Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 921

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 8
Chunk 921
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bearance Agreement, among other things: (i) permits the Company to not comply with its Fixed
Cost Coverage Ratio covenant until the end of the Forbearance Period, (ii) increases the Revolving Interest Rate (as defined in the Credit
Agreement) from 3.0% to 3.3%, (iii) increases the Management Fee (as defined in the Credit Agreement) from 0.2% to 0.3%, (iv) requires
the Company to prepare and deliver to Agent a budget on a weekly basis, (v) requires the Company to enter into a payment plan with its
Key Supplier (as defined in the Forbearance Agreement), (vi) requires the Company to maintain certain minimum consolidated EBITDA through
the Forbearance Period, (vii) requires the Company to use commercially reasonable efforts to contribute $2,000,000 to the capital of
Zircon on or prior to February 28, 2026, which amounts shall be held in a Blocked Account (as defined in the Credit Agreement), and (viii)
requires Zircon to engage the services of a third party consultant to advise on all aspects of the business, operations and properties
of the Company and Zircon within 21 days of the date of execution of the Forbearance Agreement. The Company did not meet its EBITDA target for July 2025 but was granted a waiver from the lender on September 5,
2025.

In
accordance with an agreement with S.C.E. Partners (“SCE”) dated May 15, 2023 and amended on July 15, 2024, the Company will
issue an additional 48,998
common shares to SCE for the six months ended September 4,
2025. The agreement with SCE was not renewed and is not terminated.

F-29

ITEM
9A. CONTROLS AND PROCEDURES

Disclosure
Controls and Procedures

We
maintain “disclosure controls and procedures,” as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act that
are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by a company in