Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 668

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 5
Chunk 668
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. The Company
and Zircon operate from their headquarters located in Campbell, California and an affiliate entity of Zircon, Zircon de Mexico S.A. de
C.V., located in Ensenada, Mexico. The operations of the Company and Zircon are supported also by an affiliated entity of Zircon, Zircon
Corporation Limited, located in the United Kingdom.

On
April 14, 2023 (the “Closing Date”), Zircon Corporation effectuated a merger and reorganization with Harmony Energy Technologies,
Inc. (“Harmony”), a Delaware Corporation, ZRCN Inc., a California corporation and a wholly owned subsidiary of Harmony (the
“Merger Sub”). The merger leverages Zircon’s sensor-based, ASIC (“Application-Specific Integrated Circuits”)
processor technology and patent portfolio, to accelerate growth in its product lines and global markets as a publicly disclosed company,
in accordance with the Securities Act of 1933 and the Exchange Act of 1934, both as amended. The combination of Harmony and Zircon was
effectuated through a merger (the “Merger”) of Merger Sub into Zircon. The separate existence of Merger Sub ceased, and Merger
Sub was merged with and into Zircon (Zircon, as the surviving corporation following the Merger). Upon completion of the Merger, Harmony
changed its name to ZRCN Inc. While Harmony was the legal acquirer of Zircon in the Merger, the Merger is treated as a reverse recapitalization,
whereby Zircon is deemed to be the accounting acquirer, and the historical financial statements of Zircon became the historical financial
statements of Harmony (renamed ZRCN Inc.) upon the closing of the Merger. Under this method of accounting, Harmony was treated as the
“acquired” company and Zircon is treated as the acquirer for financial reporting purposes.

Accordingly,
for accounting purposes, the Merger was treated as the equivalent of Zircon issuing stock for the net assets of Harmony, accompanied
by a recapitalization. The net assets of Harmony were stated at historical cost, with no goodwill or other intangible assets recorded.

2.
Liquidity

As
of March 31, 2025, the Company had $1.4 million in cash and working capital of $3.5 million. To date, ZRCN has been financed primarily
through secured loans and a revolving line of credit. The
Company’s line of credit expires on May