Cover
Cover - shares | 9 Months Ended | |
Dec. 31, 2023 | Feb. 19, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Dec. 31, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --03-31 | |
Entity File Number | 000-56380 | |
Entity Registrant Name | ZRCN INC. | |
Entity Central Index Key | 0001901297 | |
Entity Tax Identification Number | 83-2756695 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 1580 Dell Avenue | |
Entity Address, City or Town | Campbell | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95008 | |
City Area Code | (408) | |
Local Phone Number | 963-4550 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 9,948,272 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 | |
Current assets: | |||
Cash | $ 1,619,630 | $ 29,015 | |
Accounts receivable, net of allowance for doubtful accounts of approximately $13,000 and $10,000, respectively | 7,296,789 | 7,524,428 | |
Inventory, net | 13,904,315 | 13,137,101 | |
Prepaid expenses and other assets | 382,177 | 551,050 | |
Total current assets | 23,202,911 | 21,241,594 | |
Property and equipment, net | 1,861,470 | 1,779,615 | |
Operating lease right-of-use assets, net | 803,421 | 960,044 | |
Federal tax deposit | 170,821 | 134,600 | |
Intangible assets, net | [1] | 812,768 | 807,385 |
Deposits | 19,195 | 19,195 | |
Total assets | 26,870,586 | 24,942,433 | |
Current liabilities: | |||
Line of credit | 9,367,752 | 7,210,652 | |
Accounts payable | 5,066,935 | 3,881,323 | |
Accrued expenses | 1,695,470 | 1,876,325 | |
Notes payable, current portion | 235,000 | 205,834 | |
Operating lease liability, current | 193,054 | 185,357 | |
Total current liabilities | 16,558,211 | 13,359,491 | |
Operating lease liability, net of current portion | 608,776 | 783,631 | |
Total liabilities | 17,834,217 | 15,115,542 | |
Commitments and Contingencies (Note 12) | |||
Stockholders’ equity: | |||
Common stock; at $0.0001 par value, 20,000,000 shares authorized, 9,948,272 and 500,000 shares issued and outstanding as of December 31, 2023 and March 31, 2023 | 995 | 50 | |
Accumulated other comprehensive income | 105,382 | 16,010 | |
Note receivable from stockholder | (240,190) | ||
Retained earnings | 7,536,643 | 8,629,509 | |
Total equity attributable to ZRCN | 7,643,020 | 8,405,379 | |
Non-controlling interests in variable interest entities | 1,393,349 | 1,421,512 | |
Total stockholders’ equity | 9,036,369 | 9,826,891 | |
Total liabilities and stockholders’ equity | 26,870,586 | 24,942,433 | |
Nonrelated Party [Member] | |||
Current liabilities: | |||
Notes payable | 65,000 | ||
Related Party [Member] | |||
Current liabilities: | |||
Notes payable | $ 667,230 | $ 907,420 | |
[1]Finite-lived intangible assets have estimated useful lives of five fifteen years |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 12,955 | $ 9,765 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 9,948,272 | 500,000 |
Common stock, shares outstanding | 9,948,272 | 500,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 7,539,389 | $ 7,859,564 | $ 23,368,147 | $ 22,668,134 |
Cost of sales | 4,485,237 | 4,698,944 | 12,980,027 | 13,526,950 |
Gross profit | 3,054,152 | 3,160,620 | 10,388,120 | 9,141,184 |
Operating expenses: | ||||
General and administrative | 1,509,814 | 1,122,706 | 4,899,081 | 3,931,421 |
Marketing and selling | 1,175,449 | 1,239,230 | 3,350,846 | 3,367,962 |
Research and development | 465,029 | 471,102 | 1,453,286 | 1,418,181 |
Total operating expenses | 3,150,292 | 2,833,038 | 9,703,213 | 8,717,564 |
Income (loss) from operations | (96,140) | 327,582 | 684,907 | 423,620 |
Other expenses: | ||||
Interest expense | 229,311 | 149,785 | 562,080 | 312,689 |
Other expenses | 10,856 | 6,782 | 30,291 | 20,351 |
Loss on foreign currency transactions | 52,194 | 82,350 | 58,956 | 85,619 |
Total other expenses | 292,361 | 238,917 | 651,327 | 418,659 |
Income (loss) before income taxes | (388,501) | 88,665 | 33,580 | 4,961 |
Income tax expense | (23,092) | (14,657) | (55,929) | (117,191) |
Net income (loss) | (411,593) | 74,008 | (22,349) | (112,230) |
Less: Net (loss) income attributable to non-controlling interests | 67,430 | (11,629) | (28,163) | 142,629 |
Net income (loss) attributable to common stockholders | (479,023) | 85,637 | 5,814 | (254,859) |
Change in foreign currency translation adjustment | (11,349) | (45,343) | 89,372 | (49,057) |
Comprehensive income (loss) | (422,942) | 28,665 | 67,023 | (161,287) |
Less: Other comprehensive income (loss) attributable to noncontrolling interest | (11,349) | (45,343) | 89,372 | (49,057) |
Comprehensive income (loss) attributable to ZRCN common stockholders | $ (479,023) | $ 85,637 | $ 5,814 | $ (254,859) |
Net income (loss) per share: | ||||
Basic | $ (0.05) | $ 0.17 | $ 0 | $ (0.51) |
Diluted | $ (0.05) | $ 0.17 | $ 0 | $ (0.51) |
Weighted average common shares outstanding: | ||||
Basic | 9,948,272 | 500,000 | 9,475,858 | 500,000 |
Diluted | 9,948,272 | 500,000 | 9,514,468 | 500,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | AOCI Attributable to Parent [Member] | Receivables from Stockholder [Member] | Retained Earnings [Member] | Parent [Member] | Noncontrolling Interest [Member] | Total |
Balance at Mar. 31, 2022 | $ 50 | $ 4,565 | $ (211,390) | $ 9,520,102 | $ 9,313,327 | $ 1,188,643 | $ 10,501,970 |
Balance, shares at Mar. 31, 2022 | 500,000 | ||||||
Change in foreign currency translation adjustment | (4,054) | (4,054) | (4,054) | ||||
Net income (loss) | (456,355) | (456,355) | 120,314 | (336,041) | |||
Stockholder distributions | (223,021) | (223,021) | (223,021) | ||||
Balance at Jun. 30, 2022 | $ 50 | 511 | (211,390) | 8,840,726 | 8,629,897 | 1,308,957 | 9,938,854 |
Balance, shares at Jun. 30, 2022 | 500,000 | ||||||
Balance at Mar. 31, 2022 | $ 50 | 4,565 | (211,390) | 9,520,102 | 9,313,327 | 1,188,643 | 10,501,970 |
Balance, shares at Mar. 31, 2022 | 500,000 | ||||||
Change in foreign currency translation adjustment | (49,057) | ||||||
Net income (loss) | (112,230) | ||||||
Balance at Dec. 31, 2022 | $ 50 | (44,492) | (211,390) | 9,042,222 | 8,786,390 | 1,331,272 | 10,117,662 |
Balance, shares at Dec. 31, 2022 | 500,000 | ||||||
Balance at Jun. 30, 2022 | $ 50 | 511 | (211,390) | 8,840,726 | 8,629,897 | 1,308,957 | 9,938,854 |
Balance, shares at Jun. 30, 2022 | 500,000 | ||||||
Change in foreign currency translation adjustment | 340 | 340 | 340 | ||||
Net income (loss) | 115,859 | 115,859 | 33,944 | 149,803 | |||
Balance at Sep. 30, 2022 | $ 50 | 851 | (211,390) | 8,956,585 | 8,746,096 | 1,342,901 | 10,088,997 |
Balance, shares at Sep. 30, 2022 | 500,000 | ||||||
Change in foreign currency translation adjustment | (45,343) | (45,343) | (45,343) | ||||
Net income (loss) | 85,637 | 85,637 | (11,629) | 74,008 | |||
Balance at Dec. 31, 2022 | $ 50 | (44,492) | (211,390) | 9,042,222 | 8,786,390 | 1,331,272 | 10,117,662 |
Balance, shares at Dec. 31, 2022 | 500,000 | ||||||
Balance at Mar. 31, 2023 | $ 50 | 16,010 | (240,190) | 8,629,509 | 8,405,379 | 1,421,512 | 9,826,891 |
Balance, shares at Mar. 31, 2023 | 500,000 | ||||||
Merger with Harmony | $ 945 | (1,098,680) | (1,097,735) | (1,097,735) | |||
Merger with Harmony, shares | 9,448,272 | ||||||
Change in foreign currency translation adjustment | 116,795 | 116,795 | 116,795 | ||||
Net income (loss) | (382,620) | (382,620) | (82,756) | (465,376) | |||
Balance at Jun. 30, 2023 | $ 995 | 132,805 | (240,190) | 7,148,209 | 7,041,819 | 1,338,756 | 8,380,575 |
Balance, shares at Jun. 30, 2023 | 9,948,272 | ||||||
Balance at Mar. 31, 2023 | $ 50 | 16,010 | (240,190) | 8,629,509 | 8,405,379 | 1,421,512 | 9,826,891 |
Balance, shares at Mar. 31, 2023 | 500,000 | ||||||
Merger with Harmony | (1,097,735) | ||||||
Change in foreign currency translation adjustment | 89,372 | ||||||
Net income (loss) | (22,349) | ||||||
Balance at Dec. 31, 2023 | $ 995 | 105,382 | 7,536,643 | 7,643,020 | 1,393,349 | 9,036,369 | |
Balance, shares at Dec. 31, 2023 | 9,948,272 | ||||||
Balance at Jun. 30, 2023 | $ 995 | 132,805 | (240,190) | 7,148,209 | 7,041,819 | 1,338,756 | 8,380,575 |
Balance, shares at Jun. 30, 2023 | 9,948,272 | ||||||
Change in foreign currency translation adjustment | (16,074) | (16,074) | (16,074) | ||||
Net income (loss) | 867,457 | 867,457 | (12,837) | 854,620 | |||
Repayment of Note Receivable from Stockholder | 240,190 | 240,190 | 240,190 | ||||
Balance at Sep. 30, 2023 | $ 995 | 116,731 | 8,015,666 | 8,133,392 | 1,325,919 | 9,459,311 | |
Balance, shares at Sep. 30, 2023 | 9,948,272 | ||||||
Change in foreign currency translation adjustment | (11,349) | (11,349) | (11,349) | ||||
Net income (loss) | (479,023) | (479,023) | 67,430 | (411,593) | |||
Balance at Dec. 31, 2023 | $ 995 | $ 105,382 | $ 7,536,643 | $ 7,643,020 | $ 1,393,349 | $ 9,036,369 | |
Balance, shares at Dec. 31, 2023 | 9,948,272 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net loss | $ (411,593) | $ (465,376) | $ 74,008 | $ (336,041) | $ (22,349) | $ (112,230) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation expense | 127,315 | 276,593 | 411,272 | 796,868 | |||
Amortization of intangible assets | 39,793 | 22,362 | 62,156 | 66,343 | |||
Amortization of right-of-use assets | 156,623 | ||||||
Impairment of intangible assets | 5,995 | ||||||
Bad debt expense | 3,190 | (1,561) | $ (1,561) | ||||
Loss on foreign currency transactions | 58,956 | 85,619 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | 393,441 | 395,900 | |||||
Inventory, net | (727,214) | 921,617 | |||||
Prepaid expenses and other assets | 174,398 | 609,041 | |||||
Federal tax deposit | (36,221) | (528,085) | |||||
Accounts payable | 961,248 | (994,646) | |||||
Accrued expenses and other current liabilities | (38,439) | 194,621 | |||||
Operating lease liabilities | (167,158) | ||||||
Net cash provided by operating activities | 1,229,903 | 1,439,482 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Effect of Harmony Merger, net of cash acquired | (518,611) | ||||||
Investment in intangible assets | (67,539) | (79,938) | |||||
Purchase of property and equipment | (628,411) | (415,879) | |||||
Net cash used in investing activities | (1,214,561) | (495,817) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Repayment of notes payable | (268,334) | (307,500) | |||||
Repayment of debt assumed in Harmony Merger | (317,144) | ||||||
Distributions to stockholders | (223,021) | ||||||
Borrowing on line of credit | 10,912,716 | 14,940,797 | |||||
Repayment on line of credit | (8,755,616) | (14,484,462) | |||||
Net cash provided by (used in) financing activities | 1,571,622 | (74,186) | |||||
Effect of exchange rate fluctuations on cash | 3,651 | (2,926) | |||||
Net increase in cash | 1,590,615 | 866,553 | |||||
Cash at beginning of period | $ 29,015 | $ 266,276 | 29,015 | 266,276 | 266,276 | ||
Cash at end of period | $ 1,619,630 | $ 1,132,829 | 1,619,630 | 1,132,829 | $ 29,015 | ||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | 539,815 | 314,245 | |||||
Cash paid for taxes | 148,877 | 3,410 | |||||
Noncash investing and financing activities: | |||||||
Common stock issued in connection with Harmony merger | 18,900 | ||||||
Fair value of Advisor Warrants issued to effectuate Harmony Merger | 301,572 | ||||||
Assets acquired in Harmony Merger | 663 | ||||||
Liabilities assumed in Harmony Merger | (579,150) | ||||||
Noncash settlement of Stauss note payable for settlement of note receivable from stockholder | $ 240,190 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization
Organization | 9 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization The Business 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”); and Zircon. 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 traded company. 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 accounting, Harmony was treated as the “acquired” company and Zircon is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Merger was treated as the equivalent of Zircon issuing stock for the net assets of Harmony, accompanied by a recapitalization. The net assets of Harmony were stated at historical cost, with no goodwill or other intangible assets recorded. Zircon 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. |
Liquidity
Liquidity | 9 Months Ended |
Dec. 31, 2023 | |
Liquidity | |
Liquidity | 2. Liquidity As of December 31, 2023, the Company had $ 1,619,630 6,644,700 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company and its subsidiaries’ financial position and interim results as of and for the periods presented have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Results for interim periods are not necessarily indicative of those that may be expected for a full year. The financial information included herein should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report for the year ended March 31, 2023, in our Form 8-K/A. The merger between Harmony’s wholly owned subsidiary and Zircon was accounted for as a reverse asset acquisition in accordance with GAAP. Under this method of accounting, Harmony, through its merger subsidiary, was treated as the “acquired” company and Zircon was treated as the acquirer for financial reporting purposes. The consolidated assets, liabilities and results of operations prior to the merger are those of Zircon. Refer to Note 4 for additional information on the transaction. ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of ZRCN as well as its variable interest entities. The Company consolidates all entities over which the Company has the power to govern the financial and operating policies and therefore exercises control, and upon which the Company has a controlling financial interest. The entities are consolidated from the date at which the 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 Reverse Stock Split On May 10, 2023, ZRCN authorized a 1:20 reverse split 198,964,500 9,948,272 Variable Interest Entities In accordance with ASC 810, Consolidation If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company - that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is 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 ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 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). 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 after 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. The net income attributed to the NCI’s is separately designated in the accompanying unaudited consolidated statements of operations and comprehensive income (loss). Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Significant estimates used in preparing these unaudited consolidated financial statements include the allowance for doubtful accounts, allowance for inventory obsolescence, allocation of overhead to inventory, estimated future benefit and fair value of intangible assets, accrued rebates and advertising allowances, useful lives and depreciation methods of property and equipment, and uncertain tax positions. It is at least reasonably possible that the significant estimates used will change within the next year. Cash The carrying value of cash approximates fair value due to the short-term nature of the instruments. From time to time, the Company may be in the position of a “book overdraft” in which outstanding checks exceed cash. The Company classifies book overdrafts in accounts payable within its unaudited consolidated balance sheets, and classifies the change in accounts payable associated with book overdrafts as an operating activity within its unaudited consolidated statements of cash flows. As of December 31, 2023, the book overdraft included within accounts payable was $ 116,520 Accounts Receivable, Net The Company provides credit without requiring collateral, in the normal course of business, to credit-worthy customers as determined by management’s review of references and credit reports. Bad debts are charged against the allowance for doubtful accounts. The allowance is adjusted to provide a specific and general allowance for estimated uncollectible accounts, which is based on management’s judgment. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Based on management’s assessment of the credit history with customers having outstanding balances and current relationships with them, management believes that losses on balances outstanding will not exceed the allowance. Accounts receivable consisted of the following: Schedule of Accounts Receivable December 31, 2023 March 31, 2023 Accounts receivable $ 7,309,744 $ 7,534,193 Less allowance for doubtful accounts (12,955 ) (9,765 ) Accounts receivable, net $ 7,296,789 $ 7,524,428 ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 Activity related to the Company’s allowance for doubtful accounts was as follows: Schedule of Allowance for Doubtful Accounts December 31, 2023 March 31, 2023 Balance, beginning of period $ 9,765 $ 115,129 Increase/(decrease) in bad debt allowance 3,190 (1,561 ) Write-offs — (103,803 ) Balance, end of period $ 12,955 $ 9,765 Inventory, Net Inventories, which consist primarily of raw materials and finished goods, are stated at the lower of cost or net realizable value. The Company states inventory cost utilizing the first-in, first-out (FIFO) method. Labor and overhead associated with inventory purchases are estimated and capitalized in inventory. The need for an allowance for inventory obsolescence is based on an evaluation of slow-moving or obsolete inventory. Obsolescence allowance was estimated at $ 505,958 478,830 , respectively Revenue Recognition The Company’s revenues result from the sale of products and reflect the consideration to which the Company expects to be entitled. The Company records revenue based on a five-step model in accordance with ASC 606, Revenue from Contracts with Customers Provisions for customer volume rebates, product returns, discounts and allowances are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded. Such provisions are calculated using historical averages adjusted for any expected changes due to current business conditions. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a distinct good or service and evidence of the fair value of the advertising, in which case the expense is classified as selling, general, and administrative expense. Sales tax for the sale of products is applied to the invoice and recorded as an accrued liability. Research and Development The Company incurs research and development costs of products for use in scanning behind opaque surfaces. The Company will continue to invest in research and development to develop additional components and products of its scanning product offerings and remains committed to providing its customers and partners with best-in-class scanning products and services. Such research and development costs, software development costs, and any new product development costs, are expensed as incurred, and include personnel-related costs, depreciation related to engineering and test equipment, allocated costs of facilities and information technology, outside services and consultant costs, supplies, software tools and product certification. Comprehensive Income (Loss) Comprehensive income (loss) of all periods presented is comprised primarily of net income (loss) and foreign currency translation adjustments. ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 Segment Reporting The Company determines its reporting units in accordance with FASB ASC 280, Segment Reporting Concentration of Business and Credit Risk As of December 31, 2023, the Company maintained deposits in a single bank that exceeded the federal insured deposit limit of the Federal Deposit Insurance Corporation (FDIC). During the three months ended December 31, 2023 and 2022 the Company generated approximately 59 61 62 63 For the for the nine months ended December 31, 2023 and March 31, 2023, 71 75 Fair Value of Financial Instruments In accordance with FASB ASC 820 Fair Value Measurements and Disclosures a. Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; b. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and c. Level 3 – inputs to the valuation methodology are unobservable and insignificant to the fair value measurement. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company believes the carrying amounts of its cash equivalents, accounts receivable, other current assets, other assets, accounts payable, accrued expenses, and other current liabilities approximated their fair values as of December 31, 2023 and March 31, 2023 due to their short-term nature. Management measures intangible assets at fair value on a non-recurring basis using internally developed assumptions about the market as there is no market activity available. All carrying amounts of other applicable assets and liabilities on the Company’s balance sheet approximate fair value. For long-term debt, the estimated fair value approximates its carrying value, as the interest rate is in line with the market interest rates for this type of debt. Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 As of April 14, 2023, the Zircon’s election to be an S Corporation under the Internal Revenue Code was no longer in effect. Net Income (Loss) Per Share Basic net income (loss) per share of common stock is computed by dividing net income or loss attributable to ZRCN by the weighted average number of shares of common stock outstanding for the period. Diluted loss per share excludes, when applicable, the potential impact of common stock warrant shares and other dilutive instruments because their effect would be anti-dilutive. Diluted net income per share, when applicable, includes the warrant shares because their effect would be dilutive. The dilutive securities outstanding are as follows: Schedule of Dilutive Securities Outstanding December 31, 2023 December 31, 2022 Common stock warrants 217,184 — Leases In February 2016, the FASB issued a new accounting standard, ASC Topic 842, related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most significant among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted ASC Topic 842 effective April 1, 2022, using the modified retrospective transition approach as of the period of adoption. The Company’s lease arrangements relate primarily to office space, a vehicle, and office equipment. The Company’s leases may include renewal options and rent escalation clauses. The Company is typically required to make fixed minimum rent payments relating to its right to use an underlying leased asset. The Company has lease agreements which contain both lease and non-lease components, which it has not elected to account for as a single lease component. As such, minimum lease payments exclude fixed payments for non-lease components within a lease agreement, in addition to excluding variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. ROU assets and lease liabilities are recognized at commencement date and determined using the present value of the future minimum lease payments over the lease term. The Company uses an incremental borrowing rate based on estimated rate of interest for collateralized borrowing since the Company’s leases do not include an implicit interest rate. The estimated incremental borrowing rate considers market data, actual lease economic environment, and actual lease term at commencement date. The lease term may include options to extend when it is reasonably certain that the Company will exercise that option. The Company recognizes lease expense on a straight-line basis over the lease term. Warrant The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be liability classified and recorded at their initial fair value on the date of issuance and remeasured at fair value and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the private placement warrants was estimated using a Black Scholes valuation approach with assumptions relevant on the date of issuance and the fair value of the penny warrants issued in connection with the Merger was estimated using the intrinsic value method. Recently Issued Accounting Pronouncements As an emerging growth company, the Company will have the option of adopting new accounting pronouncements on a delayed basis and has opted to take advantage of this option. As a result, the Company has been adopting new accounting standards based on the timeline for adoption afforded to privately held companies, unless it chooses to early adopt a new accounting standard. Recently Issued Accounting Standards Adopted In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In June 2016, the FASB issued ASU No. 2016-13, Accounting for Credit Losses (Topic 326) |
Merger with Harmony Energy Tech
Merger with Harmony Energy Technologies Corporation | 9 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Merger with Harmony Energy Technologies Corporation | 4. Merger with Harmony Energy Technologies Corporation On April 14, 2023 (the “Closing Date”), Harmony closed the Merger with Zircon, as a result of which Zircon became a wholly-owned subsidiary of Harmony. While Harmony was the legal acquirer of Zircon in the Merger, for accounting purposes, 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 accounting, Harmony was treated as the “acquired” company and Zircon is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Merger was treated as the equivalent of Zircon issuing stock for the net assets of Harmony, accompanied by a recapitalization. The net assets of Harmony were stated at historical cost, with no goodwill or other intangible assets recorded. ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 As part of the Merger and reverse recapitalization, the Company assumed certain operating liabilities of Harmony, including certain payables due to vendors and employees, as well as notes payable to noteholders. In addition, Zircon and Harmony effectuated a share exchange whereby the shareholders of Zircon exchanged 500,000 100 8,865,234 89 1,057,754 25,284 1,083,038 Zircon agreed to pay the operating liabilities of Harmony, up to and including an aggregate of $ 179,762 579,150 400,000 100,000 75,000 Zircon paid transaction costs of $ 518,611 217,184 301,572 The following table reconciles the elements of the Merger to the unaudited consolidated statements of changes in stockholders’ equity for the nine months ended December 31, 2023: Schedule of Consolidated Statements of Changes in Stockholders Equity Recapitalization Cash $ 26 Non-cash net working capital assumed from Harmony (579,150 ) Less: cash transaction costs and advisory fees allocated to ZRCN equity (518,611 ) Effect of Merger, net of transaction costs $ (1,097,735 ) The following table details the number of shares of common stock issued immediately following the consummation of the Merger: Schedule of Number of Shares of Common Stock Number of Shares Common stock of Harmony prior to Merger 1,057,754 Shares issued for Warrant Exchange Agreement 25,284 Common stock owned by Harmony’s pre-Merger shareholders 1,083,038 Common stock issued in exchange for Zircon common stock 8,865,234 Total shares of common stock immediately after Merger 9,948,272 Debt Settlement Agreement In connection with the Merger, the Company entered into debt settlement agreements (the “Debt Settlement Agreements”) with certain third-party creditors of the Company under which the Company agreed to make certain payments over the next 12 months to the creditors in satisfaction of an aggregate of $ 400,000 242,500 157,500 ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 |
Revenue
Revenue | 9 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 5. Revenue Disaggregation of Revenue from Contracts with Customers Revenue disaggregated according to the timing of transfer of goods or services (e.g., at a point in time) for the three and nine months ended December 31, 2023 and 2022, were as follows: Schedule of Revenue Disaggregated Transfer of Goods and Services Revenue generated per major product line For the Three Months Ended December 31, 2023 For the Three Months Ended December 31, 2022 For the Nine Months Ended December 31, 2023 For the Nine Months Ended December 31, 2022 Stud sensor edge $ 4,182,912 $ 4,451,945 $ 13,872,571 $ 13,608,521 Multifunctional scanners 1,235,579 1,229,263 3,489,052 3,266,724 Stud sensor center 1,474,241 1,345,086 3,921,281 3,365,837 Target control products 432,145 523,399 1,210,616 1,391,164 Other 214,512 309,871 874,627 1,035,888 Total Revenue $ 7,539,389 $ 7,859,564 $ 23,368,147 $ 22,668,134 Revenue disaggregated according to the geographical location of customers for the for the three and nine months ended December 31, 2023 and 2022, were as follows: Schedule of Revenue Disaggregated Geographical Location of Customers Revenue by geographic location of customers For the Three Months Ended December 31, 2023 For the Three Months Ended December 31, 2022 For the Nine Months Ended December 31, 2023 For the Nine Months Ended December 31, 2022 United States $ 6,456,379 $ 6,887,542 $ 20,682,218 $ 20,088,444 Canada 610,550 602,562 1,394,704 1,404,577 Europe 104,175 83,111 204,258 293,622 Japan 244,193 157,831 673,451 528,895 UK 9,392 3,849 28,969 5,611 Others 114,700 124,669 384,547 346,985 Total Revenue $ 7,539,389 $ 7,859,564 $ 23,368,147 $ 22,668,134 |
Inventory
Inventory | 9 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | 6. Inventory Inventory consisted of the following: Schedule of Inventory December 31, 2023 March 31, 2023 Finished goods, net $ 7,745,676 $ 6,327,358 Raw materials, net 3,411,230 4,862,227 Work in process, net 2,747,409 1,947,516 Inventory net $ 13,904,315 $ 13,137,101 ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 7. Property and Equipment Property and equipment consisted of the following: Schedule of Plant and Equipment December 31, 2023 March 31, 2023 Manufacturing equipment $ 9,023,554 $ 8,694,039 Computer equipment 2,760,285 2,744,199 Leasehold improvements 1,207,754 1,181,382 Furniture and office equipment 945,870 923,381 Vehicles 274,853 273,499 Property and equipment, gross 14,212,316 13,816,500 Construction in progress 650,678 560,712 Property and equipment before accumulated depreciation and amortization 14,862,994 14,377,212 Less accumulated depreciation and amortization (13,001,524 ) (12,597,597 ) Property and equipment, net $ 1,861,470 $ 1,779,615 For the three and nine months ended December 31, 2023, depreciation and amortization expense was $ 127,315 411,272 276,593 796,868 Construction in progress consists of assets and technologies under development. The Company starts depreciation once the assets are completed and placed in service. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 8. Intangible Assets Acquired identifiable intangible assets are valued at the acquisition date primarily by using a discounted cash flow method. The Company’s intangible assets consisted of the following: Schedule of Intangible Assets December 31, 2023 March 31, 2023 Finite-lived intangible assets (1): Intangibles, Gross Accumulated Amortization Intangibles, Net Intangibles, Gross Accumulated Amortization Intangibles, Net Patents issued and pending $ 2,340,112 $ (1,596,443 ) $ 743,669 $ 2,272,278 $ (1,541,795 ) $ 730,483 Exclusivity rights and licenses 167,542 (98,443 ) 69,099 167,542 (90,640 ) 76,902 Total finite-lived intangible assets $ 2,507,654 $ (1,694,886 ) $ 812,768 $ 2,439,820 $ (1,632,435 ) $ 807,385 Finite-lived intangible assets (1): 2023 Weighted Average Life Remaining Patents issued and pending 14.3 Exclusivity rights and licenses 5.9 (1) Finite-lived intangible assets have estimated useful lives of five fifteen years For the three and nine months ended December 31, 2023 the amortization expense of intangible assets amounted to $ 39,793 62,156 22,362 66,343 The Company evaluates intangible assets quarterly for impairment and writes off assets that are not used in any products. ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 Expected future amortization expense of acquired finite-lived intangible assets as of December 31, 2023 is as follows: Schedule of Future Amortization Expense For the Years Ending March 31, Amount Remainder of fiscal 2024 $ 15,933 2025 73,590 2026 72,831 2027 72,716 2028 71,544 Thereafter 506,154 Total $ 812,768 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 9. Accrued Expenses Accrued expenses consisted of the following: Schedule of Accrued Liabilities December 31, 2023 March 31, 2023 Rebates $ 484,002 $ 447,959 Vacation 340,370 445,602 Payroll and related 256,621 343,696 Sales expense 254,764 235,779 Professional services 108,592 193,853 Advertising allowance 166,337 165,291 Interest 49,121 29,960 Accrued taxes 35,663 14,185 Accrued liabilities $ 1,695,470 $ 1,876,325 |
Debt
Debt | 9 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt Line of Credit The Company has a revolving line of credit with a bank, which allows borrowings up to $ 12,000,000 February 29, 2024 2.36 6.91 6,500,000 8.00 1,915,980 While the line of credit has a maximum limit of $ 12,000,000 80 50 On November 8, 2023, Zircon Corporation, a subsidiary of ZRCN Inc., entered into an amendment (the “Amendment”) to the Loan Agreement, dated as of January 23, 2023, and the related Commercial Promissory Note (the “Base Rate”) dated January 27, 2023 in the original principal amount of $ 12,000,000 300,000 ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 Pursuant to the Amendment, the Bank waived Zircon’s existing defaults under the Loan Agreement for its failure to comply with certain covenants set forth in the Loan Agreement as the result of, without limitation, Zircon’s reverse merger with the Company. In addition, the Amendment, among other things, (i) amended the aggregate amount available under the 2023 Note after December 31, 2023 from $ 12,000,000 10,000,000 Pursuant to the Amendment, while the line of credit has a maximum limit of $ 10,000,000 80 50 7,990,890 9,367,752 1,376,862 997,827.12 329,758.26 335,000.00 On February 13, 2023, the company entered a second amendment For the three and nine months ended December 31, 2023, interest expense on the line of credit totaled $ 217,474 and $ 519,516 . For the three and nine months ended December 31, 2022, interest expense on the line of credit totaled $ 129,712 and $ 253,887 , respectively. The components of the revolving line of credit consisted of the following: Schedule of Revolving Line of Credit December 31, 2023 March 31, 2023 SOFR $ 7,000,000 $ 6,500,000 Excess of SOFR 2,367,752 710,652 Line of credit $ 9,367,752 $ 7,210,652 Notes payable - bank In July 2018, the Company entered into a term loan with a bank for $ 1,750,000 29,000 In September 2019, the Company entered into a term loan with a bank for $ 300,000 5,000 4,000 For the three and nine months ended December 31, 2023, interest expense on notes payable with banks totaled $ 5,835 10,192 7,239 20,678 ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 The table below details the activity related to the Notes payable - bank: Schedule of Related to Notes Payable to Bank July 2018 Note September 2019 Note Harmony Notes Total Balance, March 31, 2023 $ 145,834 $ 125,000 $ — $ 270,834 Issuances — — 400,000 400,000 Repayments (87,500 ) (15,000 ) (100,000 ) (202,500 ) Balance, June 30, 2023 58,334 110,000 300,000 468,334 Balance, Before Accrued Interest 58,334 110,000 300,000 468,334 Plus: accrued interest 994 869 — 1,863 Total balance, June 30, 2023 $ 59,328 $ 110,869 $ 300,000 $ 470,197 Plus: accrued interest (89 ) 607 — 518 Repayments (58,334 ) (15,000 ) (67,500 ) (140,834 ) Total balance, September 30, 2023 $ 905 $ 96,476 $ 232,500 $ 329,881 Total balance, Beginning $ 905 $ 96,476 $ 232,500 $ 329,881 Plus: accrued interest 608 464 — 1,072 Repayments — — (75,000 ) (75,000 ) Total balance, December 31, 2023 $ 1,513 $ 96,940 $ 157,500 $ 255,953 Total balance, Ending $ 1,513 $ 96,940 $ 157,500 $ 255,953 Less: accrued interest (1,513 ) (11,940 ) (7,500 ) (20,953 ) Total principal balance, December 31, 2023 $ — $ 85,000 $ 150,000 $ 235,000 Future scheduled maturities of notes payable - bank are as follows: Schedule of Maturities of Notes Payable to Bank For the Period Ending December 31, Amount Remainder of fiscal 2024 $ 235,000 Note payable $ 235,000 Notes payable, current portion $ 235,000 Notes payable to Stauss Family Administrative Trust The Company has notes payable to the Stauss Family Administrative Trust to repay loans made to the Company. As of December 31, 2023, principal balance of $ 667,230 5.5 240,190 For the three and nine months ended December 31, 2023 the interest expense on notes payable to the Stauss Family Administrative Trust totaled $ 6,002 32,372 12,754 38,124 Loan Repayment Section 13(k) of the Exchange Act provides that it is unlawful for a company, such as ours, that has a class of securities registered under Section 12 of the Exchange Act to, directly or indirectly, including through any subsidiary, extend or maintain credit in the form of a personal loan to or for any director or executive officer of the Company. In March 2022, Zircon Corporation, the Company’s wholly-owned subsidiary, loaned our chief executive officer funds to pay certain tax obligations, which was still outstanding when we acquired Zircon in April 2023, which may have violated Section 13(k) of the Exchange Act as a result of the transition from private to public company accounting. The loan was repaid in August 2023 as soon as management became aware of the possible violation. The loan repayment was made by means of an offset to beneficial amounts of our chief executive officer in certain loans to the Company to which offset he did not object. Issuers that are found to have violated Section 13(k) of the Exchange Act may be subject to civil sanctions, including injunctive remedies and monetary penalties, as well as criminal sanctions. In accordance with ASC 450, Contingencies ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 |
Warrants
Warrants | 9 Months Ended |
Dec. 31, 2023 | |
Warrants | |
Warrants | 11. Warrants At the closing of the Merger, the Company issued certain consultants and advisors warrants to purchase an aggregate of 217,184 0.20 0.01 301,572 1.60 0.08 The following table provides the activity for all warrants for the three and nine months ended December 31, 2023: Schedule of Warrants Activity Total Warrants Weighted Average Remaining Term Weighted Average Exercise Price Outstanding as of March 31, 2023 — — $ — Issued 217,184 10.0 $ 0.20 Outstanding as of December 31, 2023 217,184 9.4 $ 0.20 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Legal Proceedings ZRCN is engaged in procedures to protect its proprietary rights and has filed complaints with the Federal Trade Commission and the Customs and Border Patrol. Zircon Corporation v. Stanley Black & Decker, Inc. Zircon is Appellant from an adverse ruling by the International Trade Commission (“ITC”) in an investigation before the ITC in which Zircon sought an injunction to prevent Stanley, Black & Decker, Inc. and its wholly owned subsidiary, Black & Decker (U.S.), Inc. (together “SBD”) from importing and selling in the United States certain products alleged by Zircon to infringe its patents. The appeal was initiated by Zircon following the ruling by the ITC overturning the decision by Judge Charles Bullock, Presiding Judge of the ITC issued on October 7, 2021, finding that three patents at issue in the investigation were both valid and practiced by Zircon and that SBD infringed Zircon’s auto recalibration patent. The Commission found that while Zircon’s auto recalibration patent met all objective requirements for validity, it reversed the Presiding Judge on the subjective requirement of non-obviousness. Zircon then timely appealed to the Federal Circuit Court of Appeal (“FCCA”) and the matter was heard de novo before the FCCA . Morgenthaler, et al. v. Zircon, et al. The company was one of more than twenty (20) defendants named in a suit filed in Los Angeles County, California Superior Court on behalf of three family members injured in an accident between an automobile and a truck and trailer. The accident occurred in May 2017 and the Complaint was filed on December 1, 2017. The company, represented in the case by insurance defense lawyers selected and paid for by the company’s liability insurance carrier, The Travelers Indemnity Company, had no direct or indirect involvement in the accident and had no goods on the truck at the time of the accident. The company argued that it was neither the cause in fact nor the proximate cause of the accident or of the damages suffered by the Plaintiffs, and filed a Motion for Summary Judgement. The trial court judge found that there were “…no triable issues of fact, and that the moving party, Defendant Zircon Corporation, is entitled to judgement as a matter of law…”. The Order on the Motion was entered on May 23, 2022 and the Plaintiffs appealed. On January 30, 2024 the California Second District Court of Appeal affirmed the trial court’s Summary Judgement in favor of Zircon. In accordance with ASC 450, Contingencies, ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 Leases The Company’s corporate headquarters in Campbell, California are leased from the trust of one of its former stockholders for approximately $ 19,195 57,581 172,743 The Company leases office equipment through a lease that expires in June 2026 and requires monthly lease payments of $ 987 five years 2,961 8,883 The Company leases a vehicle through a lease that expires in July 2024 and requires monthly lease payments of $ 448 three years 1,344 4,032 Schedule of Operating Lease December 31, 2023 Assets: Operating lease right-of-use assets, net $ 803,421 Liabilities Current liabilities: Operating lease liability, current 193,054 Noncurrent liabilities: Operating lease liability, net of current portion 608,776 Total operating lease liabilities $ 801,830 The components of lease expense, which are included in selling, general and administrative expense, are as follows: Schedule of Components of Lease Expense December 31, 2023 Components of lease cost: Operating lease expense $ 156,623 Total lease cost $ 156,623 Schedule of Weighted Average Remaining Lease Terms and Discount Rate December 31, 2023 Weighted-average remaining lease term: Operating leases (in years) 3.91 December 31, 2023 Weighted-average remaining discount rate: Operating leases 7.00 % ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 Future minimum lease payment under non-cancellable lease as of December 31, 2023 are as follows: Schedule of Future Minimum Lease Payment Under Non-cancellable Lease Maturities of lease liabilities Operating Leases Year ending March 31, Remainder of fiscal 2024 $ 61,889 2025 243,527 2026 242,184 2027 233,301 2028 and thereafter 172,755 Total Minimum Lease Payments 953,656 Less effects of discounting (151,826 ) Present value of future minimum lease liabilities 801,830 Less current portion of operating lease liability (193,054 ) Operating lease liability, net of current portion $ 608,776 |
Profit Sharing and 401(k) Plan
Profit Sharing and 401(k) Plan | 9 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Profit Sharing and 401(k) Plan | 13. Profit Sharing and 401(k) Plan The Company has a defined contribution profit sharing plan for all eligible employees. Contributions to the profit sharing plan are determined annually by the Board of Directors. There were no profit sharing contributions made during the three and nine months ended December 31, 2023 and 2022. All eligible employees are also allowed to participate in the Company’s 401(k) plan. The Company’s contributions to the plan are based on a specified percentage of each participant’s eligible contribution, decided annually by the Board of Directors, as defined in the plan document. The Company’s contributions of $ 36,734 38,918 48,978 52,115 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events On January 30, 2024 the California Second District Court of Appeal affirmed the trial court’s Summary Judgement in favor of Zircon. In accordance with ASC 450, Contingencies, Management has determined the best interest of the corporation is to replace the existing loan with an increased credit facility. The matter has been discussed with our current lender, US Bank. Several other lenders are negotiating with the Company to provide a credit facility that supports manufacturing and development consistent with its proposed business plans. On February 13, 2024, the Company signed an agreement with U.S. Bank to extend the maturity date on its line of credit from February 29, 2024 to July 31, 2024 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of the Company and its subsidiaries’ financial position and interim results as of and for the periods presented have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Results for interim periods are not necessarily indicative of those that may be expected for a full year. The financial information included herein should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report for the year ended March 31, 2023, in our Form 8-K/A. The merger between Harmony’s wholly owned subsidiary and Zircon was accounted for as a reverse asset acquisition in accordance with GAAP. Under this method of accounting, Harmony, through its merger subsidiary, was treated as the “acquired” company and Zircon was treated as the acquirer for financial reporting purposes. The consolidated assets, liabilities and results of operations prior to the merger are those of Zircon. Refer to Note 4 for additional information on the transaction. ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited consolidated financial statements include the accounts of ZRCN as well as its variable interest entities. The Company consolidates all entities over which the Company has the power to govern the financial and operating policies and therefore exercises control, and upon which the Company has a controlling financial interest. The entities are consolidated from the date at which the 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 |
Reverse Stock Split | Reverse Stock Split On May 10, 2023, ZRCN authorized a 1:20 reverse split 198,964,500 9,948,272 |
Variable Interest Entities | Variable Interest Entities In accordance with ASC 810, Consolidation If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company - that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is 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 ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 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). |
Non-controlling Interests | 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 after 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. The net income attributed to the NCI’s is separately designated in the accompanying unaudited consolidated statements of operations and comprehensive income (loss). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Significant estimates used in preparing these unaudited consolidated financial statements include the allowance for doubtful accounts, allowance for inventory obsolescence, allocation of overhead to inventory, estimated future benefit and fair value of intangible assets, accrued rebates and advertising allowances, useful lives and depreciation methods of property and equipment, and uncertain tax positions. It is at least reasonably possible that the significant estimates used will change within the next year. |
Cash | Cash The carrying value of cash approximates fair value due to the short-term nature of the instruments. From time to time, the Company may be in the position of a “book overdraft” in which outstanding checks exceed cash. The Company classifies book overdrafts in accounts payable within its unaudited consolidated balance sheets, and classifies the change in accounts payable associated with book overdrafts as an operating activity within its unaudited consolidated statements of cash flows. As of December 31, 2023, the book overdraft included within accounts payable was $ 116,520 |
Accounts Receivable, Net | Accounts Receivable, Net The Company provides credit without requiring collateral, in the normal course of business, to credit-worthy customers as determined by management’s review of references and credit reports. Bad debts are charged against the allowance for doubtful accounts. The allowance is adjusted to provide a specific and general allowance for estimated uncollectible accounts, which is based on management’s judgment. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Based on management’s assessment of the credit history with customers having outstanding balances and current relationships with them, management believes that losses on balances outstanding will not exceed the allowance. Accounts receivable consisted of the following: Schedule of Accounts Receivable December 31, 2023 March 31, 2023 Accounts receivable $ 7,309,744 $ 7,534,193 Less allowance for doubtful accounts (12,955 ) (9,765 ) Accounts receivable, net $ 7,296,789 $ 7,524,428 ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 Activity related to the Company’s allowance for doubtful accounts was as follows: Schedule of Allowance for Doubtful Accounts December 31, 2023 March 31, 2023 Balance, beginning of period $ 9,765 $ 115,129 Increase/(decrease) in bad debt allowance 3,190 (1,561 ) Write-offs — (103,803 ) Balance, end of period $ 12,955 $ 9,765 |
Inventory, Net | Inventory, Net Inventories, which consist primarily of raw materials and finished goods, are stated at the lower of cost or net realizable value. The Company states inventory cost utilizing the first-in, first-out (FIFO) method. Labor and overhead associated with inventory purchases are estimated and capitalized in inventory. The need for an allowance for inventory obsolescence is based on an evaluation of slow-moving or obsolete inventory. Obsolescence allowance was estimated at $ 505,958 478,830 , respectively |
Revenue Recognition | Revenue Recognition The Company’s revenues result from the sale of products and reflect the consideration to which the Company expects to be entitled. The Company records revenue based on a five-step model in accordance with ASC 606, Revenue from Contracts with Customers Provisions for customer volume rebates, product returns, discounts and allowances are variable consideration and are recorded as a reduction of revenue in the same period the related sales are recorded. Such provisions are calculated using historical averages adjusted for any expected changes due to current business conditions. Consideration given to customers for cooperative advertising is recognized as a reduction of revenue except to the extent that there is a distinct good or service and evidence of the fair value of the advertising, in which case the expense is classified as selling, general, and administrative expense. Sales tax for the sale of products is applied to the invoice and recorded as an accrued liability. |
Research and Development | Research and Development The Company incurs research and development costs of products for use in scanning behind opaque surfaces. The Company will continue to invest in research and development to develop additional components and products of its scanning product offerings and remains committed to providing its customers and partners with best-in-class scanning products and services. Such research and development costs, software development costs, and any new product development costs, are expensed as incurred, and include personnel-related costs, depreciation related to engineering and test equipment, allocated costs of facilities and information technology, outside services and consultant costs, supplies, software tools and product certification. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) of all periods presented is comprised primarily of net income (loss) and foreign currency translation adjustments. ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 |
Segment Reporting | Segment Reporting The Company determines its reporting units in accordance with FASB ASC 280, Segment Reporting |
Concentration of Business and Credit Risk | Concentration of Business and Credit Risk As of December 31, 2023, the Company maintained deposits in a single bank that exceeded the federal insured deposit limit of the Federal Deposit Insurance Corporation (FDIC). During the three months ended December 31, 2023 and 2022 the Company generated approximately 59 61 62 63 For the for the nine months ended December 31, 2023 and March 31, 2023, 71 75 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments In accordance with FASB ASC 820 Fair Value Measurements and Disclosures a. Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; b. Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly including inputs in markets that are not considered to be active; and c. Level 3 – inputs to the valuation methodology are unobservable and insignificant to the fair value measurement. Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company believes the carrying amounts of its cash equivalents, accounts receivable, other current assets, other assets, accounts payable, accrued expenses, and other current liabilities approximated their fair values as of December 31, 2023 and March 31, 2023 due to their short-term nature. Management measures intangible assets at fair value on a non-recurring basis using internally developed assumptions about the market as there is no market activity available. All carrying amounts of other applicable assets and liabilities on the Company’s balance sheet approximate fair value. For long-term debt, the estimated fair value approximates its carrying value, as the interest rate is in line with the market interest rates for this type of debt. |
Income Taxes | Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 As of April 14, 2023, the Zircon’s election to be an S Corporation under the Internal Revenue Code was no longer in effect. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share of common stock is computed by dividing net income or loss attributable to ZRCN by the weighted average number of shares of common stock outstanding for the period. Diluted loss per share excludes, when applicable, the potential impact of common stock warrant shares and other dilutive instruments because their effect would be anti-dilutive. Diluted net income per share, when applicable, includes the warrant shares because their effect would be dilutive. The dilutive securities outstanding are as follows: Schedule of Dilutive Securities Outstanding December 31, 2023 December 31, 2022 Common stock warrants 217,184 — |
Leases | Leases In February 2016, the FASB issued a new accounting standard, ASC Topic 842, related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most significant among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. Under the new standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted ASC Topic 842 effective April 1, 2022, using the modified retrospective transition approach as of the period of adoption. The Company’s lease arrangements relate primarily to office space, a vehicle, and office equipment. The Company’s leases may include renewal options and rent escalation clauses. The Company is typically required to make fixed minimum rent payments relating to its right to use an underlying leased asset. The Company has lease agreements which contain both lease and non-lease components, which it has not elected to account for as a single lease component. As such, minimum lease payments exclude fixed payments for non-lease components within a lease agreement, in addition to excluding variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. ROU assets and lease liabilities are recognized at commencement date and determined using the present value of the future minimum lease payments over the lease term. The Company uses an incremental borrowing rate based on estimated rate of interest for collateralized borrowing since the Company’s leases do not include an implicit interest rate. The estimated incremental borrowing rate considers market data, actual lease economic environment, and actual lease term at commencement date. The lease term may include options to extend when it is reasonably certain that the Company will exercise that option. The Company recognizes lease expense on a straight-line basis over the lease term. |
Warrant | Warrant The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging ZRCN Inc. CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2023 AND 2022 For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be liability classified and recorded at their initial fair value on the date of issuance and remeasured at fair value and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the private placement warrants was estimated using a Black Scholes valuation approach with assumptions relevant on the date of issuance and the fair value of the penny warrants issued in connection with the Merger was estimated using the intrinsic value method. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements As an emerging growth company, the Company will have the option of adopting new accounting pronouncements on a delayed basis and has opted to take advantage of this option. As a result, the Company has been adopting new accounting standards based on the timeline for adoption afforded to privately held companies, unless it chooses to early adopt a new accounting standard. Recently Issued Accounting Standards Adopted In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In June 2016, the FASB issued ASU No. 2016-13, Accounting for Credit Losses (Topic 326) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: Schedule of Accounts Receivable December 31, 2023 March 31, 2023 Accounts receivable $ 7,309,744 $ 7,534,193 Less allowance for doubtful accounts (12,955 ) (9,765 ) Accounts receivable, net $ 7,296,789 $ 7,524,428 |
Schedule of Allowance for Doubtful Accounts | Activity related to the Company’s allowance for doubtful accounts was as follows: Schedule of Allowance for Doubtful Accounts December 31, 2023 March 31, 2023 Balance, beginning of period $ 9,765 $ 115,129 Increase/(decrease) in bad debt allowance 3,190 (1,561 ) Write-offs — (103,803 ) Balance, end of period $ 12,955 $ 9,765 |
Schedule of Dilutive Securities Outstanding | Schedule of Dilutive Securities Outstanding December 31, 2023 December 31, 2022 Common stock warrants 217,184 — |
Merger with Harmony Energy Te_2
Merger with Harmony Energy Technologies Corporation (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consolidated Statements of Changes in Stockholders Equity | The following table reconciles the elements of the Merger to the unaudited consolidated statements of changes in stockholders’ equity for the nine months ended December 31, 2023: Schedule of Consolidated Statements of Changes in Stockholders Equity Recapitalization Cash $ 26 Non-cash net working capital assumed from Harmony (579,150 ) Less: cash transaction costs and advisory fees allocated to ZRCN equity (518,611 ) Effect of Merger, net of transaction costs $ (1,097,735 ) |
Schedule of Number of Shares of Common Stock | The following table details the number of shares of common stock issued immediately following the consummation of the Merger: Schedule of Number of Shares of Common Stock Number of Shares Common stock of Harmony prior to Merger 1,057,754 Shares issued for Warrant Exchange Agreement 25,284 Common stock owned by Harmony’s pre-Merger shareholders 1,083,038 Common stock issued in exchange for Zircon common stock 8,865,234 Total shares of common stock immediately after Merger 9,948,272 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue Disaggregated Transfer of Goods and Services | Revenue disaggregated according to the timing of transfer of goods or services (e.g., at a point in time) for the three and nine months ended December 31, 2023 and 2022, were as follows: Schedule of Revenue Disaggregated Transfer of Goods and Services Revenue generated per major product line For the Three Months Ended December 31, 2023 For the Three Months Ended December 31, 2022 For the Nine Months Ended December 31, 2023 For the Nine Months Ended December 31, 2022 Stud sensor edge $ 4,182,912 $ 4,451,945 $ 13,872,571 $ 13,608,521 Multifunctional scanners 1,235,579 1,229,263 3,489,052 3,266,724 Stud sensor center 1,474,241 1,345,086 3,921,281 3,365,837 Target control products 432,145 523,399 1,210,616 1,391,164 Other 214,512 309,871 874,627 1,035,888 Total Revenue $ 7,539,389 $ 7,859,564 $ 23,368,147 $ 22,668,134 |
Schedule of Revenue Disaggregated Geographical Location of Customers | Revenue disaggregated according to the geographical location of customers for the for the three and nine months ended December 31, 2023 and 2022, were as follows: Schedule of Revenue Disaggregated Geographical Location of Customers Revenue by geographic location of customers For the Three Months Ended December 31, 2023 For the Three Months Ended December 31, 2022 For the Nine Months Ended December 31, 2023 For the Nine Months Ended December 31, 2022 United States $ 6,456,379 $ 6,887,542 $ 20,682,218 $ 20,088,444 Canada 610,550 602,562 1,394,704 1,404,577 Europe 104,175 83,111 204,258 293,622 Japan 244,193 157,831 673,451 528,895 UK 9,392 3,849 28,969 5,611 Others 114,700 124,669 384,547 346,985 Total Revenue $ 7,539,389 $ 7,859,564 $ 23,368,147 $ 22,668,134 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following: Schedule of Inventory December 31, 2023 March 31, 2023 Finished goods, net $ 7,745,676 $ 6,327,358 Raw materials, net 3,411,230 4,862,227 Work in process, net 2,747,409 1,947,516 Inventory net $ 13,904,315 $ 13,137,101 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Plant and Equipment | Property and equipment consisted of the following: Schedule of Plant and Equipment December 31, 2023 March 31, 2023 Manufacturing equipment $ 9,023,554 $ 8,694,039 Computer equipment 2,760,285 2,744,199 Leasehold improvements 1,207,754 1,181,382 Furniture and office equipment 945,870 923,381 Vehicles 274,853 273,499 Property and equipment, gross 14,212,316 13,816,500 Construction in progress 650,678 560,712 Property and equipment before accumulated depreciation and amortization 14,862,994 14,377,212 Less accumulated depreciation and amortization (13,001,524 ) (12,597,597 ) Property and equipment, net $ 1,861,470 $ 1,779,615 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets consisted of the following: Schedule of Intangible Assets December 31, 2023 March 31, 2023 Finite-lived intangible assets (1): Intangibles, Gross Accumulated Amortization Intangibles, Net Intangibles, Gross Accumulated Amortization Intangibles, Net Patents issued and pending $ 2,340,112 $ (1,596,443 ) $ 743,669 $ 2,272,278 $ (1,541,795 ) $ 730,483 Exclusivity rights and licenses 167,542 (98,443 ) 69,099 167,542 (90,640 ) 76,902 Total finite-lived intangible assets $ 2,507,654 $ (1,694,886 ) $ 812,768 $ 2,439,820 $ (1,632,435 ) $ 807,385 Finite-lived intangible assets (1): 2023 Weighted Average Life Remaining Patents issued and pending 14.3 Exclusivity rights and licenses 5.9 (1) Finite-lived intangible assets have estimated useful lives of five fifteen years |
Schedule of Future Amortization Expense | Expected future amortization expense of acquired finite-lived intangible assets as of December 31, 2023 is as follows: Schedule of Future Amortization Expense For the Years Ending March 31, Amount Remainder of fiscal 2024 $ 15,933 2025 73,590 2026 72,831 2027 72,716 2028 71,544 Thereafter 506,154 Total $ 812,768 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses consisted of the following: Schedule of Accrued Liabilities December 31, 2023 March 31, 2023 Rebates $ 484,002 $ 447,959 Vacation 340,370 445,602 Payroll and related 256,621 343,696 Sales expense 254,764 235,779 Professional services 108,592 193,853 Advertising allowance 166,337 165,291 Interest 49,121 29,960 Accrued taxes 35,663 14,185 Accrued liabilities $ 1,695,470 $ 1,876,325 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Revolving Line of Credit | The components of the revolving line of credit consisted of the following: Schedule of Revolving Line of Credit December 31, 2023 March 31, 2023 SOFR $ 7,000,000 $ 6,500,000 Excess of SOFR 2,367,752 710,652 Line of credit $ 9,367,752 $ 7,210,652 |
Schedule of Related to Notes Payable to Bank | The table below details the activity related to the Notes payable - bank: Schedule of Related to Notes Payable to Bank July 2018 Note September 2019 Note Harmony Notes Total Balance, March 31, 2023 $ 145,834 $ 125,000 $ — $ 270,834 Issuances — — 400,000 400,000 Repayments (87,500 ) (15,000 ) (100,000 ) (202,500 ) Balance, June 30, 2023 58,334 110,000 300,000 468,334 Balance, Before Accrued Interest 58,334 110,000 300,000 468,334 Plus: accrued interest 994 869 — 1,863 Total balance, June 30, 2023 $ 59,328 $ 110,869 $ 300,000 $ 470,197 Plus: accrued interest (89 ) 607 — 518 Repayments (58,334 ) (15,000 ) (67,500 ) (140,834 ) Total balance, September 30, 2023 $ 905 $ 96,476 $ 232,500 $ 329,881 Total balance, Beginning $ 905 $ 96,476 $ 232,500 $ 329,881 Plus: accrued interest 608 464 — 1,072 Repayments — — (75,000 ) (75,000 ) Total balance, December 31, 2023 $ 1,513 $ 96,940 $ 157,500 $ 255,953 Total balance, Ending $ 1,513 $ 96,940 $ 157,500 $ 255,953 Less: accrued interest (1,513 ) (11,940 ) (7,500 ) (20,953 ) Total principal balance, December 31, 2023 $ — $ 85,000 $ 150,000 $ 235,000 |
Schedule of Maturities of Notes Payable to Bank | Future scheduled maturities of notes payable - bank are as follows: Schedule of Maturities of Notes Payable to Bank For the Period Ending December 31, Amount Remainder of fiscal 2024 $ 235,000 Note payable $ 235,000 Notes payable, current portion $ 235,000 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Warrants | |
Schedule of Warrants Activity | The following table provides the activity for all warrants for the three and nine months ended December 31, 2023: Schedule of Warrants Activity Total Warrants Weighted Average Remaining Term Weighted Average Exercise Price Outstanding as of March 31, 2023 — — $ — Issued 217,184 10.0 $ 0.20 Outstanding as of December 31, 2023 217,184 9.4 $ 0.20 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Operating Lease | Schedule of Operating Lease December 31, 2023 Assets: Operating lease right-of-use assets, net $ 803,421 Liabilities Current liabilities: Operating lease liability, current 193,054 Noncurrent liabilities: Operating lease liability, net of current portion 608,776 Total operating lease liabilities $ 801,830 |
Schedule of Components of Lease Expense | The components of lease expense, which are included in selling, general and administrative expense, are as follows: Schedule of Components of Lease Expense December 31, 2023 Components of lease cost: Operating lease expense $ 156,623 Total lease cost $ 156,623 |
Schedule of Weighted Average Remaining Lease Terms and Discount Rate | Schedule of Weighted Average Remaining Lease Terms and Discount Rate December 31, 2023 Weighted-average remaining lease term: Operating leases (in years) 3.91 December 31, 2023 Weighted-average remaining discount rate: Operating leases 7.00 % |
Schedule of Future Minimum Lease Payment Under Non-cancellable Lease | Future minimum lease payment under non-cancellable lease as of December 31, 2023 are as follows: Schedule of Future Minimum Lease Payment Under Non-cancellable Lease Maturities of lease liabilities Operating Leases Year ending March 31, Remainder of fiscal 2024 $ 61,889 2025 243,527 2026 242,184 2027 233,301 2028 and thereafter 172,755 Total Minimum Lease Payments 953,656 Less effects of discounting (151,826 ) Present value of future minimum lease liabilities 801,830 Less current portion of operating lease liability (193,054 ) Operating lease liability, net of current portion $ 608,776 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Liquidity | ||
Cash | $ 1,619,630 | $ 29,015 |
Working capital deficit | $ 6,644,700 |
Schedule of Accounts Receivable
Schedule of Accounts Receivable (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 7,309,744 | $ 7,534,193 |
Less allowance for doubtful accounts | (12,955) | (9,765) |
Accounts receivable, net | $ 7,296,789 | $ 7,524,428 |
Schedule of Allowance for Doubt
Schedule of Allowance for Doubtful Accounts (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
Accounting Policies [Abstract] | |||
Balance, beginning of period | $ 9,765 | $ 115,129 | $ 115,129 |
Increase/(decrease) in bad debt allowance | 3,190 | $ (1,561) | (1,561) |
Write-offs | (103,803) | ||
Balance, end of period | $ 12,955 | $ 9,765 |
Schedule of Dilutive Securities
Schedule of Dilutive Securities Outstanding (Details) - shares | 9 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock warrants | 217,184 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
May 10, 2023 | May 09, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
Product Information [Line Items] | |||||||
Reverse stock split | 1:20 reverse split | ||||||
Reduction in reverse stock split | 9,948,272 | 198,964,500 | |||||
Accounts payable | $ 116,520 | $ 116,520 | |||||
Obsolescence allowance | $ 13,904,315 | $ 13,904,315 | $ 13,137,101 | ||||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk, percentage | 59% | 61% | 62% | 63% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||||||
Product Information [Line Items] | |||||||
Concentration risk, percentage | 71% | 75% | |||||
Inventory Valuation and Obsolescence [Member] | |||||||
Product Information [Line Items] | |||||||
Obsolescence allowance | $ 505,958 | $ 505,958 | $ 478,830 |
Schedule of Consolidated Statem
Schedule of Consolidated Statements of Changes in Stockholders Equity (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Jun. 30, 2023 | Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | ||
Cash | $ 26 | |
Non-cash net working capital assumed from Harmony | (579,150) | |
Less: cash transaction costs and advisory fees allocated to ZRCN equity | (518,611) | |
Effect of Merger, net of transaction costs | $ (1,097,735) | $ (1,097,735) |
Schedule of Number of Shares of
Schedule of Number of Shares of Common Stock (Details) | Apr. 14, 2023 shares |
Pre-Merger Shareholders [Member] | |
Business Acquisition [Line Items] | |
Total shares of common stock immediately after Merger | 1,083,038 |
Warrant Exchange Agreement [Member] | |
Business Acquisition [Line Items] | |
Total shares of common stock immediately after Merger | 25,284 |
Harmony Common Stock Prior to Merger [Member] | |
Business Acquisition [Line Items] | |
Total shares of common stock immediately after Merger | 1,057,754 |
Zircon [Member] | |
Business Acquisition [Line Items] | |
Total shares of common stock immediately after Merger | 8,865,234 |
Harmony Energy Technologies Corporation [Member] | |
Business Acquisition [Line Items] | |
Total shares of common stock immediately after Merger | 9,948,272 |
Merger with Harmony Energy Te_3
Merger with Harmony Energy Technologies Corporation (Details Narrative) - USD ($) | 9 Months Ended | ||
Apr. 14, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Business combination operating liabilities agreed to pay | $ 179,762 | ||
Notes payable | 579,150 | $ 235,000 | |
Repayments of loans and notes payable | 400,000 | ||
Repayments of loans and upon closing acquisition payable | 100,000 | ||
Repayments of loans and four subsequent quarterly payments | $ 75,000 | ||
Repayments of debt | 317,144 | ||
Pre-Merger Shareholders [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares of common stock | 1,083,038 | ||
Advisor [Member] | |||
Business Acquisition [Line Items] | |||
Business acquisition, transaction costs | $ 518,611 | ||
Warrant to purchase | 217,184 | ||
Fair value of warrant | $ 301,572 | ||
Warrant Exchange Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares of common stock | 25,284 | ||
Debt Settlement Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Notes payable | 157,500 | ||
Aggregate amount owed to creditors | 400,000 | ||
Repayments of debt | $ 242,500 | ||
Zircon [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares exchanged by shareholders | 500,000 | ||
Outstanding shares percentage | 100% | ||
Number of shares of common stock | 8,865,234 | ||
Harmony Energy Technologies Corporation [Member] | |||
Business Acquisition [Line Items] | |||
Outstanding shares percentage | 89% | ||
Number of shares of common stock | 9,948,272 | ||
Business acquisition number of shares retained | 1,057,754 |
Schedule of Revenue Disaggregat
Schedule of Revenue Disaggregated Transfer of Goods and Services (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 7,539,389 | $ 7,859,564 | $ 23,368,147 | $ 22,668,134 |
Stud Sensor Edge [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 4,182,912 | 4,451,945 | 13,872,571 | 13,608,521 |
Multifunctional Scanners [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 1,235,579 | 1,229,263 | 3,489,052 | 3,266,724 |
Stud Sensor Center [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 1,474,241 | 1,345,086 | 3,921,281 | 3,365,837 |
Target Control Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 432,145 | 523,399 | 1,210,616 | 1,391,164 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 214,512 | $ 309,871 | $ 874,627 | $ 1,035,888 |
Schedule of Revenue Disaggreg_2
Schedule of Revenue Disaggregated Geographical Location of Customers (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 7,539,389 | $ 7,859,564 | $ 23,368,147 | $ 22,668,134 |
UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 6,456,379 | 6,887,542 | 20,682,218 | 20,088,444 |
CANADA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 610,550 | 602,562 | 1,394,704 | 1,404,577 |
Europe [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 104,175 | 83,111 | 204,258 | 293,622 |
JAPAN | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 244,193 | 157,831 | 673,451 | 528,895 |
UNITED KINGDOM | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 9,392 | 3,849 | 28,969 | 5,611 |
Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 114,700 | $ 124,669 | $ 384,547 | $ 346,985 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Finished goods, net | $ 7,745,676 | $ 6,327,358 |
Raw materials, net | 3,411,230 | 4,862,227 |
Work in process, net | 2,747,409 | 1,947,516 |
Inventory net | $ 13,904,315 | $ 13,137,101 |
Schedule of Plant and Equipment
Schedule of Plant and Equipment (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 14,212,316 | $ 13,816,500 |
Construction in progress | 650,678 | 560,712 |
Property and equipment before accumulated depreciation and amortization | 14,862,994 | 14,377,212 |
Less accumulated depreciation and amortization | (13,001,524) | (12,597,597) |
Property and equipment, net | 1,861,470 | 1,779,615 |
Manufacturing Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,023,554 | 8,694,039 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,760,285 | 2,744,199 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,207,754 | 1,181,382 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 945,870 | 923,381 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 274,853 | $ 273,499 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation and amortization expense | $ 127,315 | $ 276,593 | $ 411,272 | $ 796,868 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Intangibles, Gross, Total | [1] | $ 2,507,654 | $ 2,439,820 |
Accumulated Amortization, Total | [1] | (1,694,886) | (1,632,435) |
Intangible assets, Total | [1] | 812,768 | 807,385 |
Patents Issued and Pending [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangibles, Gross, Total | [1] | 2,340,112 | 2,272,278 |
Accumulated Amortization, Total | [1] | (1,596,443) | (1,541,795) |
Intangible assets, Total | [1] | $ 743,669 | 730,483 |
Finite-lived intangible asset, useful life | [1] | 14 years 3 months 18 days | |
Exclusivity Rights And Licenses [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangibles, Gross, Total | [1] | $ 167,542 | 167,542 |
Accumulated Amortization, Total | [1] | (98,443) | (90,640) |
Intangible assets, Total | [1] | $ 69,099 | $ 76,902 |
Licensing Agreements [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible asset, useful life | [1] | 5 years 10 months 24 days | |
[1]Finite-lived intangible assets have estimated useful lives of five fifteen years |
Schedule of Intangible Assets_2
Schedule of Intangible Assets (Details) (Parenthetical) | Dec. 31, 2023 |
Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 5 years |
Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life | 15 years |
Schedule of Future Amortization
Schedule of Future Amortization Expense (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Remainder of fiscal 2024 | $ 15,933 | ||
2025 | 73,590 | ||
2026 | 72,831 | ||
2027 | 72,716 | ||
2028 | 71,544 | ||
Thereafter | 506,154 | ||
Total | [1] | $ 812,768 | $ 807,385 |
[1]Finite-lived intangible assets have estimated useful lives of five fifteen years |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 39,793 | $ 22,362 | $ 62,156 | $ 66,343 |
Schedule of Accrued Liabilities
Schedule of Accrued Liabilities (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Payables and Accruals [Abstract] | ||
Rebates | $ 484,002 | $ 447,959 |
Vacation | 340,370 | 445,602 |
Payroll and related | 256,621 | 343,696 |
Sales expense | 254,764 | 235,779 |
Professional services | 108,592 | 193,853 |
Advertising allowance | 166,337 | 165,291 |
Interest | 49,121 | 29,960 |
Accrued taxes | 35,663 | 14,185 |
Accrued liabilities | $ 1,695,470 | $ 1,876,325 |
Schedule of Revolving Line of C
Schedule of Revolving Line of Credit (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Line of Credit Facility [Line Items] | ||
Line of credit | $ 7,990,890 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit | 9,367,752 | $ 7,210,652 |
SOFAR [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit | 7,000,000 | 6,500,000 |
Excess of SOFAR [Member] | Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit | $ 2,367,752 | $ 710,652 |
Schedule of Related to Notes Pa
Schedule of Related to Notes Payable to Bank (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | |
Short-Term Debt [Line Items] | |||
Total balance, Beginning | $ 329,881 | $ 470,197 | $ 270,834 |
Issuances | 400,000 | ||
Repayments | (75,000) | (140,834) | (202,500) |
Balance, Before Accrued Interest | 468,334 | ||
Plus: accrued interest | 1,072 | 518 | 1,863 |
Total balance, Ending | 255,953 | 329,881 | 470,197 |
Less: accrued interest | (20,953) | ||
Total principal balance, December 31, 2023 | 235,000 | ||
July 2018 Note [Member] | |||
Short-Term Debt [Line Items] | |||
Total balance, Beginning | 905 | 59,328 | 145,834 |
Issuances | |||
Repayments | (58,334) | (87,500) | |
Balance, Before Accrued Interest | 58,334 | ||
Plus: accrued interest | 608 | (89) | 994 |
Total balance, Ending | 1,513 | 905 | 59,328 |
Less: accrued interest | (1,513) | ||
Total principal balance, December 31, 2023 | |||
September 2019 Note [Member] | |||
Short-Term Debt [Line Items] | |||
Total balance, Beginning | 96,476 | 110,869 | 125,000 |
Issuances | |||
Repayments | (15,000) | (15,000) | |
Balance, Before Accrued Interest | 110,000 | ||
Plus: accrued interest | 464 | 607 | 869 |
Total balance, Ending | 96,940 | 96,476 | 110,869 |
Less: accrued interest | (11,940) | ||
Total principal balance, December 31, 2023 | 85,000 | ||
Harmony Notes [Member] | |||
Short-Term Debt [Line Items] | |||
Total balance, Beginning | 232,500 | 300,000 | |
Issuances | 400,000 | ||
Repayments | (75,000) | (67,500) | (100,000) |
Balance, Before Accrued Interest | 300,000 | ||
Plus: accrued interest | |||
Total balance, Ending | 157,500 | $ 232,500 | $ 300,000 |
Less: accrued interest | (7,500) | ||
Total principal balance, December 31, 2023 | $ 150,000 |
Schedule of Maturities of Notes
Schedule of Maturities of Notes Payable to Bank (Details) - USD ($) | Dec. 31, 2023 | Apr. 14, 2023 | Mar. 31, 2023 |
Debt Disclosure [Abstract] | |||
Remainder of fiscal 2024 | $ 235,000 | ||
Note payable | 235,000 | $ 579,150 | |
Notes payable, current portion | $ 235,000 | $ 205,834 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||||
Jan. 30, 2024 | Jan. 03, 2024 | Nov. 08, 2023 | Sep. 30, 2019 | Jul. 31, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2024 | Mar. 31, 2023 | Jan. 27, 2023 | |
Short-Term Debt [Line Items] | ||||||||||||
Line of credit facility maximum borrowing capacity | $ 10,000,000 | $ 12,000,000 | $ 12,000,000 | |||||||||
Line of credit outstanding borrowings | $ 9,367,752 | $ 9,367,752 | $ 7,210,652 | |||||||||
Accounts receivable borrowing capacity percentage | 80% | 80% | 80% | |||||||||
Inventory borrowing capacity percentage | 50% | 50% | 50% | |||||||||
Line of credit | $ 7,990,890 | $ 7,990,890 | ||||||||||
Line of credit facility current borrowing capacity | 9,367,752 | 9,367,752 | ||||||||||
Line of credit facility extended borrowing capacity | 1,376,862 | 1,376,862 | ||||||||||
Payments to line of credit facility | 8,755,616 | $ 14,484,462 | ||||||||||
Line of Credit Facility, Periodic Payment, Interest | 217,474 | $ 129,712 | 519,516 | 253,887 | ||||||||
Loans payable to Bank | $ 300,000 | |||||||||||
Debt monthly payments | 5,000 | |||||||||||
Debt payment of interest | 4,000 | |||||||||||
Note receivable from stockholder | $ 240,190 | |||||||||||
Notes Payable to Banks [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Loans payable | $ 1,750,000 | |||||||||||
Principal payments | $ 29,000 | |||||||||||
Interest expense on notes payable | 5,835 | 7,239 | 10,192 | 20,678 | ||||||||
Subsequent Event [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Payments to line of credit facility | $ 335,000 | $ 997,827.12 | ||||||||||
Remaining estimated advance | $ 329,758.26 | |||||||||||
Loan Agreement [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Debt instrument amendment description | Amendment, among other things, (i) amended the aggregate amount available under the 2023 Note after December 31, 2023 from $12,000,000 to $10,000,000, (ii) eliminated the Supply Chain Finance Sublimit, (iii) amended the maturity date of the 2019 Note to February 29, 2024, (iv) inserted an inventory sublimit in the definition of Borrowing Base in the Loan Agreement, (v) included a provision that required Zircon to reduce the amount set forth under the 2023 Note by twenty-five percent (25%) of the amount of net proceeds received by the Company from any sale of its capital stock in excess of the amount of funds disclosed in the offering to be specifically committed and applied to the project described therein (which shall not include any contingency line items), (vi) included a corporate guarantee under the Loan Agreement and the Notes by the Company, (vii) amended the minimum fixed charge coverage ratio to be less than 1.25 to 1.00 (the Company had a fixed charge coverage ratio of 1.55 as of December 31, 2023) and (viii) added a new provision restricting payment and dividends by Zircon | |||||||||||
2023 Note [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Principal balance | $ 12,000,000 | |||||||||||
2023 Note [Member] | Loan Agreement [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Principal balance | 12,000,000 | 12,000,000 | $ 10,000,000 | |||||||||
Notes [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Principal balance | $ 300,000 | |||||||||||
Stauss Family Administrative Trust [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Principal balance | 667,230 | 667,230 | ||||||||||
Interest expense on notes payable | $ 6,002 | $ 12,754 | $ 32,372 | $ 38,124 | ||||||||
Interest accrued percentage | 5.50% | 5.50% | ||||||||||
Note receivable from stockholder | $ 240,190 | $ 240,190 | ||||||||||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Line of credit facility maximum borrowing capacity | $ 12,000,000 | $ 12,000,000 | ||||||||||
Line of credit facility maturity date | Feb. 29, 2024 | |||||||||||
Bearing fixed interest, percentage rate | 2.36% | 2.36% | ||||||||||
Interest rate, percentage | 6.91% | |||||||||||
Line of credit outstanding borrowings | $ 6,500,000 | $ 6,500,000 | ||||||||||
Secured Overnight Financing Rate SOFR Overnight Index Swap Rate One [Member] | ||||||||||||
Short-Term Debt [Line Items] | ||||||||||||
Interest rate, percentage | 8% | |||||||||||
Line of credit outstanding borrowings | $ 1,915,980 | $ 1,915,980 |
Schedule of Warrants Activity (
Schedule of Warrants Activity (Details) | 9 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Warrants | |
Beginning outstanding warrants | shares | |
Beginning weighted average exercise price | $ / shares | |
Issued warrants | shares | 217,184 |
Issued weighted average remaining term | 10 years |
Issued weighted average exercise price | $ / shares | $ 0.20 |
Ending outstanding warrants | shares | 217,184 |
Weighted average remaining term | 9 years 4 months 24 days |
Ending weighted average exercise price | $ / shares | $ 0.20 |
Warrants (Details Narrative)
Warrants (Details Narrative) | Dec. 31, 2023 USD ($) $ / shares shares |
Reverse Stock Split [Member] | |
Class of Warrant or Right [Line Items] | |
Warrants price per share | $ 0.01 |
Stock price per share | $ 0.08 |
Advisor Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Advisors warrants to purchase of shares | shares | 217,184 |
Warrants price per share | $ 0.20 |
Intrinsic value for warrants outstanding | $ | $ 301,572 |
Stock price per share | $ 1.60 |
Schedule of Operating Lease (De
Schedule of Operating Lease (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease right-of-use assets, net | $ 803,421 | $ 960,044 |
Operating lease liability, current | 193,054 | 185,357 |
Operating lease liability, net of current portion | 608,776 | $ 783,631 |
Total operating lease liabilities | $ 801,830 |
Schedule of Components of Lease
Schedule of Components of Lease Expense (Details) | 9 Months Ended |
Dec. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease expense | $ 156,623 |
Total lease cost | $ 156,623 |
Schedule of Weighted Average Re
Schedule of Weighted Average Remaining Lease Terms and Discount Rate (Details) | Dec. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | |
Operating leases weighted average remaining lease term (in years) | 3 years 10 months 28 days |
Operating leases weighted average remaining lease discount rate | 7% |
Schedule of Future Minimum Leas
Schedule of Future Minimum Lease Payment Under Non-cancellable Lease (Details) - USD ($) | Dec. 31, 2023 | Mar. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of fiscal 2024 | $ 61,889 | |
2025 | 243,527 | |
2026 | 242,184 | |
2027 | 233,301 | |
2028 and thereafter | 172,755 | |
Total Minimum Lease Payments | 953,656 | |
Less effects of discounting | (151,826) | |
Present value of future minimum lease liabilities | 801,830 | |
Less current portion of operating lease liability | (193,054) | $ (185,357) |
Operating lease liability, net of current portion | $ 608,776 | $ 783,631 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Rent expense | $ 57,581 | $ 172,743 | $ 57,581 | $ 172,743 |
Office Equipment [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Payments for lease | $ 987 | |||
Payments for lease | 5 years | 5 years | ||
Lease expense | $ 2,961 | $ 8,883 | $ 2,961 | 8,883 |
Vehicles [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Payments for lease | $ 448 | |||
Payments for lease | 3 years | 3 years | ||
Lease expense | $ 1,344 | $ 4,032 | ||
Former Shareholders [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Payments for lease | $ 19,195 |
Profit Sharing and 401(k) Plan
Profit Sharing and 401(k) Plan (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Retirement Benefits [Abstract] | ||||
Payable contribution to employee | $ 36,734 | $ 38,918 | ||
Paid for employee benefit | $ 48,978 | $ 52,115 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Feb. 13, 2024 |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Maturity date | February 29, 2024 to July 31, 2024 |