Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 687

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 5
Chunk 687
---
 Harmony, or approximately 89% of the total outstanding shares of Harmony. Harmony shareholders thus retained
1,057,754 common shares according to the terms of the merger. In connection with the Merger, the Company entered into a warrant exchange
agreement, dated April 14, 2023 (the “Warrant Exchange Agreement”), with certain holders of the Company’s warrants
under which such holders received 25,284 shares of Common Stock in exchange for their warrants, bringing the total shares of the combined
organization owned by Harmony’s pre-Merger shareholders to 1,083,038 shares.

Zircon
agreed to pay the operating liabilities of Harmony, up to and including an aggregate of $0.2 million through December 31, 2022, which
amount included outstanding operating liabilities related to auditing fees, services fees, transfer agent fees, travel reimbursements
and accrued and unpaid salaries as of such date; Harmony loans and notes outstanding totaling $0.6 million were fully settled for $0.4
million, with $0.1 million paid upon closing of the Acquisition and $0.1 million being paid in four subsequent quarterly payments commencing
on the last day of the first full calendar quarter following closing.

Zircon
paid transaction costs of $0.5 million for legal and advisory services and issued warrants to purchase an aggregate 217,184 shares of
common stock to advisors who provided services to effectuate the Merger which had a fair value determined to be $0.3 million and are
included in the transaction costs and advisory fees allocated to ZRCN equity (refer to Note 13 for further detail regarding these warrants).

The
following table reconciles the elements of the Merger to the consolidated statements of changes in stockholders’ equity for the
year ended March 31, 2024:

Schedule
of Consolidated Statements of Changes in Stockholders Equity 

    (In
    thousands) 
    Recapitalization 
  
    Cash 
    $— 
  
    Non-cash
    net working capital assumed from Harmony 
     (579)
  
    Less:
    cash transaction costs and advisory fees allocated to ZRCN equity 
     (519)
  
    Effect
    of Merger, net of transaction costs 
    $(1,098)

The
following table details the number of shares of common stock issued immediately following the consummation of the Merger:

Schedule
of Number of Shares of Common Stock 

    Number