Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 249

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 249
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 $13.8 million, or 43.9%, which was a decrease of $2.7 million, or 19%, and 4.2%, respectively. The decrease in gross
profit was driven primarily by reduced revenue from one key customer and the decrease in gross margin was driven by a more unfavorable
product mix and reduced absorption of manufacturing expenses due to reduced unit volume.

Research
and development

Research
and development expenses for fiscal 2025 were $1.7 million compared to $1.9 million in fiscal 2024. The decrease in 2025 was $0.2 million,
or 11%, and was driven primarily by reduced consulting expenses.

Marketing
and selling 

Marketing
and selling expenses for fiscal 2025 were $4.5 million compared to $4.4 million in fiscal 2024 which was an increase of $0.1 million,
or 4%. This increase was driven primarily by an increase in payroll expense.

Administrative
expenses

General
and administrative expenses for fiscal 2025 were $7.3 million compared to $6.7 million in fiscal 2024 which was an increase of $0.4
million, or 6%. This increase was driven primarily by an increase of $0.4 million in non-interest bank charges such as audit and
legal expenses incurred by the lender and charged to the Company and $0.2 million of audit fees.

23

Other
income/expense

Other
income for fiscal 2025 was $0.8 million compared to zero in fiscal 2024 which was an increase of $0.8 million. This increase was driven
primarily by a settlement benefit in the Stanley Black & Decker litigation of $0.8 million. This litigation is now closed.

Interest
and other expenses for fiscal 2025 were $0.8 million compared to $0.8 million in fiscal 2024 which was an increase of $63,000 or 8%.
This increase was driven primarily by an increase in interest expense of $72,000 related to the amortization of deferred financing
cost associated with the new financing from FGI. Income from foreign currency translation adjustments increased by $0.3 million
primarily due to favorable exchange rate changes between the U.S. dollar and the Mexican peso.

Provision
for income taxes

The
Company moved from a benefit position of $70,000 during the year ended March 31, 2024 to the need for a provision