Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 121

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1
Chunk 121
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 be able to extend or renew these agreements on similar terms, or at
all. The manufacturing partners may suffer from poor financial conditions, which can lead to business failure for the supplier or consolidation
within a particular industry, further limiting our ability to obtain products on commercially reasonable terms or at all. The effects
of global or regional economic conditions on our suppliers may also affect our ability to obtain products. Therefore, we remain
subject to risks of supply shortages and price increases that can materially adversely affect our business, results of operations and
financial condition.

Our
products may be affected from time to time by design and manufacturing defects that could materially adversely affect our business and
result in harm to our reputation.

We
offer products that can be affected by design and manufacturing defects. Defects can also exist in components and so products. Component
defects could make our products unsafe and create a risk of environmental or property damage and personal injury. These risks may increase
as our products are introduced into specialized applications, including healthcare. There can be no assurance that we will be able to
detect and fix all issues and defects in the products we offer. Failure to do so can result in widespread technical and performance issues
affecting our products. In addition, we can be exposed to product liability claims, recalls, product replacements or modifications, write-offs
of inventory, property, plant and equipment, and/or intangible assets, and significant warranty and other expenses, including litigation
costs and regulatory fines. Quality problems can also adversely affect the experience for users of our products, and result in harm to
our reputation, loss of competitive advantage, poor market acceptance, reduced demand for products, delay in new product introductions
and lost sales.

We
are exposed to the risk of write-downs on the value of our inventory and other assets, in addition to purchase commitment cancellation
risk.

We
record write-downs for inventories that have become obsolete or exceed anticipated demand, or for which cost exceeds net realizable value.
We review long-lived assets, including capital assets and consigned inventory held at our suppliers’ facilities, for impairment
whenever events or circumstances indicate the assets may not be recoverable. If we determine that an impairment has occurred, we record
a write-down equal to the amount by which the carrying value of the asset exceeds its fair value. Although we believe our inventory,
capital assets, prepayments and other assets and purchase commitments are currently recoverable, there can be no assurance we will not
incur