Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 226

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 226
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 we use to determine order quantities and lead times for components purchased from outside suppliers may be incorrect.
If we do not increase our sales volumes, which drive our demand for our suppliers’ products, we may not procure volumes sufficient
to receive favorable pricing, which could impact our gross margins if we are unable to pass along price differences to our customers.
Recent global economic cost inflation trends could unfavorably impact pricing from our suppliers, which could impact our gross margins
if we are unable to pass along price differences to our customers. Our failure to obtain required components or subassemblies when needed
and at a reasonable cost would adversely affect our business. These suppliers may encounter problems during manufacturing for a variety
of reasons, any of which could delay or impede their ability to meet our demand. Any difficulties in locating and hiring third-party
suppliers, or in the ability of third-party suppliers to supply quantities of our products at the times and in the quantities, we need,
could have a material adverse effect on our business.

Future
operating results depend upon our ability to obtain products in sufficient quantities on commercially reasonable terms.

Because
we currently obtain the products from limited sources, we are subject to significant supply and pricing risks. Many components, including
those that are available from multiple sources, are at times subject to industry-wide shortages and significant commodity pricing fluctuations
that can materially adversely affect our business, results of operations and financial condition. For example, the global semiconductor
industry is experiencing high demand and shortages of supply, which has adversely affected, and could materially adversely affect, our
ability to obtain sufficient quantities of products on commercially reasonable terms or at all. While we have entered into agreements
for the supply of the products, there can be no assurance we will be able to extend or renew these agreements on similar terms, or at
all. The manufacturing partners may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation
within a particular industry, further limiting our ability to obtain products on commercially reasonable terms or at all. The effects
of global or regional economic conditions on our suppliers may also affect our ability to obtain products. Therefore, we remain
subject to risks of supply shortages and price increases that can materially adversely affect our business, results of operations and
financial condition.

Our
products may be affected from time to time by design and manufacturing defects that could materially adversely affect our business and
result in harm to our reputation.

We
offer products that can be affected by design and manufacturing defects. Defects can