Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 372

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1B
Chunk 372
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5 with interest accruing at 5.5%
per annum, which was to be paid quarterly and is included in accrued expenses. The entire principal balance of $0.7
million and the accrued interest of
approximately $9,000 will now be due and payable on December
31, 2027. The note is subordinated to the Credit Agreement and no payment is to be made on the note without prior approval
from the lender.

On
March 27, 2025, the Board of Directors of Zircon Corporation and the Stauss Family Administrative Trust agreed to extend the maturity
dates of both promissory notes to December 31, 2027. There was no change to the principal amount or the annual interest rate.

For
the years ended March 31, 2025 and 2024 the interest expense on the notes payable to the Stauss Family Administrative Trust totaled $37,000
and $30,000, 
respectively.

Loan
Repayment

Section
13(k) of the Exchange Act provides that it is unlawful for a company, such as ZRCN, that has a class of securities registered under Section
12 of the Exchange Act to, directly or indirectly, including through any subsidiary, extend or maintain credit in the form of a personal
loan to or for any director or executive officer of the Company. In March 2022, Zircon Corporation, the Company’s wholly-owned
subsidiary, loaned our chief executive officer funds to pay certain tax obligations, which was still outstanding when Zircon was acquired
in April 2023, which may have violated Section 13(k) of the Exchange Act as a result of the transition from private to public company
accounting. The loan was repaid in August 2023 as soon as management became aware of the possible violation. The loan repayment was made
by means of an offset to beneficial amounts of our chief executive officer in certain loans to the Company to which offset he did not
object. Issuers that are found to have violated Section 13(k) of the Exchange Act may be subject to civil sanctions, including injunctive
remedies and monetary penalties, as well as criminal sanctions. In accordance with ASC 450, Contingencies, no amounts have been
accrued for a loss contingency as it is not estimable as of March 31, 2025. The imposition of any of such sanctions could have a material
adverse effect on our business, financial position,