Company: ZRCN
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006748
Chunk: 22

Company: ZRCN Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 22
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 nine months ended December 31, 2024 the interest expense on the notes payable to the Stauss Family Administrative Trust
totaled less than $0.1 million in each respective period. For the three and nine months ended December 31, 2023 the interest expense
on the notes payable to the Stauss Family Administrative Trust totaled less than $0.1 million in each respective period.

Loan
Repayment

Section
13(k) of the Exchange Act provides that it is unlawful for a company, such as ours, 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 we acquired Zircon
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 management became aware of the possible violation. The loan repayment was made
by means of an offset to beneficial amounts of our chief executive officer in certain loans to the Company to which offset he did not
object. Issuers that are found to have violated Section 13(k) of the Exchange Act may be subject to civil sanctions, including injunctive
remedies and monetary penalties, as well as criminal sanctions. In accordance with ASC 450, Contingencies, no amounts have been
accrued for a loss contingency as it is not estimable as of December 31, 2024. The imposition of any of such sanctions on us could have
a material adverse effect on our business, financial position, results of operations or cash flows.

11.
Profit Sharing and 401(k) Plan

The
Company has a defined contribution profit sharing plan for all eligible employees. Contributions to the profit-sharing plan are determined
annually by the Board of Directors. There were no profit-sharing contributions made during the three and nine months ended December 31,
2024 and 2023.

All
eligible employees are also allowed to participate in the Company’s 401(k) plan. The Company’s contributions to the plan
are based on a specified percentage of each participant’s eligible contribution, decided annually by