Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 117

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1
Chunk 117
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 them. These increased costs adversely
impact the gross margin that we earn on our products. Tariffs can also make our products more expensive for customers, which could make
our products less competitive and reduce consumer demand. Countries may also adopt other measures, such as controls on imports, that
could adversely impact on our operations and supply chain and limit our ability to offer our products as designed. These measures can
require us to take various actions, including changing suppliers and restructuring business relationships. Changing our operations in
accordance with new or changed trade restrictions can be expensive, time-consuming, disruptive to our operations and distracting to management.
Such restrictions can be announced with little or no advance notice, and we may not be able to effectively mitigate all adverse impacts
from such measures. Political uncertainty surrounding 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