Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 128

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1
Chunk 128
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 and interest on its debts, to refinance its maturing indebtedness, to
fund capital expenditures or to comply with its debt covenants will depend upon future performance. The Company’s future performance
is, to a certain extent, subject to general economic, financial, competitive, legislative, regulatory and other factors beyond its control.
The breach of any of the debt covenants could result in a default under the Company’s credit facility. Upon the occurrence of an
event of default, the Company’s lender could make an immediate demand of the amount outstanding under the credit facility. If a
default was to occur and such a demand was to be made, there can be no assurance that the Company’s assets would be sufficient
to repay the indebtedness in full.

The
Company was issued a default letter by its lender during the three months ended June 30, 2025 and is now operating under a forbearance
agreement. If the Company cannot meet the covenants under the forbearance agreement, it may not be able to continue borrowing under its
Credit Agreement.

The
Company was issued a default letter from its lender during the three months ended June 30, 2025. It entered into a forbearance agreement
with its lender on July 15, 2025 under which it must meet certain monthly reporting requirements, achievement of certain EBITDA targets
and revised FCCR targets. If the Company does not meet these forbearance requirements, then the Company could be put in default again
and the lender could exercise its rights under such a default which include making an immediate demand of the amounts outstanding under
the credit facility. The Company did not meet its EBITDA target for July 2025 but was granted a waiver from the lender on September 5,
2025.

We
may incur future indebtedness and may in the future issue additional equity or debt securities to finance our business operations and
strategic initiatives.

Indebtedness
or issuances of additional equity or debt securities in connection with mergers or acquisitions, may impact the manner in which we conduct
business or our access to external sources of liquidity. The potential issuance of such securities may limit our ability to implement
elements of our business strategy and may have a dilutive effect on earnings.

Tight
capital and credit markets or the failure to maintain credit ratings could adversely affect us by limiting our ability to borrow or otherwise
access liquidity.

We
have historically maintained sufficient capital and liquidity to finance our ongoing operations and