ZRCN Inc. Files Q1 2025 10-Q

TL;DR

ZRCN Inc. 10-Q filed. Q1 FY25 financials out.

AI Summary

ZRCN Inc. filed its 10-Q for the period ending June 30, 2024. The company, formerly known as Harmony Energy Technologies Corp, is in the miscellaneous electrical machinery sector. The filing includes financial data for the first quarter of fiscal year 2025, with comparative data from the previous fiscal year.

Why It Matters

This filing provides investors with an update on ZRCN Inc.'s financial performance and position as of the end of the first quarter of fiscal year 2025.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial information.

Key Numbers

• Q1 2025 — Fiscal Quarter (Reporting period for the 10-Q)
• June 30, 2024 — Period End Date (Financial reporting date)

Key Players & Entities

• ZRCN Inc. (company) — Filer of the 10-Q
• Harmony Energy Technologies Corp (company) — Former name of ZRCN Inc.
• June 30, 2024 (date) — End of reporting period
• 20240820 (date) — Filing date

FAQ

Filing Documents

• form10-q.htm (10-Q) — 769KB
• ex31-1.htm (EX-31.1) — 17KB
• ex31-2.htm (EX-31.2) — 18KB
• ex32-1.htm (EX-32.1) — 7KB
• ex32-2.htm (EX-32.2) — 7KB
• 0001493152-24-033203.txt ( ) — 5253KB
• zrcn-20240630.xsd (EX-101.SCH) — 45KB
• zrcn-20240630_cal.xml (EX-101.CAL) — 72KB
• zrcn-20240630_def.xml (EX-101.DEF) — 134KB
• zrcn-20240630_lab.xml (EX-101.LAB) — 399KB
• zrcn-20240630_pre.xml (EX-101.PRE) — 307KB
• form10-q_htm.xml (XML) — 710KB

Financial Statements

Financial Statements 3 Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and March 31, 2023 3 Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended June 30, 2024 and 2023 (Unaudited) 4 Consolidated Statements of Changes in Shareholders' Equity for the three months ended June 30, 2023 and 2022 (Unaudited) 5 Consolidated Statements of Cash Flows for the three months ended June 30, 2024 and 2023 (Unaudited) 6 Condensed Notes to the Unaudited Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 23 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 27 Item 4.

Controls and Procedures

Controls and Procedures 28 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 29 Item 1A.

Risk Factors

Risk Factors 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30 Item 3. Defaults Upon Senior Securities 30 Item 4. Mine Safety Disclosures 30 Item 5. Other Information 30 Item 6. Exhibits 30

SIGNATURES

SIGNATURES 31 2 PART I FINANCIAL INFORMATION ITEM 1. Financial Statements. ZRCN Inc CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) June 30, 2024 March 31, 2024 (Unaudited) (Audited) ASSETS Current assets: Cash $ 374 $ 502 Accounts receivable, net of provision for credit losses of approximately $ 7 and $ 14 , respectively 5,845 8,644 Inventory, net 13,147 14,057 Prepaid expenses and other assets 427 335 Total current assets 19,793 23,538 Property and equipment, net 1,897 1,803 Deferred tax asset 499 499 Operating lease right-of-use assets 699 751 Federal tax deposit 213 213 Intangible assets, net 763 792 Deposits 19 19 Deferred financing costs 326 — Total assets $ 24,209 $ 27,615 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,286 $ 7,050 Accrued expenses 2,246 2,130 Operating lease liability, current 197 195 Notes payable, current portion — 75 Total current liabilities 7,729 9,450 Line of credit 7,493 8,026 Operating lease liability, net of current portion 481 545 Notes payable to Stauss Family Administrative Trust 667 667 Total liabilities 16,370 18,688 Commitments and Contingencies (Note 14) - - Stockholders' equity: Common stock; at $ 0.0001 par value, 20,000,000 shares authorized, 10,041,936 and 10,016,936 shares issued and outstanding as of June 30, 2024 and March 31, 2024, respectively 1 1 Accumulated other comprehensive loss ( 70 ) ( 187 ) Retained earnings 6,138 7,421 Total equity attributable to ZRCN Inc. stockholders 6,069 7,235 Non-controlling interests in variable interest entities 1,770 1,692 Total stockholders' equity 7,839 8,927 Total liabilities and stockholders' equity $ 24,209 $ 27,615 The accompanying condensed notes are an integral part of these unaudited consolidated financial statements 3 ZRCN Inc. CONSOLIDATED STATEMENTS OF OPERAT

Business

Business Zircon Corporation, ZRCN's wholly-owned subsidiary, was incorporated in California in 1977. The Company, through Zircon, is principally engaged in the design and manufacture of electronic-based consumer hardware and sells its products primarily to retail outlets located throughout the United States, Canada, Japan and Europe. The Company and Zircon operate from their headquarters located in Campbell, California and an affiliate entity of Zircon, Zircon de Mexico S.A. de C.V., located in Ensenada, Mexico. The operations of the Company and Zircon are supported also by an affiliated entity of Zircon, Zircon Corporation Limited, located in the United Kingdom. On April 14, 2023 (the "Closing Date"), Zircon Corporation ("Zircon") effectuated a merger and reorganization with Harmony Energy Technologies, Inc. ("Harmony"), a Delaware Corporation, ZRCN Inc., a California corporation and a wholly owned subsidiary of Harmony (the "Merger Sub"). The merger leverages Zircon's sensor-based, ASIC ("Application-Specific Integrated Circuits") processor technology and patent portfolio, to accelerate growth in its product lines and global markets as a publicly-disclosed company, in accordance with the Securities Act of 1933 and the Exchange Act of 1934, both as amended. The combination of Harmony and Zircon was effectuated through a merger (the "Merger") of Merger Sub into Zircon. The separate existence of Merger Sub ceased, and Merger Sub was merged with and into Zircon (Zircon, as the surviving corporation following the Merger). Upon completion of the Merger, Harmony changed its name to ZRCN Inc. ("ZRCN" or the "Company"). While Harmony was the legal acquirer of Zircon in the Merger, the Merger is treated as a reverse recapitalization, whereby Zircon is deemed to be the accounting acquirer, and the historical financial statements of Zircon became the historical financial statements of Harmony (renamed ZRCN Inc.) upon the closing of the Merger. Under this method of accounti

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