Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 705

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 5
Chunk 705
---
 later years are open to
examination. The Chinese tax returns are subject to various statutes of limitations. The Chinese tax provision is de minimis as the Company
has limited operations in China. Affiliates of the Company file income tax returns in Mexico and the UK, which are subject to various
statutes of limitations.

The
Company has unrecognized tax benefits as of March 31, 2025 and 2024 of $0.6 million and $0.6 million, respectively.

Schedule
of Unrecognized tax Benefits  

    As of March 31, 2025  
    As of March 31, 2024 
  
    (In thousands) 

    Unrecognized tax benefits, beginning balance 
    $550  
    $— 
  
    Current year increases in unrecognized tax benefits due to tax positions taken in current period 
     —  
     528 
  
    Recognized interest and penalties 
     7  
     22 
  
    Unrecognized tax benefits, end balance 
    $557  
    $550 

The
Company acquired federal net operating losses of approximately $2.5 million via the acquisition of Harmony Energy Technologies Corporation
and has used approximately $0.2 million of these net operating losses from the acquisition period through the year ended March 31, 2025.
The tax benefits of these net operating losses is deemed to be an unrecognized tax benefit. The Company additionally has federal net
operating loss carryforwards as of March 31, 2025 and March 31, 2024 of approximately $2.3 million and $2.0 million, for which a deferred
tax asset is recorded but was fully reserved and written down to zero as uncertain tax benefits in the period ended March 31, 2024. As
the net operating losses are utilized on federal tax returns, and the statute of limitations lapses on such tax returns, the benefits
of the net operating losses will be recognized in the financial statements as a reduction of tax expense.

The
Company recognized interest and penalties associated with uncertain tax positions of less than $0.1 million in the years ended March
31, 2025 and March 31, 2024, respectively. As of March 31, 2025, the Company has accumulated interest and penalties associated with uncertain
tax positions of less than $0.1 million.

On
July 4, 2025, subsequent to the balance sheet date, the One