Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 253

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 253
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 0.10% (10 basis points) per annum. If at any time the displayed Term SOFR is less than 0.00%, Term SOFR is
deemed to be 0.00% for the purposes of the credit facility.

The
Credit Agreement bears interest measured by such outstanding amounts on receivable advances and inventory advances that accrue interest
at the greater of 5.25% per annum or 3.00% above the base rate. Interest is charged on the last day of each month on a daily net balance
of funds advanced or otherwise charged to the Company.

The
Credit Agreement requires the Company to comply with a maximum total net leverage of $15.0 million and a minimum fixed charge coverage
ratio of 1.10. As of March 31, 2025, the Company was not in compliance with the fixed charge coverage ratio and is working with the lender
to obtain a waiver and has entered into a forbearance agreement with regard thereto along with additional covenants.

25

Information
on Outstanding Securities

The
following table sets out the number of common shares and warrants outstanding as of the date hereof:

    Information
    on Outstanding Securities as of March 31, 2025 

    Common shares issued and outstanding 
     10,306,426 
  
    Potential issuance of common shares 

    Warrants 
     217,184 
  
    Stock options 
     3,216,500 
  
    Fully diluted shares 
     13,740,110 

In
accordance with a services agreement with Semi-Cap Equity. Partners (“SCE”), an investment bank, dated May 15, 2023 and amended on July 15, 2024, the Company
will issue an additional 49,998 common shares to SCE earned during the period from March 31, 2025 through September 4, 2025. As of
September 4, 2025 the Company’s agreement with SCE has been terminated.

During
the year ended March 31, 2025, the Company issued 289,490 common shares primarily to two legal firms in lieu of cash payments to
settle outstanding liabilities for services related to patent infringement litigation and patent acquisition. These shares also
include the shares issued or to be issued to SCE.

Related
Party Transactions 

Zircon
is a member of a controlled group of companies and has revenue and cost-sharing activities with other members of the