What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-06-25 compared with 2025-08-26 · 541 added, 494 removed, 778 unchanged (57% 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 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 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.

We have audited the accompanying consolidated balance sheet of Quantum Corporation and subsidiaries (the “Company”) as of March 31, 2026, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the year then ended, 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, 2026, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

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

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of March 31, 2026, based on criteria established in 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated June 25, 2026, expressed an adverse opinion.

Basis for Opinion

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

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

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

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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 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 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 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

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit 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 audit 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 audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Determination of Standalone Selling Price

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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 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:

Significant judgment is exercised by the Company in determination and allocation of stand-alone selling prices for each distinct performance obligation, for products and services that are not sold separately.

Given these factors, the related audit effort in evaluating management’s judgments in determining and allocating the SSP of performance obligations was challenging, subjective, and complex and required a high degree of auditor judgment.

How our audit addressed the Critical Audit Matter

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

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

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

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

• We tested 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:

• We evaluated the reasonableness of management’s estimate of stand-alone selling prices for products and services that are not sold separately.

• We tested management’s process, including by evaluating key assumptions for performance obligations that do not include directly observable sales.

Specifically, included in our procedures 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

◦ evaluated the appropriateness of the categorization and classification of products and services;

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

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

/s/ CohnReznick LLP

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

Melville, New York

June 25, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Quantum Corporation

Adverse Opinion on Internal Control over Financial Reporting

We have audited Quantum Corporation and subsidiaries (the "Company") internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

In our opinion, because of the effect of the material weaknesses described below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

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

The following material weaknesses have been identified and included in management’s assessment:

Revenue Recognition — The Company did not maintain effective internal control related to revenue recognition for the following:

(i) internal control for reviewing and updating deferred revenue schedules;

(ii) internal control over the accuracy of the inputs into the sales order entry process;

and (iii) internal control over the allocation of revenue to performance obligations on a stand-alone selling price basis.

Inventories — The Company did not maintain effective internal control related to inventories.

Specifically, internal control over the reconciliation of physical inventories with the Company’s underlying system records.

Income taxes – The Company did not maintain effective internal control related to income taxes.

Specifically, the Company did not document and review relevant facts and apply the appropriate tax accounting under accounting standards generally accepted in the United States of America.

Control Environment — The Company did not maintain effective entity-level internal control within the control environment to prevent or detect material misstatements to the consolidated financial statements.

Specifically, the Company (i) did not maintain a sufficient complement of trained, knowledgeable resources to execute their responsibilities with respect to internal control over financial reporting for certain financial statements accounts and disclosures;

and (ii) conducted inadequate monitoring activities resulting in untimely or ineffective identification of internal control risks to support the design implementation and evaluation of the internal control necessary to provide effective oversight over financial reporting.

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

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting

was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

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

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ CohnReznick LLP

Melville, New York

June 25, 2026

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Quantum Corporation.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Quantum Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of March 31, 2025, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the year in the period ended March 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025, and the results of its operations and its cash flows for the year in the period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

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

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

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

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

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

/s/ GRANT THORNTON LLP

We served as the Company’s auditor from 2023 to 2025.

Bellevue, Washington

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69,650 52,502

Manufacturing inventories 20,336 17,753

Service parts inventories 2,098 9,783

Inventories 16,103 22,434

Prepaid expenses 2,431 2,738

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Deferred revenue, net of current portion 39,030 38,847

Convertible note 90,034 —

Operating lease liabilities 8,172 8,934

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Change in fair value of warrant liability 11,315 ( 45,270 )

Change in fair value of convertible note ( 4,119 ) —

Loss on debt extinguishment, net ( 59,641 ) ( 3,003 )

Net loss before income taxes

( 114,270 ) ( 40,575 )

Loss before income taxes ( 100,038 ) ( 114,270 )

Income tax provision 1,008 821

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$ ( 101,046 ) $ ( 115,091 )

Change in fair value of convertible note ( 8,444 ) —

Foreign currency translation adjustments, net 594 583

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Provision for manufacturing and service inventories 5,333 4,877

Bad debt expense 2,733 77

Stock-based compensation ( 849 ) 2,828

Warrants issued in connection with debt amendments 25,420 —

Change in fair value of warrant liabilities ( 11,315 ) 45,270

Change in fair value of convertible note 4,119 —

Non-cash loss on debt extinguishment 34,221 3,003

Other non-cash ( 331 ) 16

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

Changes in assets and liabilities:

Accounts receivable ( 19,881 ) 15,209

Manufacturing inventories ( 5,879 ) ( 1,396 )

Service parts inventories 6,680 11,852

Inventories 944 801

Accounts payable ( 793 ) 6,154

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Borrowings of long-term debt, net of debt issuance costs 45,045 25,000

Repayments of long-term debt ( 19,129 ) ( 5,747 )

Borrowing of convertible note 54,718 —

Repayment of long-term debt — ( 19,129 )

Repayments of long-term debt on Assignment ( 52,270 ) —

Repayments of long-term debt on Exchange ( 56,979 ) —

Borrowings of credit facility 102,914 416,418

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

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

Repayments of credit facility and payment of amendment fees ( 129,514 ) ( 418,811 )

Proceeds from shares related to the SEPA, net 75,174 15,828

Proceeds from issuance of common stock, net 80 —

Net cash provided by financing activities 39,168 19,306

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Net change in cash, cash equivalents, and restricted cash ( 369 ) ( 9,257 )

Cash, cash equivalents, and restricted cash at beginning of period 25,860 26,175

Cash, cash equivalents, and restricted cash at end of period $ 16,603 $ 25,860

Cash, cash equivalents, and restricted cash at beginning of year 16,603 25,860

Cash, cash equivalents, and restricted cash at end of year $ 16,234 $ 16,603

Supplemental disclosure of cash flow information

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Right-of-use assets obtained in exchange for new lease liabilities $ 112 $ 678

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

Warrants issued $ 25,420 $ —

Cash and cash equivalents $ 15,572 $ 16,464

Restricted cash, current 139 168

Total cash, cash equivalents and restricted cash at the end of period $ 16,603 $ 25,860

Restricted cash 662 139

Total cash, cash equivalents and restricted cash at the end of year $ 16,234 $ 16,603

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

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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

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Foreign currency translation adjustments, net of income taxes — — — — 594 594

Change in fair value of convertible note — — — — ( 8,444 ) ( 8,444 )

Shares issued under employee incentive plans, net 121 1 79 — — 80

Warrants exercised related to long-term debt

856 9 52,975 — — 52,984

Shares issued related to the SEPA, net 7,555 75 75,099 — — 75,174

1,157 11 15,817 — — 15,828

Stock-based compensation — — ( 849 ) — — ( 849 )

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Subsequent Events

Restatement of Unaudited Quarterly Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Description of Business

Quantum Corporation, together with its consolidated subsidiaries (“Quantum” or the “Company”), stores and manages digital video and other forms of unstructured data, providing streaming performance for video and rich media applications, along with low-cost, long-term storage systems for data protection and archiving.

Quantum Corporation, together with its consolidated subsidiaries (“Quantum”, the “Company”, "our" or "we"), stores and manages digital video and other forms of unstructured data, providing streaming performance for video and rich media applications, along with low-cost, long-term storage systems for data protection and archiving.

The Company helps customers around the world capture, create and share digital data and preserve and protect it for decades.

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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.

There were no VIEs for the years ended March 31, 2026 or 2025.

Reclassifications

Certain prior-period amounts in the condensed consolidated statements of cash flows have been reclassified to conform to the current period presentation.

These reclassifications had no effect on total cash flows.

Also, due to the size of the Balance, we have aggregated Manufacturing and Service Inventory into a single line called Inventories on the Consolidated Balance Sheets.

Details of the balances in the Inventories line item has been included in Note 3:

Balance Sheet Information.

Reverse Stock Split

On August 15, 2024, the Company's stockholders approved an amendment to the Company's Amended and Restated Certificate of Incorporation to effect a reverse stock split of the issued shares of the Company’s common stock, par value $ .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 Company's stockholders approved an amendment to the Company's Amended and Restated Certificate of Incorporation to effect a reverse stock split of the issued shares of the Company’s common stock, par value $ 0.01 per share, at a ratio ranging from 1-for-5 shares up to a ratio of 1-for-20 shares, with the exact ratio, if any, to be selected by 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.

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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.

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

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 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.

The Company generated negative cash flows from operations of approximately $ 37.9 million and $ 23.6 million for the fiscal years ended March 31, 2026 and 2025, respectively, and generated net losses of approximately $ 101.0 million and $ 115.1 million for the fiscal years ended March 31, 2026 and 2025, respectively.

The Company has funded operations through the sale of common stock and term debt borrowings in Note 4:

Debt and Note 7:

Common Stock.

Management believes that it has the ability to obtain additional debt or equity financing, if required, and has historically been able to do so.

Management also believes that current working capital will provide the Company with sufficient capital to fund operations for at least one year from the consolidated financial statement issuance date.

As previously disclosed, the Company identified that there was substantial doubt about the Company’s ability to continue as a going concern.

This was due to the requirement to repay the Term Loans (as defined herein) on August 5, 2026.

Subsequent to March 31, 2026, the Company completed several transactions which resulted in the repayment of the Term Loans and removed the substantial doubt noted above.

On June 1, 2026, the Company entered into Securities Purchase Agreements to issue and sell to certain accredited investors an aggregate of 10,615,712 shares of the Company’s common stock.

After deducting placement agent fees and other offering expenses payable by the Company, the Company received net proceeds of $ 94.7 million.

On June 4, 2026, the Company paid an aggregate of $ 57.8 million in connection with the termination of the Term Loan Credit Agreement.

This fully paid down and extinguished the Company's Term Loans.

Also on June 4, 2026, the Company provided a notice to YA II PN, Ltd.

("YA") regarding its termination of the Standby Equity Purchase Agreement (the "SEPA"), effective June 11, 2026.

There were no amounts owed to YA under the SEPA at the time the termination notice was provided.

See Note 13 :

Subsequent Events, for further details.

With the cash proceeds, after repayment of the Term Loans, the Company forecasts that operating performance, cash and current working capital will provide sufficient capital to fund operations for at least one year from the financial statement issuance date.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes.

Actual results could differ from these estimates and assumptions due to risks and uncertainties.

Such estimates include, but are not limited to, the determination of standalone selling price for revenue arrangements with multiple performance obligations, inventory adjustments, useful lives of intangible assets and property and equipment, stock-based compensation, fair value of warrants, and provision for income taxes including related reserves.

Such estimates include, but are not limited to, the determination of standalone selling price for revenue arrangements with multiple performance obligations, inventory adjustments, useful lives of intangible assets and property and equipment, stock-based compensation, fair value of warrants, fair value of the convertible note and provision for income taxes including related reserves.

Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

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These credit evaluations require significant judgment and are based on multiple sources of information.

The Company analyzes such factors as its historical bad debt experience, industry and geographic concentrations of credit risk, current economic trends and changes in customer payment terms.

The Company analyzes such factors as its historical bad debt experience, industry and geographic concentrations of credit risk, current economic trends and changes in

customer payment terms.

The Company will write-off customer balances in full to the reserve when it has determined that the balance is not recoverable.

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Fair Value of Financial Instruments

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

Manufacturing Inventories

Manufacturing inventory is recorded at the lower of cost or net realizable value, with cost being determined on a first-in, first-out (“FIFO”) basis.

The carrying value of our financial instruments approximates fair value.

Manufacturing inventories are recorded at the lower of cost or net realizable value, with cost being determined on a first-in, first-out (“FIFO”) basis.

Costs include material, direct labor, and an allocation of overhead in the case of work in process.

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Revisions to these adjustments would be required if these factors differ from the Company’s estimates.

Service Parts Inventories

Service parts inventories are recorded at the lower of cost or net realizable value, with cost being determined on a FIFO basis.

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Machinery and equipment 3 to 5 years

Computer equipment 3 to 5 years

Other software 3 years

Furniture and fixtures 5 years

Other office equipment 5 years

Leasehold improvements Shorter of useful life or life of lease

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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.

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.

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.

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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The quantitative test compares its reporting unit's carrying amount, including goodwill, to its fair value calculated based on its enterprise value.

If the carrying amount exceeds its fair value, an impairment loss is recognized for the excess.

If the carrying amount exceeds its fair value, an impairment loss is recognized for the

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

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Lease liabilities are recognized at the present value of the future lease payments at commencement date.

The interest rate implicit in the Company's operating leases are not readily determinable, and therefore an incremental borrowing rate is estimated to determine the present value of future payments.

The interest rates implicit in the Company's operating leases are not readily determinable, and therefore, an incremental borrowing rate is estimated to determine the present value of future payments.

The estimated incremental borrowing rate factors in a hypothetical interest rate on a collateralized basis with similar terms, payments, and economic environments.

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

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.

The Company has applied the practical expedient for short-term leases which have a lease term of less than 12 months and do not include an option to purchase the underlying asset that is reasonably certain to be exercised.

The Company recognizes rent expense in the consolidated statements of operations and comprehensive loss on a straight-line basis over the lease term and record variable lease payments as incurred.

Revenue Recognition

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Revenue from product sales is recognized at the point in time when the customer takes control of the product.

If there are significant post-delivery obligations, the related revenue is deferred until such obligations are fulfilled.

If there are significant post-delivery obligations, the related revenue is

deferred until such obligations are fulfilled.

Revenue from contracts with customer acceptance criteria are recognized upon end user acceptance.

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(a) post-contract customer support agreements,

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

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

Customers have the option to choose between different levels of hardware and software support.

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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 service and

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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Contracts with multiple goods and services have multiple distinct performance obligations as the promise to transfer hardware, installation services, and support services are capable of being distinct and provide economic benefit to customers on their own.

Stand-alone selling price

Standalone selling price

For contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative standalone selling price (“SSP”) of the good or service underlying each performance obligation.

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The duration of these contracts ranges from 1 - 7 years.

Total capitalized costs were $ 2.3 million, $ 2.7 million and $ 2.0 million for fiscal 2025, 2024 and 2023, respectively.

Total amortization of capitalized costs of obtaining revenue contracts were $ 1.3 million, $ 0.9 million and $ 0.5 million for fiscal 2025, 2024 and 2023, respectively.

These costs are recognized straight line over the associated sales contract term.

Total capitalized costs were $ 2.3 million and $ 2.3 million for fiscal 2026 and 2025, respectively.

Total amortization of capitalized costs of obtaining revenue contracts were $ 1.3 million and $ 1.3 million for fiscal 2026 and 2025, respectively.

These costs are recognized on a straight-line basis over the associated sales contract term.

Cost of Service and Subscription Revenue

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The Company has determined that technological feasibility for its software products is reached shortly before the products are released to manufacturing.

Costs incurred after technological feasibility is established have not been material.

The Company expenses software-related research and development costs as incurred.

Costs incurred after technological feasibility is established have not been material, therefore, the Company expenses software-related research and development costs as incurred.

Internal-use Software Costs

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

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

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

Software implementation costs capitalized were $ 0.0 million and $ 1.0 million in fiscal 2026 and 2025, respectively.

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Shipping and handling fees are included in cost of revenue as incurred and were $ 11.9 million and $ 6.8 million in fiscal 2026 and 2025, respectively.

Restructuring Reserves

Restructuring reserves include charges related to the realignment and restructuring of the Company’s business operations.

Accrued Restructuring Charges

Accrued restructuring charges include charges related to the realignment and restructuring of the Company’s business operations.

These charges represent judgments and estimates of the Company’s costs of severance, closure and consolidation of facilities and settlement of contractual obligations under its operating leases, including sublease rental rates, asset write-offs and other related costs.

The Company reassesses the reserve requirements to complete each individual plan under the restructuring programs at the end of each reporting period.

The Company reassesses the restructuring liability requirements to complete each individual plan under the restructuring programs at the end of each reporting period.

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

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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.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.

This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statement of operations.

This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s consolidated statements of operations and comprehensive loss.

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

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.

Quantum issued a Forbearance Warrant in September 2025.

Debt and Note 7:

Common Stock, for further details.

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

A valuation allowance is provided if the Company believes it is more likely than not that all or some portion of the deferred tax asset will not be realized.

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The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

The tax benefit to be recognized in the consolidated financial statements from such a position is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

The tax benefit to be recognized in the consolidated financial statements from such a position is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

The Company reevaluates these uncertain tax positions on a quarterly basis.

This evaluation is based on factors including, but not limited to, changes in facts or circumstances and changes in tax law.

The Company recognizes penalties and tax-related interest expense as a component of income tax expense in the consolidated statements of operations.

The Company recognizes penalties and tax-related interest expense as a component of income tax expense in the consolidated statements of operations and comprehensive loss.

Asset Retirement Obligations

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The Company’s obligations relate primarily to certain legal obligations to remediate leased property on which certain assets are located.

The liability is recorded in Other accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

Warranty Expense

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The Company regularly reassess its estimates to determine the adequacy of the recorded warranty liability and adjusts the provision, as necessary.

Balance Sheet Information, for further information.

Debt Issuance Costs

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

Amortization of these debt issuance costs is included in interest expense while the unamortized debt issuance cost balance is included in other current assets or other assets.

Debt issuance costs for the Term Loans are recorded as a reduction to the carrying amount and are amortized over their terms using the effective interest method.

Amortization of these debt issuance costs is included in interest expense.

Debt, for further information.

Stock-Based Compensation

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Equity awards are measured based on the fair value of the award at the grant date.

Liability awards are re-measured to fair value each reporting period.

The Company recognizes stock-based compensation on a straight-line basis over the award’s requisite service period, which is generally the vesting period of the award, less actual forfeitures.

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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.

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.

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

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

If the Company is unable to obtain adequate quantities of the inventory needed to sell its products, the Company could face cost increases or delays or discontinuations in product shipments, which could have a material adverse effect on the Company’s results of operations.

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Some of the products the Company purchases from these sources are proprietary or complex in nature, and therefore cannot be readily or easily replaced by alternative sources.

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

Segment Reporting

The Company’s chief operating decision-maker ("CODM") is its Chief Executive Officer who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis.

The CODM reviews and utilizes consolidated financial information, including revenue, gross profit, operating income and net income as reported on the consolidated statements of operations, to assess performance and allocate resources to support strategic priorities.

The CODM reviews and utilizes consolidated financial information, including revenue, gross profit, operating income and net income as reported on the consolidated statements of operations and comprehensive loss, to assess performance and allocate resources to support strategic priorities.

Consolidated net loss is our segment's primary measure of profit or loss.

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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, 2025 and 2024, the Company incurred $ 0.3 million and $ 1.4 million in matching contributions, respectively.

For the years ended March 31, 2026 and 2025, the Company incurred $ 0.1 million and $ 0.3 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.

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):

Improvements to Income Tax Disclosures , which requires greater disaggregation of tax information in rate reconciliation and income taxes paid by jurisdiction.

ASU 2023-09 will be effective for our fiscal year beginning April 1, 2025, with early adoption permitted.

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

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

The Company has other defined contribution plans at its international subsidiaries, as required by local law.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Account Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for annual periods beginning on or after December 15, 2024, and may be applied either prospectively or retrospectively.

In fiscal 2026, Quantum revised its tax footnote disclosures upon the adoption of ASU 2023-09.

The Company now applies a consistent approach to categorizing and presenting the information and provides enhanced disaggregation within the rate reconciliation.

Additionally, the footnote disclosure provides further disaggregation of income taxes paid in foreign jurisdictions.

The adoption of ASU 2023-09 did not have a material impact on the Company's consolidated financial statements for the fiscal year ended March 31, 2026.

The Company adopted the standard on a prospective basis.

Recent Accounting Pronouncements Not Yet Adopted

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

Disaggregation of Income Statement Expenses , which requires additional disclosures of specific expense categories included within each expense caption presented on the Statements of Operations.

The new standard can be applied on either a fully retrospective or prospective basis ASU 2024-03 will be effective for our fiscal year beginning April 1, 2027, and interim periods within our fiscal year

beginning April 1, 2028, with early adoption permitted.

We are currently evaluating the impact of this new standard

on our financial statement disclosures.

The Company is currently evaluating the impact of this new standard on its financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurements of Credit Losses for Accounts Receivable and Contract Assets .

The amendments in this update provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under FASB Accounting Standards Codification 606.

Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient.

An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated.

ASU 2025-05 is effective for the Company beginning in the fiscal year beginning April 1, 2026,with early adoption permitted.

The Company is currently evaluating the impact of this new standard on its financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software” (Topic 350) .

The updates eliminate references to software development project stages and revises the criteria that must be met to begin capitalizing internal-use software costs.

The standard permits entities to adopt the guidance using a prospective, retrospective, or modified transition approach and becomes effective for the Company beginning January 1, 2028, with early adoption permitted.

The Company is currently assessing the potential impact that ASU 2025-06 will have on its financial statements disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements , which clarifies certain aspects of interim reporting guidance.

The standard is effective for interim periods within fiscal years beginning after December 15, 2027, which will be the Company’s fiscal year beginning April 1, 2029, with early adoption permitted.

The Company is currently evaluating the impact of this guidance on its interim financial statements disclosures.

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):

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

March 31, 2026 March 31, 2025 March 31, 2024

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$ 69,650 $ 52,502 $ 67,788

Contract assets (in Other current assets) $ 351 $ 278 $ 501

Deferred revenue $ 114,684 $ 113,923 $ 116,687

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Remaining Performance Obligations

Total remaining performance obligations (“RPO”) which is contracted but not recognized revenue was $ 138.0 million as of March 31, 2025.

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.

Total remaining performance obligations (“RPO”) which are contracted but not recognized into revenue was $ 163.2 million as of March 31, 2026.

RPO consists of both deferred revenue, which is included in the consolidated balance sheets, and non-cancelable amounts from contracts that will be invoiced and are not included in the consolidated balance sheets.

These amounts exclude variable consideration related to sales-based royalties.

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

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Deferred revenue by period

(in thousands) Total 1 year or less 1 – 3 Years 3 year or greater

Current Non-current Total

Service revenue $ 62,897 $ 29,252 $ 92,149

Subscription revenue 12,161 9,778 21,939

Product revenue $ 596 $ — $ 596

Total $ 75,654 $ 39,030 $ 114,684

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Raw materials 8,508 9,485

Service parts Inventories 718 2,098

Total manufacturing inventories $ 16,103 $ 22,434

Service inventories March 31,

Finished goods $ 1,189 $ 3,660

Component parts 909 6,123

Total service inventories $ 2,098 $ 9,783

Property and equipment, net March 31,

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

Intangibles, net March 31, 2025 March 31, 2024

Intangible assets, net March 31, 2026 March 31, 2025

Gross Accumulated Amortization Net Gross Accumulated Amortization Net

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Intangible assets amortization expense was $ 0.3 million and $ 1.4 million for the years ended March 31, 2026 and 2025, respectively.

As of March 31, 2025, the remaining weighted-average amortization period for definite-lived intangible assets was approximately 0.3 years.

The Company recorded amortization of developed technology in cost of product revenue, and customer lists in sales and marketing expenses in the consolidated statements of operations.

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

Fiscal year ending Estimated future amortization expense

Fiscal year 2026 $ 281

Goodwill Amount

As of March 31, 2026, the intangible assets were fully amortized.

The Company recorded amortization of developed technology in cost of product revenue, and customer lists in sales and marketing expenses in the consolidated statements of operations and comprehensive loss.

Balance at March 31, 2024 $ 12,969

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Balance at March 31, 2025

Goodwill acquired —

Balance at March 31, 2026

Other long-term assets March 31,

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Capitalized debt costs — 2,871

Deferred taxes 1,062 705

Contract cost asset 994 1,144

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$ 7,456 $ 7,947

Asset retirement obligation

Accrued interest

Accrued supplier owned inventory obsolescence

Accrued income taxes

Accrued warranty

Accrued interest

Lease liability 799 856

Accrued product returns 783 818

Total other accrued liabilities $ 19,457 $ 17,982

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Term Loan $ 55,906 $ 102,507

Convertible Note 90,034 —

PNC Credit Facility — 26,600

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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”), 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:

On August 5, 2021, the Company entered into a Term Loan Credit and Security Agreement (the “Term Loan Credit Agreement”), pursuant to which a senior secured term loan was issued (the “2021 Term Loan”), maturing on August 5, 2026.

The Company also entered into an Amended and Restated Revolving Credit and Security Agreement on December 27, 2018 (the “PNC Credit Facility” and, together with the Term Loan Credit Agreement, the “Credit Agreements”), which, per its terms, was maturing on August 5, 2026 and provided for borrowings up to a maximum principal amount of the lesser of:

(a) $ 40.0 million or (b) the amount of the borrowing base, as defined in the PNC Credit Facility agreement.

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

On June 1, 2023, the Company entered into amendments to the Credit Agreements (the “June 2023 Amendment”) which, among other things, provided an advance of $ 15.0 million in additional term loan borrowings (the “2023 Term Loan” and, together with the 2021 Term Loan, the "Term Loan") and incurred $ 0.9 million in original issuance discount and origination fees which have been recorded as a reduction to the carrying amount of the 2023 Term Loan and amortized to interest expense over the term of the loan.

The terms of the 2023 Term Loan are substantially similar to the terms of the 2021 Term Loan, including in relation to maturity and security, except that, among other things, (a) the Applicable Margin (i) for any 2023 Term Loan designated an “ABR Loan” is 9.00 % per annum and (ii) for any 2023 Term Loan designated as a “SOFR Loan” is 10.00 % per annum, (b) accrued interest on the 2023 Term Loan is payable in kind ("PIK"), and is capitalized and added to the principal amount of the 2023 Term Loan at the end of each interest period applicable thereto, (c) the 2023 Term Loan does not amortize prior to the maturity date thereof, and (d) the 2023 Term Loan may not be prepaid prior to the payment in full of the existing term loans.

In connection with the 2023 Term Loan, the Company issued warrants to purchase an aggregate of 0.06 million 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.

The value of the June 2023 Warrants in addition to $ 0.7 million of 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 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 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.

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.

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.

In connection with the 2023 Term Loan, the Company issued warrants to purchase an aggregate of 62,500 shares (the “June 2023 Warrants”) of the Company’s common stock, at an exercise price of $ 20.00 per share.

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

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

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

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(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;

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

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

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

(vi) reset the net leverage ratio financial covenant requirements for the fiscal quarters ended 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;

(ix) removed required 2021 Term Loan principal amortization until the fiscal quarter ended 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”).

In connection with the August 2024 Amendments, the Company entered into a new senior secured delayed draw term loan facility with a borrowing capacity of up to $ 26.3 million ($ 25.0 million after original issuance discount) and a commitment period expiring on October 31, 2024 (each draw, an “August 2024 Term Loan”).

The Company borrowed $ 10.5 million at closing (“Initial August 2024 Term Loan”).

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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’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.

1 unchanged sentence

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 %;

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

(ii) the Federal funds rate plus 0.50 %;

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

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

and (iv) the “Prime Rate” last quoted by The Wall Street Journal), plus an applicable margin of 8.75 %, and (y) SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 9.75 %, in each case, with 3.75 % 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).

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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.

In connection with the August 2024 Amendments, the Company issued warrants to purchase an aggregate of 380,310 shares of 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.

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):

On April 2, 2025, the Company consented to an assignment (the “Master Assignment Agreement”) of the 2021 Term Loan and 2024 Term Loans.

One of the lenders sold $ 51.4 million of Term Loan and assigned all of its interests to Dialectic Technology SPV, LLC (“Dialectic”).

The Master Assignment Agreement was accounted for as a debt extinguishment.

The Company recorded a gain on debt extinguishment of $ 2.4 million related to the net of discount on issuance of term loans to a new lender and write-off of all unamortized debt issuance costs and fees related to the previous lender.

The $ 0.4 million in new lender fees were recorded as a reduction to the carrying amounts of the term loans and amortized to interest expense over the remaining term of the loan.

On May 5, 2025, the Company entered into an amendment (the “May 2025 Term Loan Amendment”) to the Term Loan.

The May 2025 Term Loan Amendment, among other things, revised the prepayment requirements under the Term Loan Credit Agreement in connection with the net cash proceeds received from the SEPA.

The May 2025 Term Loan Amendment was accounted for as a modification and the $ 0.1 million in lender amendment fees were recorded as a reduction to the carrying amounts of the term loans and amortized to interest expense over the remaining term of the loan.

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

As of the date of termination, there were no amounts outstanding under the facility.

In connection with the termination, the Company paid an exit fee of

$ 1.2 million, which was recorded within Loss on Debt Extinguishment on the consolidated statement of operations and comprehensive loss.

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

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

On September 23, 2025, the Company entered into the Fifteenth Amendment to the Term Loan Credit Agreement with Quantum LTO Holdings, LLC, Dialectic, OC III LVS XXXIII LP (“LVS XXXIII”), OC III LVS XL LP (“LVS XL” and together with LVS XXXIII, the “OC III Lenders”), and Alter Domus (US) LLC, as disbursing agent and collateral agent (the “Fifteenth Amendment”).

The Fifteenth Amendment, among other things, (i) permits the Company to retain up to $ 15.0 million of net cash proceeds from the SEPA received on or after the date of the Fifteenth Amendment for working capital and general corporate purposes, (ii) converts certain tranches of Term Loans held by the OC III Lenders into new and separate tranches, (iii) defers payment of cash interest on Term Loans held by Dialectic accruing during the quarters ended September 30, 2025 and December 31, 2025, until the earliest of (a) the date the Company elects to pay such deferred cash interest, (b) the maturity of such term loans, or (c) the date the Debt Exchange (as defined below) occurs, at which point such deferred interest will be subject to the terms of the Convertible Note indenture, and increases the interest rate applicable to such term loans by 2.00 % during the period that such cash interest is being deferred, (iv) eliminates the existing maximum total net leverage ratio covenant and minimum daily liquidity covenant (noting that, following the Debt Exchange (as defined below), the Convertible Note will be subject to a minimum liquidity covenant), and (v) amends certain other provisions, including mandatory prepayment events, payment of fees and expenses, and reporting requirements.

In connection with the Fifteenth Amendment, the Company issued a warrant (the “Forbearance Warrant”) to Dialectic to purchase up to 2,653,308 shares of its common stock, representing 19.9 % of the Company’s outstanding shares as of the date of the Transaction Agreement (as defined below) as consideration for the forbearance, waivers, and amendments granted under the Fifteenth Amendment.

Common Stock, for additional information.

With respect to the Term Loans held by Dialectic, the Fifteenth Amendment was accounted for as an extinguishment under ASC 470-50, resulting in the recognition of a new debt instrument, the derecognition of the original term loans, and a loss on extinguishment of $ 31.0 million, which is included in loss on debt extinguishment on the consolidated statement of operations and comprehensive loss for fiscal year ended March 31, 2026.

The fair value of the Forbearance Warrant was treated as a lender fee and included in the extinguishment loss calculation.

The Fifteenth Amendment to the Term Loans held by OC III Lenders was accounted for as a modification.

Fair Value of Financial Instruments, for additional information.

On September 23, 2025, the Company entered into an agreement with Dialectic and the OC III Lenders (the “Transaction Agreement”).

Pursuant to the Transaction Agreement, the Company agreed to issue to Dialectic, on a dollar-for-dollar basis, one or more 10.00 % PIK Senior Secured Convertible Notes due 2028 ("Convertible Note") in exchange for the amounts then outstanding under the term loans held by Dialectic (the “Debt Exchange”).

On December 18, 2025, the Company closed the transactions contemplated by the Transaction Agreement (the “Closing”), including its issuance to Dialectic of the Convertible Note and extinguishing $ 54.7 million of Term Debt.

Associated lender fees of $ 2.2 million were also incurred.

The Closing was conditioned upon, among other things, approval of the Debt Exchange by the Company’s stockholders, which approval was obtained on December 16, 2025.

The Convertible Note has a three -year maturity and bears interest at 10 % per annum, payable in kind and compounded annually.

The Convertible Note is secured by substantially all of the assets of the Company that secure the Term Loan.

The initial conversion price equals $ 10.00 per share of the Company’s common stock (the “Conversion Price”).

The Conversion Price is subject to four quarterly resets on the last day of each calendar quarter immediately following September 15, 2025 (each, a “Reset Price Date”) to the greater of (a) $ 4.00 per share and (b) the lesser of (i) the then-current Conversion Price and (ii) the 30-day Volume-Weighted Average Price (VWAP) of the Company’s common stock immediately preceding the Reset Price Date.

The Lender may, at any time, elect to exchange all or any portion of the outstanding principal amount, accrued and unpaid interest and premium (if any) of the Convertible Note for shares of the Company’s common stock at the then-applicable Conversion Price.

Beginning six months after the Closing, if certain conditions are met, the Company may, at its election, require the Lender to exchange a portion of the outstanding Convertible Note into shares of the Company’s common stock at the then-applicable Conversion Price if the 10-day VWAP exceeds specified multiples of the Conversion Price (the “Company Mandatory Exchange”).

The Company Mandatory

Exchange, if triggered, occurs in tranches of 20 %, 20 %, 30 %, and the remaining balance.

If certain conditions are met, at the Company’s option, on the maturity date, any outstanding principal, accrued and unpaid interest, and premium (if any) may be exchanged for shares of the Company’s common stock at 80 % of the average of the Daily VWAP for each of the five lowest consecutive trading days during the 20 consecutive trading days ending on (and including) the trading day immediately prior to the maturity date.

The Company accounted for the exchange of Dialectic’s term loans for the Convertible Note as an extinguishment of the term loans and recognized a loss on debt extinguishment of $ 28.9 million on the consolidated statement of operations and comprehensive loss for the fiscal year ended March 31, 2026.

The Company elected the fair value option under ASC 825 for the Convertible Note.

Fair Value of Financial Instruments , for additional information.

Related Party Transactions

The Forbearance Warrant and Convertible Note issued to Dialectic constitute related party transactions, as John Fichthorn, a member of the Company's Board, is also Managing Partner of Dialectic Capital Management, the investment adviser to Dialectic.

On issuance of the Convertible Note, Quantum paid $ 1.1 million to Dialectic for consulting services.

The fair values of the Forbearance Warrant and Convertible Note as of March 31, 2026 are included in Note 11:

Fair Value of Financial Instruments .

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

Year Ended March 31,

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Operating lease right-of-use assets $ 7,416 $ 8,580

Other current liabilities $ 856 $ 1,256

Operating lease liability, current - included in other accrued liabilities $ 799 $ 856

Operating lease liability 8,172 8,934

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Maturity of Lease Liabilities Operating Leases

Fiscal year ending 2026

Fiscal year ending March 31, 2027 $ 1,964

Thereafter 9,569

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All restructuring activities from 2025 fiscal year were completed by the fourth quarter of fiscal 2026.

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.

During fiscal year 2026, all employees were notified;

however, due to local requirements, not all employees had left employment by the end of the fiscal year.

No asset impairments occurred in fiscal year 2026 or in fiscal year 2025.

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

The following tables show the activity for accrued restructuring (in thousands):

Severance and

Balance as of March 31, 2024 $ —

Restructuring costs 3,280

Restructuring charges 4,090

Cash payments ( 3,266 )

Other non-cash ( 38 )

Balance as of March 31, 2025 786

Restructuring costs 4,090

Restructuring charges 8,112

Cash payments ( 8,363 )

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Long-Term Incentive Plan

The Company maintains two stockholder-approved incentive plans, the 2012 Long-Term Incentive Plan (the "2012 Plan") and the 2023 Long-Term Incentive Plan (the “2023 LTIP”).

The 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 .

The Company maintains the 2023 Long-Term Incentive Plan (the “2023 LTIP”) which provides for grants of performance share units, restricted stock units and stock options.

On August 15, 2024, the stockholders of the Company approved an additional 250,000 shares of Common Stock under the 2023 LTIP for future issuance and on December 16, 2025, the Company’s stockholders approved an amendment to (i) increase the number of shares of the Company’s common stock reserved for issuance thereunder by 1,400,000 shares and (ii) remove the individual annual award limits for employees and consultants.

Equity awards typically vest between one and four years .

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

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Stock options, performance share units and restricted stock units granted under the 2023 Plan are subject to forfeiture if employment terminates.

The 2023 Plan has 0.7 million shares authorized for issuance of new shares, with 0.5 million performance shares and restricted shares outstanding, and 0.1 million shares available for future issuance under the Plan as of March 31, 2025.

The 2023 Plan has 2.2 million shares authorized for issuance of new shares, with 0.5 million performance shares and restricted shares outstanding, 0.1 million stock options outstanding, and 1.6 million shares available for future issuance under the Plan as of March 31, 2026.

2021 Inducement Plan

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

In addition, the committee approved increasing the number of shares of common stock of the Company authorized for issuance under the 2021 Inducement Plan to 0.2 million.

There were 0.1 million shares available for future issuance as of March 31, 2026.

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):

Shares available for issuance at beginning of period 4.4 4.4

Shares issued during the period 200 —

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

Shares available for issuance at beginning of year 204.4 4.4

Additional shares authorized for issuance during the period — 200

Total shares available for future issuance at end of year 204.4 204.4

Performance Stock Units

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.

The estimated fair value of these Market PSUs is determined at the issuance date using a Monte Carlo simulation model.

Assumptions used in the Monte Carlo model to calculate fair values of market PSU’s during each fiscal period are as follows:

Weighted-Average 2025 2024

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.

The Company granted 120,000 and 180,126 units of performance stock units with financial performance conditions (“Performance PSUs”) in the fiscal years ended March 31, 2026 and 2025, 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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Compensation expense recognized related to Performance PSUs is reversed if the Company determines that it is no longer probable that the performance conditions will be achieved.

The following table summarizes activity for Market PSUs and Performance PSUs for the year ended March 31, 2025 (shares in thousands) :

The following table summarizes activity for the unvested Market PSUs and Performance PSUs for the year ended March 31, 2026 (shares in thousands) :

Shares Weighted-Average

Grant Date Fair Value per Share

Outstanding as of March 31, 2024 59 $ 18.59

Unvested as of March 31, 2025 213 $ 6.87

Granted 120 $ 6.11

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Forfeited or cancelled ( 200 ) $ 7.23

Outstanding as of March 31, 2025 213 $ 6.87

Unvested as of March 31, 2026 129 $ 6.87

As of March 31, 2026 , there was $ 0.7 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 1.6 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.

The total grant date fair value of shares granted during fiscal years ended March 31, 2026 and 2025 was $ 0.7 million and $ 0.4 million , respectively.

Restricted Stock Units

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RSUs are valued at the market closing share price on the date of grant and compensation expense for RSUs is recognized ratably over the applicable vesting period.

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

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

Shares Weighted-Average

Grant Date Fair Value per Share

Outstanding as of March 31, 2024

Unvested as of March 31, 2025

Granted 371 $ 6.93

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Forfeited or cancelled ( 170 ) $ 13.94

Outstanding as of March 31, 2025

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

Unvested as of March 31, 2026

The total grant date fair value of RSUs granted during fiscal years ended March 31, 2026 and 2025 was $ 2.6 million and $ 3.8 million, respectively.

As of March 31, 2026 , there was $ 2.8 million of total unrecognized stock-based compensation related to RSUs, which is expected to vest over a weighted-average period of 1.7 years .

Stock Options

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

Both awards vest in four equal annual installments, subject to continued service.

The stock option was valued using the Black-Scholes option pricing model on the grant date.

The significant assumptions used by the Company to estimate the fair value of the option awards as of March 31, 2026 are summarized below:

November 1, 2025 January 1, 2026

Term (years) 7.00 years 7.00 years

100.2 % 98.8 %

Dividend yield 2

0.00 % 0.00 %

Risk-free interest rate 3

3.66 % 3.79 %

Grant date fair value

$ 7.39 $ 5.02

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

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

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

Stock-based Compensation Expense

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

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Performance share units ( 1,635 ) 313

Stock options 93 —

Total stock-based compensation $ ( 849 ) $ 2,828

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.

The assumptions used in calculating fair values of the Lender Warrants are as follows:

December 2018 Warrants June 2020 Warrants June 2023 Warrants

March 31, 2024:

Discount period (years) 4.7 years 6.2 years 9.2 years

Risk-free interest rate 4.19 % 4.16 % 4.16 %

Stock price volatility 87.00 % 86.00 % 81.00 %

Exercise price

$ 6.60 $ 6.00 $ 9.00

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

Distinguishing liabilities from equity (Topic 480);

and Derivatives and hedging (Topic 718) ("ASC 2017-11") which provides guidance that the inclusion of certain anti-dilution provisions including down-round provisions in which the exercise price and number of shares underlying an equity-linked instrument are adjusted based on certain specified events does not preclude an instrument from being equity classified.

The Company has concluded the Warrant Repricing Feature does not meet the definition of a down-round provision that would provide a scope exception allowing equity classification;

therefore, the Company's warrants are required to be classified as liabilities.

In addition, the Company has concluded that the use of the greater of three share price inputs to the Black-Scholes valuation model in the Warrant Settlement Price Provision precludes the warrants from being indexed to the Company's own common stock under Topic 815 therefore requiring the Company to classify the warrants as liabilities with changes in fair value being recognized in the Company’s consolidated statement of operations.

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

In connection with various debt refinancing and debt amendment activities detailed in Note 4:

Debt , the Company issued warrants to purchase shares of the Company common stock.

As of March 31, 2026, there was a Forbearance Warrant issued in September 2025 which are exercisable until the seventh anniversary of its issuance.

As of March 31, 2024, there were Lender Warrants that were issued in December 2018 which were exercisable until December 27, 2028, issued in June 2020 which were exercisable until June 16, 2030 and issued in June 2023 which were exercisable until June 1, 2033 (collectively the "Lender Warrants").

The Lender Warrants were fully exercised in fiscal 2025.

Lender Warrants

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.

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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:

The table below sets forth a summary of changes in the fair value of the Company’s Level 2 Lender Warrant liabilities for the years ended March 31, 2024 and March 31, 2025.

The Company did not issue any Lender Warrants during the year ended March 31, 2026 and had no outstanding Lender Warrants as of March 31, 2026.

Balance at March 31, 2024 $ 4,046

Issuance of warrants 3,157

Exercise of warrants ( 52,985 )

Repricing adjustment 512

Change in fair value of warrant liabilities 45,270

Balance at March 31, 2025 $ —

Forbearance Warrant

The Forbearance Warrant, issued on September 23, 2025, has an exercise price of $ 8.81 per share, representing 80 % of the seven -day volume-weighted average price as of September 22, 2025, and is exercisable until the seventh anniversary of its issuance.

It includes a put right that allows the holder to require the Company to repurchase the unexercised portion for cash after the fifth anniversary, or earlier upon a change of control or

The repurchase price equals the holder’s pro rata share of the original issue value of $ 20 million, adjusted for any exercised portion.

The Forbearance Warrant is classified as a liability under ASC 480, as it may require cash settlement and meets the definition of a derivative.

It is initially measured at fair value, with subsequent changes recognized in the consolidated statements of operations and comprehensive loss under “Change in fair value of warrant liabilities.” See Note 11:

Fair Value of Financial Instruments , for additional information.

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

Balance at March 31, 2025

Issuance of warrants 25,420

Exercise of warrants ( 52,985 )

Repricing adjustment 512

Change in fair value of warrant liabilities ( 11,315 )

Balance at March 31, 2026

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

Other Warrants

The Company also issued 2,500 warrants to purchase the Company's common stock in June 2020 and June 2023 to advisors of the Company at an exercise price of $ 60.00 and $ 20.00 , respectively (collectively the "Other Warrants").

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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 25, 2025, we entered into the SEPA with YA in which pursuant to and subject to its terms, the Company has the right, but not the obligation, to sell up to $ 200.0 million of common 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.

Sales of common stock under the SEPA may be made by the Company at its discretion from time to time and will depend upon market conditions and other factors.

The purchase price for shares sold under the SEPA is based on a formula tied to the volume-weighted average price of the Company’s common stock.

In addition, in no event may the Company issue more than 1,157,139 shares of common stock under the SEPA, representing 19.99 % of the Company’s common stock outstanding immediately prior to execution of the SEPA (the “Exchange Cap”), unless the Company obtains stockholder approval in accordance with applicable Nasdaq rules or otherwise satisfies the conditions under which the Exchange Cap would not apply.

The SEPA is also subject to a 4.99 % beneficial ownership limitation, which restricts YA from acquiring shares that would result in ownership above that threshold.

As of March 31, 2026, the Company has issued approximately 8.7 million shares of common stock under the SEPA for net proceeds of approximately $ 91.0 million with 7.6 million shares sold in fiscal 2026 for net proceeds of $ 75.2 million.

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

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

The Company has analyzed the terms of the freestanding put right and has concluded that it has an immaterial value as of March 31, 2026 and 2025.

Registration Rights Agreements

The Lender Warrants grant the holders certain registration rights for the shares of common stock issuable upon the exercise of the applicable warrants, including (a) the ability of a holder to request that the Company file a Form S-1 registration statement with respect to at least 40 % of the registrable securities held by such holder as of the issuance date of the applicable warrants;

Pursuant to the registration rights agreements applicable to the Lender Warrants, the holders have certain registration rights for the shares of common stock issuable upon exercise of the applicable warrants, including (a) the ability of a holder to request that the Company file a Form S-1 registration statement with respect to at least

40 % of the registrable securities held by such holder as of the issuance date of the applicable warrants;

(b) the ability of a holder to request that the Company file a Form S-3 registration statement with respect to outstanding registrable securities if at any time the Company is eligible to use a Form S-3 registration statement;

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

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

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

NET LOSS PER SHARE

Equity Instruments Outstanding

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

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

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Total 2,715 761

The Company had outstanding market based restricted stock units as of March 31, 2025 that were eligible to vest into shares of common stock subject to the achievement of certain stock price targets in addition to a time-based vesting period.

1 Stock awards include stock options, performance share units and restricted stock units

The Company had outstanding market based restricted stock units as of March 31, 2026 and 2025 that were eligible to vest into shares of common stock subject to the achievement of certain stock price targets in addition to a time-based vesting period.

These contingently issuable shares are excluded from the computation of diluted earnings per share if, based on current period results, the shares would not be issuable if the end of the reporting period were the end of the contingency period.

There were 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):

There were 30,517 and 186,616 shares of contingently issuable market-based restricted stock units that were excluded from the table above as the market conditions were not satisfied as of March 31, 2026 and 2025, respectively.

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

Year Ended March 31,

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Total current tax expense 1,331 777

Deferred tax expense

Deferred tax expense (benefit)

Federal 19 20

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Income tax provision $ 1,008 $ 821

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

For the year ended March 31,

United Kingdom 103

Other Foreign Jurisdictions 100

Total Foreign 1,246

Total Income Taxes paid, net of refunds received $ 1,194

Beginning with 2026 annual reporting, the Company adopted ASU 2023-09, Improvements to Income Tax Disclosures , prospectively as described in Note 9.

In FY26, state and local income taxes in California, South Carolina, Minnesota, and New Jersey comprise the majority of the state and local income taxes, net of federal effect category.

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

For the year ended March 31,

At Statutory Rate $ ( 21,008 ) 21.0 %

State Income Taxes, net of Federal Effect 1,733 ( 1.7 ) %

Change in Valuation Allowance ( 7,131 ) 7.1 %

Nontaxable or Nondeductible Items

Loss on Debt Extinguishment 12,526 ( 12.5 ) %

Warrants Mark-to-Market ( 2,376 ) 2.4 %

Legal Services 2,368 ( 2.4 ) %

Other Nondeductible Items 1,477 ( 1.5 ) %

Changes in Tax Laws or Rates — — %

R&D Credits 4,614 ( 4.6 ) %

Foreign Tax Credit 11,915 ( 11.9 ) %

Cross-Border Tax Laws

Subpart F Inclusion 281 ( 0.3 ) %

Worldwide Changes in UTB ( 4,683 ) 4.7 %

Other 519 ( 0.5 ) %

Foreign Tax Effects

Other Foreign Jurisdictions 773 ( 0.8 ) %

Total Tax Expense $ 1,008 ( 1.0 ) %

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

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Accrued warranty expense 178 277

Depreciation 1,491 1,755

Gross deferred tax assets 156,898 164,423

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Deferred tax liabilities

Depreciation $ — $ ( 2,038 )

Lease assets ( 1,529 ) ( 1,711 )

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Increase in balances related to tax positions in current period 1,050 1,558

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

Increase (decrease) in balances related to tax positions in prior period 40 ( 12 )

Decrease in balances due to lapse in statute of limitations ( 6,179 ) ( 8,209 )

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At March 31, 2026, accrued interest and penalties totaled $ 1.2 million.

The Company's practice is to recognize interest and penalties related to income tax matters in the income tax provision in the consolidated statements of operations.

As of March 31, 2025, $ 75.7 million of unrecognized tax benefits were recorded as a contra deferred tax asset in other long-term assets in the consolidated balance sheets and $ 7.1 million (including interest and penalties) were included in other long-term liabilities in the consolidated balances sheets.

The Company's practice is to recognize interest and penalties related to income tax matters in the income tax provision in the consolidated statements of operations and comprehensive loss.

As of March 31, 2026, $ 70.9 million of unrecognized tax benefits were recorded as a contra deferred tax asset in other long-term assets in the consolidated balance sheets and $ 6.9 million (including interest and penalties) were included in other long-term liabilities in the consolidated balance sheets.

The Company files its tax returns as prescribed by the laws of the jurisdictions in which it operates.

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tax returns have been audited for years through 2002 by the Internal Revenue Service.

In other major jurisdictions, the Company is generally open to examination for the most recent three to five fiscal years.

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.

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 $ 2.6 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.

Upon recognition of the tax benefit related to the expiring statutes of limitation, $ 1.7 million will be offset by the establishment of a related valuation allowance.

The net tax benefit recognized in the income statement is estimated to be $ 0.9 million.

The net tax benefit recognized in the consolidated statements of operations and comprehensive loss is estimated to be $ 0.9 million.

As of March 31, 2026, the Company had federal net operating loss and tax credit carryforwards of approximately $ 324.8 million and $ 26.7 million, respectively.

The net operating loss and tax credit carryforwards expire in varying amounts in fiscal 2026 if not previously utilized, and $ 151.5 million are indefinite-lived net operating loss carryforwards.

These carryforwards include $ 5.3 million of acquired net operating losses and $ 1.0 million of acquired credits, the utilization of which is subject to various limitations due to prior changes in ownership.

These carryforwards include $ 5.3 million of acquired net operating losses, the utilization of which is subject to various limitations due to prior changes in ownership.

Certain changes in stock ownership could result in a limitation on the amount of both acquired and self-generated net operating loss and tax credit carryovers that can be utilized each year.

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As of March 31, 2026, the Company had issued non-cancelable commitments for $ 76.8 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.

Legal Proceedings

From time to time, we are a party to various legal proceedings and claims arising from the normal course of business activities.

Based on current available information, we do not expect that the ultimate outcome of any additional currently pending unresolved matters, individually or in the aggregate, will have a material adverse effect on our results of operations, cash flows or financial position.

Shareholder Litigation

On September 4, 2025, a shareholder class action complaint was filed in the United States District Court for the District of Colorado.

The complaint identifies Seung Lee as the plaintiff and names Quantum Corporation and James J.

Lerner, Kenneth P.

Gianella, and Laura Nash as defendants.

It alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 related to certain disclosures made in the Company’s quarterly and annual reports regarding its financial reporting for the third quarter of the Company’s fiscal year 2025 and its restatement of that financial reporting.

The complaint sought to designate the plaintiff as the lead plaintiff for the class and define a class period of November 15, 2024 through August 18, 2025.

On January 27, 2026, a revised final complaint named Hunsu Son as the lead plaintiff and reiterated the violations alleged in the original complaint.

The revised complaint seeks an award of unspecified damages, costs, and expenses.

The Company has filed a motion to dismiss the litigation.

Briefing of that motion is underway.

At this time, Quantum is not

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

Derivative Litigation

On October 28, 2025, a shareholder derivative complaint was filed in the United States District Court for the District of Colorado.

The complaint was filed by Brent Cullison derivatively on behalf of Quantum Corporation against James J.

Lerner, Kenneth P.

Gianella, Laura Nash, Don Jaworski, John Fichthorn, Hugues Meyrath, John R.

Tracy, Emily White, James C.

Clancy, and Tony J.

The complaint substantially repeats the allegations of the shareholder litigation described above and alleges related breaches of fiduciary duties and other causes of action.

The complaint seeks recovery of damages sustained by Quantum arising from the allegations, as well as fees and costs incurred.

Another shareholder derivative complaint was filed in the same court on November 4, 2025.

That complaint names Felicia Marti on behalf of Quantum Corporation as the plaintiff, with James J.

Lerner, Kenneth P.

Gianella, Laura Nash, John Fichthorn, Donald J.

Jaworski, Hugues Meyrath, John R.

Tracy, and Emily White named as defendants.The complaint substantially repeats the allegations of the Cullison derivative litigation and seeks relief of recovery of damages sustained by Quantum arising from the allegations, certain corporate governance reforms, and fees and costs incurred.

The court ordered the separate Cullison and Marti shareholder derivative complaints to be consolidated and stayed pending final resolution of the motion to dismiss the amended complaint in the Lee shareholder class action litigation.

At this time, Quantum is not able to determine whether the consolidated lawsuits would have any material impact on our business, operating results, or financial condition.

At the end of fiscal 2026, the Company had various non-cancelable operating leases for office facilities.

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Leases, for additional information regarding lease commitments.

Legal Proceedings

From time to time, we are a party to various legal proceedings and claims arising from the normal course of business activities.

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

FAIR VALUE OF FINANCIAL INSTRUMENTS

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The Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when an impairment is recognized.

Common Stock for disclosure related to the Company's asset and liabilities that are revalued at fair value at each reporting period.

These assets include property and equipment and amortizable intangible assets.

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

Information related to the fair value of the Company's warrant liabilities which were determined utilizing Level 2 inputs to determine such fair value are included in Note 7:

Common Stock .

The following table represents the carrying value and total estimated fair value of the Company's Term Loan and PNC Credit Facility which have been determined utilizing level 2 inputs to determine fair value.

Information related to the fair value of the Company's warrant liabilities and Convertible Note, which were determined utilizing Level 2 inputs to determine such fair value, are included in Note 4:

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

Carrying Value Fair Value Carrying Value Fair Value

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

PNC Credit Facility 26,600 24,755 26,604 24,743

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.

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

On September 23, 2025, the Company established the initial fair value for the Forbearance Warrant issued to Dialectic in connection with the Fifteenth Amendment.

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

The Forbearance Warrant was valued using a Monte Carlo simulation model in conjunction with a Probability-Weighted Expected Return Model.

This model incorporates various assumptions, including the Company’s common stock price, expected volatility, risk-free interest rate, and the remaining contractual term of the warrant.

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

The following table summarizes the key assumptions used in estimating the fair value of the Forbearance Warrant at issuance and at March 31, 2026:

March 31, 2026 September 23, 2025

Discount period (years) 6.48 years 7.0 years

Risk-free interest rate 3.65 % - 4.02 %

3.52 % - 3.83 %

Stock price volatility 100.00 % 98.00 %

Stock price at valuation date $ 4.75 $ 10.69

Probability 1

15 % - 15 % - 70 %

35 % - 15 % - 50 %

Fair value (in thousands) $ 14,105 $ 25,420

(1) Scenario probability as of issuance was based on timing expectations of management that a liquidation event occurring was estimated at 35 %;

a fundamental transaction occurring was estimated at 15 %;

and none of the previous events were estimated at 50 % and were revised at March 31, 2026 to a 15 % of a liquidation event occurring;

a 15 % of a fundamental transaction occurring;

and none of the previous events were estimated at 70 %.

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

Balance at March 31, 2025

Issuance of warrants 25,420

Change in fair value of warrant liabilities ( 11,315 )

Balance at March 31, 2026

Convertible Note

The Company measures the Convertible Note at fair value using significant inputs that are not observable in active markets and therefore classifies the Convertible Note as a Level 3 measurement within the fair value hierarchy.

Changes in the fair value of the Convertible Note resulting from updated assumptions and estimates are recognized as a fair value adjustments in the consolidated statements of operations and comprehensive loss.

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

In addition, the Company assigned probabilities to various possible settlement scenarios.

The significant assumptions used by the Company to estimate the fair value of the Convertible Note as of December 18, 2025 and March 31, 2026 are summarized below:

March 31, 2026 December 18, 2025

Term (years) 2.7 years 3.0 years

Volatility 85.0 % 120.0 %

Dividend yield 0.00 % 0.00 %

Risk-free interest rate 3.77 % 3.47 %

Probability for maturity 85 % 65 %

Probability for liquidation event 1

1 See probability discussed under Warrants.

Scenario probability was consistently applied.

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

Balance at March 31, 2025

Issuance of Convertible Note

Change in fair value of Convertible Note recognized in Net Loss 4,119

Change in fair value of Convertible Note recognized in Other Comprehensive Loss 8,444

Balance at March 31, 2026

SEGMENT INFORMATION

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1 Subscription revenue of $ 13.2 million and $ 12.1 million allocated to Primary and Secondary storage systems for the fiscal years ended 2026 and 2025, respectively.

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

(in thousands):

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

Year Ended March 31,

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Infrastructure 3

10,783 15,295

Operational costs 4

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Change in fair value of warrant liability 11,315 ( 45,270 )

Change in fair value of convertible note ( 4,119 ) —

Loss on debt extinguishment, net ( 59,641 ) ( 3,003 )

Net loss before income taxes

( 114,270 ) ( 40,575 )

Loss before income taxes ( 100,038 ) ( 114,270 )

Income tax provision 1,008 821

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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 report Restatement adjustments Reference As restated

Current assets:

Cash and cash equivalents $ 20,381 $ — $ 20,381

Restricted cash 222 — 222

Accounts receivable, net of allowance for credit losses of $ 99

61,373 — 61,373

Manufacturing inventories 18,861 — 18,861

Service parts inventories 1,884 — 1,884

Prepaid expenses 2,569 — 2,569

Other current assets 8,538 — 8,538

Total current assets 113,828 — — 113,828

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

Goodwill 12,969 — 12,969

Intangible assets, net 509 — 509

Right-of-use assets 8,670 — 8,670

Other long-term assets 20,812 — 20,812

Total assets $ 168,056 — $ 168,056

Liabilities and Stockholders’ Deficit

Current liabilities:

Accounts payable $ 34,704 — $ 34,704

Accrued compensation 11,702 — 11,702

Deferred revenue, current portion 69,916 ( 3,154 ) a, b

98,609 — 98,609

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 35,350 4,721 a, b

Operating lease liabilities 9,067 — 9,067

Other long-term liabilities 13,150 — 13,150

Total liabilities 363,111 1,567 364,678

Commitments and contingencies

Stockholders' deficit

Preferred stock, 20,000 shares authorized;

no shares issued and outstanding

Common stock, $ 0.01 par value;

225,000 shares authorized;

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

Accumulated other comprehensive loss ( 2,469 ) — ( 2,469 )

Total stockholders’ deficit ( 195,055 ) ( 1,567 ) ( 196,622 )

Total liabilities and stockholders’ deficit $ 168,056 — $ 168,056

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

Total revenue 72,551 ( 3,867 ) 68,684 214,364 ( 1,567 ) 212,797

Cost of revenue:

Product 30,922 — 30,922 93,251 — 93,251

Service and subscription 9,874 — 9,874 33,954 — 33,954

Total cost of revenue 40,796 — 40,796 127,205 — 127,205

Gross profit 31,755 ( 3,867 ) 27,888 87,159 ( 1,567 ) 85,592

Operating expenses:

Sales and marketing 12,448 — 12,448 39,321 — 39,321

General and administrative 14,142 — 14,142 49,186 — 49,186

Research and development 7,683 — 7,683 24,255 — 24,255

Restructuring charges 1,342 — 1,342 2,916 — 2,916

Total operating expenses 35,615 — 35,615 115,678 — 115,678

Loss from operations ( 3,860 ) ( 3,867 ) ( 7,727 ) ( 28,519 ) ( 1,567 ) ( 30,086 )

Other income (expense), net 967 — 967 ( 408 ) — ( 408 )

Interest expense ( 6,840 ) — ( 6,840 ) ( 16,761 ) — ( 16,761 )

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 )

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 and diluted

$ ( 14.56 ) $ ( 0.79 ) $ ( 15.35 ) $ ( 21.90 ) $ ( 0.32 ) $ ( 22.22 )

Weighted average shares - basic and diluted

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 loss to net cash used in operating activities

Depreciation and amortization 4,440 — 4,440

Amortization of debt issuance costs 3,704 — 3,704

Non-cash lease expense

1,342 — 1,342

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

Paid in kind interest 3,515 — 3,515

Change in fair value of warrant liabilities 56,408 — 56,408

Other non-cash ( 281 ) — ( 281 )

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

Prepaid expenses ( 382 ) — ( 382 )

Operating lease liabilities

( 813 ) — ( 813 )

Accounts payable 9,406 — 9,406

Accrued compensation ( 6,512 ) — ( 6,512 )

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 )

Investing activities

Purchases of property and equipment ( 4,324 ) — ( 4,324 )

Net cash used in investing activities ( 4,324 ) — ( 4,324 )

Financing activities

Borrowings of long-term debt, net of debt issuance costs 25,000 — 25,000

Repayments of long-term debt ( 14,092 ) — ( 14,092 )

Borrowings of credit facility 311,135 — 311,135

Repayments of credit facility ( 302,628 ) — ( 302,628 )

Net cash provided by financing activities 19,415 — 19,415

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 )

Cash, cash equivalents, and restricted cash at beginning of period 25,860 — 25,860

Cash, cash equivalents, and restricted cash at end of period $ 20,603 $ — $ 20,603

Cash and cash equivalents 20,381 — 20,381

Restricted cash, current 222 — 222

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

$ 20,603 $ — $ 20,603

Supplemental disclosure of cash flow information

Cash paid for interest $ 8,841 $ — $ 8,841

Cash paid for income taxes, net $ 1,798 $ — $ 1,798

Non-cash transactions

Purchases of property and equipment included in accounts payable $ 88 $ — $ 88

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

$ 538 $ — $ 538

Paid-in-kind interest $ 3,515 $ — $ 3,515

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, unaudited)

Common Stock Additional

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

Three Months Ended Shares Amount

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 )

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, 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

Nine Months Ended Shares Amount

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

Net loss — — — ( 107,347 ) — ( 107,347 )

Foreign currency translation adjustments, net — — — — ( 276 ) ( 276 )

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 — — 2,376 — — 2,376

Balance, December 31, 2024 As Restated

5,307 $ 53 $ 740,521 $ ( 934,727 ) $ ( 2,469 ) $ ( 196,622 )

Private Placement

On June 1, 2026, the Company entered into Securities Purchase Agreements (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company, in a private placement (the “Private Placement”), agreed to issue and sell to the Investors an aggregate of 10,615,712 shares of the Company’s common stock, par value $ 0.01 per share, at a price of $ 9.42 per share, for aggregate gross proceeds to the Company of $ 100.0 million.

After deducting placement agent fees and other offering expenses payable by the Company, the Company received net proceeds of approximately $ 94.7 million.

The Private Placement closed June 4, 2026 (the “Closing”).

Amendment to Term Loan

On June 1, 2026, the Company entered into a Sixteenth Amendment (the “Sixteenth Amendment”) to its Term Loan Credit Agreement.

Pursuant to the Sixteenth Amendment, among other things, the maturity date of the loans under the Term Loan Credit Agreement was extended to September 2028 and a portion of the proceeds of future equity issuances by the Company are allowed to be retained by the Company rather than 100% of the net proceeds having to be used to mandatorily prepay loans under the Term Loan Credit Agreement.

In addition, the Sixteenth Amendment clarifies that, following the conversion or exchange of the Convertible Notes (as described below), the liens securing the Convertible Notes, and the intercreditor agreement governing the priority of those liens vis-a-vis the liens securing the obligations of the Company under the Existing Credit Agreement, will terminate, and all of the outstanding obligations under the Term Loan Credit Agreement will continue to be secured by the assets of the Company on a first priority basis.

Note Conversion Agreement

In order to facilitate the Private Placement and the Sixteenth Amendment, Dialectic, as the sole beneficial owner of the Convertible Notes, agreed to voluntarily convert the Convertible Note into common stock.

Pursuant to a Conversion Agreement dated June 1, 2026 (the “Conversion Agreement”), by and among the Company, Dialectic and, solely with respect to Sections 7.1 and 7.3 and Articles III and X thereof, U.S.

Bank Trust Company, National Association, as the trustee and Notes Collateral Agent under the Indenture (the “Indenture”), dated as of December 18, 2025, by and among the Company, the guarantors party thereto and U.S.

Bank Trust Company, National Association, as trustee and collateral agent, on June 4, 2026, Dialectic converted the entire principal amount of the Convertible Note, together with all accrued and unpaid interest thereon, which was approximately $ 57.2 million, at the Closing, subject to certain conditions set forth in the Conversion Agreement (the “Conversion”).

At the Closing, the Convertible Note was canceled.

As consideration for Dialectic’s agreement to voluntarily convert the Convertible Notes to facilitate the Private Placement and the Sixteenth Amendment, the Company agreed to, at the Closing, (i) amend the Convertible Note to waive certain notice and settlement requirements otherwise applicable to a voluntary exchange;

(ii) issue to Dialectic approximately 3.1 million additional shares of the Company’s common stock in connection with the Conversion (the “Share Consideration”), which represents the quotient of (A) approximately $ 13.0 million, the present value of nominal PIK interest that would accrue on the Convertible Note from the Closing to the maturity date thereof, assuming it had remained outstanding until the end of the stated term, discounted at a rate of 11 %, plus (B) approximately $ 3.0 million, the Term Loan Deferred Cash Interest Amount (as defined in the Term Loan Credit Agreement) owed to Dialectic, divided by $ 5.1940 , the current conversion price of the Convertible Note;

and (iii) issue to Dialectic the Conversion Warrant (as defined below).

On June 1, 2026, as additional consideration for the Conversion, the Company issued to Dialectic a warrant (the “Conversion Warrant”) to purchase up to 105,911 shares of common stock at an exercise price of $ 5.1940 per share (the “Conversion Warrant Exercise Price”) (equal to the conversion price of the Convertible Note in effect following the reset period ending March 31, 2026), at any time until the fifth anniversary of the issuance of the Conversion Warrant.

Upon exercise, the aggregate exercise price may be paid, at Dialectic’s election, in cash or on a net issuance basis, based upon the then current market price of the common stock at the time of exercise.

The Conversion Warrant includes certain antidilution protections in favor of Dialectic, subject to certain limitations, including limitations that restrict Dialectic from beneficially owning more than 19.99 % of the Company’s outstanding Common Stock and certain exclusions.

Additionally, Dialectic may require the Company to repurchase the unexercised portion of the Conversion Warrant for an amount equal to $ 844,255 , proportionately adjusted for the portion of the Conversion Warrant subject to repurchase, after the fourth anniversary of the issuance of the Conversion Warrant, or, prior to the fourth anniversary, upon a change of control of the Company or immediately prior to the occurrence of a voluntary dissolution, liquidation or winding up of the affairs of the Company.

Right of First Refusal Agreement

On June 1, 2026, the Company entered into a Right of First Refusal Agreement (the “ROFR Agreement”) with Dialectic and certain investors in the Private Placement, pursuant to which the Company granted a right of first refusal to purchase 25 % of all equity securities to each investor that the Company may issue or sell for a period of the earlier of six (6) months following the date of the ROFR Agreement and completion of the Company’s next equity financing transaction, subject to certain exceptions as described in the ROFR Agreement.

Termination of Term Loan Credit Agreement

On June 4, 2026, the Company paid an aggregate of $ 57.8 million in connection with the termination of the Term Loan Credit Agreement, consisting of the entire outstanding principal amount of $ 56.0 million, accrued interest of $ 1.5 million, and fees and expenses of $ 0.3 million incurred in connection with the termination.

Termination of Equity Line of Credit

On June 4, 2026, in accordance with the terms of the SEPA, the Company provided a notice to YA regarding its termination of the SEPA, effective June 11, 2026.

There were no amounts owed to YA under the SEPA at the time the termination notice was provided.

Termination of Indenture

Pursuant to the terms of that the Conversion Agreement, on June 4, 2026, all of the Company’s outstanding Convertible Notes were canceled, and the Indenture was satisfied and discharged in full.

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