Company: ZRCN
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006748
Chunk: 1

Company: ZRCN Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 1
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as the acquirer for financial reporting purposes.

Accordingly,
for accounting purposes, the Merger was treated as the equivalent of Zircon issuing stock for the net assets of Harmony, accompanied
by a recapitalization. The net assets of Harmony were stated at historical cost, with no goodwill or other intangible assets recorded.

2.
Liquidity

As
of December 31, 2024, the Company had $1.9 million in cash and working capital of $13.5 million. To date, ZRCN has been financed primarily
through retained earnings, secured loans and a revolving line of credit. The Company’s line of credit was scheduled to expire on
July 31, 2024 but on May 31, 2024, the Company entered into a revolving credit agreement with a new lender that matures on May 31, 2027
(Note 10). The line of credit is secured by accounts receivable, inventory and fixed assets. The Company believes that it has sufficient
liquidity to fund its operations and operating capital needs for the next 12 months as well as meet its obligations as they become due
in 2025.

3.
Summary of Significant Accounting Policies

Basis
of Presentation

The
accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles
generally accepted in the United States (“GAAP”) applicable to interim financial information and with the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary
for a fair presentation of the Company and its subsidiaries’ financial position and interim results as of and for the periods presented
have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Results for interim periods are
not necessarily indicative of those that may be expected for a full year.

The
financial information included herein should be read in conjunction with our audited consolidated financial statements and related notes
included in our Annual Report for the year ended March 31, 2024, in our Form 10-K.

    8

ZRCN
Inc.

CONDENSED
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023

The
mer