Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 113

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1
Chunk 113
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, and the like, to be among
our most valuable assets (e.g., SuperScan®, StudSensor™,
MultiScanner™, MetalliScanner® and other Zircon trademarks).

As
of March 31, 2025, we held approximately 45 active and pending patents in the United States and approximately 64 active and pending patents
outside of the United States. In addition, we held approximately 20 active and pending trademarks in the United States and approximately
10 active and pending trademarks outside of the United States.

Competition

We
face competition from several companies that sell similar scanning products through the same retail channel. Stanley, Black & Decker,
Franklin, DeWalt, Ryobi, Klein, and others compete for space in retail outlets such as Home Depot and Lowe’s. All the competitors
use the capacitive technology pioneered by us and have incorporated many other features introduced by us. Competition is characterized
by aggressive pricing and generous rebates and marketing contributions resulting in downward pressure on gross margins.

Our
ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative new products to the
marketplace. Principal competitive factors important to Zircon include our reputation, price, product features and performance, product
quality and reliability, design innovation, very high fill rates and distribution capability, marketing and customer service.

Supply
Chain

Our
products are assembled by our affiliate, a single-customer Maquiladora company, Zircon de Mexico, located in Ensenada, Mexico and by
various outsourced component manufacturers located in China and elsewhere. Various components used in the production of our products
are sourced from suppliers throughout the world.

Our
products include proprietary Application Specific Integrated Circuits or ASIC Semiconductors, which are sourced in the US. Due to the
potentially long lead time in the production of microprocessors, Zircon typically seeks to maintain six to twelve months of anticipated
unit volume in any given period as ‘safety stock’ of its ASIC chips to avoid supply shortages and maintain its industry-leading
on-time delivery to its retailers and distributor partners. Zircon has historically maintained a greater than 97% on-time delivery with
its retail and distributor sales partners.

Our
manufacturing affiliate, Zircon de Mexico, also benefits from a deep-water port in Ensenada, Mexico that facilitates direct delivery
of product and parts from international vendors. Access to the port has allowed us to avoid
historic supply chain disruptions caused by congestion in US ports or other impediments