Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 356

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1B
Chunk 356
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 FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MARCH 31, 2025 AND 2024

Share
Based Compensation

The
Company expenses share based compensation to employees and non-employees over the requisite service period based on the estimated grant-date
fair value of the awards. The Company accounts for forfeitures as they occur. Share-based awards with graded-vesting schedules are recognized
on a straight-line basis over the requisite service period for each separately vesting portion of the award. For awards with performance
conditions, compensation cost is recognized over the requisite service period based on the actual or expected achievement of the performance
condition. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions
used in calculating the fair value of share-based awards represent management’s best estimates and involve inherent uncertainties
and the application of management’s judgment. The Company estimates the fair value of restricted stock award grants on the date
of issuance. All share-based compensation costs are recorded in general and administrative or research and development costs in the condensed
consolidated statements of operations and comprehensive loss based upon the underlying individual’s role at the Company. Share
based awards that do not meet the criteria for equity classification are recorded as liabilities and adjusted to fair value at the end
of each reporting period.

Comprehensive
Loss

Comprehensive
loss of all periods presented is comprised primarily of net (loss) income and foreign currency translation adjustments.

Segment
Reporting

The
Company determines its reporting units in accordance with FASB ASC 280, Segment Reporting (“ASC 280”). The Company
evaluates a reporting segment by first identifying its operating segments under ASC 280. Operating segments are defined as components
of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”)
to allocate resources and assess performance. The Company defines its CODM to be its president and chief operating officer. The Company
then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components
within an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must
be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating
segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. The Company
has one operating segment and therefore one reporting segment.

The
CODM reviews