Company: ZRCN
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001493152-25-006748
Chunk: 5

Company: ZRCN Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Item 8
Chunk 5
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 still outstanding
after management has used reasonable collection efforts are written off through a charge to the provision for credit losses and a credit
to accounts receivable. Based on management’s assessment of the credit history with customers having outstanding balances and current
relationships with them, management believes that losses on balances outstanding will not exceed the provision for credit losses.

Accounts
receivable consisted of the following:

Schedule
of Accounts Receivable 

    December 31, 2024  
    March 31, 2024 
  
    (In thousands) 
    (Unaudited)  
    (Audited) 
  
    Accounts receivable 
    $7,055  
    $8,658 
  
    Less provision for credit losses 
     (133) 
     (14)
  
    Accounts receivable, net 
    $6,922  
    $8,644 

Activity
related to the Company’s provision for credit losses was as follows:

 Schedule
of  Provision for Credit losses

    December 31, 2024  
    March 31, 2024 
  
    (In thousands) 
    (Unaudited)  
    (Audited) 
  
    Balance, beginning of period 
    $14  
    $10 
  
    Credit loss provision 
     119  
     4 
  
    Balance, end of period 
    $133  
    $14 

    10

ZRCN
Inc.

CONDENSED
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE NINE MONTHS ENDED DECEMBER 31, 2024 AND 2023

Inventory

Inventories,
which consist primarily of raw materials and finished goods, are stated at the lower of cost or net realizable value. The Company states
inventory cost utilizing the first-in, first-out (FIFO) method. Labor and overhead associated with inventory purchases are estimated
and capitalized in inventory. The need for an allowance for inventory obsolescence is based on an evaluation of slow-moving or obsolete
inventory. 

Revenue
Recognition

The
Company’s revenues result from the sale of products and reflect the consideration to which the Company expects to be entitled.
The Company records revenue based on a five-step model in accordance with ASC 606, Revenue from Contracts with Customers (“ASC
606”). For its contracts with customers, the Company identifies the performance obligations (goods or