Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 126

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1
Chunk 126
---
etary penalties, as well as criminal sanctions. The imposition of any of such sanctions on us could have a material adverse effect
on our business, financial position, results of operations or cash flows.

12

Financial
Risks

We
manufacture and sell our products in numerous countries around the world. As a result, we may be exposed to foreign currency risks as
we engage in transactions and make investments denominated in foreign currencies.

Our
primary market currently and historically is the US market, but our products are sold and distributed throughout the world. Further,
we manufacture our products internationally and maintain supply and other relationships in Europe, Canada, Mexico, and Asia. Fluctuations
in exchange rates across certain markets could adversely affect our business, results of operations and financial condition without warning.
We are pursuing growth in international markets and if we experience growth in international markets and as they become a larger portion
of our overall revenue from product sales, we expect the impact from currency fluctuations to become more pronounced in conjunction with
changes in the geographic composition of sales.

We
are subject to changes in tax rates, the adoption of new U.S. or international tax legislation and exposure to additional tax liabilities.

We
are subject to taxes in the U.S. and foreign jurisdictions. Due to economic and political conditions, tax laws and tax rates for income
taxes and other non-income taxes in various jurisdictions may be subject to significant change. Our effective tax rates are affected
by changes in the earnings, changes in the valuation of deferred tax assets and liabilities, the introduction of new taxes, or changes
in tax laws or their interpretation, including in the U.S., China and other foreign jurisdictions.

Our
results of operations could be negatively impacted by inflationary or deflationary economic conditions.

Inflationary
or deflationary economic conditions could affect our ability to obtain raw materials, component parts, freight, energy, labor, and sourced
finished goods in a timely and cost-effective manner. We may also experience changes in interest rate environments that impact our cost
of capital, the overall strength of the economy and possible demand for our products in the markets in which we operate and sell.

Financing
Risks

If
we are unable to generate sufficient cash flows from our operations, our liquidity will suffer and we may be unable to satisfy our obligations.

We
currently rely on cash flow from operations and our revolving credit facility (the “Credit Facility”) to fund our business.
Amounts outstanding on the Credit Facility are reported as debt on our balance