Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 442

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1C
Chunk 442
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 loss per share because the effect of their inclusion would have been
anti-dilutive. The dilutive securities outstanding are as follows:

 Schedule
of Dilutive Securities Outstanding

    March
    31, 2025  
    March
    31, 2024 
  
    Stock
    options 
     3,216,500  
     — 
  
    Warrants 
     217,184  
     217,184 

Leases

The
Company accounts for leases under ASC Topic 842, which requires the recognition of right-of-use (“ROU”) assets and lease
liabilities on the balance sheet.

The
Company’s lease arrangements relate primarily to office space, a vehicle, and office equipment. The Company’s leases may
include renewal options and rent escalation clauses. The Company is typically required to make fixed minimum rent payments relating to
its right to use an underlying leased asset.

The
Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating leases are presented
as right-of-use (“ROU”) assets and the corresponding lease liabilities are included in operating lease liabilities, current
and operating lease liabilities on the Company’s consolidated balance sheets. ROU assets represent the Company’s right to
use an underlying asset, and lease liabilities represent the Company’s obligation for lease payments in exchange for the ability
to use the asset for the duration of the lease term. The Company does not recognize short term leases that have a term of twelve months
or less as ROU assets or lease liabilities.

ROU
assets and lease liabilities are recognized at commencement date and determined using the present value of the future minimum lease payments
over the lease term. The Company uses an incremental borrowing rate based on estimated rate of interest for collateralized borrowing
since the Company’s leases do not include an implicit interest rate. The estimated incremental borrowing rate considers market
data, actual lease economic environment, and actual lease term at commencement date. The lease term may include options to extend when
it is reasonably certain that the Company will exercise that option. The Company recognizes lease expense on a straight-line basis over
the lease term.

The
Company has lease agreements which contain both lease and non-lease components, which it has not elected to account for as a single lease
component. As such, minimum lease payments exclude fixed payments for non-lease components within a lease agreement, in addition to excluding
variable lease payments not dependent on an index or rate, such as