Company: ZRCN
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006748
Chunk: 4

Company: ZRCN Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 4
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 interest positions, which represent 100% of the
activity in the Company’s consolidated entities before intercompany transactions have been eliminated, are reported as a separate
component of consolidated stockholders’ equity from the equity attributable to ZRCN’s stockholders for all years presented.
The net income attributed to the NCI’s is separately designated in the accompanying unaudited consolidated statements of operations
and comprehensive income (loss).

Use
of Estimates

The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported amounts of revenues and expenses. Significant estimates used in preparing these unaudited consolidated financial statements
include the provision for credit losses, allowance for inventory obsolescence, allocation of overhead to inventory, estimated future
benefit and fair value of intangible assets, accrued rebates and advertising allowances, useful lives and depreciation methods of property
and equipment, and uncertain tax positions. It is at least reasonably possible that the significant estimates used will change within
the next year.

Cash

The
carrying value of cash approximates fair value due to the short-term nature of the instruments. From time to time, the Company may be
in the position of a “book overdraft” in which outstanding checks exceed cash. The Company classifies book overdrafts in
accounts payable within its unaudited consolidated balance sheets, and classifies the change in accounts payable associated with book
overdrafts as an operating activity within the unaudited consolidated statement of cash flows. As of December 31, 2024, the book overdraft
included within accounts payable was $0.1 million. As of March 31, 2024, the book overdraft included within accounts payable was $0.4
million.

Accounts
Receivable, Net

Accounts
receivables are stated at the amount the Company expects to collect. The Company provides credit without requiring collateral, in the
normal course of business, to credit-worthy customers as determined by management’s review of references and credit reports. Bad
debts are charged against the provision for credit losses. The provision for credit losses is adjusted to provide a specific and general
allowance for estimated uncollectible accounts, which is based on management’s judgment based on a number of factors, including
the length of time the receivables are past due, significant one-time events and historical experience. Balances that are