Company: ZRCN
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006748
Chunk: 29

Company: ZRCN Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 29
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, a portion of the note payable to Stauss Family Administrative Trust was settled
as a non-cash transaction against the note receivable from one stockholder for $0.2 million. For the three and nine months ended December
31, 2024, the interest expense on notes payable to the Stauss Family Administrative Trust totaled less than $0.1 million, respectively.

For
the three and nine months ended December 31, 2023, the interest expense on notes payable to the Stauss Family Administrative Trust totaled
less than $0.1 million, respectively.

On
March 31, 2024 the Stauss Family Administrative Trust and the Company agreed to extend the maturity date of the Notes Payable to the
trust to December 31, 2025.

During
the nine months ended December 31, 2024, the Company made a distribution of $0.7 million to certain related party shareholders and one
director shareholder for taxes due resulting from the Company converting from an S corporation to a C corporation. $0.3 million of this
distribution was in cash and the remaining $0.4 million is recorded in accrued expenses on the balance sheet. During October 2024 the
Company made a cash distribution of approximately $0.4 million to settle the remaining liability.

16.
Subsequent Events

On
January 15, 2025, the Company issued an additional 24,999 common shares to an outside service provider.

On
January 28, 2025, the Company’s Board of Directors approved grants of 2,818,000 options to purchase the Company’s common
shares in accordance with its Equity Compensation Plan.

24

MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following management discussion and analysis of the financial position and results of operations (“MD&A”) should be read
in conjunction with the audited consolidated financial statements and related notes to the financial statements included elsewhere in
this Report. This discussion contains forward-looking statements that relate to future events or our future financial performance. These
statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance
or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied
by these forward-looking statements. These risks and other factors include, among others, those listed under “Forward-Looking Statements”
and “Risk Factors” and those included elsewhere in