What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-08-26 compared with 2024-06-28 · 413 added, 1660 removed, 859 unchanged (71% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets

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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, 2024, the related consolidated statement of operations and comprehensive loss, consolidated statement of stockholders’ deficit, and cash flows for the year ended March 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024, and the results of its operations and its cash flows for the year ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Quantum Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of March 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for each of the two years 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, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Going concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, as of March 31, 2024, the Company was in default of certain debt covenants of its term debt and credit facility and obtained a waiver from its lenders.

All defaults existing at March 31, 2024 were waived by the lenders through July 2024.

The Company believes it is probable that it will be in violation certain debt covenants at the next testing date of July 2024.

The Company’s plan, which is also described in Note 1, contemplates the Company obtaining additional covenant waivers or refinancing the existing term debt and credit facility.

Additionally, the Company is evaluating strategies to obtain the additional funding, including potential asset sales.

In the event the Company is unable to obtain an extension of the waiver additional funding will be required to pay the amount due on the revolver and term loan.

However, the Company may be unable to obtain an extension of the waiver or obtain additional funding.

As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The Company’s ability to achieve this plan is uncertain and raises substantial doubt about its ability to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company believes it will be in violation of the net leverage coverage covenant for the quarter ended September 30, 2025.

The Company’s plan which is also described in Note 1, contemplates the Company negotiating waivers to these covenants and is evaluating strategies to restructure or refinance the existing term debt.

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.

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.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

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 audits.

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.

We conducted 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 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.

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.

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.

Our audits 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 provide a reasonable basis for our opinion.

Our audits 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 audits provide a reasonable basis for our opinion.

Critical audit matter

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Determination of Standalone Selling Price

As described further in Note 1 to the financial statements, the Company’s contracts with customers often include multiple performance obligations.

As 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.

We identified the determination of the SSP of performance obligations as a critical audit matter.

The principal consideration for our assessment that the determination of the SSP of performance obligations represents a critical audit matter is that the estimates made in determining SSP involve significant judgments.

Evaluating the appropriateness of these estimates requires a high degree of auditor judgment and an increased extent of effort.

Our audit procedures related to the determination of the SSP of performance obligations included the following procedures, among others:

• Tested management’s process for developing the estimates of SSP by evaluating the appropriateness of the overall methodology used by management to develop the estimates by considering (i) whether the methodology maximized the use of observable inputs available and (ii) making inquiries of staff members outside of the accounting department.

• Tested the accuracy of management’s calculations of estimated selling prices.

• In the cases where directly observable standalone sales were not available, for selected items we evaluated whether the significant assumptions used by management were reasonable by (i) considering the consistency with external market and competitor margin data and (ii) making inquiries of staff members outside of the accounting department.

The principal considerations for our assessment that the determination of the SSP of performance obligations represents a critical audit matter are the high degree of auditor judgment and an increased extent of effort related to evaluating SSP due to the absence of directly observable data which requires the Company to make subjective assumptions used to estimate the SSP for each performance obligation.

Our audit procedures related to the determination of the SSP of performance obligations included the following primary procedures, among others:

• 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 management’s process by evaluating key assumptions for performance obligations that do not include directly observable sales or for performance obligations that do not include sufficient directly observable sales.

Specifically, we:

◦ considered the consistency with external market and competitor margin data for products and services

◦ determined the appropriateness of the categorization and classification of products and services

◦ recalculated and validated the inputs used in management’s calculations, including selling prices and discounts.

Since the inputs were derived from multiple sources and were dependent on the type of revenue for each performance obligation, our audit procedures needed to be tailored accordingly.

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

/s/ GRANT THORNTON LLP

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Bellevue, Washington

June 28, 2024

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Quantum Corporation

San Jose, California

Opinions on the Financial Statements

We have audited the accompanying consolidated balance sheets of Quantum Corporation (the Company) as of March 31, 2023 and 2022 and the related consolidated statements of operations and comprehensive loss, stockholders' deficit, and cash flows for each of the two years in the period ended March 31, 2023, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Restatement of Previously Issued Financial Statements

As discussed in Note 14 to the consolidated financial statements, the 2023 and 2022 consolidated financial statements have been restated to correct misstatements.

Basis for Opinions

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 audits.

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 audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provides a reasonable basis for our opinion.

/s/ Armanino LLP

San Ramon, California

We have served as the Company's auditor since 2019.

In 2023, we became the predecessor auditor.

June 6, 2023, except for the effects of the tables reflecting the impact of the restatement as of and for the years ended March 31, 2023 and 2022 discussed in Note 14 and Note 15 (not presented herein) to the consolidated financial statements appearing under Item 8 of the Company’s 2024 Annual Report (Form 10-K), as to which the date is June 28, 2024.

August 26, 2025

QUANTUM CORPORATION

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(in thousands, except per share amounts)

2024 2023 2022

Restated Restated

Current assets:

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Deferred revenue, current portion 75,076 78,511

Term debt, current portion 82,496 5,000 4,375

Accrued restructuring charges 786 —

96,486 82,496

Revolving credit facility 26,600 26,604

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Deferred revenue, net of current portion 38,847 38,176

Revolving credit facility — 16,750 17,735

Term debt, net of current portion — 66,354 89,448

Operating lease liabilities 8,934 9,621

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QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

Year Ended March 31,

2024 2023 2022

Restated Restated

Product $ 154,182 $ 174,879

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Loss from operations ( 41,680 ) ( 28,877 )

Other income (expense), net ( 1,746 ) 1,956 ( 251 )

Other expense, net

( 710 ) ( 1,746 )

Interest expense ( 23,607 ) ( 15,089 )

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Loss on debt extinguishment, net ( 3,003 ) —

Net income (loss) before income taxes ( 40,575 ) ( 16,428 ) 39,696

Net loss before income taxes

( 114,270 ) ( 40,575 )

Income tax provision 821 711

Net income (loss) $ ( 41,286 ) $ ( 18,368 ) $ 38,355

Net income (loss) per share - basic $ ( 0.43 ) $ ( 0.20 ) $ 0.65

Net income (loss) per share - diluted $ ( 0.43 ) $ ( 0.28 ) $ ( 0.32 )

Weighted average shares - basic 95,087 90,348 58,871

Weighted average shares - diluted 95,087 91,188 66,017

Net income (loss) $ ( 41,286 ) $ ( 18,368 ) $ 38,355

$ ( 115,091 ) $ ( 41,286 )

Net loss per share - basic and diluted

$ ( 22.35 ) $ ( 8.68 )

Weighted average shares - basic and diluted 5,150 4,754

$ ( 115,091 ) $ ( 41,286 )

Foreign currency translation adjustments, net 583 ( 612 )

Total comprehensive income (loss) $ ( 41,898 ) $ ( 18,526 ) $ 37,788

Total comprehensive loss

$ ( 114,508 ) $ ( 41,898 )

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

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Year Ended March 31,

2024 2023 2022

Restated Restated

Operating activities

Net income (loss)

$ ( 41,286 ) $ ( 18,368 ) $ 38,355

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Net loss $ ( 115,091 ) $ ( 41,286 )

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

Depreciation and amortization 5,598 9,313

Amortization of debt issuance costs 5,475 2,735

Long-term debt related costs — 992 8,471

Non-cash lease expense

Paid-in-kind interest 5,179 2,314

Provision for manufacturing and service inventories 4,877 6,490

Gain on PPP loan extinguishment — — ( 10,000 )

Stock-based compensation 2,828 4,721

Change in fair value of warrant liabilities 45,270 ( 3,943 )

Non-cash loss on debt extinguishment 3,003 —

Other non-cash 93 990

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Prepaid expenses ( 552 ) 1,971

Operating lease liabilities

( 1,490 ) ( 1,536 )

Deferred revenue ( 2,764 ) 1,386

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Purchases of property and equipment ( 4,947 ) ( 5,869 )

Business acquisitions — ( 3,020 ) ( 7,808 )

Net cash used in investing activities

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Repayments of credit facility ( 418,811 ) ( 412,704 )

Proceeds from issuance of common stock — 67,146 1,762

Proceeds from shares issued related to the SEPA, net 15,828 —

Net cash provided by financing activities 19,306 15,713

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Purchases of property and equipment included in accounts payable $ 850 $ 661

Transfer of manufacturing inventory to services inventory $ 341 $ 4,045 $ 211

Transfer of manufacturing inventory to property and equipment $ 264 $ 343 $ 818

Paid-in-kind interest $ 2,314 $ 319 $ —

Right-of-use assets obtained in exchange for new lease liabilities $ 678 $ 594

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:

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Shares Amount

Balances as restated, March 31, 2021* 56,915 $ 570 $ 606,431 $ ( 806,081 ) $ ( 856 ) $ ( 199,936 )

Net income — — — 38,355 — 38,355

Foreign currency translation adjustments, net of income taxes — — — — ( 567 ) ( 567 )

Shares issued under employee stock purchase plan 389 4 1,758 — — 1,762

Shares issued under employee incentive plans, net 2,308 23 ( 23 ) — — —

Shares issued in connection with business acquisition 821 8 2,810 — — 2,818

Stock-based compensation — — 13,829 — — 13,829

Restated, March 31, 2022 60,433 $ 605 $ 624,805 $ ( 767,726 ) $ ( 1,423 ) $ ( 143,739 )

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 stock purchase plan 600 6 891 — — 897

Shares issued under employee incentive plans, net 114 1 ( 1 ) — — —

Shares issued in connection with rights offering, net 30,000 300 65,949 — — 66,249

Shares issued in connection with business acquisition 361 4 ( 4 ) — — —

Warrants issued related to long-term debt — — 49 — — 49

Stock-based compensation — — 4,720 — — 4,720

Restated, March 31, 2023 93,574 $ 936 $ 702,370 $ ( 786,094 ) $ ( 1,581 ) $ ( 84,369 )

March 31, 2024 4,792 $ 48 $ 708,027 $ ( 827,380 ) $ ( 2,193 ) $ ( 121,498 )

Net loss — ( 115,091 ) ( 115,091 )

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Shares issued under employee incentive plans, net 157 2 ( 2 ) — — —

Warrants issued related to long-term debt — — 49 — — 49

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 )

* The March 31, 2021 ending total shareholders’ deficit reflects the impact of the restatement totaling $ 87.7 million related to SSP and warrant classification adjustments prior to that time, including a $ 67.5 million increase of Accumulated deficit and a $ 20.2 million decrease of Additional paid-in -capital.

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

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Description of Business and Significant Accounting Policies

Business Acquisitions

Balance Sheet Information

Restructuring Charges

Net Income (Loss) Per Share

Net Loss Per Share

Commitments and Contingencies

Fair Value of Financial Instruments

Segment Information

Subsequent Events

Restatement of Previously Issued Financial Statements

Quarterly Financial Summary (Unaudited)

Restatement of Unaudited Quarterly Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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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.

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 $ .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 of directors (the “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 the Common Stock.

The Reverse Stock Split became effective as of August 26, 2024 at 4:01 p.m., Eastern Time (the “Effective Time”).

At the Effective Time, every twenty issued shares of Common Stock were automatically reclassified into one issued share of Common Stock, with any fractional shares resulting from the Reverse Stock Split rounded up to the nearest whole share.

The number of outstanding shares of common stock was reduced from approximately 95.9 million shares to approximately 4.8 million shares.

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

Going Concern

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.

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

However, substantial doubt about the Company’s ability to continue as a going concern exists.

The Company was in violation of its March 31, 2024 net leverage covenant and received a waiver from its lenders in May 2024 (See Note 13:

Subsequent Events for additional information) which provides forbearance from the lenders exercising their rights to immediately call the loans until the next net leverage covenant testing date in July 2024.

However, the Company believes it is probable that it will be in violation of the net leverage covenant at the next testing date.

If the Company is unable to obtain additional waivers, the Term Debt and PNC Credit Facility will become immediately due, and additional liquidity will be required to satisfy the obligations.

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.

Debt for additional information related to the Company’s debt agreements.

The Company is currently working to obtain additional covenant waivers or refinance the existing Term Debt and PNC Credit Facility.

Additionally, the Company is evaluating strategies to obtain the additional funding, including potential asset sales.

In the event the Company is unable to obtain an extension of the waiver additional funding will be required to pay the amount due on the revolver and term loan.

However, the Company may be unable to obtain an extension of the waiver, or obtain additional funding.

As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

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.

Restatement of Previously Issued Consolidated Financial Statements

During the year ended March 31, 2024, the Company identified multiple prior period misstatements.

In accordance with Staff Accounting Bulletins No.

99”) Topic 1.M, “Materiality” and SAB No.

99 Topic 1.N “Considering the Effects of Misstatements when Quantifying Misstatements in the Current Year Financial Statements,” the Company assessed the materiality of these errors to its previously issued consolidated financial statements.

Based upon the Company’s evaluation of both quantitative and qualitative factors, the Company concluded the errors were material to the Company’s previously issued consolidated financial statements for the fiscal years ended March 31, 2023 and 2022.

Accordingly, the Company has restated the accompanying fiscal years ended March 31, 2023 and 2022 Consolidated Financial Statements for the fiscal years ended March 31, 2023 and 2022.

Restatement of Previously Issued Financial Statements.

Use of Estimates

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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 income (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.

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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.

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.

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.

Business Combinations

The Company allocates the purchase price to the assets acquired and liabilities assumed based on their estimated fair values.

The excess of the purchase price over the fair values of the assets acquired and liabilities assumed is recorded as goodwill.

During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the estimated fair value of the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

The results of operations of an acquired business are included in its consolidated financial statements from the date of acquisition.

Acquisition-related expenses are expensed as incurred.

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.

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Impairment of Long-Lived Assets

The Company reviews its long-lived assets, including property and equipment and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

The Company measures the recoverability of these assets by comparing the carrying amounts to the future undiscounted cash flows the assets are expected to generate.

If the total of the future undiscounted cash flows is less than the carrying amount of an asset, the Company records an impairment charge for the amount by which the carrying amount of the asset exceeds its fair market value.

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

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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 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.

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These allowances are accounted for as lease incentives and reduce its ROU asset and lease cost over the lease term.

For short-term leases which have a lease term 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.

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

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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 upon completion of such services at a point in time.

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

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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 subscription services.

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.

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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:

340-40, 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.

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.

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Software implementation costs are capitalized to either other current assets or other long-term assets on the Company's consolidated balance sheet and amortized over 10 years starting when the software is ready for its intended use.

Software implementation costs capitalized were $ 5.0 million, $ 5.6 million and $ 3.1 million in fiscal 2024, 2023 and 2022, respectively.

Related amortization expense for software implementation costs was $ 0.1 million, $ 0.1 million and $ 0.1 million during fiscal 2024, 2023 and 2022, respectively.

Software implementation costs capitalized were $ 1.0 million and $ 5.0 million in fiscal 2025 and 2024, respectively.

Related amortization expense for software implementation costs was $ 1.8 million and $ 0.1 million during fiscal 2025 and 2024, respectively.

Advertising Expense

Advertising expense is recorded as incurred and was $ 2.5 million, $ 3.2 million, and $ 3.5 million in fiscal 2024, 2023 and 2022, respectively.

Advertising expense is recorded as incurred and was $ 2.0 million and $ 2.5 million in fiscal 2025 and 2024, respectively.

Shipping and Handling Fees

Shipping and handling fees are included in cost of revenue as incurred and were $ 9.7 million, $ 12.1 million, and $ 11.5 million in fiscal 2024, 2023 and 2022, respectively.

Shipping and handling fees are included in cost of revenue as incurred and were $ 6.8 million and $ 9.7 million in fiscal 2025 and 2024, respectively.

Restructuring Reserves

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If these estimates change in the future or actual results differ from the Company’s estimates, additional charges may be required.

Restructuring Charges for more information.

Foreign Currency Translation

6 unchanged sentences

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.

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.

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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.

All Lender Warrants were exercised as of March 31, 2025.

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes, in which deferred tax asset 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.

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Debt Issuance Costs

Debt issuance costs for revolving credit agreements are capitalized and amortized over the term of the underlying agreements on a straight-line basis.

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.

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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

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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.

During the fiscal year ended March 31, 2024, no customer represented 10% or more of the Company's total revenue.

In fiscal 2023, one customer represented more than 10% of the Company's total revenue.

In fiscal 2022, no customer represented 10% or more of the Company’s total revenue.

One customer comprised approximately 23 % of accounts receivable as of March 31, 2024.

One customer comprised approximately 22 % of accounts receivable as of March 31, 2023.

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

No 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.

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Segment Reporting

The Company’s chief operating decision-maker is its Chief Executive Officer and Chief Financial Officer who make resource allocation decisions and assess performance based on financial information presented on a consolidated basis.

There are no segment managers who are held accountable by the chief operating decision-maker, or anyone else, for operations, operating results, and planning for levels or components below the consolidated unit level.

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, 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:

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and (c) Asia Pacific (“APAC”).

The following table summarizes property and equipment, net by geographic region (in thousands):

For the year ended March 31,

2024 2023 2022

United States 1

$ 11,759 $ 16,289 $ 12,506

International 269 266 347

Total $ 12,028 $ 16,555 $ 12,853

1 Property and equipment for regions outside of the United States is not significant.

Segment Information for more information.

Defined Contribution Plan

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Participants may voluntarily contribute to the plan up to the maximum limits established by Internal Revenue Service regulations.

For the years ended March 31, 2024, 2023 and 2022, the Company incurred $ 1.4 million, $ 1.7 million, and $ 1.7 million in matching contributions, respectively.

Recent Accounting Pronouncements Not Yet Adopted

For the years ended March 31, 2025 and 2024, the Company incurred $ 0.3 million and $ 1.4 million in matching contributions, respectively.

The Company suspended its program of matching contributions under the 401(k) retirement plan as of July 2024.

Recently Adopted Accounting Pronouncement

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires disclosure of incremental segment information on an annual and interim basis.

ASU 2023-07 will be effective for our fiscal year beginning April 1, 2024, and interim periods within our fiscal year beginning April 1, 2025, with early adoption permitted and requires application on a fully retrospective basis.

We are currently evaluating the impact of this standard on our financial statement disclosures.

We adopted this standard for our annual period beginning fiscal year 2025 on a 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 Accounting Pronouncement Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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We are currently evaluating the impact of this standard on our financial statement disclosures.

In the following table, revenue is disaggregated by major product offering and geographies (in thousands):

Year Ended March 31,

2024 % 2023 % 2022 %

Restated Restated

Product revenue $ 92,907 $ 175,652 $ 130,248

Service and subscription 71,317 77,581 82,927

Total revenue 164,224 53 % 253,233 60 % 213,175 55 %

Product revenue 59,465 70,025 71,498

Service and subscription 47,372 46,279 46,401

Total revenue 106,837 34 % 116,304 28 % 117,899 31 %

Product revenue 22,507 29,177 29,068

Service and subscription 7,901 9,658 7,913

Total revenue 30,408 10 % 38,835 9 % 36,981 10 %

Product revenue 174,879 274,854 230,814

Service and subscription 126,590 133,518 137,241

10,131 3 % 13,705 3 % 15,377 4 %

Total revenue $ 311,600 100 % $ 422,077 100 % $ 383,432 100 %

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

2 Royalty revenue is not allocable to geographic regions.

Revenue by Solution

Year Ended March 31,

2024 % 2023 % 2022 %

As restated As restated

Primary storage systems $ 53,525 17 % $ 63,334 15 % $ 67,592 18 %

Secondary storage systems 100,599 32 % 178,431 42 % 118,537 31 %

Device and media 33,477 11 % 42,008 10 % 49,959 13 %

Service 113,868 37 % 124,599 30 % 131,967 34 %

Royalty 10,131 3 % 13,705 3 % 15,377 4 %

Total revenue 1

$ 311,600 100 % $ 422,077 100 % $ 383,432 100 %

1 Subscription revenue of $ 7.3 million, $ 5.6 million and $ 4.2 million allocated to Primary and Secondary storage systems for the fiscal years ended 2024, 2023 and 2022, respectively.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income -

Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which

requires additional disclosures of specific expense categories included within each expense caption presented on

the Statements of Operations.

The new standard can be applied on either a fully retrospective or prospective basis.

ASU 2024-03 will be effective for our fiscal year beginning April 1, 2027, and interim periods within our fiscal year

beginning April 1, 2028, with early adoption permitted.

We are currently evaluating the impact of this new standard

on our financial statement disclosures.

Contract Balances

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

March 31, 2024

Deferred revenue $ 116,687

Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period $ 76,304

March 31, 2023

Deferred revenue $ 115,302

Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period $ 83,113

March 31, 2022

March 31, 2025 March 31, 2024 March 31, 2023

Accounts receivable, net

$ 52,502 $ 67,788 $ 72,464

Deferred revenue $ 113,923 $ 116,687 $ 115,302

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RPO consists of both deferred revenue and non-cancelable amounts that are expected to be invoiced and recognized as revenue in future periods and excludes variable consideration related to sales-based royalties.

Of the $ 131.4 million RPO at the end of fiscal 2024, we expect to recognize approximately 31.1 % over the next 13 to 60 months.

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

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Total $ 113,923 $ 75,076 $ 31,260 $ 7,587

BUSINESS ACQUISITIONS

In July 2021, the Company purchased specified assets related to the video surveillance business of PV3 (an ABC) LLC, a Delaware limited liability company as assignee for the benefit of Pivot3, Inc., a Delaware corporation (“Pivot 3”).

The transaction costs associated with the acquisition were not material and were expensed as incurred.

Goodwill generated from this acquisition is primarily attributable to the expected post-acquisition synergies from integrating Pivot3's video surveillance portfolio and assets.

Goodwill obtained in an asset acquisition is deductible for tax purposes.

The total purchase consideration for the acquisition of Pivot3 was $ 7.8 million, which consisted of the following (in thousands):

Fair value of stock consideration 2,818

Total $ 7,818

The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of the acquisition (in thousands):

Amount Estimated Useful Life

Goodwill $ 9,503

Identified intangible assets:

Developed technology 1,700 2 years

Customer lists 3,700 4 years

Property, plant and equipment 4,300 3 years

Net liabilities assumed ( 11,385 )

Total $ 7,818

Pivot3 has also agreed to license to the Company certain intellectual property rights related to the business.

The historical results of operations for Pivot3 were not significant to the Company's consolidated results of operations for the periods presented.

In October 2021, the Company acquired all intellectual property rights and certain other assets of EnCloudEn, an early stage hyperconverged infrastructure software company.

The transaction costs associated with the acquisition were not material and were expensed as incurred.

The total purchase consideration for the acquisition was $ 2.8 million with $ 2.6 million paid at closing and an additional $ 0.2 million paid in three equal quarterly installments after closing.

The fair value of the assets acquired was allocated to developed technology with an estimated useful life of three years .

BALANCE SHEET INFORMATION

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Manufacturing inventories March 31,

2024 2023 2022

Manufactured finished goods $ 10,471 $ 7,074

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Service inventories March 31,

2024 2023 2022

Finished goods $ 1,189 $ 3,660

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Property and equipment, net March 31,

2024 2023 2022

Machinery and equipment, and software $ 47,385 $ 49,095

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Total property, plant and equipment, net $ 11,378 $ 12,028

Depreciation expense for property and equipment amounted to $ 6.0 million, $ 5.5 million, and $ 5.7 million for the years ended March 31, 2024, 2023, and 2022, respectively.

Intangibles, net March 31, 2024 March 31, 2023 March 31, 2022

Gross Accumulated Amortization Net Gross Accumulated Amortization Net Gross Accumulated Amortization Net

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

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

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Intangible assets, net $ 13,411 $ ( 13,130 ) $ 281 $ 13,411 $ ( 11,742 ) $ 1,669

Intangible assets amortization expense was $ 3.3 million, $ 4.6 million, and $ 3.7 million for the years ended March 31, 2024, 2023, and 2022, respectively.

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.

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Fiscal year ending Estimated future amortization expense

Thereafter 281

Total $ 1,669

Fiscal year 2026 $ 281

Goodwill Amount

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Balance at March 31, 2025

Goodwill acquired —

Balance at March 31, 2024

Other long-term assets March 31,

2024 2023 2022

Capitalized SaaS implementation costs for internal use $ 13,910 $ 15,349

Capitalized debt costs 2,871 1,923

Contract asset 1,477 1,247 699

Deferred taxes 734 1,054 866

Contract cost asset

Other 1,463 991

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Other accrued liabilities March 31,

2024 2023 2022

Accrued expenses

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Asset retirement obligation

2,069 2,513 4,590

Accrued income taxes

1,044 1,509 943

Accrued warranty

1,545 2,094 1,899

Accrued interest

Lease liability 856 1,256

3,297 3,704 2,141

Total other accrued liabilities $ 17,982 $ 13,986

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Year Ended March 31,

2024 2023 2022

Balance as of April 1 $ 1,545 $ 2,094

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Charges incurred ( 2,735 ) ( 2,971 )

Reclassification to long-term warranty

Balance as of March 31 $ 1,032 $ 1,545

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Year Ended March 31,

2024 2023 2022

Term Loan $ 102,507 $ 87,942

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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 senior secured term loan, as amended (the “2021 Term Loan”).

Principal is payable at a rate per annum equal to (a) 2.5 % of the original principal balance thereof during the first year following the closing date of the 2021 Term Loan and (b) 5 % of the original principal balance thereof thereafter.

Principal and interest payments are payable on a quarterly basis.

Loans under the Term Loan designated as ABR Loans bear interest at a rate per annum equal to the greatest of (i) 1.75 %;

(ii) the Federal funds rate plus 0.50 %;

(iii) the secured overnight financing rate ("SOFR") 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 5.00 %.

Loans designated as SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 6.00 %

(the "Applicable Margin").

The SOFR Rate is subject to a floor of 0.75 %.

The Company can designate a loan as an ABR Rate Loan or SOFR Rate Loan in its discretion.

The Company has a revolving credit facility agreement with PNC Bank, as amended (the "PNC Credit Facility" and, collectively with the Term Loan, the "Credit Agreements") maturing on August 5, 2026 and providing for borrowings up to a maximum principal amount of the lesser of:

On August 5, 2021, the Company entered into a senior secured term loan (as amended, the “2021 Term Loan”), maturing on August 5, 2026.

The Company also has a revolving credit facility agreement with PNC Bank (as amended, the “PNC Credit Facility” and together with the Term Loan (as defined below), the “Credit Agreements”) maturing on August 5, 2026 and providing 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.

PNC Credit Facility loans designated as PNC SOFR Loans bear interest at a rate per annum equal to the SOFR rate plus 2.75 % until December 31, 2023 and thereafter between 2.25 % and 2.75 % determined based on the Company’s Total Net Leverage Ratio, (as defined in the PNC Credit Facility agreement) for the most recently completed fiscal quarter (the "PNC SOFR Loan Interest Rate").

Loans under the PNC Credit Facility designated as PNC Domestic Rate Loans and Swing Loans bear interest at a rate per annum equal to the greatest of (i) the base commercial lending rate of PNC Bank;

(ii) the Overnight Bank Funding Rate plus 0.5 %;

and (iii) the daily SOFR rate plus 1.0 %, plus 1.75 % until December 31, 2023 and thereafter between 1.25 % and 1.75 % determined based on the Company’s Total Net Leverage Ratio (the “PNC Domestic Loan Interest Rate”).

With respect to any PNC SOFR Rate Loan, the Company has agreed to pay affiliates of certain Term Loan lenders a fee equal to a percentage per annum equal to the sum of (x) 6.50 %, minus (y) the PNC SOFR Loan Interest Rate, plus (z) if the SOFR Rate applicable to such interest payment is less than 0.75 %, (i) 0.75 % minus (ii) such SOFR Rate.

With respect to any Domestic Rate Loan or Swing Loan, the Company has agreed to pay an affiliate of certain Term Loan lenders a fee equal to a percentage per annum equal to the sum of (x) 5.50 %, minus (y) the PNC Domestic Loan Interest Rate, plus (z) if the Alternative Base Rate applicable to such interest payment is less than 1.00 %, (i) 1.00 % minus (ii) such Alternative Base Rate.

The Credit Agreements contain certain covenants, including requirements to prepay the Term Loan in an amount equal to (i) 100 % of the net cash proceeds from certain asset dispositions, extraordinary receipts, debt issuances and equity issuances, subject to certain reinvestment rights and other exceptions and (ii) 75 % of certain excess cash flow of the Company and its subsidiaries beginning in the fiscal year ended March 31, 2023, subject to certain exceptions, including reductions to the percentage of such excess cash flow that is required to prepay the loans to 50 % and 0 %, based on the Company’s applicable total net leverage ratio.

Amounts outstanding under the Term Loan may become due and payable upon the occurrence of specified events, which among other things include (subject to certain exceptions and cure periods):

(i) failure to pay principal, interest, or any fees when due;

(ii) breach of any representation or warranty, covenant, or other agreement in the Term Loan and other related loan documents;

(iii) the occurrence of a bankruptcy or insolvency proceeding with respect to the Company or certain of its subsidiaries;

(iv) any “Event of Default” with respect to other indebtedness involving an aggregate amount of $ 3,000,000 or more;

(v) any lien created by the Term Loan or any related security documents ceasing to be valid and perfected;

(vi) the Term Loan or any related security documents or guarantees ceasing to be legal, valid, and binding upon the parties thereto;

or (vii) a change of control shall occur.

Additionally, the Credit Agreements contain financial covenants relating to minimum liquidity and quarterly total net leverage.

The PNC Credit Facility contains a financial covenant related to the Company's quarterly fixed charges coverage ratio, as defined in the PNC Credit Facility agreements beginning in the fiscal quarter ending March 31, 2025.

The Term Loan and PNC Credit Facility matures on August 5, 2026 under the terms of the related agreements.

As discussed in Note 1:

Description of Business and Significant Accounting Policies—Going Concern , the Company expect to be in violation of its net leverage covenant as of the June 30, 2024 testing date and the violation will cause the outstanding Term Loan and PNC Credit Facility outstanding balances to become due as an event of default.

As a result, the Company has classified the Term Loan and PNC Credit Facility as current liabilities in the accompanying consolidated balance sheet.

On June 1, 2023, the Company entered into amendments to the Credit Agreements (the “June 2023 Amendment”) which, among other things, provided an advance of $ 15.0 million in additional Term Loan borrowings (the “2023 Term Loan” and, collectively 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.

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.

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 1.25 million shares

(the “June 2023 Warrants”) of the Company’s common stock, at an exercise price of $ 1.00 per share.

Common Stock for additional discussion related to the 2023 Warrants.

In connection with the 2023 Term Loan, the Company issued warrants to purchase an aggregate of 0.06 million shares (the “June 2023 Warrants”) of the Common Stock, at an exercise price of $ 20.00 per share.

The June 2023 Amendment to the 2021 Term Loan was accounted for as a modification.

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The Company incurred $ 0.9 million of legal and financial advisory fees which were included in general and administrated expenses in the condensed consolidated statement of operations and comprehensive loss.

The June 2023 Amendments to the PNC Credit Facility were accounted for as modifications and $ 0.7 million in related fees and expenses were recorded to other assets and are amortized to interest expense over the remaining term of the agreement.

On February 14, 2024, the Company entered into amendments to the Credit Agreements which waived testing of the total net leverage ratio financial covenant for the fiscal quarter ended December 31, 2023.

The June 2023 Amendment to the PNC Credit Facility was accounted for as a modification and $ 0.7 million in related fees and expenses were recorded to other assets and are amortized to interest expense over the remaining term of the agreement.

The June 2023 Amendment and the June 2023 Warrants were entered into with and issued to certain entities managed by Pacific Investment Management Company, LLC ("PIMCO") which is considered a related party due to the fact that Christopher D.

Neumeyer is a member of the Company's Board of Directors and also an executive vice president and portfolio manager at PIMCO.

The principal and PIK interest related to the June 2023 Amendment which totaled $ 17.3 million as of March 31, 2024 are payable at maturity.

On February 14, 2024, the Company entered into amendments to the Credit Agreements (“February 2024 Amendments”) which waived testing of the total net leverage ratio financial covenant for the fiscal quarter ended December 31, 2023.

In connection with the amendment, the Company incurred fees related to the Term Loan that was paid-in-kind of $ 1.2 million and an amendment fee of $ 0.1 million that was paid in cash.

These fees have been reflected as a reduction to the carrying amount of the Term Loan and are amortized to interest expense over the remaining loan term.

In connection with the related PNC Credit Facility amendment, the Company incurred $ 0.2 in fees and expenses.

On March 22, 2024, the Company entered into amendments to the Credit Agreements.

The amendment, among other things, (i) permits the sale of certain assets by the Company and (ii) require that certain proceeds from the sale of such assets be applied to partially prepay the outstanding term loans under the Term Loan credit facility.

As the February 2024 Amendments were accounted for as a modification, the fees were reflected as a reduction to the carrying amount of the Term Loan and are amortized to interest expense over the remaining loan term.

In connection with the related PNC Credit Facility amendment, the Company incurred $ 0.2 million in fees and expenses.

On March 22, 2024, the Company entered into further amendments to the Credit Agreements (the "March 2024 Amendments").

The March 2024 Amendments, among other things, (i) permit the sale of certain assets by the Company and (ii) require that certain proceeds from the sale of such assets be applied to partially prepay the outstanding term loans under the Term Loan credit facility.

The Company did not incur any amendment fees related to the March 2024 Amendments and the financial terms of the Credit Agreements were not impacted.

The Company is required to pay an undrawn commitment fee related to the PNC Credit Facility at a rate per annum of between 0.25 % and 0.375 % (the “PNC Commitment Fee”) based on the average PNC Credit Facility Usage Amount ending on the last day off the most recently completed quarter (the “Average Usage Amount”) multiplied by $ 40 million less the Average Usage Amount.

The Company has also agreed to pay affiliates of certain Term Loan lenders a fee at a rate per annum equal to 1.00 % minus the PNC Commitment Fee multiplied by $ 40 million less the Average Usage Amount.

As of March 31, 2024, the interest rates on the 2021 Term Loan and 2023 Term Loan was 11.65 % and 15.65 %, respectively.

As of March 31, 2024, the interest rate on the PNC Credit Facility was 10.25 %.

During the quarter ended June 30, 2024, the Company prepaid $ 12.3 million of the Term Loan.

In connection with this prepayment, the Company recorded a loss on debt extinguishment of $ 0.7 million related to the write-off of a portion of unamortized debt issuance costs.

On May 24, 2024, the Company entered into amendments to the Credit Agreements (the “May 2024 Amendments”) which, among other things, (i) waived compliance with the Company’s net leverage covenant as of March 31, 2024;

and (ii) reduced the daily minimum liquidity covenant below $ 15.0 million until June 16, 2024 and waived any default that might arise as a result of the restatement of certain of the Company’s historical financial statements.

In connection with the May 2024 Amendments, the Company issued to the Term Loan lenders warrants to purchase an aggregate of 100,000 shares of the Common Stock at a purchase price of $ 9.20 (the “May 2024 Warrants”).

Additionally, in connection with the May 2024 Amendment to the Term Loan, the Company incurred an amendment fee that was paid-in-kind of $ 0.8 million and issued the May 2024 Warrants with a fair market value of $ 0.8 million.

In connection with the May 2024 Amendment to the PNC Credit Facility Amendment, the Company incurred $ 0.5 million of fees and expenses paid to the lender.

The May 2024 Amendment to the Term Loan was accounted for as a modification.

The value of the May 2024 Warrants, in addition to $ 0.8 million of amendment fees paid to the lenders, have been reflected as a reduction to the carrying amount of the Term Loan and amortized to interest expense over the remaining loan term.

The May 2024 Amendment to the PNC Credit Facility was accounted for as a modification and the $ 0.5 million in related fees and expenses were recorded to other assets and are amortized to interest expense over the remaining term of the agreement.

On July 11, 2024, the Company entered into amendments to the Credit Agreements (the “July 2024 Amendments”) which, among other things, delayed the testing of the Company’s June 30, 2024 net leverage ratio financial covenant until July 31, 2024.

In connection with the amendments, the Company issued the Term Loan lenders warrants to purchase an aggregate of 50,000 shares of the Common Stock at a purchase price of $ 8.20 (the “July 2024 Warrants”).

The July 2024 Amendments to the 2021 Term Loan were accounted for as a modification.

The fair value of the July 2024 Warrants of $ 0.4 million is reflected as a reduction to the carrying amount of the 2021 Term Loan and amortized to interest expense over the remaining loan term.

The July 2024 Amendments to the PNC Credit Facility were accounted for as a modification and the $ 0.1 million in related fees and expenses were recorded to other assets and are amortized to interest expense over the remaining term of the agreement.

On August 13, 2024, the Company entered into amendments to the Credit Agreements (the “August 2024 Amendments”) which, among other things, (i) waived compliance with the June 30, 2024 net leverage ratio financial covenant;

(ii) waived any non-compliance with the minimum liquidity financial covenant through the date of the amendments;

(iii) removed the fixed charges coverage ratio financial covenant until the fiscal quarter ending September 30, 2025;

(iv) waived the testing requirement for the net leverage financial covenant for the fiscal quarter ending September 30, 2024;

(v) replaced the net leverage financial covenant with a minimum EBITDA financial covenant for the fiscal quarters ending December 31, 2024 and March 31, 2025;

(vi) reset the net leverage financial covenant requirements for the fiscal quarters ending June 30, 2025 and September 30, 2025;

(vii) reduced the minimum liquidity covenant to $ 10 million through September 30, 2025;

(viii) adjusted the applicable interest rates on the Term Loan and PNC Credit Facility;

(ix) removed required 2021 Term Loan principal amortization until the fiscal quarter ending September 30, 2025;

and (x) repriced certain Lender Warrants.

In connection with the August 2024 Amendments, the Company received 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 August 2024 Term Loan designated as a ‘SOFR Loan’, 14.00 % per annum, and (ii) for any August 2024 Term Loan 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 2024 Term Loan lenders.

Subsequently, the Company borrowed the remaining $ 15.8 million of the August 2024 Term Loan’s borrowing capacity before September 30, 2024.

Subsequent to the August 2024 Amendments, the 2021 Term Loan amortizes at 5.00 % per annum commencing on September 30, 2025.

Subsequent to the August 2024 Amendments and (A) until March 31, 2025, loans under the 2021 Term Loan designated as (x) ABR Loans bear interest at a rate per annum equal to the “ABR Rate” (calculated as the greatest of (i) 1.75 %;

(ii) the Federal funds rate plus 0.50 %;

(iii) a secured overnight financing rate based rate (the “SOFR Rate”) based upon an interest period of one month plus 1.0 %;

and (iv) the “Prime Rate” last quoted by the Wall Street Journal), plus an applicable margin of 8.75 %, and (y) SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 9.75 %, in each case, with 3.75 % of such interest rate margin paid-in-kind, with two specified step-downs in such applicable margin upon the receipt by the Company of cash proceeds from certain specified capital raises, and (B) from and after April 1, 2025, loans under the 2021 Term Loan designated as (x) ABR Loans bear interest at a rate per annum equal to the ABR Rate, plus an applicable margin of 8.75 %, and (y) SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 9.75 %, in each case, with 3.75 % of such applicable margin paid-in-kind, with a step-up of 1.00 % per annum (which shall be paid-in-kind) if the Company’s total net leverage ratio is greater than 4.00 x, and a step-down of 1.00 % per annum if the Company’s total net leverage ratio is less than 3.50 x (which shall reduce the paid-in-kind component of the applicable margin).

The SOFR Rate is subject to a floor of 2.00 %.

The Company can designate a loan as an ABR Rate Loan or SOFR Rate Loan in its discretion.

Subsequent to the August 2024 Amendments, PNC Credit Facility loans designated as (x) PNC SOFR Loans bear interest at a rate per annum equal to a SOFR based rate, plus an applicable margin of 4.75 %and (y) PNC Domestic Rate Loans and Swing Loans bear interest at a rate per annum equal to the greatest of (i) the base commercial lending rate of PNC Bank;

(ii) the Overnight Bank Funding Rate plus 0.5 %;

and (iii) the daily SOFR rate plus 1.0 %, plus an applicable margin of 3.75 %.

The Company can designate a loan as a PNC SOFR Loan or PNC Domestic Rate Loan in its discretion.

In connection with the August 2024 Amendments, the Company issued warrants to purchase an aggregate of 380,510 shares of the Common Stock, at an exercise price of $ 6.20 per share (the “August 2024 Warrants”) and which had a fair value of $ 2.0 million.

The August 2024 Amendments to the 2021 Term Loan held by one lender was accounted for as a modification.

The $ 1.2 million fair value of the August 2024 Warrants issued to this lender and the $ 0.5 million of PIK fees paid to this lender are reflected as a reduction to the carrying amount of their Term Loan and their initial delayed draw term loan and amortized to interest expense over the remaining loan terms.

The August 2024 Amendments to the 2021 Term Loan held by another lender was accounted for as a debt extinguishment.

The Company recorded a loss on debt extinguishment of $ 3.0 million related to the write-off of a portion of unamortized debt issuance costs and fees and expenses incurred with the August 2024 Amendments.

The August 2024 Amendments to the PNC Credit Facility were accounted for as a modification, and the $ 0.7 million in related fees and expenses were recorded to other assets and amortized to interest expense over the remaining term of the agreement.

On January 27, 2025, the Company entered into an amendment (the “January 2025 Term Loan Amendment”) to the Term Loan.

The January 2025 Term Loan Amendment, among other things, (i) amends the minimum EBITDA covenant so that such covenant is not tested on December 31, 2024 or March 31, 2025, (ii) amends certain mandatory prepayment events, and (iii) waives certain events of default, in each case, as set forth in the January 2025 Term Loan Amendment.

On January 27, 2025, the Company entered into an amendment (the “January 2025 Revolver Amendment”) to the PNC Credit Facility.

The January 2025 Revolver Amendment, among other things, (i) amends the minimum EBITDA covenant so that such covenant is not tested on December 31, 2024 or March 31, 2025, (ii) amends certain mandatory prepayment events, and (iii) waives certain events of default, in each case, as set forth in the January 2025 Revolver Amendment.

As of March 31, 2025, the interest rate on the 2021 Term Loan, 2023 Term Loan, and 2024 Term Loans were 14.34 %, 14.59 % and 16.59 %, respectively.

As of March 31, 2025, the interest rate on the PNC Credit Facility for Domestic Rate Loans and Swing Loans was 11.25 % and for PNC SOFR Loans was 9.17 %.

As of 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.

We are subject to various debt covenants under our debt agreements.

Our failure to comply with our debt covenants could materially and adversely affect our financial condition and ability to service our obligations.

On February 14, 2024, we entered into amendments to the Credit Agreements which waived testing of the total net leverage ratio financial covenant for the fiscal quarter ended December 31, 2023.

On May 24, 2024, we entered into amendments to the Credit Agreements which, among other things, waives compliance with our net leverage covenant as of March 31, 2024, reduced the daily minimum liquidity below $ 15.0 million until June 16, 2023 and waived any default that might arise as a result of the restatement of certain of our historical financial statements.

The Term Loan and PNC Credit Facility both mature on August 5, 2026 under the terms of the related agreements.

As discussed in Note 1 :

Description of Business and Significant Accounting Policies—Going Concern , we expect to be in violation of our net leverage covenant as of the June 30, 2024 testing date and the violation will cause the outstanding Term Loan and PNC Credit Facility outstanding balances to become due as an event of default.

As a result, we have classified the Term Loan and PNC Credit Facility as current liabilities in the accompanying consolidated balance sheet.

We are currently working to obtain additional covenant waivers or refinance the existing Term Debt and PNC Credit Facility.

Additionally, we are evaluating strategies to obtain additional funding to provide additional liquidity, including potential asset sales.

In the event we are unable to obtain an extension of the waiver, additional funding will be required to pay the amount due on the revolver and term loan.

However, we may be unable to obtain an extension of the waiver, or obtain additional funding.

As such, there can be no assurance that we will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

Neumeyer is a member of the Company's Board of Directors and also an executive vice president and portfolio manager at PIMCO.

The principal and PIK interest related to the June 2023 Amendment which totaled $ 17.3 million as of March 31, 2024 are payable at maturity.

On January 27, 2025, the Company filed a registration statement on Form S-1 related to the resale, from time to time, of up to 2,302,733 shares of Common Stock in connection with the SEPA.

The Registration Statement on Form S-1 was declared effective February 11, 2025.

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

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Maturity of Lease Liabilities Operating Leases

Fiscal year ending 2026

Thereafter 10,855

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Lease Term and Discount Rate March 31,

2024 2023 2022

Weighted average remaining operating lease term (years) 10.19 10.53

Weighted average discount rate for operating leases 12.59 % 12.64 %

Operating cash outflows related to operating leases totaled $ 2.9 million, $ 3.5 million and $ 3.7 million for the fiscal years ended March 31, 2024, March 31, 2023, and March 31, 2022, respectively.

Operating cash outflows related to operating leases totaled $ 2.8 million and $ 2.9 million for the fiscal years ended March 31, 2025 and March 31, 2024, respectively.

RESTRUCTURING CHARGES

During fiscal years 2025 and 2024, the Company approved certain restructuring plans to improve operational efficiencies and rationalize its cost structure.

All restructuring activities were completed by the fourth quarter of fiscal 2024, and no asset impairments occurred as a result.

All restructuring activities from 2024 fiscal year were completed by the fourth quarter of fiscal 2024.

During fiscal year 2025, 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 or in fiscal year 2024.

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

Severance and

benefits Total

Balance as of March 31, 2023 $ —

Adjustments of prior estimates 850 850

Other non-cash ( 1,430 ) ( 1,430 )

Balance as of March 31, 2022 — —

Restructuring costs 3,280

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Cash payments ( 3,266 )

Other non-cash ( 38 )

Balance as of March 31, 2025 $ 786

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

Common Stock Rights Offering

On April 22, 2022, the Company completed a rights offering of 30 million shares of its common stock for $ 2.25 per share (the “Rights Offering”).

The proceeds net of offering expenses was $ 66.2 million.

A portion of the proceeds from the Rights Offering was used to prepay $ 20.0 million of the Company’s Term Loan.

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 (“2012 Plan”) and a 2023 Long-Term Incentive Plan ("2023 Plan").

The 2023 Plan serves as the successor to our 2012 Plan and provides for grants of performance share units, restricted stock units and stock options.

Our equity awards typically vest between one and three years .

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 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.

Equity awards typically vest between one and three years .

Stock options, performance shares and restricted stock grants to non-employee directors typically vest over one year .

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2021 Inducement Plan

The Company's 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 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.

There were 0.8 million shares available for future issuance as of March 31, 2024.

There were 38,380 shares available for future issuance as of March 31, 2025.

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

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

2024 2023 2022

Shares available for issuance at beginning of period 4.4 4.4

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Total shares available for future issuance at end of period 204.4 4.4

The Company uses the Black-Scholes-Merton option-pricing model (“Black-Scholes”) to determine the fair value for stock options, shares forecasted to be issued pursuant to its ESPP, and warrants.

This requires the use of assumptions about expected life, stock price, volatility, risk-free interest rates and expected dividends.

Expected Life —The expected term was based on historical experience with similar awards, giving consideration to the contractual terms, exercise patterns and post-vesting forfeitures.

Volatility —The expected stock price volatility for the Company's common stock was based on the historical volatility of its common stock over the most recent period corresponding with the estimated expected life of the award.

Risk-Free Rate —The risk-free interest rate is based on the yields of U.S.

Treasury securities with maturities similar to the expected term of the options for each option group.

Dividend Yield —The Company has never declared or paid any cash dividends and does not currently plan to pay cash dividends in the foreseeable future.

Consequently, an expected dividend yield of zero was used.

The weighted-average grant date fair value and the assumptions used in calculating fair values of shares forecasted to be issued pursuant to the Company's ESPP are as follows:

Year Ended March 31,

2024 2023 2022

Expected life n/a 0.5 years 0.5 years

Volatility n/a 96 %

Risk-free interest rate n/a 3.10 %

0.06 % - 0.23 %

Dividend yield n/a — % — %

Fair value of common stock n/a $ 1.85

$ 4.60 - $ 6.40

Performance Stock Units

The Company granted 0.1 million, 0.4 million, and 0.6 million of performance share units with market conditions (“Market PSUs”) in fiscal 2024, 2023, and 2022, respectively.

The Company granted 0 and 6,000 shares of performance share units with market conditions (“Market PSUs”) in fiscal 2025 and 2024, respectively.

Market PSUs vest one to three years from the issuance date and become eligible for vesting based on the Company achieving certain stock price targets and are contingent upon continued service of the holder of the award during the vesting period.

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Weighted-Average 2025 2024

Discount period (years) 3.00 3.00 2.98

Risk-free interest rate 3.53 % 2.84 % 0.93 %

Stock price volatility 80.50 % 80.00 % 75.00 %

Grant date fair value $ 0.91 $ 1.17 $ 5.40

The Company granted 0.9 million, 0.9 million and 0.0 million of performance share units with financial performance conditions (“Performance PSUs”) in the fiscal years ended March 31, 2024, 2023 and 2022, respectively.

Discount period (years) n/a 3.00

Risk-free interest rate n/a 3.53 %

Stock price volatility n/a 80.50 %

Grant date fair value n/a $ 18.20

The 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 and 2024, respectively.

Performance PSUs become eligible for vesting based on the Company achieving certain financial performance targets, and are contingent upon continued service of the holder of the award during the vesting period.

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Outstanding as of March 31, 2025 213 $ 6.87

As of March 31, 2024 , there was $ 0.6 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 one year .

The total grant date fair value of shares vested during fiscal years ended March 31, 2024 , 2023, and 2022 was $ 1.0 million, $ 1.9 million, and $ 3.9 million, respectively.

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 1.2 million, 2.9 million, and 2.8 million of service-based restricted stock units (“RSUs”) in the fiscal years ended March 31, 2024, 2023 and 2022, respectively, which generally vest ratably over a three-year service period.

The Company granted 312,250 and 60,000 of service-based restricted stock units (“RSUs”) in the fiscal years ended March 31, 2025 and 2024, 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.

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Outstanding as of March 31, 2025

The total grant date fair value of RSUs vested during fiscal years ended March 31, 2024, 2023, and 2022 was $ 6.4 million, $ 5.2 million, and $ 5.0 million, respectively.

As of March 31, 2024 , there was $ 2.6 million of total unrecognized stock-based compensation related to RSUs, which is expected to be recognized over a weighted-average period of two years .

The total grant date fair value of RSUs vested during fiscal years ended March 31, 2025 and 2024 was $ 3.8 million and $ 6.4 million, respectively.

As of March 31, 2025 , there was $ 1.5 million of total unrecognized stock-based compensation related to RSUs, which is expected to be recognized over a weighted-average period of 1.3 years.

Compensation Expense

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

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

Year Ended March 31,

2024 2023 2022

Cost of revenue $ 373 $ 774

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Year Ended March 31,

2024 2023 2022

Restricted stock units $ 2,515 $ 4,551

Performance share units 313 170

Employee stock purchase plan — 573 687

Total stock-based compensation $ 2,828 $ 4,721

In connection with a debt refinancing and debt amendment activities, the Company issued warrants to purchase shares of the Company common stock in December 2018 which are exercisable until December 27, 2028 (the "December 2018 Warrants), in June 2020 which are exercisable until June 16, 2030 (the "June 2020 Warrants") and in June 2023 which are exercisable until June 1, 2033 (the "June 2023 Warrants").

The exercise price and the number of shares underlying the Company's December 2018 Warrants, June 2020 Warrants and June 2023 Warrants (collectively, the "Lender Warrants") and are 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 may be 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 have 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 requires 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 are carried as liabilities at fair value.

In connection with various debt refinancing and debt amendment activities, the Company issued warrants to purchase shares of the Company common stock (the "Lender Warrants").

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 (the "June 2023 Warrants").

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.

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Stock price volatility 87.00 % 86.00 % 81.00 %

Grant date fair value $ 0.33 $ 0.30 $ 0.45

March 31, 2023:

Discount period (years) 5.7 years 7.2 years n/a

Risk-free interest rate 3.55 % 3.52 % n/a

Stock price volatility 79.00 % 77.00 % n/a

Grant date fair value $ 0.77 $ 0.69

March 31, 2022:

Discount period (years) 6.7 years 8.2 years n/a

Risk-free interest rate 2.39 % 2.36 % n/a

Stock price volatility 79.00 % 74.00 % n/a

Grant date fair value $ 1.80 $ 1.59 n/a

Exercise price

$ 6.60 $ 6.00 $ 9.00

The Company has adopted ASC 2017-11, Earnings per share (Topic 260) ;

Distinguishing liabilities from equity (Topic 480);

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.

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;

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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.

The following summarizes the Company's outstanding Lender Warrants (in thousands, except exercise price):

December 2018 Warrants June 2020 Warrants June 2023 Warrants Total

March 31, 2024:

Exercise price $ 1.33 $ 2.77 $ 1.00

Number shares under warrant(s) 7,131 3,683 1,250 12,064

Fair value $ 2,320 $ 1,135 $ 591 $ 4,046

March 31, 2023:

Exercise price $ 1.33 $ 2.79 n/a

Number shares under warrant(s) 7,111 3,656 n/a 10,767

Fair value $ 5,447 $ 2,542 n/a $ 7,989

March 31, 2022:

Exercise price $ 1.33 $ 3.00 n/a

Number shares under warrant(s) 7,111 3,400 n/a 10,511

Fair value $ 12,769 $ 5,468 n/a $ 18,237

The Rights Offering triggered the Down Round Feature for the for June 2020 Warrants on April 22, 2022 due to the price per share received in the Rights Offering being lower than the exercise price.

The exercise price for the June 2020 Warrants was adjusted to $ 2.79 per share and an additional 256,111 warrants were issued with an exercise price of $ 2.79 .

The issuance of the June 2023 Warrants triggered the Warrant Repricing Feature in the June 2020 Warrants and the December 2018 Warrants.

The exercise price for the June 2020 Warrants was adjusted to $ 2.77 per share and an additional 27,269 warrants were issued with an exercise price of $ 2.77 .

The exercise price for the December 2018 warrants was not adjusted and an additional 20,417 warrants were issued with an exercise price of $ 1.33 .

The changes to the exercise price and number of warrants related to these adjustments were recorded as an adjustment to the warrant liability and reflected as a change in fair value of the warrant liability in the respective periods.

The table below sets forth a summary of changes in the fair value of the Company’s Level 2 warrant liabilities for the year ended December 31, 2023

Balance at March 31, 2021 $ 78,267

Change in fair value of warrant liabilities ( 60,030 )

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 liabilities for the years ended March 31, 2024 and March 31, 2025:

Balance at March 31, 2023 $ 7,989

Issuance of warrants 1,194

Change in fair value of warrant liabilities ( 5,137 )

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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 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):

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 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 Company entered into a SEPA in which pursuant to and subject to its terms, the Company has the right, but not the obligation, to sell up to $ 200 million of Common 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.

As of March 31, 2025, the Company has issued approximately 1.2 million shares of Common Stock under the SEPA for net proceeds of approximately $ 16.4 million.

Registration Rights Agreements

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and (c) certain piggyback registration rights related to potential future equity offerings of the Company, subject to certain limitations.

NET INCOME (LOSS) PER SHARE

NET LOSS PER SHARE

Equity Instruments Outstanding

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

The Company has also issued warrants to purchase shares of the Company’s stock.

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

The Company has 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,

2024 2023 2022

As Restated As Restated

Net income (loss) attributable to common stockholders used in basic earnings per share $ ( 41,286 ) $ ( 18,368 ) $ 38,355

Excluded (gain) loss on assumed exercise of liability-classified common stock warrants during the period — ( 7,323 ) ( 59,753 )

Net loss attributable to common stockholders used in diluted earnings per share $ ( 41,286 ) $ ( 25,691 ) $ ( 21,398 )

Weighted average common shares outstanding used in basic earnings per share 95,087 90,348 58,871

Incremental common shares from:

Assumed exercise of dilutive warrants — 840 7,146

Weighted average common shares outstanding used in diluted earnings per share 95,087 91,188 66,017

Net income (loss) per share attributable to common stockholders - Basic $ ( 0.43 ) $ ( 0.20 ) $ 0.65

Net income (loss) per share attributable to common stockholders - Diluted $ ( 0.43 ) $ ( 0.28 ) $ ( 0.32 )

Net loss used in basic and diluted earnings per share $ ( 115,091 ) $ ( 41,286 )

Weighted average common shares outstanding used in basic and diluted earnings per share 5,150 4,754

Net income loss per share - basic and diluted $ ( 22.35 ) $ ( 8.68 )

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 income (loss) per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive (in thousands):

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,

2024 2023 2022

Stock awards 127 17

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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 0.9 million 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, 2024.

Pre-tax income (loss) reflected in the consolidated statements of operations for the years ended March 31, 2024, 2023 and 2022 is as follows (in thousands):

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.

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

Year Ended March 31,

$ ( 112,416 ) $ ( 40,555 )

As Restated As Restated

$ ( 40,555 ) $ ( 18,429 ) $ 39,146

Foreign ( 1,854 ) ( 20 )

2 unchanged sentences

Year Ended March 31,

2024 2023 2022

As Restated As Restated

Current tax expense

Federal $ — $ —

State 14 70 477

Foreign 741 919

2 unchanged sentences

Federal 20 18

State 21 108 22

Foreign ( 13 ) ( 261 )

3 unchanged sentences

For the year ended March 31,

2024 2023 2022

As Restated As Restated

Expense (benefit) at the federal statutory rate $ ( 24,122 ) $ ( 8,507 )

5 unchanged sentences

Uncertain tax positions ( 6,672 ) ( 8,010 )

Credit monetization — — ( 2,100 )

Expiration of attributes 8,427 10,901

5 unchanged sentences

As of March 31,

2024 2023 2022

As Restated As Restated

Deferred tax assets

18 unchanged sentences

Net deferred tax assets (liabilities) $ 705 $ 274

The valuation allowance increased by $ 6.5 million during the year ended March 31, 2024, increased by $ 3.1 million during the year ended March 31, 2023, and decreased by $ 7.4 million during the year ended March 31, 2022, respectively.

The valuation allowance increased by $ 14.1 million during the year ended March 31, 2025 and increased by $ 6.5 million during the year ended March 31, 2024, respectively.

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

For the year ended March 31,

2024 2023 2022

As restated As restated

Beginning Balance $ 88,341 $ 96,343

Increase in balances related to tax positions in current period 1,558 2,229

Increase in balances related to tax positions in prior period — — 4,881

Decrease in balances related to tax positions in prior period ( 12 ) ( 1,364 )

10 unchanged sentences

In other major 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 $ 12.6 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.

next 12 months, it is reasonably possible that approximately $ 10.4 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 $ 9.5 million will be offset by the establishment of a related valuation allowance.

19 unchanged sentences

As of March 31, 2025, the Company had issued non-cancelable commitments for $ 48.6 million to purchase inventory from its contract manufacturers and suppliers.

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.

At the end of fiscal 2025, the Company had various non-cancelable operating leases for office facilities.

4 unchanged sentences

Based on current available information, we do not expect that the ultimate outcome of any 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.

Realtime Data Matter

On July 22, 2016, Realtime Data LLC d/b/a IXO (“Realtime Data”) filed a patent infringement lawsuit against the Company in the U.S.

District Court for the Eastern District of Texas, alleging infringement of U.S.

7,161,506, 7,378,992, 7,415,530, 8,643,513, 9,054,728, and 9,116,908.

The lawsuit was thereafter transferred to the U.S.

District Court for the Northern District of California for further proceedings.

Realtime Data asserts that the Company has incorporated Realtime Data’s patented technology into its compression products and services.

July 31, 2017, the Court in the Northern District of California stayed proceedings in this litigation pending the outcome of Inter Partes Review proceedings before the Patent Trial and Appeal Board relating to the asserted Realtime patents.

In those proceedings the asserted claims of the ’506 patent, the ’992 patent, and the ’513 patent were found unpatentable.

In addition, on July 19, 2019, the United States District Court for the District of Delaware issued a Quantum Corporation Confidential decision finding that all claims of the ’728 patent, the ’530 patent, and the ’908 patent are not eligible for patent protection under 35 U.S.C.

§ 101 (the “Delaware Action”).

On appeal, the

Federal Circuit vacated the decision in the Delaware Action and remanded for the Court to “elaborate on its ruling.” In opinions dated May 4, 2021 and August 23, 2021, the Court in the Delaware Action reaffirmed its earlier ruling and granted defendants’ motions to dismiss under Section 101.

Realtime Data appealed those decisions to the Federal Circuit, which affirmed on August 2, 2023.

In January 2024, the U.S.

Supreme Court denied Realtime Data's petition for certiorari to hear the case.

Following that decision, the parties entered into a covenant not to sue and settlement agreement.

The agreement provides that Realtime Data will not sue Quantum based on certain covered patents and dismissed the action pending in the Northern District of California with prejudice.

Arrow Electronics Matter

On July 27, 2023, Arrow Electronics, Inc.

("Arrow Electronics"), an electronics component distributor filed a lawsuit in a federal court in the Northern District of California against Quantum, alleging breach of contract and breach of the covenant of good faith and fair dealing, seeking, among other things just over $ 4.6 million in damages.

Quantum has filed a responsive pleading disputing Arrow Electronics’ claims and plans to aggressively defend itself against them.

At this time, Quantum believes the probability that this lawsuit will have a material adverse effect on our business, operating results, or financial condition is remote.

FAIR VALUE OF FINANCIAL INSTRUMENTS

15 unchanged sentences

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.

2024 2023 2022

Carrying Value Fair Value Carrying Value Fair Value Carrying Value Fair Value

Carrying Value Fair Value Carrying Value Fair Value

Term Loan $ 102,507 $ 91,576 $ 87,942 $ 75,143

1 unchanged sentence

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

SUBSEQUENT EVENTS

Debt Amendments

On May 24, 2024, the Company entered into amendments to the Credit Agreements which, among other things, waives compliance with the Company's net leverage covenant as of March 31, 2024 as well as any default that might arise as a result of the restatement of certain of the Company’s historical financial statements.

In connection with the amendment to the Term Loan, the Company issued to the Term Loan lenders (the “2024 Term Loan Warrants”) to purchase an aggregate of 2,000,000 shares of the Company’s common stock at a purchase price of $ 0.46 .

The exercise price and the number of shares underlying the 2024 Term Loan Warrants are subject to adjustment in the event of specified events, including dilutive issuances at a price lower than the exercise price of the 2024 Term Loan Warrants, a subdivision or combination of the common stock, a reclassification of the common stock or specified dividend payments.

Term Debt Prepayment

On March 23, 2024, the Company sold certain service inventory for an approximate $ 15.0 million.

On April 2, 2024, the Company used a portion of the proceeds from the disposition of these assets to prepay $ 12.3 million of the Term Loan.

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

As described in Note 1:

Description of Business and Significant Accounting Policies, and as further described below, in November 2023, the Company determined that it was necessary to re-evaluate its application of standalone selling price under Topic 606.

The Company concluded that its application of Topic 606 related to standalone selling price was inconsistent with the generally accepted application of the guidance.

The Company’s management reperformed the determination of standalone selling price with the support of external advisors, and the resulting calculations have been applied to the revenue allocations in the fiscal years ended March 31, 2024, March 31, 2023 and March 31, 2022.

The Company additionally identified contractual terms contained within outstanding warrant agreements issued to its prior and current lenders in 2018, 2020 and 2023, which required further evaluation under Topic 815.

After consulting with external advisors and completing an extensive review process, management concluded that the classification of warrants as equity was not consistent with Topic 815 and has restated them as a liability.

This also resulted in the requirement to account for the change in the fair value of the warrants through the Statement of Operations.

As a result of these errors, the Company is restating the financial statements for the years ended March 31, 2023 and 2022.

The nature of the restatement adjustments and their impact on previously reported consolidated financial statements is as follows:

Application of Topic 606 related to standalone selling price - The Company historically used invoice price as the standalone selling price for all goods and services.

This was partly because of the high level of customization for each product sold and because the pricing for individual performance obligations is highly variable.

Standalone selling price has now been established for all goods and services sold in a bundled

contract using the adjusted market assessment approach or the cost plus a reasonable margin approach and maximizing the use of observable inputs.

The impact on the consolidated statement of operations and comprehensive loss for the fiscal years ended March 31, 2022 and March 31, 2023 is an increase to product revenue of $ 7.1 million and $ 8.3 million respectively, an increase to service revenue of $ 3.6 million and $ 1.0 million respectively, and a decrease to pre-tax loss of $ 10.6 million and $ 9.3 million respectively.

The impact to the consolidated balance sheet at March 31, 2022 and March 31, 2023 is an increase to short term deferred revenue of $ 0.6 million as at March 31, 2022, a decrease to short term deferred revenue of $ 2.7 million as at March 31, 2023, and a decrease to long term deferred revenue of $ 1.8 million and $ 7.8 million, respectively.

Application of Topic 815 related to classification of outstanding warrants - The Company inappropriately classified the warrants issued in 2018, 2020 and 2023 as equity.

The impact on the consolidated statement of operations and comprehensive loss for the fiscal years ended March 31, 2022 and March 31, 2023 is an increase to the change in value of warrant liabilities of $ 60.0 million and $ 10.2 million, respectively, and a decrease to pre-tax loss of $ 60.0 million and $ 10.2 million respectively.

The impact to the consolidated balance sheet at March 31, 2022 and March 31, 2023 is a decrease to warrant liabilities of $ 18.2 million and $ 8.0 million, respectively, and a decrease to additional paid-in capital of $ 20.2 million and $ 20.2 million, respectively.

Below are our restated consolidated balance sheets as of March 31, 2023 and 2022, and the restated consolidated statements of operations and comprehensive loss, statements of stockholders’ equity, and statements of cash flows for each of the years ended March 31, 2023 and 2022.

QUANTUM CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

March 31, 2023

As previously reported Restatement adjustments Reference As restated

Current assets:

Cash and cash equivalents $ 25,963 $ — $ 25,963

Restricted cash 212 — 212

Accounts receivable, net of allowance for credit losses of $ 201

SEGMENT INFORMATION

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 %

Manufacturing inventories 19,441 — 19,441

Service parts inventories 25,304 — 25,304

Prepaid expenses 4,158 — 4,158

Other current assets 5,513 — 5,513

Total current assets 153,055 — 153,055

Property and equipment, net 16,555 — 16,555

Intangible assets, net 4,941 — 4,941

Goodwill 12,969 — 12,969

Right-of-use assets, net 10,291 — 10,291

Other long-term assets 15,846 — 15,846

Total assets $ 213,657 $ — $ 213,657

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 35,716 $ — 35,716

Accrued compensation 15,710 — 15,710

Deferred revenue, current portion 82,504 ( 2,697 ) (a) 79,807

Term debt, current portion 5,000 — 5,000

Warrant liabilities — 7,989 (b) 7,989

Other accrued liabilities 13,666 — 13,666

Total current liabilities 152,596 5,292 157,888

Deferred revenue, net of current portion 43,306 ( 7,811 ) 35,495

Revolving credit facility 16,750 — 16,750

Term debt, net of current portion 66,354 — 66,354

Operating lease liabilities 10,169 — 10,169

Other long-term liabilities 11,370 — 11,370

Total liabilities 300,545 ( 2,519 ) 298,026

Stockholders’ deficit

Preferred stock:

Preferred stock, 20,000 shares authorized;

no shares issued

Common stock:

Common stock, $ 0.01 par value;

225,000 shares authorized;

93,574 shares issued and outstanding

Additional paid-in capital 722,603 ( 20,233 ) (b) 702,370

Accumulated deficit ( 808,846 ) 22,752 (a) (b) ( 786,094 )

Accumulated other comprehensive loss ( 1,581 ) — ( 1,581 )

Total stockholders' deficit ( 86,888 ) 2,519 ( 84,369 )

Total liabilities and stockholders' deficit $ 213,657 $ — $ 213,657

QUANTUM CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

March 31, 2022

As previously reported Restatement adjustments Reference As restated

Current assets:

Cash and cash equivalents $ 5,210 $ — $ 5,210

Restricted cash 283 — 283

Accounts receivable, net of allowance for credit losses of $ 422 , respectively

Product revenue $ 82,772 $ 92,907

Service and subscription 59,277 71,317

Total revenue 142,049 52 % 164,224 53 %

Product revenue 53,742 59,465

Service and subscription 40,818 47,372

Total revenue 94,560 35 % 106,837 34 %

Product revenue 17,668 22,507

Service and subscription 10,563 7,901

Total revenue 28,231 10 % 30,408 10 %

Product revenue 154,182 174,879

Service and subscription 110,658 126,590

9,218 3 % 10,131 3 %

Manufacturing inventories 33,546 — 33,546

Service parts inventories 24,254 — 24,254

Prepaid expenses 7,853 — 7,853

Other current assets 4,697 — 4,697

Total current assets 145,197 — 145,197

Property and equipment, net 12,853 — 12,853

Intangible assets, net 9,584 — 9,584

Goodwill 12,969 — 12,969

Right-of-use assets, net 11,107 — 11,107

Other long-term assets 9,925 — 9,925

Total assets $ 201,635 $ — $ 201,635

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 34,220 $ — 34,220

Accrued compensation 16,141 — 16,141

Deferred revenue, current portion 86,517 611 (a) 87,128

Term debt, current portion 4,375 — 4,375

Warrant liabilities — 18,237 (b) 18,237

Other accrued liabilities 16,562 — 16,562

Total current liabilities 157,815 18,848 176,663

Deferred revenue, net of current portion 41,580 ( 1,792 ) 39,788

Revolving credit facility 17,735 — 17,735

Term debt, net of current portion 89,448 — 89,448

Operating lease liabilities 9,891 — 9,891

Other long-term liabilities 11,849 — 11,849

Total liabilities 328,318 17,056 345,374

Stockholders’ deficit

Preferred stock:

Preferred stock, 20,000 shares authorized;

no shares issued

Common stock:

Common stock, $ 0.01 par value;

225,000 shares authorized;

60,433 shares issued and outstanding

Additional paid-in capital 645,038 ( 20,233 ) (b) 624,805

Accumulated deficit ( 770,903 ) 3,177 (a) (b) ( 767,726 )

Accumulated other comprehensive loss ( 1,423 ) — ( 1,423 )

Total stockholders' deficit ( 126,683 ) ( 17,056 ) ( 143,739 )

Total liabilities and stockholders' deficit $ 201,635 $ — $ 201,635

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

Total revenue $ 274,058 100 % $ 311,600 100 %

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

2 Royalty revenue is not allocable to geographic regions.

Revenue by Solution

Year Ended March 31,

As previously reported Restatement adjustments Reference As restated

Product $ 266,537 $ 8,317 (a) $ 274,854

Service and subscription 132,510 1,008 (a) 133,518

2025 % 2024 %

Primary storage systems $ 58,127 21 % $ 53,525 17 %

Secondary storage systems 73,772 27 % 100,599 32 %

Device and media 34,352 13 % 33,477 11 %

Service 98,589 36 % 113,868 37 %

Royalty 9,218 3 % 10,131 3 %

Total revenue 1

Cost of revenue

Product 220,031 — 220,031

Service and subscription 58,782 — 58,782

Total cost of revenue 278,813 — 278,813

Gross profit 133,939 9,325 143,264

Operating expenses

Sales and marketing 66,034 — 66,034

General and administrative 47,752 — 47,752

Research and development 44,555 — 44,555

Restructuring charges 1,605 — 1,605

Total operating expenses 159,946 — 159,946

Income (loss) from operations ( 26,007 ) 9,325 ( 16,682 )

Other income, net 1,956 — 1,956

Interest expense ( 10,560 ) — ( 10,560 )

Change in fair value of warrant liability — 10,250 (b) 10,250

Loss on debt extinguishment, net ( 1,392 ) — ( 1,392 )

Net income (loss) before income taxes ( 36,003 ) 19,575 ( 16,428 )

Income tax provision 1,940 — 1,940

Net income (loss) $ ( 37,943 ) $ 19,575 $ ( 18,368 )

Deemed dividend on warrants ( 389 ) 389 (b) —

Net income (loss) attributable to common stockholders $ ( 38,332 ) $ 19,964 $ ( 18,368 )

Net income (loss) per share attributable to common stockholders- basic $ ( 0.42 ) $ 0.22 $ ( 0.20 )

Net income (loss) per share attributable to common stockholders - diluted $ ( 0.42 ) $ 0.14 $ ( 0.28 )

Weighted average shares - basic 90,348 90,348 90,348

Weighted average shares - basic and diluted 90,348 91,188 91,188

Net income (loss) $ ( 37,943 ) $ 19,575 $ ( 18,368 )

Foreign currency translation adjustments, net ( 158 ) — ( 158 )

Total comprehensive income (loss) $ ( 38,101 ) $ 19,575 $ ( 18,526 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

$ 274,058 100 % $ 311,600 100 %

1 Subscription revenue of $ 12.1 million and $ 7.3 million allocated to Primary and Secondary storage systems for the fiscal years ended 2025 and 2024, respectively.

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

(in thousands):

Year Ended March 31,

As previously reported Restatement adjustments Reference As restated

Product $ 223,761 $ 7,053 (a) $ 230,814

Service and subscription 133,689 3,552 (a) 137,241

Royalty 15,377 — 15,377

Total revenue

Cost of revenue

Product 169,780 — 169,780

Service and subscription 56,012 — 56,012

$ 274,058 $ 311,600

Total cost of revenue

Gross profit 147,035 10,605 157,640

164,226 186,711

109,832 124,889

40.1 % 40.1 %

Operating expenses

Research and development 51,812 — 51,812

Sales and marketing 62,957 — 62,957

General and administrative 45,256 — 45,256

Restructuring charges 850 — 850

Total operating expenses 160,875 — 160,875

Income (loss) from operations ( 13,840 ) 10,605 ( 3,235 )

Other expense, net ( 251 ) — ( 251 )

Interest expense ( 11,888 ) — ( 11,888 )

Change in fair value of warrant liabilities — 60,030 (b) 60,030

Loss on debt extinguishment, net ( 4,960 ) — ( 4,960 )

Net income (loss) before income taxes ( 30,939 ) 70,635 39,696

Income tax provision 1,341 — 1,341

Net income (loss) $ ( 32,280 ) $ 70,635 $ 38,355

Net income (loss) per share - basic $ ( 0.55 ) $ 1.20 $ 0.65

Net income (loss) per share - diluted $ ( 0.55 ) $ 0.23 $ ( 0.32 )

Weighted average shares - basic 58,871 58,871 58,871

Weighted average shares - diluted 58,871 66,017 66,017

Net income (loss) $ ( 32,280 ) $ 70,635 $ 38,355

Foreign currency translation adjustments, net ( 567 ) — ( 567 )

Total comprehensive income (loss) $ ( 32,847 ) $ 70,635 $ 37,788

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year Ended March 31, 2023

As previously reported Restatement adjustments Reference As restated

Operating activities

Net income (loss)

$ ( 37,943 ) $ 19,575 (a) (b) $ ( 18,368 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization 10,118 — 10,118

Amortization of debt issuance costs 1,624 — 1,624

Long-term debt related costs 992 — 992

Provision for manufacturing and service inventories 18,052 — 18,052

Stock-based compensation 10,750 — 10,750

Change in fair value of warrant liabilities — ( 10,250 ) (b) ( 10,250 )

Other non-cash ( 2,067 ) — ( 2,067 )

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable ( 2,966 ) — ( 2,966 )

Manufacturing inventories ( 1,839 ) — ( 1,839 )

Service parts inventories ( 3,503 ) — ( 3,503 )

Accounts payable 1,158 — 1,158

Prepaid expenses 3,695 — 3,695

Deferred revenue ( 2,286 ) ( 9,325 ) (a) ( 11,611 )

Accrued compensation ( 431 ) — ( 431 )

Other assets ( 1,270 ) — ( 1,270 )

Other liabilities 1,022 — 1,022

Net cash used in operating activities

Salaries & fringe 1

80,882 94,871

Investing activities

Purchases of property and equipment ( 12,581 ) — ( 12,581 )

Business acquisitions ( 3,020 ) — ( 3,020 )

Net cash used in investing activities

Outside services 2

37,171 21,635

Financing activities

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

Repayments of long-term debt ( 24,596 ) — ( 24,596 )

Borrowings of credit facility 497,280 — 497,280

Repayments of credit facility ( 498,665 ) — ( 498,665 )

Borrowings of paycheck protection program — — —

Proceeds from secondary offering, net — — —

Payment of taxes due upon vesting of restricted stock — — —

Proceeds from issuance of common stock 67,146 — 67,146

Net cash provided by financing activities 41,165 — 41,165

Effect of exchange rate changes on cash and cash equivalents 12 — 12

Net change in cash, cash equivalents, and restricted cash 20,682 — 20,682

Cash, cash equivalents, and restricted cash at beginning of period 5,493 — 5,493

Cash, cash equivalents, and restricted cash at end of period $ 26,175 $ — $ 26,175

Supplemental disclosure of cash flow information

Cash paid for interest $ 8,701 $ — $ 8,701

Cash paid for income taxes, net of refunds $ 1,418 $ — $ 1,418

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 1,049 $ — $ 1,049

Transfer of manufacturing inventory to services inventory $ 4,045 $ — $ 4,045

Transfer of manufacturing inventory to property and equipment $ 343 $ — $ 343

Payment of litigation settlements with insurance proceeds $ — $ — $ —

Paid-in-kind interest $ 319 $ — $ 319

Deemed dividend $ 389 $ ( 389 ) (b) $ —

Cash and cash equivalents $ 25,963 $ — $ 25,963

Restricted cash, current 212 — 212

Total cash, cash equivalents and restricted cash at the end of period $ 26,175 $ — $ 26,175

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Year Ended March 31, 2022

As previously reported Restatement adjustments Reference As adjusted

Operating activities

Net income (loss)

$ ( 32,280 ) $ 70,635 (a) (b) $ 38,355

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization 9,418 — 9,418

Amortization of debt issuance costs 2,414 — 2,414

Long-term debt related costs 8,471 — 8,471

Provision for manufacturing and service inventories 5,740 — 5,740

Gain on PPP loan extinguishment ( 10,000 ) — ( 10,000 )

Stock-based compensation 13,829 13,829

Change in fair value of warrant liabilities — ( 60,030 ) (b) ( 60,030 )

Other non-cash ( 832 ) — ( 832 )

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable 3,651 — 3,651

Manufacturing inventories ( 12,069 ) — ( 12,069 )

Service parts inventories ( 4,400 ) — ( 4,400 )

Accounts payable ( 1,939 ) — ( 1,939 )

Prepaid expenses ( 3,959 ) — ( 3,959 )

Deferred revenue ( 2,514 ) ( 10,605 ) (a) ( 13,119 )

Accrued restructuring charges ( 580 ) — ( 580 )

Accrued compensation ( 3,073 ) — ( 3,073 )

Other assets ( 2,602 ) — ( 2,602 )

Other liabilities ( 3,003 ) — ( 3,003 )

Net cash used in operating activities

Infrastructure 3

10,783 15,295

Investing activities

Purchases of property and equipment ( 6,316 ) — ( 6,316 )

Business acquisitions ( 7,808 ) — ( 7,808 )

Net cash used in investing activities

Operational costs 4

Restructuring

Other segment items 5

Total operating expenses

151,512 153,766

Financing activities

Borrowings of long-term debt, net of debt issuance costs 94,961 — 94,961

Repayments of long-term debt ( 94,301 ) — ( 94,301 )

Borrowings of credit facility 309,000 — 309,000

Repayments of credit facility ( 291,265 ) — ( 291,265 )

Proceeds from issuance of common stock 1,762 1,762

Net cash provided by financing activities 20,157 — 20,157

Effect of exchange rate changes on cash and cash equivalents 51 — 51

Net change in cash, cash equivalents, and restricted cash ( 27,644 ) — ( 27,644 )

Cash, cash equivalents, and restricted cash at beginning of period 33,137 — 33,137

Cash, cash equivalents, and restricted cash at end of period $ 5,493 $ — $ 5,493

Supplemental disclosure of cash flow information

Cash paid for interest $ 9,140 $ — $ 9,140

Cash paid for income taxes, net of refunds $ 944 $ — $ 944

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 147 $ — $ 147

Transfer of manufacturing inventory to services inventory $ 211 $ — $ 211

Cash and cash equivalents $ 5,210 $ — $ 5,210

Restricted cash, current 283 — 283

Total cash, cash equivalents and restricted cash at the end of period $ 5,493 $ — $ 5,493

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands)

Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Deficit

Reference Shares Amount

As previously reported

Balance, March 31, 2022 60,433 $ 605 $ 645,038 $ ( 770,903 ) $ ( 1,423 ) $ ( 126,683 )

Net loss — — — ( 37,943 ) — ( 37,943 )

Foreign currency translation adjustments, net — — — — ( 158 ) ( 158 )

Shares issued under employee stock purchase plan 600 6 891 — — 897

Shares issued under employee incentive plans, net 2,180 21 ( 21 ) — — —

Shares issued in connection with rights offering, net 30,000 300 65,949 — — 66,249

Shares issued in connection with business acquisition 361 4 ( 4 ) — — —

Settlement of warrant down round provision — — 389 — — 389

Deemed dividend on warrants — — ( 389 ) — — ( 389 )

Stock-based compensation — — 10,750 — — 10,750

Balance, March 31, 2023 93,574 $ 936 $ 722,603 $ ( 808,846 ) $ ( 1,581 ) $ ( 86,888 )

March 31, 2022 (a) (b) — — ( 20,233 ) 3,177 — ( 17,056 )

Net loss (a) (b) — — — 19,575 — 19,575

March 31, 2023 — $ — $ ( 20,233 ) $ 22,752 $ — $ 2,519

March 31, 2022 60,433 $ 605 $ 624,805 $ ( 767,726 ) $ ( 1,423 ) $ ( 143,739 )

Net loss — — — ( 18,368 ) — ( 18,368 )

Foreign currency translation adjustments, net — — — — ( 158 ) ( 158 )

Shares issued under employee stock purchase plan 600 6 891 — — 897

Shares issued under employee incentive plans, net 2,180 21 ( 21 ) — — —

Shares issued in connection with rights offering, net 30,000 300 65,949 — — 66,249

Shares issued in connection with business acquisition 361 4 ( 4 ) — — —

Stock-based compensation — — 10,750 — — 10,750

March 31, 2023 93,574 $ 936 $ 702,370 $ ( 786,094 ) $ ( 1,581 ) $ ( 84,369 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands)

Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Deficit

Reference Shares Amount

As previously reported

Balance, March 31, 2021 56,915 $ 570 $ 626,664 $ ( 738,623 ) $ ( 856 ) $ ( 112,245 )

Net loss — — — ( 32,280 ) — ( 32,280 )

Foreign currency translation adjustments, net — — — — ( 567 ) ( 567 )

Shares issued under employee stock purchase plan 389 4 1,758 — — 1,762

Shares issued under employee incentive plans, net 2,308 23 ( 23 ) — — —

Shares issued in connection with business acquisition 821 8 2,810 — — 2,818

Stock-based compensation — — 13,829 — — 13,829

Balance, March 31, 2022 60,433 $ 605 $ 645,038 $ ( 770,903 ) $ ( 1,423 ) $ ( 126,683 )

March 31, 2021 (a) (b) — — ( 20,233 ) ( 67,458 ) — ( 87,691 )

Net loss (a) (b) — — — 70,635 — 70,635

March 31, 2022 — $ — $ ( 20,233 ) $ 3,177 $ — $ ( 17,056 )

March 31, 2021 56,915 $ 570 $ 606,431 $ ( 806,081 ) $ ( 856 ) $ ( 199,936 )

Net loss — — — 38,355 — 38,355

Foreign currency translation adjustments, net — — — — ( 567 ) ( 567 )

Shares issued under employee stock purchase plan 389 4 1,758 — — 1,762

Shares issued under employee incentive plans, net 2,308 23 ( 23 ) — — —

Shares issued in connection with business acquisition 821 8 2,810 — — 2,818

Stock-based compensation — — 13,829 — — 13,829

March 31, 2022 60,433 $ 605 $ 624,805 $ ( 767,726 ) $ ( 1,423 ) $ ( 143,739 )

QUARTERLY FINANCIAL SUMMARY (Unaudited)

The following tables present the impact of the restatement for the quarters ended June 30, 2023, December 31, 2022, September 30, 2022, and June 30, 2022.

These tables also include financial information for the quarters ended December 31, 2023 and September 30, 2023 that were not previously filed.

The unaudited consolidated interim financial statements reflect all adjustments, consisting only of normal and recurring items, necessary to present fairly our financial position as of March 31, 2024, the results of operations and comprehensive loss, statements of cash flows, and changes in stockholder's deficit for the three and nine months ended June 30, September 30 and December 31, 2023 and 2022.

The nature of the restatement adjustments are as follows:

Application of Topic 606 related to standalone selling price - The Company historically used invoice price as the standalone selling price for all goods and services.

This was partly because of the high level of customization for each product sold and because the pricing for individual performance obligations is highly variable.

Standalone selling price has now been established for all goods and services sold in a bundled contract using the adjusted market assessment approach or the cost plus a reasonable margin approach and maximizing the use of observable inputs.

Application of Topic 815 related to classification of outstanding warrants - The Company inappropriately classified the warrants issued in 2018, 2020 and 2023 as equity.

Summarized Financial Items

The following table sets forth financial information summarizing the effects of the restatement and other immaterial error correction on our previously reported Statements of Operations for the quarters ended June 30, 2023, December 31, 2022, September 30, 2022, and June 30, 2022.

It also includes summarized information for each of the quarters ended December 31, 2023 and September 30, 2023.

(in thousands, except per share data) FY 2024

March 31 December 31 September 30 June 30

Total revenue $ 71,500 $ 71,926 $ 75,680 $ 92,495

Gross profit 27,332 29,181 32,736 35,641

Income (loss) from operations ( 13,808 ) ( 6,216 ) ( 3,712 ) ( 5,139 )

Change in fair value of warrants ( 2,203 ) 2,213 4,402 726

Income (loss) before income taxes ( 19,805 ) ( 9,359 ) ( 2,798 ) ( 8,612 )

Net income (loss) ( 18,943 ) ( 9,869 ) ( 3,331 ) ( 9,142 )

Income (loss) per share - basic $ ( 0.20 ) $ ( 0.10 ) $ ( 0.04 ) $ ( 0.10 )

(in thousands, except per share data) FY 2023

March 31 December 31 September 30 June 30

As restated As restated As restated As restated

Total revenue $ 109,203 $ 113,475 $ 100,565 $ 98,833

Gross profit 35,642 42,568 29,259 35,807

Income (loss) from operations ( 5,666 ) 4,047 ( 9,741 ) ( 5,319 )

Change in fair value of warrants ( 430 ) 4 3,092 7,582

Income (loss) before income taxes ( 9,800 ) 806 ( 6,963 ) ( 469 )

Net income (loss) ( 10,176 ) 113 ( 7,424 ) ( 879 )

Income (loss) per share - basic $ ( 0.11 ) $ — $ ( 0.08 ) $ ( 0.01 )

Income (loss) per share - diluted $ ( 0.11 ) $ — $ ( 0.10 ) $ ( 0.07 )

Quarterly Financial Summary

The net impact of the restatement on our quarterly and year-to-date unaudited condensed financial statements is as follows:

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

December 31 September 30 June 30

Current assets:

Cash and cash equivalents $ 24,377 $ 25,574 $ 25,465

Restricted cash 172 180 200

Accounts receivable, net of allowance for credit losses of $ 21 , $ 26 and $ 163 , respectively

Loss from operations

( 41,680 ) ( 28,877 )

Manufacturing inventories 20,409 21,376 20,017

Service parts inventories 25,423 25,880 25,276

Prepaid expenses 3,763 4,149 6,444

Other current assets 7,224 5,389 6,004

Total current assets 141,388 134,077 149,651

Property and equipment, net 13,251 14,621 15,583

Intangible assets, net 1,986 2,819 3,801

Goodwill 12,969 12,969 12,969

Right-of-use assets, net 9,625 9,844 10,017

Other long-term assets 19,986 20,475 18,463

Total assets $ 199,205 $ 194,805 $ 210,484

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 22,426 $ 26,946 $ 30,560

Accrued compensation 15,286 13,746 14,894

Deferred revenue, current portion 73,240 70,696 76,688

Term debt, current portion 82,587 82,681 5,000

Revolving credit facility 32,000 21,450 17,800

Warrant liabilities 1,843 4,056 8,457

Other accrued liabilities 13,854 11,724 12,715

Total current liabilities 241,236 231,299 166,114

Deferred revenue, net of current portion 37,281 35,337 35,685

Term debt, net of current portion — — 77,814

Operating lease liabilities 9,885 10,079 10,001

Other long-term liabilities 12,734 12,522 12,191

Total liabilities 301,136 289,237 301,805

Stockholders’ deficit

Preferred stock:

Preferred stock, 20,000 shares authorized;

no shares issued

Common stock:

Common stock, $ 0.01 par value;

225,000 shares authorized;

95,850 , 95,519 and 93,705 shares issued and outstanding, respectively

Additional paid-in capital 706,133 705,229 704,309

Accumulated deficit ( 808,436 ) ( 798,566 ) ( 795,236 )

Accumulated other comprehensive loss ( 587 ) ( 2,052 ) ( 1,332 )

Total stockholders' deficit ( 101,931 ) ( 94,433 ) ( 91,321 )

Total liabilities and stockholders' deficit $ 199,205 $ 194,804 $ 210,484

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

December 31 September 30 June 30

As restated As restated As restated

Current assets:

Cash and cash equivalents $ 26,028 $ 25,698 $ 26,528

Restricted cash 219 223 255

Accounts receivable, net of allowance for credit losses of $ 219 , $ 195 and $ 195 respectively

Other expense, net

( 710 ) ( 1,746 )

Manufacturing inventories 32,402 23,671 32,642

Service parts inventories 25,822 25,458 25,129

Prepaid expenses 7,198 9,241 10,715

Other current assets 7,489 4,839 4,574

Total current assets 172,069 150,439 164,752

Property and equipment, net 16,794 15,973 14,093

Intangible assets, net 6,497 7,245 8,420

Goodwill 12,969 12,969 12,969

Right-of-use assets, net 10,468 10,579 10,641

Other long-term assets 13,600 12,477 10,796

Total assets $ 232,397 $ 209,682 $ 221,671

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 41,788 $ 34,263 $ 33,867

Accrued compensation 15,527 13,192 14,531

Deferred revenue, current portion 70,876 69,499 74,130

Term debt, current portion 5,000 5,000 5,000

Warrant liabilities 7,559 7,563 10,655

Other accrued liabilities 15,852 14,502 14,157

Total current liabilities 156,602 144,019 152,340

Deferred revenue, net of current portion 36,220 36,480 37,391

Revolving credit facility 27,736 21,500 17,300

Term debt, net of current portion 67,306 68,250 69,195

Operating lease liabilities 10,346 10,315 9,932

Other long-term liabilities 12,150 11,653 12,013

Total liabilities 310,360 292,217 298,171

Stockholders’ deficit

Preferred stock:

Preferred stock, 20,000 shares authorized;

no shares issued

Common stock:

Common stock, $ 0.01 par value;

225,000 shares authorized;

93,144 , 92,158 and 90,606 shares issued and outstanding, respectively

Additional paid-in capital 699,536 696,567 693,895

Accumulated deficit ( 775,914 ) ( 776,027 ) ( 768,603 )

Accumulated other comprehensive loss ( 2,517 ) ( 3,997 ) ( 2,699 )

Total stockholders' deficit ( 77,963 ) ( 82,535 ) ( 76,500 )

Total liabilities and stockholders' deficit $ 232,397 $ 209,682 $ 221,671

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

June 30, 2023

As previously reported Restatement adjustments Reference As restated

Current assets:

Cash and cash equivalents $ 25,465 $ — $ 25,465

Restricted cash 200 — 200

Accounts receivable, net of allowance for credit losses of $ 163

Interest expense ( 23,607 ) ( 15,089 )

Change in fair value of warrant liability ( 45,270 ) 5,137

Loss on debt extinguishment, net ( 3,003 ) —

Net loss before income taxes

( 114,270 ) ( 40,575 )

Manufacturing inventories 20,017 — 20,017

Service parts inventories 25,276 — 25,276

Prepaid expenses 6,444 — 6,444

Other current assets 6,004 — 6,004

Total current assets 149,651 — 149,651

Property and equipment, net 15,583 — 15,583

Intangible assets, net 3,801 — 3,801

Goodwill 12,969 — 12,969

Right-of-use assets, net 10,017 — 10,017

Other long-term assets 18,463 — 18,463

Total assets $ 210,484 $ — $ 210,484

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 30,560 $ — $ 30,560

Accrued compensation 14,894 — 14,894

Deferred revenue, current portion 79,686 ( 2,998 ) (a) 76,688

Term debt, current portion 5,000 — 5,000

Revolving credit facility 17,800 — 17,800

Warrant liabilities — 8,457 (b) 8,457

Other accrued liabilities 12,715 — 12,715

Total current liabilities 160,655 5,459 166,114

Deferred revenue, net of current portion 43,903 ( 8,218 ) 35,685

Term debt, net of current portion 77,814 — 77,814

Operating lease liabilities 10,001 — 10,001

Other long-term liabilities 12,191 — 12,191

Total liabilities 304,564 ( 2,759 ) 301,805

Stockholders’ deficit

Preferred stock:

Preferred stock, 20,000 shares authorized;

no shares issued

Common stock:

Common stock, $ 0.01 par value;

225,000 shares authorized;

93,705 shares issued and outstanding

Additional paid-in capital 725,736 ( 21,427 ) (b) 704,309

Accumulated deficit ( 819,422 ) 24,186 (a) (b) ( 795,236 )

Accumulated other comprehensive loss ( 1,332 ) — ( 1,332 )

Total stockholders' deficit ( 94,080 ) 2,759 ( 91,321 )

Total liabilities and stockholders' deficit $ 210,484 $ — $ 210,484

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

Income tax provision 821 711

$ ( 115,091 ) $ ( 41,286 )

1 Salaries & fringe includes spend on contractors.

2 Outside services includes contractor, recruiting and legal expenses.

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

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

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

Long-lived assets

The following table summarizes property and equipment, net by geographic region (in thousands):

For the year ended March 31,

United States $ 11,160 $ 11,759

International 218 269

Total $ 11,378 $ 12,028

SUBSEQUENT EVENTS

On April 2, 2025, certain entities affiliated with Blue Torch Finance, LLC (“Blue Torch”), fully assigned their rights and obligations in an aggregate amount of approximately $ 37.8 million in the 2021 Term Loan and $ 13.5 million in the August 2024 Term Loan, to Dialectic Technology SPV LLC ("Dialectic").

Effective April 3, 2025, John Fichthorn was appointed as a director of the Company.

Fichthorn is the Managing Partner of Dialectic Capital Management, an investment advisor to Dialectic.

On April 18, 2025, the Company filed a registration statement on Form S-3 related to the resale, from time to time, of up to 17,550,626 shares of Common Stock in connection with the SEPA.

The Registration Statement on Form S-3 was declared effective April 28, 2025.

During the period from April 1, 2025 through July 31, 2025, the Company issued approximately 6.3 million shares of Common Stock under the SEPA for net proceeds of approximately $ 66.3 million.

On July 4, 2025, President Trump signed into law the legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA includes various provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others being implemented through 2027.

While there is no impact to the Company's fiscal year 2025 consolidated financial statements, the Company is assessing its impact on the consolidated financial statements that would take effect beginning in the period in which the OBBBA was signed into law.

On August 13, 2025, the Company terminated the PNC Credit Facility.

As of the date of termination, there were no amounts drawn under the PNC Credit Facility and the Company paid an exit fee of $ 1.2 million in connection with the termination.

On August 13, 2025, the Company obtained waivers to certain covenants including the net leverage covenant under the Term Loan for the quarter ended June 30, 2025.

Additionally, the requirement to use certain proceeds of the SEPA to pay down the Term Loan was waived.

RESTATEMENT OF UNAUDITED QUARTERLY FINANCIAL STATEMENTS

The unaudited condensed consolidated financial statements for three and nine-months ended December 31, 2024 are being restated for the following.

Service contract term - The Company identified that there were inconsistencies in the period used to recognize service and subscription revenue, which is deferred under Topic 606 and recognized ratably over the contractual term of the contract.

The Company’s management reviewed and updated the periods over which revenue was being recognized to ensure consistent application for all service contracts invoiced in the fiscal year ended March 31, 2025 and the results have been applied to revenue.

Application of Topic 606 related to standalone selling price - The Company also determined that the standalone selling price that was being used for the fiscal year ended March 31, 2025 needed to be updated resulting in an adjustment to revenue.

Standalone selling price has now been refreshed for all goods and services sold in a bundled contract under Topic 606, maximizing the use of observable inputs.

The following tables present the impact of the restatement for three and nine-months ended December 31, 2024:

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts, unaudited)

December 31, 2024

As previously reported Restatement adjustments Reference As restated

As previously report Restatement adjustments Reference As restated

Current assets:

9 unchanged sentences

Property and equipment, net 11,268 — 11,268

Intangible assets, net 6,497 — 6,497

Goodwill 12,969 — 12,969

Right-of-use assets, net 10,468 — 10,468

Other long-term assets 13,600 — 13,600

Total assets $ 232,397 $ — $ 232,397

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 41,788 $ — $ 41,788

Accrued compensation 15,527 — 15,527

Deferred revenue, current portion 72,669 ( 1,793 ) (a) 70,876

Term debt, current portion 5,000 — 5,000

Warrant liabilities — 7,559 (b) 7,559

Other accrued liabilities 15,852 — 15,852

Total current liabilities 150,836 5,766 156,602

Deferred revenue, net of current portion 41,076 ( 4,856 ) 36,220

Revolving credit facility 27,736 — 27,736

Term debt, net of current portion 67,306 — 67,306

Operating lease liabilities 10,346 — 10,346

Other long-term liabilities 12,150 — 12,150

Total liabilities 309,450 910 310,360

Stockholders’ deficit

Preferred stock:

Preferred stock, 20,000 shares authorized;

no shares issued

Common stock:

Common stock, $ 0.01 par value;

225,000 shares authorized;

93,144 shares issued and outstanding

Additional paid-in capital 719,769 ( 20,233 ) (b) 699,536

Accumulated deficit ( 795,237 ) 19,323 (a) (b) ( 775,914 )

Accumulated other comprehensive loss ( 2,517 ) — ( 2,517 )

Total stockholders' deficit ( 77,053 ) ( 910 ) ( 77,963 )

Total liabilities and stockholders' deficit $ 232,397 $ — $ 232,397

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

September 30, 2022

As previously reported Restatement adjustments Reference As restated

Current assets:

Cash and cash equivalents $ 25,698 $ — $ 25,698

Restricted cash 223 — 223

Accounts receivable, net of allowance for credit losses of $ 195

61,309 — 61,309

Manufacturing inventories 23,671 — 23,671

Service parts inventories 25,458 — 25,458

Prepaid expenses 9,241 — 9,241

Other current assets 4,839 — 4,839

Total current assets 150,439 — 150,439

Property and equipment, net 15,973 — 15,973

Intangible assets, net 509 — 509

Goodwill 12,969 — 12,969

Right-of-use assets, net 10,579 — 10,579

Right-of-use assets 8,670 — 8,670

Other long-term assets 20,812 — 20,812

4 unchanged sentences

Accrued compensation 11,702 — 11,702

Deferred revenue, current portion 70,184 ( 685 ) (a) 69,499

Term debt, current portion 5,000 — 5,000

Warrant liabilities — 7,563 (b) 7,563

Other accrued liabilities 14,502 — 14,502

Total current liabilities 137,141 6,878 144,019

Deferred revenue, net of current portion 40,165 ( 3,685 ) 36,480

Revolving credit facility 21,500 — 21,500

Term debt, net of current portion 68,250 — 68,250

Operating lease liabilities 10,315 — 10,315

Other long-term liabilities 11,653 — 11,653

Total liabilities 289,024 3,193 292,217

Stockholders’ deficit

Preferred stock:

Preferred stock, 20,000 shares authorized;

no shares issued

Common stock:

Common stock, $ 0.01 par value;

225,000 shares authorized;

92,158 shares issued and outstanding

Additional paid-in capital 716,800 ( 20,233 ) (b) 696,567

Accumulated deficit ( 793,067 ) 17,040 (a) (b) ( 776,027 )

Accumulated other comprehensive loss ( 3,997 ) — ( 3,997 )

Total stockholders' deficit ( 79,342 ) ( 3,193 ) ( 82,535 )

Total liabilities and stockholders' deficit $ 209,682 $ — $ 209,682

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

June 30, 2022

As previously reported Restatement adjustments Reference As restated

Current assets:

Cash and cash equivalents $ 26,528 $ — $ 26,528

Restricted cash 255 — 255

Accounts receivable, net of allowance for credit losses of $ 195

Deferred revenue, current portion 69,916 ( 3,154 ) a, b

98,609 — 98,609

Manufacturing inventories 32,642 — 32,642

Service parts inventories 25,129 — 25,129

Prepaid expenses 10,715 — 10,715

Other current assets 4,574 — 4,574

Total current assets 164,752 — 164,752

Property and equipment, net 14,093 — 14,093

Intangible assets, net 8,420 — 8,420

Goodwill 12,969 — 12,969

Right-of-use assets, net 10,641 — 10,641

Other long-term assets 10,796 — 10,796

Total assets $ 221,671 $ — $ 221,671

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 33,867 $ — $ 33,867

Accrued compensation 14,531 — 14,531

Deferred revenue, current portion 74,267 ( 137 ) (a) 74,130

Term debt, current portion 5,000 — 5,000

Warrant liabilities — 10,655 (b) 10,655

Revolving credit facility 37,500 — 37,500

Warrant liabilities 34,005 — 34,005

Other accrued liabilities 19,108 — 19,108

Total current liabilities 305,544 ( 3,154 ) 302,390

Deferred revenue, net of current portion 40,196 ( 2,805 ) 37,391

Revolving credit facility 17,300 — 17,300

Term debt, net of current portion 69,195 — 69,195

Deferred revenue, net of current portion 35,350 4,721 a, b

Operating lease liabilities 9,067 — 9,067

1 unchanged sentence

Total liabilities 363,111 1,567 364,678

Commitments and contingencies

Stockholders' deficit

Preferred stock:

Preferred stock, 20,000 shares authorized;

no shares issued as of June 30, 2022

Common stock:

no shares issued and outstanding

Common stock, $ 0.01 par value;

225,000 shares authorized;

90,606 shares issued and outstanding at June 30, 2022

Additional paid-in capital 714,128 ( 20,233 ) (b) 693,895

5,307 and 4,792 shares issued and outstanding

Additional paid-in capital 740,521 — 740,521

Accumulated deficit ( 933,160 ) ( 1,567 ) a, b

2 unchanged sentences

Total liabilities and stockholders’ deficit $ 168,056 — $ 168,056

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

3 Months Ended 9 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended

December 31 September 30 June 30

Product $ 37,113 $ 138,635 $ 42,947 $ 101,522 $ 58,577

Service and subscription 32,771 94,229 30,505 61,458 30,953

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts, unaudited)

Three Months Ended December 31

Nine Months Ended December 31

As previously report Adjustments Reference As restated As previously report Adjustments Reference As restated

Product $ 38,610 $ 24 b

$ 38,634 $ 116,389 $ 4,176 b

Service and subscription 31,615 ( 3,891 ) a, b

27,724 90,383 ( 5,743 ) a, b

Royalty 2,326 — 2,326 7,592 — 7,592

15 unchanged sentences

Change in fair value of warrant liabilities ( 61,630 ) — ( 61,630 ) ( 56,414 ) — ( 56,414 )

Loss on debt extinguishment — — — ( 3,003 ) — ( 3,003 )

Net loss before income taxes ( 71,363 ) ( 3,867 ) ( 75,230 ) ( 105,105 ) ( 1,567 ) ( 106,672 )

( 9,359 ) ( 20,769 ) ( 2,798 ) ( 11,410 ) ( 8,612 )

Income tax provision 70 — 70 675 — 675

Net loss $ ( 71,433 ) $ ( 3,867 ) $ ( 75,300 ) $ ( 105,780 ) $ ( 1,567 ) $ ( 107,347 )

Net loss per share - basic $ ( 0.10 ) $ ( 0.24 ) $ ( 0.04 ) $ ( 0.13 ) $ ( 0.10 )

Net loss per share - diluted $ ( 0.10 ) $ ( 0.24 ) $ ( 0.04 ) $ ( 0.13 ) $ ( 0.10 )

Weighted average shares - basic 95,806 94,834 95,010 94,345 93,673

Weighted average shares - diluted 95,806 94,834 95,010 94,345 93,711

Net loss $ ( 9,869 ) $ ( 22,342 ) $ ( 3,331 ) $ ( 12,473 ) $ ( 9,142 )

Foreign currency translation adjustments, net 1,465 994 ( 720 ) ( 471 ) 249

Total comprehensive loss $ ( 8,404 ) $ ( 21,348 ) $ ( 4,051 ) $ ( 12,944 ) $ ( 8,893 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share amounts)

3 Months Ended 9 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended

December 31 September 30 June 30

As restated As restated As restated As restated As restated

Product $ 77,494 $ 203,192 $ 64,110 $ 125,698 $ 61,588

Service and subscription 33,155 99,937 32,977 66,782 33,805

Royalty 2,826 9,744 3,478 6,918 3,440

Total revenue 113,475 312,873 100,565 199,398 98,833

Cost of revenue

Product 58,528 163,010 56,561 104,482 47,921

Service and subscription 12,379 42,229 14,745 29,850 15,105

Total cost of revenue 70,907 205,239 71,306 134,332 63,026

Gross profit 42,568 107,634 29,259 65,066 35,807

Operating expenses

Sales and marketing 16,339 47,894 15,593 31,555 15,962

General and administrative 10,969 35,223 11,940 24,254 12,314

Research and development 11,254 33,925 10,546 22,671 12,125

Restructuring charges ( 41 ) 1,605 921 1,646 725

Total operating expenses 38,521 118,647 39,000 80,126 41,126

Income (loss) from operations 4,047 ( 11,013 ) ( 9,741 ) ( 15,060 ) ( 5,319 )

Other income (expense), net ( 544 ) 2,638 2,431 3,182 751

Interest expense ( 2,701 ) ( 7,537 ) ( 2,745 ) ( 4,836 ) ( 2,091 )

Change in fair value of warrant liability 4 10,678 3,092 10,675 7,582

Loss on debt extinguishment, net — ( 1,392 ) — ( 1,392 ) ( 1,392 )

Net income (loss) before income taxes 806 ( 6,626 ) ( 6,963 ) ( 7,431 ) ( 469 )

Income tax provision 693 1,564 461 872 410

Net income (loss) $ 113 $ ( 8,190 ) $ ( 7,424 ) $ ( 8,303 ) $ ( 879 )

Net income (loss) per share - basic and diluted $ 0.00 $ ( 0.10 ) $ ( 0.08 ) $ ( 0.09 ) $ ( 0.01 )

Net income (loss) per share - basic and diluted $ 0.00 $ ( 0.18 ) $ ( 0.10 ) $ ( 0.18 ) $ ( 0.07 )

Weighted average shares - basic and diluted 92,752 89,335 91,550 87,617 83,641

Weighted average shares - basic and diluted 92,752 90,440 92,773 89,315 85,756

Net income (loss) $ 113 $ ( 8,190 ) $ ( 7,424 ) $ ( 8,303 ) $ ( 879 )

Foreign currency translation adjustments, net 1,480 ( 1,094 ) ( 1,298 ) ( 2,574 ) ( 1,276 )

Total comprehensive income (loss) $ 1,593 $ ( 9,284 ) $ ( 8,722 ) $ ( 10,877 ) $ ( 2,155 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

Three Months Ended

As previously reported Adjustments Reference As restated

Product $ 57,447 $ 1,130 (a) $ 58,577

Service and subscription 31,375 ( 422 ) (a) 30,953

Royalty 2,965 — 2,965

Total revenue 91,787 708 92,495

Cost of revenue

Product 44,451 — 44,451

Service and subscription 12,403 — 12,403

Total cost of revenue 56,854 — 56,854

Gross profit 34,933 708 35,641

Operating expenses

Sales and marketing 15,839 — 15,839

General and administrative 12,699 — 12,699

Research and development 10,913 — 10,913

Restructuring charges 1,329 — 1,329

Total operating expenses 40,780 — 40,780

Income (loss) from operations ( 5,847 ) 708 ( 5,139 )

Other expense, net ( 998 ) — ( 998 )

Interest expense ( 3,201 ) — ( 3,201 )

Change in fair value of warrant liabilities — 726 (b) 726

Net income (loss) before income taxes ( 10,046 ) 1,434 ( 8,612 )

Income tax provision 530 — 530

Net income (loss) from operations $ ( 10,576 ) $ 1,434 $ ( 9,142 )

Net income (loss) per share - basic and diluted $ ( 0.11 ) $ 0.01 $ ( 0.10 )

Weighted average shares - basic and diluted 93,673 93,673 93,673

Weighted average shares - basic and diluted 93,673 93,711 93,711

Net income (loss) $ ( 10,576 ) $ 1,434 $ ( 9,142 )

Foreign currency translation adjustments, net 249 — 249

Total comprehensive income (loss) $ ( 10,327 ) $ 1,434 $ ( 8,893 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share amounts)

Three Months Ended

As previously reported Adjustments Reference As restated

Product $ 75,420 $ 2,074 (a) $ 77,494

Service and subscription 32,950 205 (a) 33,155

Royalty 2,826 — 2,826

Total revenue 111,196 2,279 113,475

Cost of revenue

Product 58,528 — 58,528

Service and subscription 12,379 — 12,379

Total cost of revenue 70,907 — 70,907

Gross profit 40,289 2,279 42,568

Operating expenses

Sales and marketing 16,339 — 16,339

General and administrative 10,969 — 10,969

Research and development 11,254 — 11,254

Restructuring charges ( 41 ) — ( 41 )

Total operating expenses 38,521 — 38,521

Income from operations 1,768 2,279 4,047

Other expense, net ( 544 ) — ( 544 )

Interest expense ( 2,701 ) — ( 2,701 )

Change in fair value of warrant liability — 4 (b) 4

Net income (loss) before income taxes ( 1,477 ) 2,283 806

Income tax provision 693 — 693

Net income (loss) $ ( 2,170 ) $ 2,283 $ 113

Net income (loss) per share - basic $ ( 0.02 ) $ 0.02 $ 0.00

Net income (loss) per share - diluted $ ( 0.02 ) $ 0.02 $ 0.00

Weighted average shares - basic 92,752 92,752 92,752

Weighted average shares - diluted 92,752 92,752 92,752

Net income (loss) $ ( 2,170 ) $ 2,283 $ 113

Foreign currency translation adjustments, net 1,480 — 1,480

Total comprehensive income (loss) $ ( 690 ) $ 2,283 $ 1,593

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

Three Months Ended

Net loss per share - basic and diluted

$ ( 14.56 ) $ ( 0.79 ) $ ( 15.35 ) $ ( 21.90 ) $ ( 0.32 ) $ ( 22.22 )

As previously reported Adjustments Reference As restated As previously reported Adjustments Reference As restated

Product $ 62,967 $ 1,143 (a) $ 64,110 $ 60,211 $ 1,377 (a) $ 61,588

Service and subscription 32,692 285 (a) 32,977 33,423 382 (a) 33,805

Royalty 3,478 — 3,478 3,440 — 3,440

Total revenue 99,137 1,428 100,565 97,074 1,759 98,833

Cost of revenue

Product 56,561 — 56,561 47,921 — 47,921

Service and subscription 14,745 — 14,745 15,105 — 15,105

Total cost of revenue 71,306 — 71,306 63,026 — 63,026

Gross profit 27,831 1,428 29,259 34,048 1,759 35,807

Operating expenses

Sales and marketing 15,593 — 15,593 15,962 — 15,962

General and administrative 11,940 — 11,940 12,314 — 12,314

Research and development 10,546 — 10,546 12,125 — 12,125

Restructuring charges 921 — 921 725 — 725

Total operating expenses 39,000 — 39,000 41,126 — 41,126

Income (loss) from operations ( 11,169 ) 1,428 ( 9,741 ) ( 7,078 ) 1,759 ( 5,319 )

Other income, net 2,431 — 2,431 751 — 751

Interest expense ( 2,745 ) — ( 2,745 ) ( 2,091 ) — ( 2,091 )

Change in fair value of warrant liability — 3,092 (b) 3,092 — 7,582 (b) 7,582

Loss on debt extinguishment, net — — — ( 1,392 ) — ( 1,392 )

Net income (loss) before income taxes ( 11,483 ) 4,520 ( 6,963 ) ( 9,810 ) 9,341 ( 469 )

Income tax provision 461 — 461 410 — 410

Net income (loss) $ ( 11,944 ) $ 4,520 $ ( 7,424 ) $ ( 10,220 ) $ 9,341 $ ( 879 )

Deemed dividend on warrants — — — ( 389 ) 389 (b) —

Net income (loss) attributable to common stockholders $ ( 11,944 ) $ 4,520 $ ( 7,424 ) $ ( 10,609 ) $ 9,730 $ ( 879 )

Net income (loss) per share attributable to common stockholders - basic and diluted $ ( 0.13 ) $ 0.05 $ ( 0.08 ) $ ( 0.12 ) $ 0.11 $ ( 0.01 )

Net income (loss) per share attributable to common stockholders - basic and diluted $ ( 0.13 ) $ 0.03 $ ( 0.10 ) $ ( 0.12 ) $ 0.05 $ ( 0.07 )

Weighted average shares - basic and diluted

Weighted average shares - basic and diluted 91,550 92,773 92,773 83,641 85,756 85,756

Net income (loss) attributable to common stockholders $ ( 11,944 ) $ 4,520 $ ( 7,424 ) $ ( 10,220 ) $ 9,341 $ ( 879 )

Foreign currency translation adjustments, net ( 1,298 ) — ( 1,298 ) ( 1,276 ) — ( 1,276 )

Total comprehensive income (loss) $ ( 13,242 ) $ 4,520 $ ( 8,722 ) $ ( 11,496 ) $ 9,341 $ ( 2,155 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

Nine Months Ended Six Months Ended

December 31 September 30

As previously reported Adjustments Reference As restated As previously reported Adjustments Reference As restated

Product $ 198,597 $ 4,595 (a) $ 203,192 $ 123,178 $ 2,520 (a) $ 125,698

Service and subscription 99,066 871 (a) 99,937 66,116 666 (a) 66,782

Royalty 9,744 — 9,744 6,918 — 6,918

Total revenue 307,407 5,466 312,873 196,212 3,186 199,398

Cost of revenue

Product 163,010 — 163,010 104,482 — 104,482

Service and subscription 42,229 — 42,229 29,850 — 29,850

Total cost of revenue 205,239 — 205,239 134,332 — 134,332

Gross profit 102,168 5,466 107,634 61,880 3,186 65,066

Operating expenses

Sales and marketing 47,894 — 47,894 31,555 — 31,555

General and administrative 35,223 — 35,223 24,254 — 24,254

Research and development 33,925 — 33,925 22,671 — 22,671

Restructuring charges 1,605 — 1,605 1,646 — 1,646

Total operating expenses 118,647 — 118,647 80,126 — 80,126

Income (loss) from operations ( 16,479 ) 5,466 ( 11,013 ) ( 18,246 ) 3,186 ( 15,060 )

Other income, net 2,638 — 2,638 3,182 — 3,182

Interest expense ( 7,537 ) — ( 7,537 ) ( 4,836 ) — ( 4,836 )

Change in fair value of warrant liability — 10,678 (b) 10,678 — 10,675 (b) 10,675

Loss on debt extinguishment, net ( 1,392 ) — ( 1,392 ) ( 1,392 ) — ( 1,392 )

Net income (loss) from operations before income taxes ( 22,770 ) 16,144 ( 6,626 ) ( 21,292 ) 13,861 ( 7,431 )

Income tax provision 1,564 — 1,564 872 — 872

Net income (loss) from operations $ ( 24,334 ) $ 16,144 $ ( 8,190 ) $ ( 22,164 ) $ 13,861 $ ( 8,303 )

Deemed dividend on warrants ( 389 ) 389 (b) — ( 389 ) 389 (b) —

Net income (loss) attributable to common stockholders $ ( 24,723 ) $ 16,533 $ ( 8,190 ) $ ( 22,553 ) $ 14,250 $ ( 8,303 )

Net income (loss) per share attributable to common stockholders - basic $ ( 0.28 ) $ 0.18 $ ( 0.10 ) $ ( 0.25 ) $ 0.16 $ ( 0.09 )

Net income (loss) per share attributable to common stockholders - diluted $ ( 0.28 ) $ 0.10 $ ( 0.18 ) $ ( 0.25 ) $ — $ ( 0.18 )

Weighted average shares - basic 89,335 89,335 89,335 87,617 87,617 87,617

Weighted average shares - diluted 89,335 89,335 90,440 87,617 87,617 89,315

Net income (loss) $ ( 24,334 ) $ 16,144 $ ( 8,190 ) $ ( 22,164 ) $ 13,861 $ ( 8,303 )

Foreign currency translation adjustments, net ( 1,094 ) — ( 1,094 ) ( 2,574 ) — ( 2,574 )

Total comprehensive income (loss) $ ( 25,428 ) $ 16,144 $ ( 9,284 ) $ ( 24,738 ) $ 13,861 $ ( 10,877 )

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

9 months ended 6 months ended 3 months ended

4,907 — 4,907 4,831 — 4,831

Net loss $ ( 71,433 ) $ ( 3,867 ) $ ( 75,300 ) $ ( 105,780 ) $ ( 1,567 ) $ ( 107,347 )

Foreign currency translation adjustments, net ( 1,077 ) — ( 1,077 ) ( 276 ) — ( 276 )

Total comprehensive loss $ ( 72,510 ) $ ( 3,867 ) $ ( 76,377 ) $ ( 106,056 ) $ ( 1,567 ) $ ( 107,623 )

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

Nine Months Ended December 31, 2024

As previously reported Restatement adjustments Reference As restated

Operating activities

Net loss $ ( 105,780 ) $ ( 1,567 ) $ ( 107,347 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

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

Depreciation and amortization 4,440 — 4,440

Amortization of debt issuance costs 3,704 — 3,704

Provision for manufacturing and service inventories 3,328 892 516

Gain on PPP loan extinguishment — —

Stock-based compensation 3,741 2,831 1,901

Change in fair value of warrant liabilities ( 6,146 ) ( 3,933 ) 469

Other non-cash 3,010 826 750

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable 12,616 21,109 6,255

Manufacturing inventories ( 3,099 ) ( 2,070 ) ( 692 )

Service parts inventories ( 1,520 ) ( 1,505 ) ( 516 )

Accounts payable ( 13,226 ) ( 9,073 ) ( 5,421 )

Prepaid expenses 394 8 ( 2,287 )

Deferred revenue ( 4,780 ) ( 9,268 ) ( 2,929 )

Accrued restructuring charges — — 110

Accrued compensation ( 425 ) ( 1,946 ) ( 816 )

Other assets ( 3,230 ) ( 2,240 ) ( 1,422 )

Other liabilities 2,605 162 508

Net cash used in operating activities

( 19,533 ) ( 10,151 ) ( 9,444 )

Investing activities

Purchases of property and equipment ( 5,025 ) ( 3,925 ) ( 2,299 )

Net cash used in investing activities

( 5,025 ) ( 3,925 ) ( 2,299 )

Financing activities

Borrowings of long-term debt, net of debt issuance costs 12,889 12,889 12,889

Repayments of long-term debt ( 4,497 ) ( 3,247 ) ( 1,997 )

Borrowings of credit facility 318,223 217,084 108,186

Repayments of credit facility ( 303,671 ) ( 213,082 ) ( 107,834 )

Proceeds from issuance of common stock — — ( 9 )

Net cash provided by financing activities 22,944 13,644 11,235

Effect of exchange rate changes on cash and cash equivalents ( 12 ) 11 ( 2 )

Net change in cash, cash equivalents, and restricted cash ( 1,626 ) ( 421 ) ( 510 )

Cash, cash equivalents, and restricted cash at beginning of period 26,175 26,175 26,175

Cash, cash equivalents, and restricted cash at end of period $ 24,549 $ 25,754 $ 25,665

Supplemental disclosure of cash flow information

Cash paid for interest $ 9,154 $ 6,079 $ 2,665

Cash paid for income taxes, net of refunds $ 1,136 $ 831 $ 307

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 164 $ 689 $ 977

Transfer of manufacturing inventory to services inventory $ 75 $ ( 218 ) $ ( 226 )

Transfer of manufacturing inventory to property and equipment $ 205 $ 172 $ 143

Paid-in-kind interest $ 1,401 $ 777 $ 191

Cash and cash equivalents $ 24,377 $ 25,574 $ 25,465

Restricted cash, current 172 180 200

Total cash, cash equivalents and restricted cash at the end of period $ 24,549 $ 25,754 $ 25,665

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

9 months ended 6 months ended 3 months ended

12/31/2022 9/30/2022 6/30/2022

As restated As restated As restated

Operating activities

Net income (loss)

Non-cash lease expense

1,342 — 1,342

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization 7,235 5,133 2,586

Amortization of debt issuance costs 1,201 768 336

Long-term debt related costs 992 992 —

Provision for manufacturing and service inventories 11,334 9,946 1,631

Gain on PPP loan extinguishment — — —

Loss on debt extinguishment 3,003 — 3,003

Provision for product and service inventories 1,165 — 1,165

Stock-based compensation 2,376 — 2,376

Change in fair value of warrant liabilities ( 10,678 ) ( 10,675 ) ( 7,582 )

Non-cash loss on debt extinguishment — — 992

Other non-cash ( 3,193 ) ( 2,918 ) ( 1,469 )

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable ( 3,367 ) 8,264 4,677

Manufacturing inventories ( 9,352 ) 416 ( 412 )

Service parts inventories ( 2,671 ) ( 1,971 ) ( 1,384 )

Accounts payable 7,015 293 ( 175 )

Prepaid expenses 654 ( 1,208 ) —

Deferred revenue ( 19,817 ) ( 20,933 ) ( 15,393 )

Accrued restructuring charges 130 115 39

Accrued compensation ( 614 ) ( 2,949 ) ( 1,610 )

Other assets ( 1,455 ) ( 835 ) ( 3,000 )

Other liabilities 2,840 573 228

Net cash used in operating activities

( 19,596 ) ( 17,935 ) ( 18,346 )

Investing activities

Purchases of property and equipment ( 10,644 ) ( 7,795 ) ( 3,036 )

Business acquisitions ( 2,000 ) ( 2,000 ) ( 2,000 )

Net cash used in investing activities

( 12,644 ) ( 9,795 ) ( 5,036 )

Financing activities

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

Repayments of long-term debt ( 23,346 ) ( 22,096 ) ( 20,846 )

Borrowings of credit facility 363,103 229,605 109,740

Repayments of credit facility ( 353,502 ) ( 226,240 ) ( 110,575 )

Proceeds from issuance of common stock 66,718 66,723 66,324

Net cash provided by financing activities 52,973 47,992 44,643

Effect of exchange rate changes on cash and cash equivalents 21 166 29

Net change in cash, cash equivalents, and restricted cash 20,754 20,428 21,290

Cash, cash equivalents, and restricted cash at beginning of period 5,493 5,493 5,493

Cash, cash equivalents, and restricted cash at end of period $ 26,247 $ 25,921 $ 26,783

Supplemental disclosure of cash flow information

Cash paid for interest $ 6,270 $ 4,114 $ 1,863

Cash paid for income taxes, net of refunds $ 837 $ 465 $ 115

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 1,198 $ 548 $ 133

Transfer of manufacturing inventory to services inventory $ 2,308 $ 1,905 $ 890

Transfer of manufacturing inventory to property and equipment $ 264 $ 279 $ 193

Paid in kind interest 3,515 — 3,515

Cash and cash equivalents $ 26,028 $ 25,698 $ 26,528

Restricted cash, current 219 223 255

Total cash, cash equivalents and restricted cash at the end of period $ 26,247 $ 25,921 $ 26,783

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended June 30, 2023

As previously reported Restatement adjustments Reference As restated

Operating activities

Net income (loss)

$ ( 10,576 ) $ 1,434 (a) (b) $ ( 9,142 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization 2,752 — 2,752

Amortization of debt issuance costs 520 — 520

Long-term debt related costs — — —

Provision for manufacturing and service inventories 516 — 516

Gain on PPP loan extinguishment — — —

Stock-based compensation 1,901 — 1,901

Change in fair value of warrant liabilities — 469 (b) 469

Non-cash income tax benefit — — —

Non-cash loss on debt extinguishment — — —

Change in fair value of warrant liabilities 56,408 — 56,408

Other non-cash ( 281 ) — ( 281 )

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable 6,255 — 6,255

Changes in assets and liabilities:

Accounts receivable, net 6,337 — 6,337

Manufacturing inventories ( 2,347 ) — ( 2,347 )

Service parts inventories 7,972 — 7,972

Accounts payable ( 5,421 ) — ( 5,421 )

Prepaid expenses ( 382 ) — ( 382 )

Deferred revenue ( 2,221 ) ( 708 ) (a) ( 2,929 )

Accrued restructuring charges 110 — 110

Accrued compensation ( 816 ) — ( 816 )

Other assets ( 1,422 ) — ( 1,422 )

Other liabilities 508 — 508

Net cash used in operating activities

( 10,655 ) 1,211 ( 9,444 )

Investing activities

Purchases of property and equipment ( 2,299 ) — ( 2,299 )

Net cash used in investing activities

Operating lease liabilities

( 813 ) — ( 813 )

Financing activities

Borrowings of long-term debt, net of debt issuance costs 14,100 ( 1,211 ) 12,889

Repayments of long-term debt ( 1,997 ) — ( 1,997 )

Borrowings of credit facility 108,186 — 108,186

Repayments of credit facility ( 107,834 ) — ( 107,834 )

Proceeds from issuance of common stock ( 9 ) — ( 9 )

Net cash provided by financing activities 12,446 ( 1,211 ) 11,235

Effect of exchange rate changes on cash and cash equivalents ( 2 ) — ( 2 )

Net change in cash, cash equivalents, and restricted cash ( 510 ) — ( 510 )

Cash, cash equivalents, and restricted cash at beginning of period 26,175 — 26,175

Cash, cash equivalents, and restricted cash at end of period $ 25,665 $ — $ 25,665

Supplemental disclosure of cash flow information

Cash paid for interest $ 2,665 $ — $ 2,665

Cash paid for income taxes, net of refunds $ 307 $ — $ 307

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 977 $ — $ 977

Transfer of manufacturing inventory to services inventory $ ( 226 ) $ — $ ( 226 )

Transfer of manufacturing inventory to property and equipment $ 143 $ — $ 143

Paid-in-kind interest $ 191 $ — $ 191

Cash and cash equivalents $ 25,465 $ — $ 25,465

Restricted cash, current 200 — 200

Total cash, cash equivalents and restricted cash at the end of period $ 25,665 $ — $ 25,665

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended December 31, 2022

As previously reported Restatement adjustments Reference As restated

Operating activities

Net income (loss)

$ ( 24,334 ) $ 16,144 (a) (b) $ ( 8,190 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization 7,235 — 7,235

Amortization of debt issuance costs 1,201 — 1,201

Long-term debt related costs 992 — 992

Provision for manufacturing and service inventories 11,334 — 11,334

Stock-based compensation 8,340 — 8,340

Change in fair value of warrant liabilities — ( 10,678 ) (b) ( 10,678 )

Other non-cash ( 3,193 ) — ( 3,193 )

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable ( 3,367 ) — ( 3,367 )

Manufacturing inventories ( 9,352 ) — ( 9,352 )

Service parts inventories ( 2,671 ) — ( 2,671 )

Accounts payable 9,406 — 9,406

Prepaid expenses 654 — 654

Deferred revenue ( 14,351 ) ( 5,466 ) (a) ( 19,817 )

Accrued restructuring charges 130 — 130

Accrued compensation ( 6,512 ) — ( 6,512 )

Other assets ( 1,455 ) — ( 1,455 )

Other liabilities 2,840 — 2,840

Deferred revenue ( 11,421 ) 1,567 a, b

Other current assets 1,243 — 1,243

Other current liabilities 6,280 — 6,280

Net cash used in operating activities ( 20,345 ) — ( 20,345 )

( 19,596 ) — ( 19,596 )

Investing activities

Purchases of property and equipment ( 4,324 ) — ( 4,324 )

Business acquisitions ( 2,000 ) — ( 2,000 )

Net cash used in investing activities ( 4,324 ) — ( 4,324 )

( 12,644 ) — ( 12,644 )

Financing activities

3 unchanged sentences

Repayments of credit facility ( 302,628 ) — ( 302,628 )

Proceeds from issuance of common stock 66,718 — 66,718

Net cash provided by financing activities 19,415 — 19,415

Effect of exchange rate changes on cash and cash equivalents 21 — 21

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 3 ) — ( 3 )

Net change in cash, cash equivalents and restricted cash ( 5,257 ) — ( 5,257 )

1 unchanged sentence

Cash, cash equivalents, and restricted cash at end of period $ 20,603 $ — $ 20,603

Supplemental disclosure of cash flow information

Cash paid for interest $ 6,270 $ — $ 6,270

Cash paid for income taxes, net of refunds $ 837 $ — $ 837

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 1,198 $ — $ 1,198

Transfer of manufacturing inventory to services inventory $ 2,308 $ — $ 2,308

Transfer of manufacturing inventory to property and equipment $ 264 $ — $ 264

Paid-in-kind interest $ 319 $ — $ 319

Deemed dividend $ 389 $ ( 389 ) (b) $ —

1 unchanged sentence

Restricted cash, current 222 — 222

Total cash, cash equivalents and restricted cash at the end of period $ 26,247 $ — $ 26,247

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Six Months Ended September 30, 2022

As previously reported Restatement adjustments Reference As restated

Operating activities

Net income (loss)

$ ( 22,164 ) $ 13,861 (a) (b) $ ( 8,303 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization 5,133 — 5,133

Amortization of debt issuance costs 768 — 768

Long-term debt related costs 992 — 992

Provision for manufacturing and service inventories 9,946 — 9,946

Gain on PPP loan extinguishment — — —

Stock-based compensation 5,357 — 5,357

Change in fair value of warrant liabilities — ( 10,675 ) (b) ( 10,675 )

Other non-cash ( 2,918 ) — ( 2,918 )

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable 8,264 — 8,264

Manufacturing inventories 416 — 416

Service parts inventories ( 1,971 ) — ( 1,971 )

Accounts payable 293 — 293

Prepaid expenses ( 1,208 ) — ( 1,208 )

Deferred revenue ( 17,747 ) ( 3,186 ) (a) ( 20,933 )

Accrued restructuring charges 115 — 115

Accrued compensation ( 2,949 ) — ( 2,949 )

Other assets ( 835 ) — ( 835 )

Other liabilities 573 — 573

Net cash used in operating activities

( 17,935 ) — ( 17,935 )

Investing activities

Purchases of property and equipment ( 7,795 ) — ( 7,795 )

Business acquisitions ( 2,000 ) — ( 2,000 )

Net cash used in investing activities

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

$ 20,603 $ — $ 20,603

Financing activities

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

Repayments of long-term debt ( 22,096 ) — ( 22,096 )

Borrowings of credit facility 229,605 — 229,605

Repayments of credit facility ( 226,240 ) — ( 226,240 )

Proceeds from issuance of common stock 66,723 — 66,723

Net cash provided by financing activities 47,992 — 47,992

Effect of exchange rate changes on cash and cash equivalents 166 — 166

Net change in cash, cash equivalents, and restricted cash 20,428 — 20,428

Cash, cash equivalents, and restricted cash at beginning of period 5,493 — 5,493

Cash, cash equivalents, and restricted cash at end of period $ 25,921 $ — $ 25,921

Supplemental disclosure of cash flow information

Cash paid for interest $ 8,841 $ — $ 8,841

Cash paid for income taxes, net of refunds $ 465 $ — $ 465

Cash paid for income taxes, net $ 1,798 $ — $ 1,798

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 88 $ — $ 88

Transfer of manufacturing inventory to services inventory $ 1,905 $ — $ 1,905

Transfer of manufacturing inventory to property and equipment $ 279 $ — $ 279

Paid-in-kind interest $ 319 $ — $ 319

Deemed dividend $ 389 $ ( 389 ) (b) $ —

Cash and cash equivalents $ 25,698 $ — $ 25,698

Restricted cash, current 223 — 223

Total cash, cash equivalents and restricted cash at the end of period $ 25,921 $ — $ 25,921

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended June 30, 2022

As previously reported Restatement adjustments Reference As restated

Operating activities

Net income (loss)

$ ( 10,220 ) $ 9,341 (a) (b) $ ( 879 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization 2,586 — 2,586

Amortization of debt issuance costs 336 — 336

Long-term debt related costs — —

Provision for manufacturing and service inventories 1,631 — 1,631

Gain on PPP loan extinguishment — — —

Stock-based compensation 3,069 — 3,069

Change in fair value of warrant liabilities — ( 7,582 ) (b) ( 7,582 )

Non-cash income tax benefit — — —

Non-cash loss on debt extinguishment 992 — 992

Other non-cash ( 1,469 ) — ( 1,469 )

Changes in assets and liabilities, net of effect of acquisitions:

Accounts receivable 4,677 — 4,677

Manufacturing inventories ( 412 ) — ( 412 )

Service parts inventories ( 1,384 ) — ( 1,384 )

Accounts payable ( 175 ) — ( 175 )

Prepaid expenses — — —

Deferred revenue ( 13,634 ) ( 1,759 ) (a) ( 15,393 )

Accrued restructuring charges 39 — 39

Accrued compensation ( 1,610 ) — ( 1,610 )

Other assets ( 3,000 ) — ( 3,000 )

Other liabilities 228 — 228

Net cash used in operating activities

( 18,346 ) — ( 18,346 )

Investing activities

Purchases of property and equipment ( 3,036 ) — ( 3,036 )

Business acquisitions ( 2,000 ) — ( 2,000 )

Net cash used in investing activities

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

$ 538 $ — $ 538

Financing activities

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

Repayments of long-term debt ( 20,846 ) — ( 20,846 )

Borrowings of credit facility 109,740 — 109,740

Repayments of credit facility ( 110,575 ) — ( 110,575 )

Borrowings of paycheck protection program — — —

Proceeds from secondary offering, net — — —

Payment of taxes due upon vesting of restricted stock — — —

Proceeds from issuance of common stock 66,324 — 66,324

Net cash provided by financing activities 44,643 — 44,643

Effect of exchange rate changes on cash and cash equivalents 29 — 29

Net change in cash, cash equivalents, and restricted cash 21,290 — 21,290

Cash, cash equivalents, and restricted cash at beginning of period 5,493 — 5,493

Cash, cash equivalents, and restricted cash at end of period $ 26,783 $ — $ 26,783

Supplemental disclosure of cash flow information

Cash paid for interest $ 1,863 $ — $ 1,863

Cash paid for income taxes, net of refunds $ 115 $ — $ 115

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 133 $ — $ 133

Transfer of manufacturing inventory to services inventory $ 890 $ — $ 890

Transfer of manufacturing inventory to property and equipment $ 193 $ — $ 193

Paid-in-kind interest $ 3,515 $ — $ 3,515

Deemed dividend $ 389 $ ( 389 ) (b) $ —

Cash and cash equivalents $ 26,528 $ — $ 26,528

Restricted cash, current 255 — 255

Total cash, cash equivalents and restricted cash at the end of period $ 26,783 $ — $ 26,783

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands)

Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Deficit

Three Months Ended Shares Amount

Balance, March 31, 2023, As restated 93,574 $ 936 $ 702,370 $ ( 786,094 ) $ ( 1,581 ) $ ( 84,369 )

Activity, As reported 131 2 3,133 ( 10,576 ) 249 ( 7,192 )

Adjustments — — ( 1,194 ) 1,434 — 240

Balance, June 30, 2023, As restated 93,705 $ 938 $ 704,309 $ ( 795,236 ) $ ( 1,332 ) $ ( 91,321 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, unaudited)

Common Stock Additional

1 unchanged sentence

Three Months Ended Shares Amount

Balance, June 30, 2023, As Restated 93,705 $ 938 $ 704,309 $ ( 795,236 ) $ ( 1,332 ) $ ( 91,321 )

Net loss — — — ( 3,331 ) — ( 3,331 )

Foreign currency translation adjustments, net — — — — ( 720 ) ( 720 )

Shares issued under employee incentive plans, net 1,814 18 ( 18 ) — — —

Stock-based compensation — — 939 — — 939

Balance, September 30, 2023 95,519 $ 956 $ 705,230 $ ( 798,567 ) $ ( 2,052 ) $ ( 94,433 )

Six Months Ended

Balance, March 31, 2023, As Restated 93,574 $ 936 $ 702,370 $ ( 786,094 ) $ ( 1,581 ) $ ( 84,369 )

Balance, September 30, 2024, As Revised

4,792 $ 48 $ 709,667 $ ( 859,427 ) $ ( 1,392 ) $ ( 151,104 )

Net loss — — — ( 75,300 ) — ( 75,300 )

Foreign currency translation adjustments, net — — — — ( 1,077 ) ( 1,077 )

Warrants issued related to long-term debt — — 49 — — 49

Shares issued under employee incentive plans, net 109 1 ( 1 ) — — —

Warrants exercised related to long-term debt

406 4 30,119 — — 30,123

Stock-based compensation — — 736 — — 736

Balance, September 30, 2023 95,519 $ 956 $ 705,230 $ ( 798,567 ) $ ( 2,052 ) $ ( 94,433 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands)

Balance, December 31, 2024, As Restated

5,307 $ 53 $ 740,521 $ ( 934,727 ) $ ( 2,469 ) $ ( 196,622 )

Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Deficit

Three Months Ended Shares Amount

Balance, September 30, 2023 95,519 $ 956 $ 705,230 $ ( 798,567 ) $ ( 2,052 ) $ ( 94,433 )

Net loss — — — ( 9,869 ) — ( 9,869 )

Foreign currency translation adjustments, net — — — — 1,465 1,465

Shares issued under employee incentive plans, net 331 3 ( 3 ) — — —

Stock-based compensation — — 906 — — 906

Balance, December 31, 2023 95,850 $ 959 $ 706,133 $ ( 808,436 ) $ ( 587 ) $ ( 101,931 )

Nine Months Ended

Nine Months Ended Shares Amount

Balance, March 31, 2024 4,792 $ 48 $ 708,027 $ ( 827,380 ) $ ( 2,193 ) $ ( 121,498 )

2 unchanged sentences

Shares issued under employee incentive plans, net 109 1 ( 1 ) — — —

Warrants issued in connection with debt refinancing — — 49 — — 49

Warrants exercised related to long-term debt

406 4 30,119 — — 30,123

Stock-based compensation — — 2,376 — — 2,376

Balance, December 31, 2023 95,850 $ 959 $ 706,133 $ ( 808,436 ) $ ( 587 ) $ ( 101,931 )

QUANTUM CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands)

Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Total Stockholders' Deficit

Three Months Ended Shares Amount

Balance, March 31, 2022, As restated 60,433 $ 605 $ 624,805 $ ( 767,726 ) $ ( 1,423 ) $ ( 143,739 )

Activity, As reported 30,173 302 69,091 ( 10,219 ) ( 1,276 ) 57,898

Adjustments — — — 9,341 — 9,341

Balance, June 30, 2022, As restated 90,606 $ 907 $ 693,896 $ ( 768,604 ) $ ( 2,699 ) $ ( 76,500 )

Activity, As reported 1,552 15 2,671 ( 11,943 ) ( 1,298 ) ( 10,555 )

Adjustments — — — 4,520 — 4,520

Balance, September 30, 2022, As restated 92,158 $ 922 $ 696,567 $ ( 776,027 ) $ ( 3,997 ) $ ( 82,535 )

Activity, As reported 986 $ 10 $ 2,969 $ ( 2,170 ) $ 1,480 2,289

Adjustments — — — 2,283 — 2,283

Balance, December 31, 2024 As Restated

5,307 $ 53 $ 740,521 $ ( 934,727 ) $ ( 2,469 ) $ ( 196,622 )

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data