Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 223

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 223
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 trade and other international disputes could also have a negative effect on consumer
confidence and spending, which could adversely affect our business.

Many
of our suppliers and manufacturing partners are in locations that are prone to earthquakes and other natural disasters. In addition,
such operations and facilities are subject to the risk of interruption by fire, power shortages, nuclear power plant accidents and other
industrial accidents, terrorist attacks and other hostile acts, ransomware and other cybersecurity attacks, labor disputes, public health
issues, including pandemics such as the COVID-19 pandemic, and other events beyond our control. Global climate change is resulting in
certain types of natural disasters occurring more frequently or with more intense effects. Such events can make it difficult or impossible
for us to operate and deliver products to our customers. Following an interruption to our business, we may require substantial recovery
time, experience significant expenditures to resume operations, and lose significant sales. Because we rely on single or limited sources
for our products, a business interruption affecting such sources would exacerbate any negative consequences to us.

8

Our
operations are also subject to the risks of industrial accidents at our manufacturing partners. While our partners are required to maintain
safe working environments and operations, an industrial accident could occur and could result in disruption to our business. Although
we maintain insurance coverage for certain types of losses, such insurance coverage may be insufficient to cover all losses that may
arise.

The
market for our products is competitive but not subject to rapid technological change. If that were to change, we may be unable to compete
effectively.

We
take measures that we believe are prudent to manage our technology risks, including investing in research & development (R&D)
to ensure that our products maintain technological competitiveness, seeking patent and intellectual property protections in key markets
and legally asserting our intellectual property rights when we believe that our rights have been violated. These efforts have proven
effective for us historically, but there is no guarantee that our technology, R&D or that our efforts to protect our intellectual
property will be wholly successful in every instance going forward. Should efforts prove unsuccessful or insufficient, our technology
may not be able to maintain our current level of market competitiveness.

The
market for our products is highly price sensitive and subject to change with market conditions.

The
United States represents our primary market. The US consumer retail market is a highly competitive market characterized by aggressive
price competition and potential downward pressure on gross margins. The hand tool industry is not typically characterized by frequent
introduction of new