Company: ZRCN
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006748
Chunk: 20

Company: ZRCN Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 20
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 $380  
    $538 
  
    Accrued taxes 
     308  
     361 
  
    Sales expense 
     336  
     205 
  
    Payroll and related 
     240  
     334 
  
    Advertising allowance 
     195  
     134 
  
    Vacation 
     310  
     389 
  
    Professional services 
     172  
     94 
  
    Interest 
     —  
     75 
  
    Accrued
    liabilities 
    $1,941  
    $2,130 

10.
Debt

Line
of Credit 

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
current US Bank loan 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.

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