Company: ZRCN
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006748
Chunk: 25

Company: ZRCN Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 25
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 an additional 24,999 common shares

As
these common shares were fully vested upon the date of grant, the grant date fair value was expensed in the respective period of the
grant date.

During
the nine months ended December 31, 2024 the Company made distributions of $0.7 million to certain related party shareholders and one
director shareholder for taxes due as a result of the Company converting from an S corporation to a C corporation, of which the total
distribution was paid in cash.

    21

ZRCN
Inc.

CONDENSED
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023

13.
Warrants

At
the closing of the Merger, the Company issued certain consultants and advisors warrants to purchase an aggregate of 217,184 shares of
Company common stock (the “Advisor Warrants”). The Advisor Warrants are exercisable any time ten years from the date of issuance,
have an exercise price of $0.20 per share, and are classified within equity. The Company determined the fair value of the Advisor Warrants
of $0.3 million using the intrinsic value method based on a stock price established in the Merger of $1.60 per share.

The
following table provides the activity for all warrants for the nine months ended December 31, 2024:

 Schedule
of Warrants Activity 

    Total Warrants  
    Weighted Average Remaining Term  
    Weighted Average Exercise Price 
  
    Outstanding as of March 31, 2024 
     217,184  
     9.2  
    $0.20 
  
    Outstanding as of December 31, 2024 
     217,184  
     8.5  
    $0.20 

14.
Commitments and Contingencies

Legal
Proceedings

Zircon
is engaged in procedures to protect its proprietary rights and has filed complaints with the Federal Trade Commission and the Customs
and Border Patrol.

Zircon
Corporation v. Stanley Black & Decker, Inc.

A
stay, placed on Zircon’s patent infringement suit filed against Stanley Black & Decker, Inc. (“SBD”) in the Federal
District Court in the Northern District of California in December 2019, was released on May 8, 2024 following disposition