Company: ZRCN
Filing Date: 2025-09-10
Form Type: 10-K
Source: 0001641172-25-027037
Chunk: 954

Company: ZRCN Inc.
Filing Date: 2025-09-10
Form: 10-K
Item: Item 8
Chunk 954
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 Company obtains
control and are de-consolidated from the date at which control ceases. All intercompany balances and transactions have been eliminated.
Accounting policies of the entities have been revised where necessary to ensure consistency with the policies adopted by the Company.

Under
Accounting Standards Codification (“ASC”) Topic 810-10-25, Consolidation, Zircon de Mexico S.A. de C.V. (“ZDM”)
and Zircon Corporation Limited (“Zircon UK”) have been determined to be variable interest entities with Zircon as the primary
beneficiary. Therefore, the financial statements of ZDM and Zircon UK are consolidated with Zircon and the Company, and all significant
intercompany transactions and balances have been eliminated.

    F-7

ZRCN
Inc.

NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MARCH 31, 2025 AND 2024

Non-controlling
Interests

The
Company follows ASC 810, which governs the accounting for and reporting of non-controlling interests (“NCIs”) in
partially owned consolidated entities and the loss of control of those entities. Non-controlling interest positions, which represent
100% of the activity in the Company’s consolidated entities before intercompany transactions have been eliminated, are
reported as a separate component of consolidated stockholders’ equity from the equity attributable to ZRCN’s
stockholders for all years presented. 100% of Zircon de Mexico and 85% of Zircon UK are held by common shareholders. As of March 31,
2025, these same shareholders held collectively approximately 73% of ZRCN Inc. The net (loss) income attributed to the NCI’s
is separately designated in the accompanying consolidated statements of operations and comprehensive loss resulting from the
Company’s controlling position in Zircon’s subsidiary position in the United Kingdom.

Variable
Interest Entities

In
accordance with ASC 810, Consolidation (“ASC 810”), the Company assesses whether it has an explicit or implicit variable
interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are variable interest entities
(“VIEs”). Variable interests are contractual, ownership, or other pecuniary interests in an entity whose value changes with
changes in the fair value of the entity’s net assets, exclusive of variable interests. Explicit variable interests are those which
directly absorb the variability of a VIE