ZRCN Inc. 8-K

What Happened
ZRCN Inc. (and its subsidiary Zircon Corporation) announced it entered into a Loan and Security Agreement with Altriarch Holdings SPV, LLC establishing a $12.5 million senior secured revolving credit facility that matures on March 17, 2029 (with a one‑year extension option). The facility can be used, among other things, to replace the Company’s existing $15.0 million loan with FGI Worldwide, LLC and to provide additional working capital; $7.5 million had been drawn as of the filing date. Interest is the lesser of the agreement’s Maximum Rate and 3‑month SOFR + 8.75%, with monthly interest payments starting April 14, 2026.

Key Details

• Credit Facility size: $12.5 million revolving facility; Debtor may request up to $5.0 million in additional commitments in up to two requests, subject to lender approval.
• Amount drawn: approximately $7.5 million outstanding as of the filing.
• Maturity and interest: Maturity March 17, 2029 (option to extend up to 1 year); interest = lesser of Maximum Rate or 3‑month SOFR + 8.75%; monthly interest payments commence April 14, 2026.
• Security, guarantees & covenants: facility ranks senior to all current/future indebtedness and is secured by substantially all assets (excluding IP); CEO John Stauss provided a limited guaranty; four largest shareholders pledged shares as collateral. Financial covenants include maximum tangible net worth and minimum fixed charge coverage ratios; standard affirmative/negative covenants and events of default apply.
• Prepayment premium: if terminated prior to the 1st, 2nd or 3rd anniversary, prepayment premium equals 1.5%, 1.0% or 0.5% of the maximum amount respectively (waived if refinanced by an FDIC‑insured bank on/after the 2nd anniversary).
• ROFR on IP loans: lender has a right to match third‑party offers for debt secured by the Company’s intellectual property.

Why It Matters
This facility provides ZRCN with immediate liquidity and flexibility to replace prior debt and support operations or growth initiatives. However, the loan is senior and secured, includes financial covenants and standard default provisions that could accelerate repayment and allow the lender to enforce collateral if breached—factors investors should monitor in upcoming filings and the Company’s 10‑K, which will include the full loan agreement.