Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 975

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 8
Chunk 975
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     205 
  
    Payroll and related 
     303  
     334 
  
    Advertising allowance 
     87  
     134 
  
    Vacation 
     359  
     389 
  
    Professional services 
     297  
     94 
  
    Accrued stockholder distributions 
     —  
     659 
  
    Interest 
     —  
     75 
  
    Accrued
    liabilities 
    $1,720  
    $2,789 

See
Note 3 for an illustration of the reported balance and the revised balance for Accrued expenses for the period ended March 31, 2024.

10.
Debt

Line
of Credit 

The
Company had a revolving line of credit with a bank, allowing borrowings up to $10 million, with interest at a fixed rate for a fixed
term (2.36% per annum in excess of the Daily Simple Secured Overnight Financing Rate (“SOFR”) or variable rate (“Reference
Rate”) selected by management which was 9.5% and was secured by substantially all of the Company’s assets.

On
May 31, 2024, the Company entered into a Revolving Credit Agreement (the “Credit Agreement”) with FGI Worldwide LLC, as Agent
for the lender (“FGI”). The Credit Agreement provides for a $15.0 million senior secured revolving credit facility (the “Credit
Facility”) available to be used by the Company, Zircon and its Affiliates for replacement and discharge of the Company’s
prior line of credit balance of $8.8 million, and matures on May 31, 2027. The Company, Zircon and the Affiliates are guarantors of all
of the obligations under the Credit Agreement and the Company’s four principal shareholders are limited guarantors thereof.

The
Credit Agreement stipulates a base rate measured by the sum of Term SOFR for a period of one month, as published by the CME Group Benchmark
Administration Limited (or any successor administration of Term SOFR) two business days prior to the beginning of the calendar month
and a percentage equal to 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.

    F-20