Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 494

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 2
Chunk 494
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 in fiscal 2024 which was an increase of $0.4
million, or 6%. This increase was driven primarily by an increase of $0.4 million in non-interest bank charges such as audit and
legal expenses incurred by the lender and charged to the Company and $0.2 million of audit fees.

23

Other
income/expense

Other
income for fiscal 2025 was $0.8 million compared to zero in fiscal 2024 which was an increase of $0.8 million. This increase was driven
primarily by a settlement benefit in the Stanley Black & Decker litigation of $0.8 million. This litigation is now closed.

Interest
and other expenses for fiscal 2025 were $0.8 million compared to $0.8 million in fiscal 2024 which was an increase of $63,000 or 8%.
This increase was driven primarily by an increase in interest expense of $72,000 related to the amortization of deferred financing
cost associated with the new financing from FGI. Income from foreign currency translation adjustments increased by $0.3 million
primarily due to favorable exchange rate changes between the U.S. dollar and the Mexican peso.

Provision
for income taxes

The
Company moved from a benefit position of $70,000 during the year ended March 31, 2024 to the need for a provision of $0.6 million for
the year ended March 31, 2025 as the Company recorded a full valuation allowance on its previously recorded deferred tax assets. The
Company recorded this valuation allowance as a result of net losses recorded during recent fiscal years.

Cash
Flow Analysis

    For
    the Years Ended March 31, 
  
    In thousands 
    2025  
    2024 
  
    Operating activities 
    $2,153  
    $1,184 
  
    Investing activities 
     (788) 
     (1,169)
  
    Financing activities 
     (667) 
     590 
  
    Effect of exchange rate
    changes 
     207  
     (132)
  
    Net
    increase (decrease) in cash 
    $905  
    $473 

Operating
Activities

During
the year ended March 31, 2025, net cash provided by operating activities was $2.2 million. This increase was due to a decrease in accounts
receivable of $2.