Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 231

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 231
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 and procedures. If we are found
to have violated laws and regulations, it could materially adversely affect our business, results of operations and financial condition.
Regulatory changes and other actions that materially adversely affect our business may be announced with little or no advance notice
and we may not be able to mitigate all adverse impacts from such measures.

We
may have inadvertently violated Section 13(k) of the Exchange Act (implementing Section 402 of the Sarbanes-Oxley Act of
2002) as a result of the transition from private to public accounting and may be subject to sanctions as a result.

Section
13(k) of the Exchange Act provides that it is unlawful for a company, such as ours, that has a class of securities registered under Section
12 of the Exchange Act to, directly or indirectly, including through any subsidiary, extend or maintain credit in the form of a personal
loan to or for any director or executive officer of the company. In March 2022, Zircon Corporation, our wholly owned subsidiary, loaned
our chief executive officer funds to pay certain tax obligations, which was still outstanding when we acquired Zircon in April 2023,
which may have violated Section 13(k) of the Exchange Act as a result of the transition from private to public company accounting. The
loan was repaid in August 2023 as soon as management became aware of the possible violation. The loan repayment was made by means of
an offset to beneficial amounts of our chief executive officer in certain loans to the Company to which offset he did not object. Issuers
that are found to have violated Section 13(k) of the Exchange Act may be subject to civil sanctions, including injunctive remedies and
monetary penalties, as well as criminal sanctions. The imposition of any of such sanctions on us could have a material adverse effect
on our business, financial position, results of operations or cash flows.

12

Financial
Risks

We
manufacture and sell our products in numerous countries around the world. As a result, we may be exposed to foreign currency risks as
we engage in transactions and make investments denominated in foreign currencies.

Our
primary market currently and historically is the US market, but our products are sold and distributed throughout the world. Further,
we manufacture our products internationally and maintain supply and other relationships in Europe, Canada, Mexico, and Asia. Fluctuations
in exchange rates across certain markets could adversely affect our business, results of operations and financial condition without warning.