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Quantum Announces the Next Steps of its Debt Reduction Initiative
SAN JOSE, Calif.--(BUSINESS WIRE)-- Quantum® Corporation (Nasdaq: QMCO) ("Quantum" or the "Company"), a leader in solutions for AI and unstructured data,
About this update from Quantum Corporation
[{"type":"text","content":" SAN JOSE, Calif.--(BUSINESS WIRE)--\nQuantum® Corporation (Nasdaq: QMCO) (\"Quantum\" or the \"Company\"), a leader in solutions for AI and unstructured data, today announced of its entry into a Standby Equity Purchase Agreement (the “SEPA”) an investment fund managed by Yorkville Advisors Global, LP (“Yorkville”).\n\n\nTransaction Summary:\n\n\n\nAccess to additional equity capital and liquidity with discount fees of 3% and 4%\n\n\n\nLimited initially to 1.15 million shares, remainder requires shareholder approval\n\n\n\nThree years to access full amount with 100% at Company’s discretion\n\n\n\nCovenant relief during the process to reduce its debt\n\n\n\n“This strategic financial partnership provides Quantum with the flexibility to support our ongoing operations and accelerate our growth initiatives,” said Jamie Lerner, CEO of Quantum. “We have solidified access to significant capital, which, over time, will be used to strengthen our balance sheet and enable us to focus on executing our vision of revolutionizing data management solutions for the AI industry.”\n\n\nMr. Lerner continues, “Quantum has made substantial efforts over the last year to improve our operational and financial health through a combination of revenue and margin improvement plans, financial and organizational restructuring, and cost reduction initiatives. In addition, we have been exploring several strategic alternatives to pay down our currently outstanding debt, which would also help to lower our cost structure, including lowering the interest expense and other fees the Company has incurred. These actions combined with improving our operating free cash flow, strengthen Quantum for its future success.”\n\n\nThe Company’s agreement with Yorkville is initially limited to 19.99% of outstanding shares, or no more than 1,157,139 shares of common stock of the Company under the Purchase Agreement until shareholder approval is obtained. The Company intends to strategically use the SEPA to raise capital as desired, drawing on the available amount based on market conditions and business opportunities. Pursuant to the terms of the SEPA, the Company has the right, but not the obligation, to issue up to $200 million of shares of the Company’s common stock at any time during the three-year period following the execution date of the SEPA, subject to certain customary con...