Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 282

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 282
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 for all entities. The Company is currently evaluating the disclosure
impact that ASU 2025-04 may have on its consolidated financial statement presentation and disclosures.

In
July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).
This standard introduces a practical expedient that companies can choose to apply when determining allowances for credit losses. Specifically,
it permits companies to assume that the current conditions as of the balance sheet date remain unchanged throughout the remaining life
of the assets. This standard is effective for the Company for annual reporting periods beginning after December 15, 2025, and requires
prospective application. The Company is currently evaluating the impact of ASU 2025-05, however, does not expect it to have a material
impact on its consolidated financial statements.

4.
Merger with Harmony Energy Technologies Corporation

On
April 14, 2023 (the “Closing Date”), Harmony closed the Merger with Zircon, as a result of which Zircon became a wholly-owned
subsidiary of Harmony. While Harmony was the legal acquirer of Zircon in the Merger, for accounting purposes, the Merger is treated as
a reverse recapitalization, whereby Zircon is deemed to be the accounting acquirer, and the historical financial statements of Zircon
became the historical financial statements of Harmony (renamed ZRCN Inc.) upon the closing of the Merger. Under this method of accounting,
Harmony was treated as the “acquired” company and Zircon is treated as the acquirer for financial reporting purposes.

    F-16

ZRCN
                                            Inc.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MARCH 31, 2025 AND 2024

Accordingly,
for accounting purposes, the Merger was treated as the equivalent of Zircon issuing stock for the net assets of Harmony, accompanied
by a recapitalization. The net assets of Harmony were stated at historical cost, with no goodwill or other intangible assets recorded.

As
part of the Merger and reverse recapitalization, the Company assumed certain operating liabilities of Harmony, including certain payables
due to vendors and employees, as well as notes payable to noteholders. In addition, Zircon and Harmony effectuated a share exchange whereby
the shareholders of Zircon exchanged 500,