SEC Form 10-Q filed by Quantum Corporation

2/17/26 4:07:11 PM ET

$QMCO

Electronic Components

Technology

Get the next $QMCO alert in real time by email

qtm-20251231

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended December 31, 2025


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

For the transition period from ___ to ___

Commission File Number 001-13449


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

Delaware

94-2665054

(State or other jurisdiction of incorporation or organization)

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

10770 E. Briarwood Avenue

Centennial

80112

(Address of Principal Executive Offices)

(Zip Code)


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


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

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value per share

QMCO

Nasdaq Global Market

Table of Contents

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

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

Yes

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


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐

Yes

As of the close of business on February 12, 2026, there were 14,638,029 shares of Quantum Corporation’s common stock issued and outstanding.

Table of Contents

QUANTUM CORPORATION

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended December 31, 2025

Table of Contents



		Page

PART I
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Cash Flows	3
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit	4
	Index to Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 5.	Other Information	36
Item 6.	Exhibits	37

Signatures		38

Table of Contents

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

Note Regarding Forward-Looking Statements

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

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

QUANTUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts, unaudited)


	December 31, 2025		March 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	13,180	$	16,464
Restricted cash	661		139
Accounts receivable, net of allowance for credit losses of $2,730 and $99, respectively	59,429		52,502
Inventories	17,629		22,434

Prepaid expenses	3,744		2,738
Other current assets	8,976		8,529
Total current assets	103,619		102,806
Property and equipment, net	9,952		11,378
Goodwill	12,969		12,969
Intangible assets, net	—		281
Right-of-use assets	7,755		8,580
Other long-term assets	14,977		19,388
Total assets	$	149,272	$	155,402
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	29,953	$	31,463
Accrued compensation	9,669		9,214
Deferred revenue, current portion	74,917		75,076
Accrued restructuring	905		786
Term debt	52,758		96,486
Revolving credit facility	—		26,600
Warrant liabilities	16,335		—
Other accrued liabilities	18,639		17,982
Total current liabilities	203,176		257,607
Deferred revenue, net of current portion	33,409		38,847
Convertible Note	75,873		—

Operating lease liabilities	8,406		8,934
Other long-term liabilities	12,637		14,380
Total liabilities	333,501		319,768
Commitments and contingencies (Note 11)
Stockholders' deficit
Preferred stock, 20,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $0.01 par value; 225,000 shares authorized; 14,135 and 6,962 shares issued and outstanding	141		70
Additional paid-in capital	850,512		779,645
Accumulated deficit	(1,033,976)		(942,471)
Accumulated other comprehensive loss	(906)		(1,610)
Total stockholders’ deficit	(184,229)		(164,366)
Total liabilities and stockholders’ deficit	$	149,272	$	155,402

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts, unaudited)


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

Revenue:
Product	$	46,471	$	38,634	$	119,375	$	120,565
Service and subscription	26,520		27,724		77,082		84,640
Royalty	1,595		2,326		5,130		7,592
Total revenue	74,586		68,684		201,587		212,797
Cost of revenue:
Product	35,611		30,922		95,104		93,251
Service and subscription	10,043		9,874		31,287		33,954
Total cost of revenue	45,654		40,796		126,391		127,205
Gross profit	28,932		27,888		75,196		85,592
Operating expenses:
Sales and marketing	12,977		12,448		37,451		39,321
General and administrative	10,045		14,142		34,621		49,186
Research and development	5,573		7,683		17,926		24,255
Restructuring charges	1,525		1,342		7,141		2,916
Total operating expenses	30,120		35,615		97,139		115,678
Income (loss) from operations	(1,188)		(7,727)		(21,943)		(30,086)
Other income (expense), net	(387)		960		(1,261)		(429)
Interest income	42		7		301		21
Interest expense	(5,933)		(6,840)		(18,675)		(16,761)
Change in fair value of warrant liabilities	7,560		(61,630)		9,085		(56,414)
Change in fair value of Convertible Note	1,599		—		1,599		—
Loss on debt extinguishment	(28,946)		—		(59,641)		(3,003)
Loss before income taxes	(27,253)		(75,230)		(90,535)		(106,672)
Income tax provision	590		70		970		675
Net loss	$	(27,843)	$	(75,300)	$	(91,505)	$	(107,347)

Net loss per share - basic and diluted	$	(2.03)	$	(15.35)	$	(7.58)	$	(22.22)

Weighted average shares - basic and diluted	13,689		4,907		12,077		4,831


Net loss	$	(27,843)	$	(75,300)	$	(91,505)	$	(107,347)
Foreign currency translation adjustments, net	44		(1,077)		704		(276)
Total comprehensive loss	$	(27,799)	$	(76,377)	$	(90,801)	$	(107,623)

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)


	Nine Months Ended December 31,
	2025		2024

Operating activities
Net loss	$	(91,505)	$	(107,347)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	2,656		4,440
Amortization of debt issuance costs	5,830		3,704
Non-cash lease expense	976		1,342
Loss on debt extinguishment	34,221		3,003
Provision for product and manufacturing inventories	4,579		1,165
Stock-based compensation	(1,174)		2,376
Paid-in-kind interest	5,328		3,515
Warrants issued in connection with debt amendments	25,420		—
Change in fair value of warrant liabilities	(9,085)		56,408
Change in fair value of Convertible Note	(1,599)		—
Other non-cash	2,710		(281)
Changes in assets and liabilities:
Accounts receivable, net	(7,446)		6,337
Inventories	(580)		5,625

Prepaid expenses	(1,006)		9,406
Operating lease liabilities	(857)		(813)
Accounts payable	(2,290)		(382)
Accrued compensation	454		(6,512)
Accrued restructuring charges	119		—
Deferred revenue	(5,597)		(9,854)
Other current assets	(478)		(124)
Other non-current assets	1,967		1,367
Other current liabilities	1,163		4,839
Other non-current liabilities	(1,244)		1,441
Net cash used in operating activities	(37,438)		(20,345)
Investing activities
Purchases of property and equipment	(925)		(4,324)
Net cash used in investing activities	(925)		(4,324)
Financing activities
Borrowings of long-term debt, net of debt issuance costs	45,046		25,000
Borrowing of Convertible Note	54,718		—
Repayments of long-term debt on Assignment, net	(52,271)		(14,092)
Repayments of long term debt on Exchange, net	(56,979)		—
Borrowings of credit facility	71,625		311,135
Repayments of credit facility	(98,682)		(302,628)
Proceeds from shares issued related to the SEPA, net	72,031		—
Proceeds from the issuance of common stock, net	81		—
Net cash provided by financing activities	35,569		19,415
Effect of exchange rate changes on cash, cash equivalents and restricted cash	32		(3)
Net change in cash, cash equivalents and restricted cash	(2,762)		(5,257)
Cash, cash equivalents and restricted cash at beginning of period	16,603		25,860
Cash, cash equivalents and restricted cash at end of period	$	13,841	$	20,603

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents	$	13,180	$	20,381
Restricted cash	661		222

Cash, cash equivalents and restricted cash at the end of period	$	13,841	$	20,603
Supplemental disclosure of cash flow information
Cash paid for interest	$	4,270	$	8,841
Cash paid for income taxes, net	$	556	$	1,798
Non-cash transactions
Purchases of property and equipment included in accounts payable	$	67	$	88
Right-of-use assets obtained in exchange for new lease liabilities	$	61	$	538



Paid-in-kind interest	$	5,328	$	3,515
Exchange of Term Loan for Convertible Note	$	77,472	$	—

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders' Deficit
Three Months Ended	Shares	Amount
Balance, September 30, 2024	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)		—		—		—
Shares issued related to warrants	406	4		30,119		—		—		30,123
Stock-based compensation	—	—		736		—		—		736
Balance, December 31, 2024	5,307	$	53	$	740,521	$	(934,727)	$	(2,469)	$	(196,622)

Balance, September 30, 2025	13,333	$	133	$	846,451	$	(1,006,133)	$	(950)	$	(160,499)
Net loss	—	—		—		(27,843)		—		(27,843)
Foreign currency translation adjustments, net	—	—		—		—		44		44
Shares issued under employee incentive plans, net	70	1		(1)		—		—		—
Shares issued related to the SEPA, (net of $804 issuance costs)	732	7		5,031		—		—		5,038
Stock-based compensation	—	—		(969)		—		—		(969)
Balance, December 31, 2025	14,135	$	141	$	850,512	$	(1,033,976)	$	(906)	$	(184,229)

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

QUANTUM CORPORATION

CONDENSED 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
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)		—		—		—
Shares issued related to warrants	406	4		30,119		—		—		30,123
Stock-based compensation	—	—		2,376		—		—		2,376
Balance, December 31, 2024	5,307	$	53	$	740,521	$	(934,727)	$	(2,469)	$	(196,622)

Balance, March 31, 2025	6,962	$	70	$	779,645	$	(942,471)	$	(1,610)	$	(164,366)
Net loss	—	—		—		(91,505)		—		(91,505)
Foreign currency translation adjustments, net	—	—		—		—		704		704
Shares issued under employee incentive plans, net	121	1		80		—		—		81
Shares issued related to the SEPA, (net of $3,502 issuance costs)	7,052	70		71,961		—		—		72,031
Stock-based compensation	—	—		(1,174)		—		—		(1,174)
Balance, December 31, 2025	14,135	$	141	$	850,512	$	(1,033,976)	$	(906)	$	(184,229)

See accompanying Notes to Condensed Consolidated Financial Statements.

Table of Contents

INDEX TO NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


		Page
Note 1:	Description of Business and Summary of Significant Accounting Policies	7
Note 2:	Revenue	9
Note 3:	Balance Sheet Information	10
Note 4:	Debt	11
Note 5:	Fair Value of Financial Instruments	14
Note 6:	Leases	16
Note 7:	Restructuring Charges	17
Note 8:	Common Stock	18
Note 9:	Net Loss Per Share	19
Note 10:	Income Taxes	19
Note 11:	Commitments and Contingencies	20
Note 12:	Segment Information	21
Note 13:	Subsequent Events	23

Table of Contents

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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

Description of Business

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

Basis of Presentation

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

The unaudited condensed consolidated interim financial statements reflect all adjustments, consisting only of normal and recurring items, necessary to present fairly our financial position as of December 31, 2025, the results of operations and comprehensive loss, statements of cash flows, and changes in stockholders’ deficit for the three and nine months ended December 31, 2025 and 2024. Interim results are not necessarily indicative of full year performance because of short-term variations.

Going Concern

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

The Company is required to repay the Term Loan (as defined herein) on August 5, 2026. The Company does not have sufficient cash to make this repayment, nor does the Company expect to generate sufficient cash through operating activities to repay the Term Loan by August 5, 2026. The Company may be required to use proceeds from the Standby Equity Purchase Agreement (“SEPA”) or other financing sources to meet this obligation. There can be no assurance that the Company will be able to raise sufficient proceeds under the SEPA on acceptable terms, or at all.

The condensed consolidated financial statements do not include any adjustments to the carrying amounts or classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

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.

Table of Contents

Use of Estimates

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

Restricted Cash

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

Convertible Note

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

Accounting Pronouncement Recently Adopted

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

Recent Accounting Pronouncement Not Yet Adopted

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

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets. 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.

Table of Contents

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

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

NOTE 2: REVENUE

Contract Balances

As of December 31, 2025, March 31, 2025 and March 31, 2024, the Company’s contract assets related to performance obligations completed in advance of the right to invoice and are included in other current asset in the condensed consolidated balance sheets. Contract assets were not material as of December 31, 2025, March 31, 2025 and March 31, 2024. As of March 31, 2024, accounts receivable totaled $67.8 million.

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

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


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

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

Remaining Performance Obligations

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

RPO consisted of the following (in thousands):


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

Table of Contents

NOTE 3: BALANCE SHEET INFORMATION

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

Inventories


	December 31, 2025		March 31, 2025



Finished goods	$	5,810	$	10,471
Work in progress	1,254		380
Raw materials	9,909		9,485
Service parts	656		2,098
Total inventories	$	17,629	$	22,434

Intangibles, net


	December 31, 2025						March 31, 2025
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net


Customer lists	$	4,398	$	(4,398)	$	—	$	4,398	$	(4,117)	$	281

Intangible assets, net	$	4,398	$	(4,398)	$	—	$	4,398	$	(4,117)	$	281

Intangible assets amortization expense was $0.0 million and $0.2 million, and $0.3 million and $0.8 million for the three and nine months ended December 31, 2025 and 2024, respectively. The Company recorded amortization of developed technology in cost of product revenue, and customer lists in sales and marketing expenses in the condensed consolidated statements of operations and comprehensive loss.

Goodwill

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


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

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

Table of Contents

NOTE 4: DEBT

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


	December 31, 2025		March 31, 2025
Term Loan	$	54,636	$	102,507
Convertible Note	75,873		—
PNC Credit Facility	—		26,600
Less: current portion	(52,758)		(123,086)
Less: unamortized debt issuance costs (1)	(1,878)		(6,021)
Long-term debt, net	$	75,873	$	—

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

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

On June 1, 2023, the Company entered into amendments to the Credit Agreements (the “June 2023 Amendment”) which, among other things, provided an advance of $15.0 million in additional term loan borrowings (the “2023 Term Loan” and, together with the 2021 Term Loan, the "Term Loan") and incurred $0.9 million in original issuance discount and origination fees which have been recorded as a reduction to the carrying amount of the 2023 Term Loan and amortized to interest expense over the term of the loan. The terms of the 2023 Term Loan are substantially similar to the terms of the 2021 Term Loan, including in relation to maturity and security, except that, among other things, (a) the Applicable Margin (i) for any 2023 Term Loan designated an “ABR Loan” is 9.00% per annum and (ii) for any 2023 Term Loan designated as a “SOFR Loan” is 10.00% per annum, (b) accrued interest on the 2023 Term Loan is payable in kind ("PIK"), and is capitalized and added to the principal amount of the 2023 Term Loan at the end of each interest period applicable thereto, (c) the 2023 Term Loan does not amortize prior to the maturity date thereof, and (d) the 2023 Term Loan may not be prepaid prior to the payment in full of the existing term loans. In connection with the 2023 Term Loan, the Company issued warrants to purchase an aggregate of 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. In connection with the amendments, the Company issued the Term Loan lenders warrants to purchase an aggregate of 50,000 shares of the common stock at a purchase price of $8.20 (the “July 2024 Warrants”).

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

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

Table of Contents

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 ended September 30, 2025; and (x) repriced certain lender warrants.

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”). Borrowings under the August 2024 Term Loan have an August 5, 2026 maturity date, which aligns with the 2021 Term Loan. The principal is payable quarterly beginning September 30, 2025, at a rate per annum equal to 5% of the original principal balance. The August 2024 Term Loan’s interest rate margin is (a) until March 31, 2025 (i) for any August 2024 Term Loan designated as a ‘SOFR Loan’, 12.00% per annum and (ii) for any August 2024 Term Loan designated an ‘ABR Loan’, 11.00% per annum, in each case, with 6.00% of such interest rate margin paid-in-kind, and (b) from April 1, 2025, (i) for any August 2024 Term Loan designated as a ‘SOFR Loan’, 14.00% per annum and (ii) for any August 2024 Term Loan designated an ‘ABR Loan’, 13.00% per annum, in each case, with 8.00% of such interest rate margin paid-in-kind. The August 2024 Term Loan also includes a multiple on invested capital payable to the August 2024 Term Loan lenders. Subsequently, the Company borrowed the remaining $15.8 million of the August 2024 Term Loan’s borrowing capacity before September 30, 2024.

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

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

In connection with the August 2024 Amendments, the Company issued warrants to purchase an aggregate of 380,310 shares of 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 term of the loan. The August 2024 Amendments to the 2021 Term Loan held by another lender was accounted for as a debt extinguishment. The Company recorded a loss on debt extinguishment of $3.0 million related to the write-off of a portion of unamortized debt issuance costs and fees and expenses incurred with the August 2024 Amendments.

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

Table of Contents

recorded a gain on debt extinguishment of $2.4 million related to the net of discount on issuance of term loans to a new lender and write-off of all unamortized debt issuance costs and fees related to the previous lender. The $0.4 million in new lender fees were recorded as a reduction to the carrying amounts of the term loans and amortized to interest expense over the remaining term of the loan.

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

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

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

On September 23, 2025, the Company entered into 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 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 warrants (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.

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 for the nine months ended December 31, 2025. 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.

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

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

Table of Contents

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 VWAP of the Company’s common stock immediately preceding the Reset Price Date.

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

The Company accounted for the exchange of Dialectic’s term loans for the Convertible Note as an extinguishment of the term loan and recognized a loss on debt extinguishment of $28.9 million for the three and nine months ended December 31, 2025. The Company elected the fair value option under ASC 825 for the Convertible Note. See Note 5, Fair Value of Financial Instruments, for additional information.

Forbearance Warrant

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

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

Related Party Transaction

The Forbearance Warrant and Convertible Note issued to Dialectic constitute related party transactions, as John Fichthorn, a member of the Company's Board of Directors, 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 December 31, 2025 are included in Note 5: Fair Value of Financial Instruments.

NOTE 5: FAIR VALUE OF FINANCIAL INSTRUMENTS

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

No impairment charges were recognized for non-financial assets for the three and nine months ended December 31, 2025 and 2024. The Company has no non-financial liabilities measured and recorded at fair value on a non-recurring basis.

Debt

Debt is generally recorded at amortized cost; however, the Company elected the fair value option for the Convertible Note, which is recorded at fair value on a recurring basis. The fair value of the Company’s debt is disclosed for informational purposes only and is not recognized in the condensed consolidated balance sheets.

Table of Contents

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

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


	December 31, 2025				March 31, 2025
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loans	$	54,636	$	52,096	$	102,507	$	91,576
PNC Credit Facility	$	—	$	—	$	26,600	$	24,755
Convertible Note	$	75,873	$	75,873	$	—	$	—

Warrants

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

The Forbearance Warrant was valued using a Monte Carlo simulation model in conjunction with a Probability-Weighted Expected Return Model. 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 December 31, 2025:


	December 31, 2025	September 23, 2025





Discount period (years)	6.73 years	7.0 years
Risk-free interest rate	3.46% - 3.87%	3.52% - 3.83%
Stock price volatility	100.00%	98.00%
Stock price at valuation date	$6.45	$10.69
Probability1	35% - 15% - 50%	35% - 15% - 50%
Fair value (in thousands)	$16,335	$25,420

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

The table below sets forth a summary of changes in the fair value of the Company’s warrant liabilities for the period ended December 31, 2025:








Issuance of warrants	$	25,420
Change in fair value of warrant liabilities	(1,525)
Balance at September 30, 2025	23,895



Change in fair value of warrant liabilities	(7,560)
Balance at December 31, 2025	$	16,335

Table of Contents

Convertible Note

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

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

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


	December 31, 2025	December 18, 2025





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

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








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

NOTE 6: LEASES

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


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

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

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


	Three Months Ended December 31,				Nine Months Ended December 31,
Lease Cost	2025		2024		2025		2024
Operating lease cost	$	545	$	716	$	1,686	$	2,207
Variable lease cost	145		69		220		221

Total lease cost	$	690	$	785	$	1,906	$	2,428

Table of Contents


Maturity of Lease Liabilities	Operating Leases
Remainder of fiscal year 2026	$	556
2027	1,880
2028	1,625
2029	1,247
2030	1,244
Thereafter	10,855
Total lease payments	17,407
Less: imputed interest	(8,322)
Present value of lease liabilities	$	9,085


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

Operating cash outflows related to operating leases each totaled $1.6 million and $2.1 million for the nine months ended December 31, 2025 and 2024, respectively.

NOTE 7: RESTRUCTURING CHARGES

During the quarters ended December 31, 2025 and 2024, the Company had certain approved restructuring plans to improve operational efficiencies and rationalize its cost structure. During the quarter ended December 31, 2025, the Company recognized $1.5 million of restructuring charges primarily related to employee severance and other termination benefits. These charges are presented within restructuring charges in the condensed consolidated statements of operations and comprehensive loss. The Company expects to recognize additional restructuring charges in future periods, primarily related to severance and termination benefits, and is expected to be substantially complete by the end of fiscal year 2026, which is subject to change.

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


	Severance and Benefits
Balance as of March 31, 2024	$	—
Restructuring charges	2,916

Cash payments	(2,849)
Other non-cash	(67)
Balance as of December 31, 2024	$	—

Balance as of March 31, 2025	$	786
Restructuring charges	7,141

Cash payments	(7,053)
Other non-cash	31
Balance as of December 31, 2025	$	905

During the three and nine months ended December 31, 2025, the Company recognized approximately $0.8 million and $2.0 million in forfeitures of unvested restricted stock units (“RSUs”) in connection with workforce reductions and employee departures, which reduced stock-based compensation expense in the respective periods.

Table of Contents

NOTE 8: COMMON STOCK

2023 Long-Term Incentive Plan

At the Company’s 2025 annual meeting of shareholders held on December 16, 2025 (the “Annual Meeting”), the Company’s shareholders approved an amendment and restatement of the Quantum Corporation 2023 Long-Term Incentive Plan (the “2023 Plan”) 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.

CEO New Hire Awards

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

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

December 31, 2025

Term (years)

7.00 years

Volatility

80.0%

Dividend yield

0.00%

Risk-free interest rate

3.52%

Grant date fair value

$368,038

Standby Equity Purchase Agreement

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

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

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

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

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

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

Table of Contents

NOTE 9: NET LOSS PER SHARE

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

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

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


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

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

NOTE 10: INCOME TAXES

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

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

Table of Contents

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

NOTE 11: COMMITMENTS AND CONTINGENCIES

Commitments to Purchase Inventory

The Company uses contract manufacturers for its manufacturing operations. Under these arrangements, the contract manufacturer procures inventory to manufacture products based upon the Company’s forecast of customer demand. The Company has similar arrangements with certain other suppliers. The Company may be responsible for the financial impact on the supplier or contract manufacturer of any reduction or product mix shift in the forecast relative to materials that the third party had already purchased under a prior forecast. Such a variance in forecasted demand could require a cash payment for inventory in excess of current customer demand or for costs of excess or obsolete inventory. As of December 31, 2025, the Company had issued non-cancelable commitments for $47.2 million to purchase inventory from its contract manufacturers and suppliers.

Litigation

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

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

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.

On January 22, 2026, the court ordered the separate Cullison and Marti shareholder derivative complaints to be consolidated.

At this time, Quantum is not able to determine whether the shareholder class action or derivative lawsuits would have any material impact on our business, operating results, or financial condition. Quantum expects to be able to utilize its directors’ and officers’ liability insurance to cover the insurable costs for these litigations, to the extent applicable.

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

Table of Contents

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

NOTE 12: SEGMENT INFORMATION

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

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

Disaggregation of Revenue

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


	Three Months Ended December 31,								Nine Months Ended December 31,
	2025				2024				2025				2024
Americas1



Product revenue	$	26,605			$	19,245			$	70,292			$	65,671
Service and subscription	15,540				14,639				44,887				46,029
Total revenue	42,145		57	%	33,884		50	%	115,179		56	%	111,700		52	%

EMEA



Product revenue	14,930				14,423				35,763				40,396
Service and subscription	8,906				10,544				25,811				31,245
Total revenue	23,836		32	%	24,967		36	%	61,574		31	%	71,641		34	%

APAC



Product revenue	4,936				4,966				13,320				14,498
Service and subscription	2,074				2,541				6,384				7,366
Total revenue	7,010		9	%	7,507		11	%	19,704		10	%	21,864		10	%

Consolidated



Product revenue	46,471				38,634				119,375				120,565
Service and subscription	26,520				27,724				77,082				84,640
Royalty2	1,595		2	%	2,326		3	%	5,130		3	%	7,592		4	%
Total revenue	$	74,586	100	%	$	68,684	100	%	$	201,587	100	%	$	212,797	100	%

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

2 Royalty revenue is not allocatable to geographic regions.

Revenue by Solution

Table of Contents


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

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

Net Loss

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


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

1 Salaries & fringe includes spend on contractors.

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

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

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

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

Table of Contents

NOTE 13: SUBSEQUENT EVENTS

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

Table of Contents

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

The following discussion and analysis compares the change in the condensed consolidated financial statements for quarters and nine months ended December 31, 2025 and December 31, 2024, and should be read together with our condensed consolidated financial statements and the related notes thereto included in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 (the “Annual Report”). In particular, the risk factors contained in Part I, Item 1A of the Annual Report under the heading “Risk Factors” may reflect trends, demands, commitments, events, or uncertainties that could materially impact our results of operations and liquidity and capital resources. For comparisons of quarters and nine months ended December 31, 2024 and December 31, 2023, see our Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the year ended March 31, 2025, filed with the SEC on August 26, 2025 and incorporated herein by reference. Our fiscal year ends on March 31 of each calendar year. "Fiscal 2025" refers to the fiscal year ended March 31, 2025.

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

OVERVIEW

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

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

Macroeconomic Conditions

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

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

Table of Contents

RESULTS OF OPERATIONS


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

Total revenue	$	74,586	$	68,684	$	201,587	$	212,797
Total cost of revenue (1)	45,654		40,796		126,391		127,205
Gross profit	28,932		27,888		75,196		85,592

Operating expenses
Sales and marketing (1)	12,977		12,448		37,451		39,321
General and administrative (1)	10,045		14,142		34,621		49,186
Research and development (1)	5,573		7,683		17,926		24,255
Restructuring charges (1)	1,525		1,342		7,141		2,916
Total operating expenses	30,120		35,615		97,139		115,678
Income (loss) from operations	(1,188)		(7,727)		(21,943)		(30,086)
Other income (expense), net	(387)		960		(1,261)		(429)
Interest income	42		7		301		21
Interest expense	(5,933)		(6,840)		(18,675)		(16,761)
Change in fair value of warrant liabilities	7,560		(61,630)		9,085		(56,414)
Change in fair value of Convertible Note	1,599		—		1,599		—
Loss on debt extinguishment	(28,946)		—		(59,641)		(3,003)
Loss before income taxes	(27,253)		(75,230)		(90,535)		(106,672)
Income tax provision	590		70		970		675
Net loss	$	(27,843)	$	(75,300)	$	(91,505)	$	(107,347)

(1) Includes stock-based compensation as follows:


	Three Months Ended December 31,				Nine Months Ended December 31,
(in thousands)	2025		2024		2025		2024
Cost of revenue	$	(58)	$	95	$	(38)	$	361
Research and development	27		105		114		454
Sales and marketing	(66)		46		(72)		219
General and administrative	(872)		490		(1,178)		1,342
Total	$	(969)	$	736	$	(1,174)	$	2,376

Comparison of the Three Months Ended December 31, 2025 and 2024

Revenue


	Three Months Ended December 31,





(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Product revenue	$	46,471	62	%	$	38,634	57	%	$	7,837	20	%
Service and subscription	26,520		36	%	27,724		40	%	(1,204)		(4)	%
Royalty	1,595		2	%	2,326		3	%	(731)		(31)	%
Total revenue	$	74,586	100	%	$	68,684	100	%	$	5,902	9	%

Product Revenue

Table of Contents

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

Service and Subscription Revenue

Service and subscription revenue decreased $1.2 million, or 4%, in the three months ended December 31, 2025 compared to the same period in fiscal 2025. This decrease was due to a strong quarter for support renewals and related revenue recognition.

Royalty Revenue

We receive royalties from third parties that license our linear-tape open media patents through our membership in the linear-tape open consortium. Royalty revenue decreased $0.7 million, or 31%, in the three months ended December 31, 2025 compared to the same period in fiscal 2025 due to both lower market volume and a mix weighted towards linear-tape-open (“LTO”) types with lower royalty rates.

Gross Profit and Margin



	Three Months Ended December 31,

(dollars in thousands)	2025		Gross margin %		2024		Gross margin %		$ Change		Basis point change
Product	$	10,860	23.4	%	$	7,712	20.0	%	$	3,148	340
Service and subscription	16,477		62.1	%	17,850		64.4	%	(1,373)		(230)
Royalty	1,595		100.0	%	2,326		100.0	%	(731)		—
Gross profit	$	28,932	38.8	%	$	27,888	40.6	%	$	1,044	(180)

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

Product Gross Margin

Product gross margin increased by $3.1 million, or by 340 basis points, for the three months ended December 31, 2025, as compared with the same period in fiscal 2025. This increase was primarily due to sales during the quarter more heavily weighted towards higher margin products.

Service and Subscription Gross Margin

Service and subscription gross margins decreased by $1.4 million, or by 230 basis points, for the three months ended December 31, 2025, as compared with the same period in fiscal 2025. This decrease was primarily driven by higher service inventory and logistics costs as we rebalance spare parts supply worldwide.

Royalty Gross Margin

Royalties do not have significant related cost of sales.

Operating Expenses



	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Sales and marketing	$	12,977	17	%	$	12,448	18	%	$	529	4	%
General and administrative	10,045		13	%	14,142		21	%	(4,097)		(29)	%
Research and development	5,573		8	%	7,683		11	%	(2,110)		(27)	%
Restructuring charges	1,525		2	%	1,342		2	%	183		14	%
Total operating expenses	$	30,120	40	%	$	35,615	52	%	$	(5,495)	(15)	%

In the three months ended December 31, 2025, sales and marketing expenses increased $0.5 million, or 4%, as compared with the same period in fiscal 2025. This increase was primarily driven by higher commission expense related to product and service sales.

Table of Contents

In the three months ended December 31, 2025, general and administrative expenses decreased $4.1 million, or 29%, as compared with the same period in fiscal 2025. This decrease was primarily driven by higher expense in the prior year related to compliance focused outside services.

In the three months ended December 31, 2025, research and development expenses decreased $2.1 million, or 27%, as compared with the same period in fiscal 2025. This decrease was the result of efficiencies realized through improved organization design, including the consolidation of common functions.

In the three months ended December 31, 2025, restructuring expenses increased $0.2 million, or 14%, as compared with the same period in fiscal 2025. This increase in restructuring expenses primarily involves workforce reductions and related severance and termination benefits. These actions are part of management’s ongoing efforts to align the Company’s organizational structure and resources with its strategic priorities and to streamline operations across business units.

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

Other Income (Expense), net



	Three Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Other income (expense),net	$	(387)	(1)	%	$	960	1	%	$	(1,347)	(140)	%

The change in other income (expense), net during the three months ended December 31, 2025 compared with the same period in fiscal 2025 was related primarily to fluctuations in foreign currency exchange rates during the three months ended December 31, 2025.

Interest Income



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

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

Interest Expense



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

Interest expense	$	(5,933)	(8)	%	$	(6,840)	(10)	%	$	907	(13)	%

In the three months ended December 31, 2025, interest expense decreased $0.9 million, or 13%, as compared with the same period in fiscal 2025, primarily due to the exchange of Dialectic’s portion of the Term Loan for the Convertible Note on December 18, 2025, which reduced the amount of Term Loan principal outstanding during the quarter.

Table of Contents

Warrant Liabilities



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

Change in fair value of warrant liabilities - Lender Warrants	$	—	—	%	$	(61,630)	(90)	%	$	61,630	100	%
Change in fair value of warrant liabilities - Forbearance Warrant	$	7,560	10	%	$	—	—	%	$	7,560	100	%

In the three months ended December 31, 2025, we recorded a non-cash gain of $7.6 million related to the change in fair value of our Forbearance Warrant liabilities. In the three months ended December 31, 2024, we recorded a non-cash loss of $61.6 million related to the change in fair value of our Lender Warrant liabilities. These changes were primarily driven by fluctuations in our stock price.

Convertible Note



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

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

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

Loss on Debt Extinguishment



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

Loss on debt extinguishment	$	(28,946)	(42)	%	$	—	—	%	$	(28,946)	100	%

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

Income Taxes


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

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

Table of Contents

Comparison of the Nine Months Ended December 31, 2025 and 2024

Revenue


	Nine Months Ended December 31,





(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Product revenue	$	119,375	59	%	$	120,565	56	%	$	(1,190)	(1)	%
Service and subscription	77,082		38	%	84,640		40	%	(7,558)		(9)	%
Royalty	5,130		3	%	7,592		4	%	(2,462)		(32)	%
Total revenue	$	201,587	100	%	$	212,797	100	%	$	(11,210)	(5)	%

Product Revenue

In the nine months ended December 31, 2025, product revenue decreased $1.2 million, or 1%, as compared to the same period in fiscal 2025. The primary driver of the decrease was in primary storage systems with a large video surveillance order in the prior period.

Service and Subscription Revenue

Service and subscription revenue decreased $7.6 million, or 9%, in the nine months ended December 31, 2025 compared to the same period in fiscal 2025. This decrease was due to certain long-lived products reaching their end-of-service-life.

Royalty Revenue

We receive royalties from third parties that license our linear-tape open media patents through our membership in the linear-tape open consortium. Royalty revenue saw a decrease of $2.5 million, or 32%, in the nine months ended December 31, 2025 compared to the same period in fiscal 2025 due to both lower market volume and a mix weighted towards LTO types with lower royalty rates.

Gross Profit and Margin



	Nine Months Ended December 31,

(dollars in thousands)	2025		Gross margin %		2024		Gross margin %		$ Change		Basis point change
Product	$	24,271	23.4	%	$	27,314	22.7	%	$	(3,043)	70
Service and subscription	45,795		62.1	%	50,686		59.9	%	(4,891)		220
Royalty	5,130		100.0	%	7,592		100.0	%	(2,462)		—
Gross profit	$	75,196	38.8	%	$	85,592	40.2	%	$	(10,396)	(140)

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

Product Gross Margin

Product gross margin decreased by $3.0 million, or by 70 basis points, for the nine months ended December 31, 2025, as compared with the same period in fiscal 2025. This decrease was primarily due to an inventory provision accrued for certain end-of-life products, as well as supply chain logistics costs including import tariffs.

Service and Subscription Gross Margin

Service and subscription gross margins decreased by $4.9 million, or by 220 basis points for the nine months ended December 31, 2025, as compared with the same period in fiscal 2025. This decrease was primarily driven by the reduction of service costs across the organization, including logistics, repair, and labor.

Royalty Gross Margin

Royalties do not have significant related cost of sales.

Table of Contents

Operating Expenses



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

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

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

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

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

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

Other Income (Expense), net



	Nine Months Ended December 31,
(dollars in thousands)	2025		% of revenue		2024		% of revenue		$ Change		% Change
Other income (expense), net	$	(1,261)	(1)	%	$	(429)	(0)	%	$	(832)	(194)	%

The change in other income (expense), net during the nine months ended December 31, 2025 compared with the same period in fiscal 2025 was related primarily to fluctuations in foreign currency exchange rates during the nine months ended December 31, 2025.

Interest Income



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

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

Table of Contents

Interest Expense



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

Interest expense	$	(18,675)	(9)	%	$	(16,761)	(8)	%	$	(1,914)	11	%

In the nine months ended December 31, 2025, interest expense increased $1.9 million, or 11%, as compared with the same period in fiscal 2025 due to a higher effective interest rate on our Term Loan as well as increased amortization of deferred debt issuance costs.

Warrant Liabilities



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

Change in fair value of warrant liabilities - Lender Warrants	$	—	—	%	$	(56,414)	(27)	%	$	56,414	(100)	%
Change in fair value of warrant liabilities - Forbearance Warrant	$	9,085	5	%	$	—	—	%	$	9,085	100	%

In the nine months ended December 31, 2025, we recorded a non-cash gain of $9.1 million related to the change in fair value of our Forbearance Warrant liabilities. In the nine months ended December 31, 2024, we recorded a non-cash loss of $56.4 million related to the change in fair value of our Lender Warrant liabilities. These changes were primarily driven by fluctuations in our stock price.

Convertible Note



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

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

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

Loss on Debt Extinguishment



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

Loss on debt extinguishment	$	(59,641)	(30)	%	$	(3,003)	(1)	%	$	(56,638)	1,886	%

In the nine months ended December 31, 2025, loss on debt extinguishment was related to the exchange of Dialectic’s portion of the Term Loan for the Convertible Note as well as the loss which was recorded for the issuance of new term loans in September 2025. In the nine months ended December 31, 2024, loss on debt extinguishment was related to prepayment of our long-term debt.

Income Taxes


	Nine Months Ended December 31,
(dollars in thousands)	2025		% of pretax income		2024		% of pretax income		$ Change		% Change
Income tax provision	$	970	(2)	%	$	675	—	%	$	295	44	%

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

Table of Contents

attributes in certain foreign jurisdictions, and the difficulty in predicting future results, we believe that we cannot rely on projections of future taxable income to realize most of our deferred tax assets. Accordingly, we have established a full valuation allowance against our U.S. and certain foreign net deferred tax assets. Significant management judgment is required in assessing our ability to realize any future benefit from our net deferred tax assets. We intend to maintain this valuation allowance until sufficient positive evidence exists to support its reversal. Our income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, our valuation allowance.

LIQUIDITY AND CAPITAL RESOURCES

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

We had cash and cash equivalents of $13.2 million as of December 31, 2025, which consisted primarily of bank deposits and money market accounts. As of December 31, 2025, our total outstanding Term Loan debt was $54.6 million.

We generated negative cash flows from operations of approximately $37.4 million and $20.3 million for the nine months ended December 31, 2025 and 2024, respectively, and generated net losses of approximately $91.5 million and $107.3 million for the nine months ended December 31, 2025 and 2024, respectively. We have funded operations through the sale of common stock, Term Loan borrowings and PNC Credit Facility borrowings described in Note 4: Debt.

On January 25, 2025, we entered into the SEPA, pursuant to which, and subject to its terms, we have the right, but not the obligation, to sell up to $200 million of our common stock during the three-year period following the date of the SEPA. As of December 31, 2025, we sold approximately 8.2 million shares of common stock under the SEPA for net proceeds of approximately $89.6 million. There were 0.7 million and 7.1 million shares of common stock sold for net proceeds of approximately $5.0 million and $72.0 in the three and nine months ended December 31, 2025.

On December 18, 2025, we completed an exchange of Dialectic’s portion of the Term Loan for one or more senior secured Convertible Note with a three-year maturity. This exchange reduced the amount of the Term Loan principal scheduled to mature on August 5, 2026. However, we remain obligated to repay the remaining Term Loan balance at maturity. As discussed in Note 1: Description of Business and Summary of Significant Accounting Policies—Going Concern, we do not expect to be able to repay the Term Loan at maturity using cash generated from operating activities. While we intend to use proceeds from the SEPA and/or other financing sources to support repayment of the remaining Term Loan balance, there can be no assurance that we will be able to access sufficient proceeds under the SEPA, obtain additional financing on acceptable terms, or at all.

Cash Flows

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


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

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

Table of Contents

Cash Used In Operating Activities

Net cash used in operating activities was $37.4 million for the nine months ended December 31, 2025. This use of cash was primarily attributed to the net loss and changes in working capital, partially offset by non-cash charges including loss on debt extinguishment, paid-in-kind interest, and changes in the fair value of warrant liabilities and the Convertible Note.

Net cash used in operating activities was $20.3 million for the nine months ended December 31, 2024. This use of cash was primarily attributed to net loss offset by non-cash charges, including a $56.4 million change in fair value of warrant liabilities, depreciation and amortization, stock-based compensation, paid-in-kind interest, and a loss on debt extinguishment. Working capital changes provided cash, including decreases in accounts receivable, inventories and prepaid expenses, partially offset by decreases in deferred revenue and accrued compensation.

Cash Used in Investing Activities

Net cash used in investing activities was $0.9 million in the nine months ended December 31, 2025, which was attributable to capital expenditures.

Net cash used in investing activities was $4.3 million in the nine months ended December 31, 2024, which was attributable to capital expenditures.

Cash Provided by Financing Activities

Net cash provided by financing activities was $35.6 million for the nine months ended December 31, 2025, which was related primarily to net borrowings, the issuance of the Convertible Note, and proceeds from the SEPA, partially offset by repayments of long-term debt and credit facility borrowings.

Net cash provided by financing activities was $19.4 million for the nine months ended December 31, 2024, primarily reflecting borrowings under the revolving credit facility and issuance of long-term debt, partially offset by repayments of long-term debt and revolver borrowings.

Commitments and Contingencies

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

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

Off Balance Sheet Arrangements

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

Contractual Obligations

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

Table of Contents

Critical Accounting Estimates and Policies

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

Recently Issued and Adopted Accounting Pronouncements

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

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

Material Weaknesses in Internal Control Over Financial Reporting

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

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

Revenue Recognition

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

•Controls related to the Company’s accounting practices and procedures for application of standalone selling price under Accounting Standards Codification Topic 606 Revenue from Contracts with Customers (“Topic

Table of Contents

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

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

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

Manufacturing Inventory

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

Control Environment

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

Remediation Plan

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

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

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

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

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

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

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

Changes in Internal Control

Except for the ongoing remediation measures to address the material weaknesses, in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act, there were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

Limitations on Effectiveness of Controls

Table of Contents

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

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

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

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Arrangement

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

Table of Contents

ITEM 6. EXHIBITS

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

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

Filing Date

Exhibit

Filed or Furnished Herewith

3.1

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

S-1

1/27/25

3.1

3.2

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

8-K

6/18/25

3.1

4.1

Indenture (including form of 10.00% PIK Senior Secured Convertible Note due 2028) dated 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

8-K

12/18/25

4.1

4.2

Registration Rights Agreement dated December 18, 2025, by and between the Company and Dialectic Technology SPV LLC

8-K

12/18/25

4.2

10.1#

Quantum Corporation 2023 Long-Term Incentive Plan, as amended and restated through October 20, 2025

10.2#

Amendment No. 2 to Quantum Corporation 2021 Inducement Plan, dated January 8, 2026

31.1

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

31.2

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

32.1^

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

32.2^

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

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

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

# Indicates management contract or compensatory plan or arrangement.

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

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Quantum Corporation

(Registrant)

February 17, 2026

/s/ Hugues Meyrath

(Date)

Hugues Meyrath

President and Chief Executive Officer

(Principal Executive Officer)

February 17, 2026

/s/ William H. White

(Date)

William H. White

Chief Financial Officer

(Principal Financial Officer)

Get the next $QMCO alert in real time by email

SEC Form 10-Q filed by Quantum Corporation

Crush Q1 2026 with the Best AI Superconnector

Recent Analyst Ratings for
$QMCO

$QMCO
Press Releases

Quantum Reports Fiscal Third Quarter 2026 Financial Results

Quantum to Announce Fiscal Third Quarter 2026 Financial Results on February 17, 2026

Quantum Appoints William H. White as Chief Financial Officer

$QMCO
SEC Filings