Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 757

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 7
Chunk 757
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 customers.

Fair
Value of Financial Instruments

In
accordance with FASB ASC 820 Fair Value Measurements and Disclosures, the Company uses a three-level hierarchy for fair value
measurements of certain assets and liabilities for financial reporting purposes that distinguishes between market participant assumptions
developed from market data obtained from outside sources (observable inputs) and our own assumptions about market participant assumptions
developed from the best information available to us in the circumstances (unobservable inputs). The fair value hierarchy is divided into
three levels based on the source of inputs as follows:

●Level
                                            1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical
                                            assets or liabilities in active markets;

●Level
                                            2 – inputs to the valuation methodology include quoted prices for similar assets and
                                            liabilities in active markets, and inputs that are observable for the asset or liability
                                            other than quoted prices, either directly or indirectly including inputs in markets that
                                            are not considered to be active; and

●Level
                                            3 – inputs to the valuation methodology are unobservable and insignificant to the fair
                                            value measurement.

Categorization
within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company
believes the carrying amounts of its cash, accounts receivable, prepaid expenses and other assets, accounts payable, accrued expenses,
and other current liabilities approximated their fair values as of March 31, 2025 and March 31, 2024 due to their short-term nature.
All carrying amounts of other applicable assets and liabilities on the Company’s balance sheet approximate fair value. For long-term
debt, the estimated fair value approximates its carrying value, as the interest rate is in line with the market interest rates for this
type of debt.

Foreign
Operations and Foreign Currency

The
Company’s reporting currency is the U.S. dollar and the Company’s records are maintained in U.S. dollars. Assets and liabilities,
including any amounts due or receivable from foreign entities, are translated into the reporting currency using the exchange rates in
effect on the consolidated balance sheet dates. Equity accounts are translated at historical rates, except for the change in retained
earnings during the year, which is the result of the consolidated statement of operations translation process. Any revenues or expenses
that are billed in foreign currency are converted at the average rates of exchange prevailing during each period. Realized and unrealized
foreign currency exchange