Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 254

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 254
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 controlled group.
Results of operations and financial condition may not represent amounts that would have been reported if Zircon operated as an unaffiliated
entity.

Zircon
has an exclusive manufacturing and technical assistance agreement with Zircon de Mexico S.A. de C.V. (the “Contractor”),
an entity which is owned by certain shareholders of Zircon. Under the terms of the agreement, Zircon provides materials, technical assistance,
and expertise to the Contractor, and the Contractor assembles certain of Zircon’s products.

In
September 2017, an affiliated company, Zircon Corporation Limited, was established in the United Kingdom to facilitate the sale of Zircon’s
products to European customers and operations began during the year ended March 31, 2019. The ownership structure of the affiliate is
similar to the ownership of Zircon.

The
Company leases a 14,000 square foot facility from a trust owned by the Stauss Family Administrative Trust.

The
Company has notes payable to the Stauss Family Administrative Trust to repay loans made to the Company. As of March 31, 2025, principal
balance of $0.7 million is due and payable on December 31, 2027. Interest accrued at 5.5% per annum is paid quarterly and included in
accrued expenses. The note is subordinated to the line of credit note payable to FGI and no payment is to be made on the note without
prior approval from FGI. In the second quarter of 2023, a portion of the note payable to Stauss Family Administrative Trust was settled
as a non-cash transaction against the note receivable from one stockholder for $240,190.

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

On
March 31, 2024 the Stauss Family Administrative Trust and the Company agreed to extend the maturity date of the Notes Payable to the
trust to December 31, 2025.

On
March 27, 2025 the Stauss Family Administrative Trust and the Company agreed to extend the maturity date of the Notes Payable to the
trust to December 31, 2027.

26

Off-Balance
Sheet Arrangements 

ZRCN
has no off-balance sheet arrangements.

Contractual
Obligations and Commitments

As
of March