Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 513

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 2
Chunk 513
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 determined that the Company is the primary beneficiary.

The
Company has determined that ZDM and Zircon UK are variable interest entities with the Company’s wholly owned subsidiary, Zircon,
as the primary beneficiary, and thus the Company, with the ability to exercise control, as determined under the guidance of ASC 810.
In its determination, management considered the following qualitative and quantitative factors:

    a.
    the
    overall purpose and design of the entities, which exist primarily for the benefit of or on behalf of the Company and; 

    b.
    the
    Company’s contractual and common control arrangements with the VIEs, through which it gains both the power to direct the activities
    that most significantly impact their economic performance, and the obligation to absorb losses and receive benefits that potentially
    could be significant to the VIEs;

    c.
    the
    equity at risk of the entities is not sufficient to finance the entities’ activities without additional subordinated financial
    support by the Company (i.e., the entities are thinly capitalized).

    F-8

ZRCN
Inc.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MARCH 31, 2025 AND 2024

The
following table summarizes the carrying amount of the assets and liabilities of ZDM included in the Company’s consolidated balance
sheets at March 31, 2025 and 2024 (after elimination of intercompany transactions and balances):

 Schedule
of Carrying Amount of Assets and Liabilities for Variable Interest Entities

    March
    31, 2025  
    March
    31, 2024 
  
    ASSETS 

    Current assets: 

    Cash 
    $34  
    $30 
  
    Accounts receivable 
     12  
     10 
  
    Prepaid
    expenses and other assets 
     57  
     63 
  
    Total current assets 
     103  
     103 

    Property
    and equipment 
     168  
     252 
  
    Total
    assets 
    $271  
    $355 

    LIABILITIES 

    Current liabilities: 

    Accounts payable 
    $126  
    $131 
  
    Accrued
    expenses 
     60  
     63 
  
    Total
    current liabilities 
    $186  
    $194