Company: ZRCN
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006748
Chunk: 28

Company: ZRCN Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 28
---
2025 
    $55 
  
    2026 
     219 
  
    2027 
     169 
  
    2028 
     193 
  
    2029 and thereafter 
     — 
  
    Total Minimum Lease Payments 
     636 
  
    Less effects of discounting 
     — 
  
    Present value of future minimum lease liabilities 
     636 
  
    Less current portion of operating lease liability 
     (209)
  
    Operating lease liability, net of current portion 
    $427 

    23

ZRCN
Inc.

CONDENSED
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023

15.
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 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 the premerger ownership of Zircon.

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

The
Company has notes payable to the Stauss Family Administrative Trust to repay loans made to the Company. As of March 31, 2024, principal
balance of $0.7 million is due and payable in December 2025. 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 the bank and no payment is to be made on the note without prior
approval from the bank. In the second quarter of 2023