QUANTUM CORP /DE/

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Principal Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-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 this evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting related to revenue recognition, inventories, income taxes and control environment as previously described in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, which remain unremediated as of September 30, 2026.

Notwithstanding the identified material weaknesses, management, including our Chief Executive Officer and Principal Financial Officer, have determined, based on the procedures performed, that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present in all material respects the financial condition, results of operations and cash flows of the Company for the periods presented in accordance with U.S. generally accepted accounting principles.

Remediation Update

Management has initiated and continues to implement a remediation plan designed to address the material weaknesses described above. Remediation activities in the quarter ended September 30, 2026 include:

•Engaging an independent third-party consulting firm with expertise in internal controls over financial reporting, revenue recognition, inventory accounting, and Sarbanes-Oxley compliance to assist management in evaluating control deficiencies, designing enhanced controls, and supporting remediation efforts;

•We continued to implement enhanced controls over sales order entry, contract review, deferral schedule maintenance, and standalone selling price analyses to support compliance with ASC 606;

•We enhanced inventory count, reconciliation, and monitoring procedures, including enhanced controls over the reconciliation of physical inventory records to underlying system records;

•We began implementing enhanced controls over the preparation and review of the income tax provision and related tax accounts and disclosures by implementing a formalized preparation and review process.

•We enhanced the accounting and finance organization through the addition of personnel with public company financial reporting, revenue recognition, inventory accounting, and income tax expertise. During the second quarter, we hired a Director of Tax and a Chief Accounting Officer who is a certified public accountant with prior public company financial reporting experience.

While management has begun implementing these remediation measures, the material weaknesses cannot be considered remediated until the enhanced controls have been fully designed, implemented, operated for a sufficient period of time, and management has completed testing and concluded that the controls are operating effectively.

Changes in Internal Controls over Financial Reporting

Except for the matters discussed above, there were no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control performed during the fiscal quarter ended September 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II