Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 683

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 5
Chunk 683
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 Company’s own common stock and whether
the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control,
among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the
time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of stockholders’ equity at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be liability classified and recorded at their initial fair value on the date of issuance and remeasured
at fair value and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash
gain or loss on the statements of operations. The fair value of the private placement warrants was estimated using a Black Scholes valuation
approach with assumptions relevant on the date of issuance and the fair value of the advisor warrants issued in connection with the Merger
was estimated using the intrinsic value method (see note 13).

Recently
Issued Accounting Pronouncements

As
an emerging growth company, the Company will have the option of adopting new accounting pronouncements on a delayed basis and has opted
to take advantage of this option. As a result, the Company has been adopting new accounting standards based on the timeline for adoption
afforded to privately held companies, unless it chooses to early adopt a new accounting standard.

Accounting
Standards Adopted

In
November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures. The new standard
requires a company to disclose incremental segment information on an annual and interim basis, including significant segment expenses
and measures of profit or loss that are regularly provided to the chief operating decision maker. The standard was effective for the
Company beginning in fiscal year 2024 and interim periods within fiscal year 2025, with early adoption permitted. As of March 31, 2025,
ASU 2023-07 became effective and the Company’s management adopted ASU 2023-07 in its financial statements and related disclosures.

Recently
Issued Accounting Standards Not Yet Adopted

In
December 2023, the FASB also issued ASU 2023-09, Income Taxes