated September 30, 2021 to Term Loan Credit and Security Agreement dated August 5, 2021 by and among the Company, Quantum LTO Holdings, LLC, the borrowers and guarantors party thereto, the lenders party thereto, and Blue Torch Finance LLC
8-K 10/06/21 10.2
10.34 Second Amendment dated March 15, 2022 to Term Loan Credit and Security Agreement dated August 5, 2021 by and among the Company, Quantum LTO Holdings, LLC, the borrowers and guarantors party thereto, the lenders party thereto, and Blue Torch Finance LLC
8-K 3/17/22 10.2
10.35 Third Amendment dated April 25, 2022 to Term Loan Credit and Security Agreement dated August 5, 2021 by and among the Company, Quantum LTO Holdings, LLC, Square Box Systems Limited, the lenders party thereto, and Blue Torch Finance LLC
8-K 4/27/22 10.2
10.36 Investment Commitment Agreement dated March 16, 2022 by and among the Company, Neuberger Berman Investment Advisers LLC, OC II FIE V LP, OC III LVS XI LP, BRF Investments, LLC, B. Riley Securities, Inc., and BRC Partners Opportunity Fund, LP.
8-K 3/17/22 10.1
10.37# Director Offer Letter dated September 16, 2022 by and between the Company and Don Jaworski
8-K 9/28/22 10.1
10.38# Director Offer Letter dated September 16, 2022 by and between the Company and Hugues Meyrath
8-K 9/28/22 10.2
10.39# Offer Letter dated December 15, 2022 by and between the Company and Kenneth P. Gianella
8-K 1/11/23 10.1
10.40# Transition Agreement dated January 29, 2023 by and between the Company and J. Michael Dodson
8-K 1/11/23 10.3
21.1 List of Subsidiaries
10-K 6/24/20 21.1
23.1 Consent of Armanino, LLP
X
24.1 Power of Attorney (contained on the signature page hereof)
X
31.1 Certification of the Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
X
31.2 Certification of the Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
X
32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002
X
32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley act of 2002
X
101.INS XBRL Instance Document X
101.SCH XBRL Taxonomy Extension Schema Document X
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB XBRL Taxonomy Extension Label Linkbase Document X
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) X
* Schedules and attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules and attachments upon request by the Securities and Exchange Commission.
# Indicates management contract or compensatory plan or arrangement.
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ITEM 16. FORM 10-K SUMMARY
None.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Quantum Corporation
(Registrant)
June 6, 2023 /s/ Kenneth P. Gianella
(Date) Kenneth P. Gianella
Chief Financial Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints James Lerner and Kenneth Gianella, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange mission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons in the capacities on June 6, 2023.
Signature Title
/s/ James J. Lerner President, Chief Executive Officer and Chairman of the Board
James J. Lerner (Principal Executive Officer)
/s/ Kenneth P. Gianella Chief Financial Officer
Kenneth P. Gianella (Principal Financial Officer)
/s/ Lewis Moorehead Chief Accounting Officer
Lewis Moorehead (Principal Accounting Officer)
/s/ Rebecca J. Jacoby Director
Rebecca J. Jacoby
/s/ Donald Jaworski Director
Donald Jaworski
/s/ Hugues Meyrath Director
Hugues Meyrath
/s/ Christopher D. Neumeyer Director
Christopher D. Neumeyer
/s/ Marc E. Rothman Director
Marc E. Rothman
/s/ Yue Zhou White Director
Yue Zhou White
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