Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 237

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 1A
Chunk 237
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 these regulations. In addition, we may in the future be, held responsible for remedial
investigations and clean-up costs resulting from the discharge of hazardous substances into the environment, including sites that have
never been owned or operated by us but at which we have been identified as a potentially responsible party under federal and state environmental
laws and regulations. Changes in environmental and other laws and regulations in both domestic and foreign jurisdictions could adversely
affect our operations due to increased costs of compliance and potential liability for non-compliance.

We
manufacture products and perform various services that create exposure to product and professional liability claims and litigation. The
failure of our products and services to be properly manufactured, configured, installed, designed or delivered, resulting in personal
injuries, property damage or business interruption could subject us to claims for damages. The costs associated with defending ongoing
or future product liability claims and payment of damages could be substantial. Our reputation could also be adversely affected by such
claims, whether or not successful.

There
can be no assurance that we will be able to continue to successfully avoid, manage and defend such matters. In addition, given the
inherent uncertainties in evaluating certain exposures, actual costs to be incurred in future periods may vary from our estimates
for such contingent liabilities.

15

Our
products could be recalled.

We
maintain an awareness of and responsibility for the potential health and safety impacts on our customers. Our product development processes
include product safety reviews and extensive testing. Safety reviews are performed at various product development milestones, including
a review of product labeling and marking to ensure safety and operational hazards are identified for the customer.

Despite
safety and quality reviews, the Consumer Product Safety Commission or other applicable regulatory bodies may require, or Zircon may voluntarily
institute, the recall, repair or replacement of our products if those products are found to not be in compliance with applicable standards
or regulations. A recall could increase our costs and adversely impact our reputation.

Users
might not understand the product limitations.

Certain
of our tools are designed to detect objects behind opaque surfaces, such as electrical wiring or pipes. However, these tools have known
technical limitations. In particular, they may not detect alternating current (AC) activity or other objects if the wires or components
are located mor than two inches (5 cm) behind the scanned surface, embedded in concrete, encased in conduit or shielded cable, behind
a plywood shear wall or metallic wall covering or wall covering that includes metallic or similar particles,