Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 275

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 275
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in the Company’s operating or reporting segments for the year ended March 31, 2025.

    F-12

ZRCN
                                            Inc.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MARCH 31, 2025 AND 2024

Concentration
of Business and Credit Risk

As
of March 31, 2025, the Company maintained deposits in a single bank that exceeded the federal insured deposit limit of the Federal Deposit
Insurance Corporation (FDIC).

During
the years ended March 31, 2025 and 2024, respectively, the Company generated approximately 64% and 72% of its total revenue from three
customers.

As
of March 31, 2025 and March 31, 2024, respectively, 64% and 77% of its total accounts receivable were from three customers.

Fair
Value of Financial Instruments

In
accordance with FASB ASC 820 Fair Value Measurements and Disclosures, the Company uses a three-level hierarchy for fair value
measurements of certain assets and liabilities for financial reporting purposes that distinguishes between market participant assumptions
developed from market data obtained from outside sources (observable inputs) and our own assumptions about market participant assumptions
developed from the best information available to us in the circumstances (unobservable inputs). The fair value hierarchy is divided into
three levels based on the source of inputs as follows:

●Level
                                            1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical
                                            assets or liabilities in active markets;

●Level
                                            2 – inputs to the valuation methodology include quoted prices for similar assets and
                                            liabilities in active markets, and inputs that are observable for the asset or liability
                                            other than quoted prices, either directly or indirectly including inputs in markets that
                                            are not considered to be active; and

●Level
                                            3 – inputs to the valuation methodology are unobservable and insignificant to the fair
                                            value measurement.

Categorization
within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company
believes the carrying amounts of its cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses,
and other current liabilities approximated their fair values as of March 31, 2025 and March 31, 2024 due to their short-term nature.
All