Quantum Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2024

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


	Year Ended March 31,
	2024		2023		2022
			As Restated		As Restated
U.S.	$	(40,555)	$	(18,429)	$	39,146
Foreign	(20)		2,001		550
Total	$	(40,575)	$	(16,428)	$	39,696

Schedule of income tax provision

Income tax provision consists of the following (in thousands):


	Year Ended March 31,
	2024		2023		2022
			As Restated		As Restated
Current tax expense
Federal	$	—	$	—	$	—
State	14		70		477
Foreign	919		2,045		1,381
Total current tax expense	933		2,115		1,858
Deferred tax expense
Federal	18		23		9
State	21		108		22
Foreign	(261)		(306)		(548)
Total deferred tax expense (benefit)	(222)		(175)		(517)
Income tax provision	$	711	$	1,940	$	1,341

Schedule of federal income tax rate reconciliation

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


	For the year ended March 31,
	2024		2023		2022
			As Restated		As Restated
Expense (benefit) at the federal statutory rate	$	(8,507)	$	(3,450)	$	8,341
Equity compensation	1,102		1,945		195
Permanent items	768		1,498		1,941
Foreign taxes	264		586		1,761
State income taxes	(860)		(124)		(133)
Valuation allowance	6,313		2,890		(7,396)
Uncertain tax positions	(8,010)		(3,791)		(6,349)

Credit monetization	—		—		(2,100)
Expiration of attributes	10,901		5,733		18,345
Research and development credits	(1,169)		(1,582)		(2,094)
Warrant fair value adjustments	(1,093)		(2,152)		(12,606)
Other	1,002		387		1,436
Income tax provision	$	711	$	1,940	$	1,341

Schedule of components of deferred tax assets and liabilities

Significant components of deferred tax assets and liabilities are as follows (in thousands):


	As of March 31,
	2024		2023		2022
			As Restated		As Restated
Deferred tax assets
Loss carryforwards	$	54,280	$	56,675	$	59,636
Deferred revenue	27,431		25,903		29,206
Capitalized research and development	27,785		23,949		16,289
Tax credits	15,888		15,894		16,085
Disallowed interest	16,572		13,162		12,296
Other accruals and reserves not currently deductible for tax purposes	4,685		4,494		4,450
Lease obligations	2,269		2,384		2,514
Inventory	2,426		2,715		1,701
Acquired intangibles	1,344		961		853
Accrued warranty expense	365		495		447

Gross deferred tax assets	153,045		146,632		143,477
Valuation allowance	(147,674)		(141,218)		(138,086)
Total deferred tax assets, net of valuation allowance	$	5,371	$	5,414	$	5,391
Deferred tax liabilities
Depreciation	$	(2,038)	$	(2,009)	$	(1,921)
Lease assets	(1,929)		(2,128)		(2,439)
Other	(1,130)		(548)		(1,048)
Total deferred tax liabilities	$	(5,097)	$	(4,685)	$	(5,408)
Net deferred tax assets (liabilities)	$	274	$	729	$	(17)

Reconciliation of gross unrecognized tax benefits

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


	For the year ended March 31,
	2024		2023		2022
			As restated		As restated
Beginning Balance	$	96,343	$	99,603	$	101,119
Increase in balances related to tax positions in current period	2,229		2,778		2,785
Increase in balances related to tax positions in prior period	—		—		4,881

Decrease in balances related to tax positions in prior period	(1,364)		(817)		(1,020)
Decrease in balances due to lapse in statute of limitations	(8,867)		(5,221)		(8,162)

Ending balance	$	88,341	$	96,343	$	99,603