13. Commitments and Contingencies

Legal Proceedings

Zircon engages in procedures to protect its proprietary rights and has filed complaints with the Federal Trade Commission and the Customs and Border Patrol. As of June 30, 2026, no material contingencies exist.

Leases

The Company’s corporate headquarters in Campbell, California are leased from the Stauss Family Administrative Trust for approximately $19,000 per month under a lease expiring in December 2027. The lease requires the Company to pay utilities, maintenance and real estate taxes. Rent expense was approximately $58,000 for both of the three months ended June 30, 2026 and 2025, respectively.

The Company leases office equipment through a lease that expires in June 2026 and requires monthly lease payments of less than $0.1 million for a period of five years. The total lease expense for the three months ended June 30, 2026 and 2025 amounted to less than $0.1 million in each respective period.

In July 2024 the Company leased a new vehicle that required a monthly lease payment of less than $0.1 million This lease expires in June 2027. The total lease expense for the three months ended June 30, 2026 and 2025 amounted to less than $0.1 million in each respective period.

The components of lease expense, which include short-term and variable lease expense and are included in selling, general and administrative expense, are as follows:

   Schedule of Components of Lease Expense

ZRCN Inc.

CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025

The following table provides the weighted average lease term and weighted average discount rate for the three months ended June 30, 2026 and 2025, respectively:   

 Schedule of Weighted Average Remaining Lease Terms and Discount Rate

Future minimum lease payment under non-cancellable lease as of June 30, 2026 are as follows:

 Schedule of Future Minimum Lease Payment Under Non-cancellable Lease