Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 771

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 7
Chunk 771
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 ended March 31, 2025, the Company recognized approximately $0.1 million as interest expense
for the amortization of deferred financing costs. For the years ended March 31, 2025 and 2024, interest expense on the line of credit
totaled $0.8 million and $0.7 million, respectively.

Notes
payable to 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, the
outstanding principal balance was approximately $0.7 million.
Under the original terms of the agreement, the note was due and payable in December 2025 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