Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 822

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 7A
Chunk 822
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 and 2024, there has been no impairment of long lived assets.

Revenue
Recognition

The
Company’s revenues result from the sale of products and reflect the consideration to which the Company expects to be entitled.
The Company records revenue based on a five-step model in accordance with ASC 606, Revenue from Contracts with Customers (“ASC
606”). For its contracts with customers, the Company identifies the performance obligations (goods or services), determines the
transaction price, allocates the contract transaction price to the performance obligations, and recognizes the revenue when (or as) the
performance obligation is transferred to the customer. A good or service is transferred when (or as) the customer obtains control of
that good or service. The Company satisfies its performance obligation and recognizes revenue at the time the customer obtains the rights
to the product, which is generally when goods are shipped. As a result, the majority of the Company’s revenue is recognized at
a point in time, at shipment.

Provisions
for customer volume rebates, product returns, discounts and allowances are variable consideration and are recorded as a reduction of
revenue in the same period the related sales are recorded. Such provisions are calculated using historical averages adjusted for any
expected changes due to current business conditions. Consideration given to customers for cooperative advertising is recognized as a
reduction of revenue except to the extent that there is a distinct good or service and evidence of the fair value of the advertising,
in which case the expense is classified as marketing and selling expense. Advertising expenses included within marketing and selling
expenses were $0.1 million and $0.1 million for the years ended March 31, 2025 and 2024, respectively. Sales tax for the sale of products
is applied to the invoice and recorded as an accrued liability.

Research
and Development

The
Company incurs research and development costs of products for use in scanning behind opaque surfaces. The Company will continue to invest
in research and development to develop additional components and products of its scanning product offerings and remains committed to
providing its customers and partners with best-in-class scanning products and services. Such research and development costs, software
development costs, and any new product development costs, are expensed as incurred, and include personnel-related costs, depreciation
related to engineering and test equipment, allocated costs of facilities and information technology, outside services and consultant
costs, supplies, software tools and product certification.

    F-11

ZRCN
                                            Inc.

NOTES
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