10-Q - ZRCN - Equibles

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

WASHINGTON,

D.C. 20549

FORM

10-Q

(Mark One)

☒	QUARTERLY<br> REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Forthe quarterly period ended ### March 31, 2023

☐	TRANSITION<br> REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For

the transition period from _____________to____________________________

Commission

File No. 000-56380

ZRCN

INC.

(Exact name of registrant as specified in its charter)

Delaware	83-2756695
(State<br> or other jurisdiction of<br><br> <br>incorporation<br> or organization)	(I.R.S.<br> Employer<br><br> <br>Identification<br> No.)
1580 Dell Avenue, Campbell, CA	95008
(Address<br> of principal executive offices)	(Zip<br> Code)

(408)963-4550

(Registrant’s telephone number, including area code)

HarmonyEnergy Technologies Corp.

165Broadway FL 23

NewYork, New York 10006

(Former name and former address, if changed since last report)

Securities registered under Section 12(b) of the Exchange Act: None

Title<br> of each class	Trading<br> Symbol(s)	Name<br> of each exchange on which registered
N/A	N/A	N/A

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $0.0001 per share

(Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large<br> accelerated filer	☐	Accelerated<br> filer	☐
Non-accelerated<br> filer	☒	Smaller<br> reporting company	☒
		Emerging<br> growth company	☒

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐ No ☒

198,964,500

shares of common stock were issued and outstanding as of May 15, 2023.

ZRCN

INC.

(FormerHARMONY ENERGY TECHNOLOGIES CORPORATION)

Form

10-Q

For

the Fiscal Quarter Ended March 31, 2023

TABLE

OF CONTENTS

		Page
	Part I
Item<br> 1.	Financial Statements	1
Item<br> 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2
Item<br> 3.	Quantitative and Qualitative Disclosures About Market Risk	6
Item<br> 4.	Controls and Procedures	7
	Part II
Item<br> 1.	Legal Proceedings	7
Item<br> 1A.	Risk Factors	7
Item<br> 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7
Item<br> 3.	Defaults Upon Senior Securities	7
Item<br> 4.	Mine Safety Disclosures	7
Item<br> 5.	Other Information	7
Item<br> 6.	Exhibits	7

PART

I — FINANCIAL INFORMATION

Item1. Financial Statements

Index<br> to the Interim Condensed Consolidated Financial Statements	Page
Interim Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022	F-1
Interim Condensed Consolidated Statements of Operations and Comprehensive Income for the three-month Ended March 31, 2023 and 2022	F-2
Interim Condensed Consolidated Statements of Changes In Stockholders’ Equity (Deficit) as of March 31, 2023 and December 31, 2022	F-3
Interim Condensed Consolidated Statements of Cash Flows for the three-month Ended March 31, 2023 and 2022	F-4
Notes to Interim Condensed Consolidated Financial Statements	F-5

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ZRCN

INC.

(FormerHARMONY ENERGY TECHNOLOGIES CORPORATION)

INTERIM

CONDENSED CONSOLIDATED BALANCE SHEETS

As<br> of March 31, 2023 and December 31, 2022	(in<br> US Dollars)
	Note	March 31, 2023			December 31, 2022
---	---	---	---	---	---	---	---
ASSETS
Current Assets:
Cash			7,552			27,924
Total Current Assets			7,552			27,924
Non-Current Assets:
Equipment	6		637			1,413
Total Assets			8,189			29,337
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued liabilities			195,917			174,750
Loan payable	7		584,534			502,928
Loan from related parties	7,9		-			78,205
Total Liabilities			780,451			755,883
Stockholders’ Equity:
Share capital	5		2,115			2,115
Additional paid in capital	5		1,622,922			1,622,922
Capital reserves			168,263			168,263
Accumulated deficit			(2,558,926	)		(2,514,824	)
Accumulated other comprehensive loss			(6,636	)		(5,022	)
Total Stockholders’ Equity			(772,262	)		(726,546	)
Total Liabilities and Stockholders’ Equity			8,189			29,337

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

Approved on behalf of the Board

John<br> Stauss, CEO, Director	Ron<br> Bourque, President,Director

| F-1 |

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ZRCN

INC.

(FormerHARMONY ENERGY TECHNOLOGIES CORPORATION)

INTERIM

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the three-month periods ended March 31, 2023 and 2022

		(in US Dollars)
		Three-month periods ended
	Note	March<br> 31, 2023			March<br> 31, 2022
Operating<br> Expenses
Research<br> and development			-			(15,304	)
Administrative<br> expenses			(40,238	)		(87,493	)
Financial<br> expenses			(328	)		63,628
Acquisition<br> costs			-			-
Total<br> Operating Expenses			(40,566	)		(39,169	)
Operating<br> Loss			(40,566	)		(39,169	)
Other<br> Income (Expenses)
Other<br> Income/expense			(965	)		-
Foreign<br> exchange loss			(2,571	)		(1,225	)
Loss,<br> Net of Income Tax			(44,102	)		(40,394	)
Foreign<br> currency translation differences of foreign operations			(1,614	)		(469	)
Net<br> Loss and Other Comprehensive Loss			(45,716	)		(40,863	)
Basic<br> net income per share			(0.002	)		(0.002	)
Weighted<br> average number of common shares outstanding			21,155,079			19,780,079

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

| F-2 |

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ZRCN

INC.

(FormerHARMONY ENERGY TECHNOLOGIES CORPORATION)

INTERIM

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

As<br> of March 31, 2023 and December 31, 2022	(in<br> US Dollars)
	Note	Number of Common Share		Par Value		Additional Paid in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance - January 1, 2022			19,780,079		1,978		1,653,822		(2,183,207	)		(36,809	)		(564,216	)
Shares issued for private placement			475,000		47		47,453		-			-			47,500
Shares issued for debt settlement			540,000		54		53,946		-			-			54,000
Shares issued to Officers and Consultants as compensation			360,000		36		35,964		-			-			36,000
Net loss			-		-		-		(331,617	)		-			(331,617	)
Foreign currency translation differences of foreign operations			-		-		-		-			31,787			31,787
Balance - December 31, 2022			21,155,079		2,115		1,791,185		(2,514,824	)		(5,022	)		(726,546	)
Balance - January 1, 2023			21,155,079		2,115		1,791,185		(2,514,824	)		(5,022	)		(726,546	)
Beginning balance			21,155,079		2,115		1,791,185		(2,514,824	)		(5,022	)		(726,546	)
Net loss			-		-		-		(44,102	)		-			(44,102	)
Foreign currency translation differences of foreign operations			-		-		-		-			(1,614	)		(1,614	)
Balance – March 31, 2023			19,780,079		1,978		1,653,822		(2,558,926	)		(6,636	)		(772,262	)
Ending balance			19,780,079		1,978		1,653,822		(2,558,926	)		(6,636	)		(772,262	)

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

| F-3 |

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ZRCN

INC.

(FormerHARMONY ENERGY TECHNOLOGIES CORPORATION)

INTERIM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For<br> the three-month periods ended March 31, 2023 and 2022	(in<br> US Dollars)
	Note	March 31, 2023			March 31, 2022
---	---	---	---	---	---	---	---
		Three-month periods ended
	Note	March 31, 2023			March 31, 2022
OPERATING ACTIVITIES
Net loss			(44,102	)		(40,394	)
Non-cash items:
Gain on disposal			652			-
Depreciation	6		124			149
Interest expense			-			(63,690	)
Loss on foreign exchange gain and loss			3,401			-
Exchange differences on translation from functional to presentation currency			(1,614	)		(8,378	)
Change in non-cash working capital items
Prepaid expenses and other assets			-			4,674
Accounts payable and accrued liabilities			21,167			42,081
Cash Flow From Operating Activities			(20,372	)		(65,558	)
INVESTING ACTIVITIES
Cash Flow From Investing Activities			-			-
FINANCING ACTIVITIES
Cash Flow From Financing Activities			-			-
Net change in cash during the period			(20,372	)		(65,558	)
Cash, beginning of period			27,924			119,357
Cash, end of period			7,552			53,799

The accompanying notes are an integral part of the interim condensed consolidated financial statements.

| F-4 |

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ZRCN

INC.

(FormerHARMONY ENERGY TECHNOLOGIES CORPORATION)

NOTES

TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in United States Dollars)

For

the three-month periods ended March 31, 2023 and 2022

NOTE

NATURE OF OPERATION

ZRCN Inc., former Harmony Energy Technologies Corporation, (“Harmony” or “Company”) designs, develops, and markets power solutions integrated with lithium-ion battery technologies. The Company is headquartered at 1580 Dell Avenue, Campbell, CA. 95008. The Company’s common stock is not listed or quoted on any market at this moment.

On June 19, 2018, Harmony was registered under the General Corporation Law of the State of Delaware, USA, as a subsidiary of Golden Share Resources Corporation (“Golden Share”).

On January 14, 2019, the Company completed the spin off from Golden Share with its energy storage business.

On September 1, 2020, the Company completed the acquisition of Shenzhen Smarten Technology Co., Ltd. (“Smarten”).

On

April 13, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with ZRCN Inc. (f/k/a Harmony Energy Technologies Corp.) ZRCN Inc.,a California corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”), and Zircon Corporation, a California corporation (“Zircon”). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by Zircon’s shareholders, Merger Sub will be merged with and into Zircon (the “Merger”), with Zircon surviving the Merger as a wholly-owned subsidiary of the Company. The shareholders of Zircon will become the majority owners of the Company’s outstanding common stock upon the closing of the Merger. Terms of the Merger include a payment of approximately an aggregate of $180,000 to certain creditors of the Company from Zircon, which is intended to repay certain of the Company’s payables at closing. Please refer to Form 8-K filed on April 13, 2023 for more details.

On April 18, 2023, in connection with the Merger, the Company filed an amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware to change the Company’s name from “Harmony Energy Technologies Corp.” to “ZRCN Inc.”

NOTE

GOING CONCERN ASSUMPTION

These financial statements have been prepared on the basis of the going concern assumption which contemplates that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations.

The

Company has not yet determined when its business can generate income or cash flows. As of March 31, 2023, the Company has an accumulated deficit of $2,558,926 (deficit of $2,514,824 on December 31, 2022) and working capital deficit of $772,262 (deficit of $726,546 on December 31, 2022) which will not be sufficient to support the Company’s needs for cash during this and the coming year. In addition, the COVID-19 pandemic has had a significant negative impact on the Company’s interim condensed consolidated financial statements as of March 31, 2023, and management expects the pandemic to continue to have a negative impact in the foreseeable future, the extent of which is uncertain and largely subject to whether the severity of the pandemic worsens, or duration lengthens. In the event that the COVID-19 pandemic and the economic disruptions it has caused continue for an extended period of time, the Company cannot assure that it will remain in compliance with the financial covenants in its credit facilities. The Company will require additional funding to be able to develop the business and to meet ongoing requirements for general operations. These factors indicate that material uncertainties exist which may cast significant doubt regarding the Company’s ability to continue as a going concern.

| F-5 |

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The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funds to further develop the business and continued support of suppliers and creditors. Even if the Company has been successful in the past in doing so, there is no assurance that it will manage to obtain additional financing in the future.

The carrying amounts of assets, liabilities and expenses presented in the financial statements and the classification used in the statement of financial position have not been adjusted as would be required if the going concern assumption was not appropriate. Those adjustments could be material.

NOTE

SUMMARY OF ACCOUNTING POLICIES

Basisof Presentation

These interim condensed consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”)

The financial statements have been approved and authorized for issue by the Board of Directors on May 15, 2023.

Basisof consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Smarten. Smarten is a company registered in China. All significant intercompany accounts and transactions have been eliminated in consolidation.

Businesscombinations

We account for the acquisition of Smarten as a business combination under the acquisition method of accounting, which means that the acquired assets and the liabilities assumed are recorded at their acquisition date at their respective fair values. Any excess of the purchase price over the estimated fair value of the net assets acquired is recorded as goodwill. Acquisition-related costs are expensed as incurred in the consolidated financial statements. Significant judgments are used in determining the estimated fair values assigned to the assets acquired and liabilities assumed and in determining estimates of useful lives of long-lived assets acquired. Estimates of the fair value of assets acquired, and liabilities assumed are based upon assumptions believed to be reasonable, and when appropriate, include assistance from independent third-party appraisal firms. While we use our best estimates and assumptions to value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Overpayments are best addressed through subsequent impairment testing of goodwill. However, when there is evidence to suggest that the business combination transaction is not an exchange of equal values, such overpayments should be expensed at acquisition date.

Functionaland presentation currency

The financial statements are presented in United States dollars, which is also the functional currency of the Company. The functional currency of Smarten is Chinese Renminbi Yuan (“CNY”).

Foreigncurrency transactions and balances

In respect of transactions denominated in currencies other than the Company and its subsidiaries’ functional currencies, the monetary assets and liabilities are remeasured at the period end rates. Revenue and expenses are re-measured at rates of exchange prevailing on the transaction dates. All the exchange gains or losses resulting from these transactions are recognized in the consolidated statements of operations.

When the Company translates the financial statements of subsidiaries from their functional currency to presentation currency, assets and liabilities are translated into United States dollars at the exchange rate in effect at the balance sheet date. Share capital, contributed surplus, other comprehensive (loss) income, and accumulated deficits are translated into United States dollars at historical exchange rates. Revenues and expenses are translated into United States dollars at the average exchange rate for the year. Foreign exchange gains and losses on translation are included in other comprehensive (loss) income.

| F-6 |

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Right-of-useassets & lease liabilities

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date according to ASC 842 Leases. Right-of-use assets are measured in cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the initial amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.

Unless the Company is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the right-of-use assets are depreciated on a straight-line basis over the shorter of the estimated useful life and the lease term. Right-of-use assets are subject to impairment.

At the commencement date of the lease, the Company recognizes a lease liability measured at the present value of lease payments to be made over the lease term, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate.

Currently, the Company only have the leases with terms of 12 months or less, the Company elects to not recognize lease assets and liabilities, instead recognize lease expense on a straight-line basis, generally, over the term of the lease.

Cash

Cash consists of cash on hand and deposits in banks with no restrictions.

Inventories

Inventories are stated at the lower of the cost or net realizable value and include raw materials, work in progress and finished goods. Cost is determined as follows: Raw Materials and Work in Progress (“WIP”) – Cost is determined on a standard cost basis utilizing the weighted average cost of historical purchases, which approximates actual cost. The cost of WIP and finished goods includes the cost of raw materials and the applicable share of the cost of labor and fixed and variable production overheads.

The Company regularly evaluates the value of inventory based on a combination of factors including the following: historical usage rates, product end of life dates, technological obsolescence and product introductions. The Company includes demonstration units within inventories. Proceeds from the sale of demonstration units are recorded as revenue.

Equipment

Equipment is measured at cost less accumulated depreciation and impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Depreciation commences when the asset is available for use and is charged to the consolidated statements of net loss on a straight-line basis over the useful life of the asset as outlined below:

SCHEDULE

OF USEFUL LIFE OF ASSET

Equipment	3 years
Furniture and fixtures	5 years

When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheets, and any resulting gain or loss is reflected in the consolidated statements of operations.

| F-7 |

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Revenuerecognition

The Company adopted Accounting Standards Codification (“ASC”) 606 “Revenue from contract with customers” (“ASC 606”) on June 19,2018 (the incorporation date) using the modified retrospective method for all contracts not completed as of the date of adoption.

The Company generates revenue from the sales of its products. According to ASC 606, revenue is recognized based on the following five steps: (1) identification of the contract(s) with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; and (4) allocation of the transaction price to the separate performance obligations in the contract; and (5) recognition of revenue when (or as) the entity satisfies a performance obligation.

Costof goods sold

For product sales, the costs of goods sold are recognized upon shipment to the customer or distributor.

Impairmentof long-lived assets

The Company accounts for the impairment of long-lived assets in accordance with FASB, Accounting Standards Codification (“ASC”) 360-10, “Accounting for the Impairment of Long-Lived Assets”. This standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the assets’ carrying amounts may not be recoverable. For assets that are to be held and used, impairment is assessed when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying values. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of the carrying value and estimated net realizable value. During the three months period ended March 31, 2023 and 2022, there was no impairment of long-lived assets.

Fair value measurement

Financial assets and financial liabilities are initially recognized at fair value when the Company becomes a party to the contractual provision of the financial instrument. Subsequently, all financial instruments are measured at amortized cost using the effective interest method.

The financial instruments of the Company consist of cash, accounts receivable, loan receivable, accounts payable and accrued liabilities, loan payable, and lease liability. The fair value of financial instruments approximates their carrying value due to their short-term nature.

The Company measures the fair value of its financial assets and liabilities using the fair value hierarchy. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses. The update is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The new standard is effective for fiscal years beginning after December 15, 2019 (i.e., a January 1, 2020 effective date), with early adoption permitted for fiscal years beginning after December 15, 2018. The Company adopted the standard on January 1, 2019.

| F-8 |

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Incometaxes

Income tax expense is the total of the current year’s income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

Equity

Share capital represents the par value of shares issued and the residual amount received upon the share issuance less the share issue expenses net of any tax benefits on the earnings underlying these share issue expenses are recorded as additional paid in capital.

Stock-basedcompensation

The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company’s consolidated statements of operations.

The fair value of stock options (“options”) on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock, to determine the fair value of the award. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The Company has made a policy choice to account for forfeitures when they occur.

Stock options granted to non-employees are based on the fair value on the grant date and re-measured at the end of each reporting period based on the fair value until the earlier of the options being fully vested and completion of the performance obligations. These are subject to a service vesting condition and are recognized on a straight-line method over the requisite service period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Estimated forfeitures are based on historical pre-vesting forfeitures.

Lossper share

The Company computes loss per share in accordance with ASC Topic 260, “Earnings Per Share” (“ASC 260”) and related guidance, which requires two calculations of loss attributable to the Company’s shareholders per share to be disclosed: basic and diluted. A diluted loss per share is the same as a basic loss per share for the years in which the Company had a net loss because the inclusion of outstanding common stock equivalents would be anti-dilutive.

Recentlyissued accounting standards not yet adopted

In April 2020, Financial Accounting Standards Board (the “FASB”) issued a Staff Question-and-Answer Document (Q&A): ASC Topic 842 and ASC Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic, that focuses on the application of the lease guidance for lease concessions related solely to the effects of COVID-19. The FASB issued the guidelines to reduce the burden and complexity for companies to account for such lease concessions (e.g., rent abatements or other economic incentives) under current lease accounting rules due to COVID-19 by providing certain practical expedients that can be used. This guidance can be applied immediately. The Company anticipates that the adoption of the guidance will not have a material impact on the Company’s consolidated financial statements.

| F-9 |

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In March 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-04 - Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASC Topic 848). This authoritative guidance provides optional relief for companies preparing for the discontinuation of interest rates such as LIBOR, which is expected to be phased out at the end of calendar 2021, and applies to lease contracts, hedging instruments, held-to-maturity debt securities and debt arrangements that have LIBOR as the benchmark rate. This guidance can be applied for a limited time, as of the beginning of the interim period that includes March 12, 2020 or any date thereafter, through December 31, 2022. The guidance may no longer be applied after December 31, 2022. In January 2021, the FASB issued authoritative guidance that makes amendments to the new rules on accounting for reference rate reform. The amendments clarify that all derivative instruments affected by the changes to interest rates used for discounting, margining or contract price alignment, regardless of whether they reference LIBOR, or another rate expected to be discontinued as a result of reference rate reform, an entity may apply certain practical expedients in ASC Topic 848. The Company is currently assessing the impact of applying this guidance as well as when to adopt this guidance.

In February 2020, the FASB issued authoritative guidance (ASU 2020-02 – Financial Instruments – Credit Losses (Topic 326) and Leases (Topic 842)) that amends and clarifies Topic 326 and Topic 842. For Topic 326, the codification was updated to include the SEC staff interpretations associated with registrants engaged in lending activities. ASC Topic 326 is effective for annual periods beginning after January 1, 2023, including interim periods within those fiscal years. The Company is currently evaluating the impact of applying this guidance on its financial instruments, such as accounts receivable.

NOTE

ESTIMATES, JUDGMENTS AND ASSUMPTIONS

The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the implicit interest rate used to record lease liabilities, allowance for doubtful accounts, inventory valuation, the valuation and measurement of deferred tax assets and liabilities, useful lives of property and equipment, valuation of acquired assets and assumed liabilities, recognition of intangible assets and goodwill for the business combination. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates.

Judgments

The following are significant judgments in applying the accounting policies of the Company that have the most significant effect on the financial statements.

Acquisitionof Smarten

The Corporation accounted as business combinations by using acquisition method when the control was transferred to the Corporation. The Company measured the identifiable assets and liabilities assumed at their fair value at the acquisition date. Acquisition related costs are recognized in profit or loss as incurred.

The management assessed that the acquisition of Smarten is a business acquisition. The Company obtained control of Smarten on January 1, 2020, and deemed Smarten as the wholly owned subsidiary of the Company since then.

Goingconcern

The evaluation of the Company’s ability to continue as a going concern, to raise additional financing in order to cover its operating expenses and its obligations for the incoming year requires significant judgment based on past experience and other assumptions including the probability that future events are considered reasonable according to circumstances. Please refer to Note 2 for further information.

| F-10 |

| --- |

Estimates

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below:

ExpectedCredit Loss on the accounts receivable and the loan receivable

Accounts receivable and loan receivable were assessed for the expected credit loss at each reporting date. Expected credit loss represents management’s best estimate and assumptions based on actual credit loss experience and informed credit assessment, and takes into consideration forward-looking information.

Fairvalue of the shares issued for acquisition of Smarten

The Company’s shares are not quoted in an active market, therefore the fair value of the Company’s issued shares to Smarten is based on valuation methods and techniques generally recognized as standard within the industry in which observable data have been used to the extent practicable. Changes in assumptions about these factors could affect the reported fair value of the shares issued for acquisition of Smarten.

Businessacquisition of Smarten

In a business combination, the Corporation may acquire assets and assume certain liabilities of an acquired entity. Estimates are made as to the fair value of property and equipment, intangible assets, and goodwill, among other items. In certain circumstances, such as the valuation of property and equipment, intangible assets and goodwill acquired, the Corporation may rely on independent third-party valuators. The determination of these fair values involves a variety of assumptions, including revenue growth rates, expected operating income, discount rates, and earnings multiples.

Incometaxes

The estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. If changes were made to the management’s assessment regarding the Company’s ability to use future tax deductions, the Company would adjust future income tax provisions or recoveries.

NOTE

SHARE CAPITAL

Sharecapital

The

share capital of the Company consists only of fully paid common shares. The Company has been authorized to issue up to two hundred million (200,000,000) of common shares with a par value of $0.0001 per share.

| F-11 |

| --- |

Transactionson share capital

SCHEDULE

OF TRANSACTIONS ON SHARE CAPITAL

	Number of<br> <br>Shares
Outstanding as of January 1, 2022		19,780,079		1,655,800
Shares issued for private placement (i)		475,000	0.10	47,500
Shares issued for debt settlement (ii)		540,000	0.10	54,000
Shares issued to Officers and Consultants as compensation (iii)		360,000	0.10	36,000
Outstanding as of December 31, 2022		21,155,079		1,793,300
Outstanding as of March 31, 2023		21,155,079		1,793,300
(i)	On<br> September 16, 2022, the Company completed a private placement for total proceeds of $47,500 and issued 475,000 units at a price of<br> $0.10 per unit. Each Unit consists of one common share and one common share purchase warrant (“Warrant”). Each Warrant<br> entitles the holder thereof to acquire one common share at a price of $0.25 for a period of 24 months from the issuance date.
---	---
(ii)	On<br> September 16, 2022, the Company settled accounts payable with key management personnel for an aggregate amount of $54,000 by issuing<br> 540,000 common shares at a price of $0.10 per share
(iii)	On<br> September 16, 2022, the Company issued 360,000 common shares to compensate one officer at a price of $0.10 per share.

Warrants

The following table shows the change in warrants and outstanding warrants.

SCHEDULE

OF CHANGE IN WARRANTS AND OUTSTANDING WARRANTS

							Expiry Date
Outstanding as of December 31, 2019	100,000		1.00	35,457		-	January 13, 2022
Issued for private placement	1,000,000		0.25	29,415		0.75	December 28, 2023
Outstanding as of December 31, 2020	1,100,000		-	64,872		-
Issued for private placement	200,000		0.25	6,052		0.85	February 5, 2024
Issued for private placement	1,000,000		0.25	30,810		1.27	July 7, 2024
Issued for private placement	2,381,880		0.25	66,529		0.49	September 26, 2023
Outstanding as of December 31, 2021	4,681,880		-	168,263		-
Issued for private placement	475,000		0.25	10,538		1.46	September 15, 2024
Warrants expired	(100,000	)	1.00	(35,457	)	-
Outstanding as of December 31, 2022	5,056,880		0.25	143,344		-
Outstanding as of March 31, 2023	5,056,880		0.25	143,344		0.80

| F-12 |

| --- |

NOTE

EQUIPMENT

SCHEDULE

OF EQUIPMENT

COST	Computer and Office Equipment			Total
Balance - December 31, 2022		2,097			2,097
Write off		(928	)		(928	)
Foreign currency translation differences		17			17
Balance – March 31, 2023		1,186			1,186
Accumulated Depreciation	Computer and Office Equipment		Total
---	---	---	---	---
Balance - December 31, 2022	684		684
Amortization	124		124
Write off	(266	)	(266	)
Foreign currency translation differences	5		5
Balance – March 31, 2023	547		547
Net Book Value	Computer and Office Equipment		Total
---	---	---	---	---
Balance - December 31, 2022		1,413		1,413
Balance – March 31, 2023		637		637 II

NOTE

LOAN PAYABLES

As of March 31, 2023, the Company has the following loan agreements outstanding. The Company has entered into these loan agreements since January 1, 2020. All the following loans were settled on April 14, 2023 and no interest accrued during the three months period ended March 31, 2023.

SCHEDULE

OF LOAN PAYABLES

Lender	Principal as of March 31, 2023	Unpaid Interest as of March 31, 2023	Notes
Lender 1	$65,513<br> (CNY450,000)	3,931 (CNY27,000)	Was settled on April 14, 2023
Lender 2	$121,105<br> (CNY831,858)	24,155 (CNY 165,916)	Was settled on April 14, 2023
Nan Du	$291,168<br> (CNY2,000,000)	-	Was settled on April 14, 2023
Keystone Associates Inc.	$54,521<br> (CNY374,500)	24,141 (CNY165,825)	Was settled on April 14, 2023
Total	$532,307<br> (CNY3,656,358)	52,227 (CNY358,741)

All values are in US Dollars.

a.	In<br> January 2020, Smarten entered into an agreement of six-month unsecured loans with Lender 1 for $45,951 (CNY300,000) with annual interest<br> as 18% (1.5% per month). This agreement was renewed in July 2020, January 2021, and July 2021, for 6 months each time. On December<br> 30, 2021, Smarten increased the loan amount of $23,603 (CNY150,000) with the same terms as before, and renewed the agreement for<br> another 6 months at the same time. The agreement was renewed in July 2022 for 12 months. During the year ended December 31, 2022,<br> the Company accrued interest expense of $12,035 and paid an interest expense of $8,179 for this loan. During the three month period<br> ended March 31, 2023,
b.	In<br> January 2020, Smarten entered into an agreement of six-month unsecured loans for $45,951 (CNY300,000) and renewed the loan in July<br> 2020, the loan bears interest at 20% annually.
c.	In<br> May 2020, Smarten entered into an agreement of six-month unsecured loans for $30,634 (CNY200,000) and the loan bears interest at<br> 20% annually.
d.	In<br> August 2020, Smarten entered into a six-month unsecured loan agreement for $15,317 (CNY100,000) and the loan bears interest at 20%<br> annually.

| F-13 |

| --- | | e. | During the year ended December 31, 2020, the Company has accrued interest of $12,674 for the above 3 loan agreements (b, c, and d). On December 31, 2020, the Company entered into a new loan agreement to replace the 3 loan agreements, and total principal amount is $105,302 (CNY 687,486, includes the unpaid interest) and the loan bears interest at 20% annually. The loan agreement was renewed on June 30, 2021 and December 31, 2021. During the year ended December 31, 2022, the Company accrued interest expense of $24,014 (2021- $22,375). | | --- | --- | | f. | In July 2020, Smarten entered into a loan agreement with the former President & CEO of Harmony for a loan of $55,830 (CNY364,500) and renewed on December 31, 2020 and June 30, 2021. The loan bears 18% interest annually. On December 31, 2021, the principal of loan was increased to $58,929 (CNY374,500) and extended to December 31, 2022, at the same time, the loan was assigned to Keystone Associates Inc., which is 100% owned by the former President & CEO of Harmony. The Company accrued interest expenses of $10,016 (2021- $10,168) for this loan during the year ended December 31, 2022. | | g. | In September 2020, the Company entered into an agreement with one former shareholder of Smarten, Ms. Nan Du, to settle the unpaid cash consideration of $287,280 (CNY2,000,000) for acquisition of Smarten as loan payable. The loan bears an annual interest rate of 18%. The Company accrued interest expenses of $55,830 for the cash consideration during the year ended December 31, 2021. | | h. | In February 2022, Ms. Du waived all the accumulated interest of $75,982 and agreed to receive payment when Harmony cash position is sufficient upon Harmony’s decision. |

NOTE

OFFICE AND GENERAL BY NATURE

SCHEDULE

OF OFFICE AND GENERAL EXPENSES

	March 31, 2023		March 31, 2022
	Three-month periods ended
	March 31, 2023		March 31, 2022
Management fees		-		18,000
Professional service fees		27,900		49,373
Salaries and benefits expenses		-		12,537
Office rent and related expenses		5,905		4,298
Transfer agent fee		2,783		2,686
Regulatory fee		3,526		450
Depreciation		124		149
Total		40,238		87,493

NOTE

RELATED PARTIES

The Company considers its related parties to consist of key members or former members of its management personnel (including all officers and directors), their close family members, and companies controlled or significantly influenced by such individuals; and reporting shareholders and their affiliates which may exert significant influence over the Company’s activities.

During

the three months period ended March 31, 2023, the Company recorded $12,000 (2022 - $12,000) in professional fees to the CFO for the services provided, and no other related party transactions, while in the comparable period in 2022:

●	the<br> Company recorded $18,000 in management fees for the former CEO’s service.
●	the<br> Company made a cash payment of $6,137 (CNY 39,000) to a director, who is acting as the General Manager of Smarten for his service<br> at Smarten since August 2021.
●	the<br> Company settled accounts payable with the CEO and the CFO for an aggregate amount of $10,000 by issuing 100,000 common shares

| F-14 |

| --- |

NOTE

CAPITAL MANAGEMENT

The Company’s capital management objectives are:

–	to<br> ensure the Company’s ability to continue as a going concern;
–	to<br> increase the value of the Company’s assets; and
–	to<br> provide an adequate return to shareholders of the Company.

These objectives will be achieved by selling its tested vanadium electrolyte with licensed technology, revenue generated from Smarten.

The Company monitors capital on the basis of the carrying amount of equity. Capital for the reporting periods under review is summarized in the statement of changes in equity (deficit).

The Company sets the amount of capital in proportion to its overall financing structure, i.e. equity and financial liabilities. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares, or sell assets. When financing conditions are not optimal, the Company may enter into option agreements or other solutions to continue its activities or may slow its activities until conditions improve.

No changes were made in the objectives, policies and processes for managing capital during the reporting periods.

NOTE

FINANCIAL INSTRUMENT RISKS

The Company is exposed to various risks in relation to financial instruments. The Company’s financial assets and liabilities by category are summarized in Note 3. The main types of risks the Company is exposed are credit risk and liquidity risk. The Company does not use financial assets for speculative purposes.

No changes were made in the objectives, policies and processes related to financial instrument risk management during the reported periods.

Creditrisk

Credit risk is the risk that another party to a financial instrument will cause a financial loss for the Company by failing to discharge an obligation. The Company’s maximum exposure to credit risk is limited to the carrying amount of financial assets at the reporting date, as summarized below:

SCHEDULE

OF COMPANY MAXIMUM EXPOSURE TO CREDIT RISK

As of
Cash	7,552	53,799
VAT recoverable	-	55,334
Prepaid expenses and other assets	-	29,240
Total	7,552	138,373

The credit risk regarding cash is considered to be negligible because the counterparty is a reputable bank with an investment grade external credit rating.

Liquidityrisk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Liquidity risk management serves to maintain a sufficient amount of cash and to ensure that the Company has financing sources such as private and public investments for a sufficient amount.

Over the past period, the Company has financed its business development commitments, its working capital requirements and acquisitions through private placement. As of March 31, 2023, the Company did not have sufficient cash to pay its accounts payable and accrued liabilities which have contractual maturities within twelve months.

Foreigncurrency risk

Foreign currency risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will fluctuate because of changes in foreign exchange rates. The Company functional currency is the United States dollars and major purchases are transacted in United States dollars. The Company’s foreign currency risk arises primarily with respect to its loan denominated in CNY.

NOTE

SUBSEQUENT EVENTS

On

April 13, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with ZRCN Inc. (f/k/a Harmony Energy Technologies Corp.)ZRCN Inc., a California corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”), and Zircon Corporation, a California corporation (“Zircon”). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by Zircon’s shareholders, Merger Sub will be merged with and into Zircon (the “Merger”), with Zircon surviving the Merger as a wholly-owned subsidiary of the Company. The shareholders of Zircon will become the majority owners of the Company’s outstanding common stock upon the closing of the Merger. Terms of the Merger include a payment of approximately an aggregate of $180,000 to certain creditors of the Company from Zircon, which is intended to repay certain of the Company’s payables at closing. Please refer to Form 8-K filed on April 13, 2023 for more details.

In

connection with the Merger, the Company entered into a warrant exchange agreement, dated April 14, 2023, with certain Holders of the Company’s warrants under which such holders will receive 470,188 shares of Common Stock in exchange for their warrants.

In

connection with the Merger, the Company entered into debt settlement with certain 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 $576,881 which was owed to them.

| F-15 |

| --- |

Item2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Thissection and other parts of this Quarterly Report on Form 10-Q (“Form 10-Q”) contain forward-looking statements, within themeaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Forward-looking statements providecurrent expectations of future events based on certain assumptions and include any statement that does not directly relate to any historicalor current fact. For example, statements in this Form 10-Q regarding the potential future impact of the COVID-19 pandemic on the Company’sbusiness and results of operations are forward-looking statements. Forward-looking statements can also be identified by words such as“future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,”“plans,” “predicts,” “will,” “would,” “could,” “can,” “may,”and similar terms. Forward-looking statements are not guarantees of future performance and the Company’s actual results may differsignificantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but arenot limited to, those discussed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December31, 2022 (the “2022 Form 10-K”) under the heading “Risk Factors.” and those discussed in Part I, Item 1A of theCompany’s Form 10_12G/A Registration Amendment 3, which was filed on August 8, 2022, under the heading “Risk Factors.”The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

Unlessotherwise stated, all information presented herein is based on the Company’s fiscal calendar, and references to particular years,quarters, months or periods refer to the Company’s fiscal years and the associated quarters, months and periods of those fiscalyears. Each of the terms the “Company” and “Harmony” as used herein refers collectively to ZRCN (former HarmonyEnergy Technologies Corporation). and its wholly owned subsidiary, unless otherwise stated.

Thefollowing discussion should be read in conjunction with the 2022 Form 10-K filed with the U.S. Securities and Exchange Commission (the“SEC”) and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form10-Q.

AvailableInformation

The Company periodically provides certain information for investors on its corporate website, www.hetcusa.com. This includes press releases and other information about financial performance, information on environmental, social and corporate governance matters, and details related to the Company’s annual meeting of shareholders. The information contained on the websites referenced in this Form 10-Q is not incorporated by reference into this filing. Further, the Company’s references to website URLs are intended to be inactive textual references only.

BusinessHighlights

On April 13, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), with ZRCN Inc. (f/k/a Harmony Energy Technologies Corp.), ZRCN Inc., a California corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub”), and Zircon Corporation, a California corporation (“Zircon”). Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, including approval of the transaction by Zircon’s shareholders, Merger Sub will be merged with and into Zircon (the “Merger”), with Zircon surviving the Merger as a wholly-owned subsidiary of the Company. The shareholders of Zircon will become the majority owners of the Company’s outstanding common stock upon the closing of the Merger. Terms of the Merger include a payment of approximately an aggregate of $180,000 to certain creditors of the Company from Zircon, which is intended to repay certain of the Company’s payables at closing. Please refer to Form 8-K filed on April 13, 2023 for more details.

In connection with the Merger, the Company entered into a warrant exchange agreement, dated April 14, 2023, with certain Holders of the Company’s warrants under which such holders will receive 470,188 shares of Common Stock in exchange for their warrants.

In connection with the Merger, the Company entered into debt settlement with certain 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 $576,881 which was owed to them.

In accordance with the Merger Agreement, on April 14, 2023, at the Effective Time, (i) Kenneth Charles Grainger resigned as President & Chief Executive Officer and Demin (Fleming) Huang resigned as Chief Financial Officer and Secretary and (ii) Kenneth Charles Grainger and Christian Guilbaud resigned from the Board, which resignations were not the result of any disagreements with the Company relating to the Company’s operations, policies or practices.

In accordance with the Merger Agreement, on April 14, 2023, the Board appointed the following officers of the Company, effective at the Effective Time: John Stauss as Chairman and Chief Executive Officer, Ronald Bourque as President, Chief Financial Officer and Chief Operating Officer and Robert Wyler as General Counsel and Secretary.

| Page **2** of **8** |

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RESULTS

OF OPERATIONS

During the three months period ended March 31, 2023, the Company’s selected financial information as the following. All the data is presented in United States dollars.

FinancialPosition Analysis

The information presented as of March 31, 2023, December 31, 2022 and 2021 represents the information of ZRCN Inc.


Assets	8,189		29,337		224,341
Liabilities	780,451		755,883		788,557
Equity	(772,262	)	(726,546	)	(564,216	)

Assets

The total assets on March 31, 2023 were $8,189 compared to $29,337 on December 31, 2022, a decrease of $21,148, which mainly because the Company paid the operation expense and reduced the cash on hand.

Liabilities

Total liabilities on March 31, 2023 were $780,451 while $755,883 on December 31, 2022, the increase of $24,568 were mainly because the Company increased accounts payable and accrued liability of $21,167 and loan payable and loan from related parties of 3,401 due to the exchange rate unfavored.

Equity

Total equity on March 31, 2023 was deficit of $772,262 compared to deficit of $726,546 on December 31, 2022, a decrease of $45,716, which was caused by the net loss of $44,102 and the loss of $1,614 from foreign currency translation during the three months period ended March 31, 2023.

OperatingResults Analysis

Readers are invited to take into consideration the operation results of Harmony for the three months periods ended March 31, 2023 and 2022.

	Three-month periods ended
	March 31, 2023			March 31, 2022
Operating Expenses
Research and development		-			(15,304	)
Administrative expenses		(40,238	)		(87,493	)
Financial expenses		(328	)		63,628
Acquisition costs		-			-
Total Operating Expenses		(40,566	)		(39,169	)
Operating Loss		(40,566	)		(39,169	)
Other Income (Expenses)
Other Income/expense		(965	)		-
Foreign exchange loss		(2,571	)		(1,225	)
Loss, Net of Income Tax		(44,102	)		(40,394	)
Foreign currency translation differences of foreign operations		(1,614	)		(469	)
Net Loss and Other Comprehensive Loss		(45,716	)		(40,863	)
Basic net income per share		(0.002	)		(0.002	)
Weighted average number of common shares outstanding		21,155,079			19,780,079

The above net loss for three months periods ended March 31, 2023 and 2022 is composed as the following:

| Page **3** of **8** |

| --- |

Researchand development

For the three-month period ended March 31, 2022, the Company incurred R&D expenditures of $15,304, including the salaries of researchers and materials, the Company did not incur R&D expenditures during the three-month period ended March 31, 2023.

Administrativeexpenses, professional and management fee

Comparing the two comparable periods of three months periods ended March 31, 2023 and 2022, the Company decreased professional service fee of $21,473, management fee of $18,000, salary and benefits expense of $12,537 which was offset by the increased regulatory fee of $3,076 and office related expense of 1,607. The detailed administrative expenses are presented in the following table.

	Three-month periods ended
	March 31, 2023		March 31, 2022
Management fees		-		18,000
Professional service fees		27,900		49,373
Salaries and benefits expenses		-		12,537
Office rent and related expenses		5,905		4,298
Transfer agent fee		2,783		2,686
Regulatory fee		3,526		450
Depreciation		124		149
		40,238		87,493

Financialexpenses

During the three months period ended March 31, 2023 the Company did not accrue any interest for the 4 unsecured loan agreements which were settled on April 14, 2023, while the Company accrued interest of $21,745 during the comparable period in 2022, and the accrued interest was offset by the interest waived of $84,968 from one of the creditors.

OtherIncome (expenses)

During the three months period ended March 31, 2023, the Company incurred other expense of $3,536 due to the foreign exchange loss and write off one fixed asset, while the company incurred foreign exchange loss of $1,225 during the comparable period in 2022.

CashFlow Analysis

	Three-month periods ended
	March 31, 2023			March 31, 2022
Operating Activities		(20,372	)		(65,558	)
Investing Activities		-			-
Financing Activities		-			-

OperatingActivities

During the three months period ended March 31, 2023, the operating activities used cash flows of $20,372, compared to $65,558 for the comparable periods in 2022. The cash was spent on the general operation activities.

| Page **4** of **8** |

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InvestingActivities

During the three months period ended March 31, 2023 and 2022, the Company did not have any investing activity.

FinancingActivities

During the three months period ended March 31, 2023 and 2022, the Company did not have any financing activity.

QuarterlyResults Trend (In Thousands of $)

The following table presents the operating results for each of the last eight quarters. Management considers that the information for each of those quarters was determined in the same way as for our audited financial statements for the year ended December 31, 2022.

	2023				2022						2021
	Q1		Q4		Q3		Q2		Q1		Q4		Q3		Q2

Revenue
Net loss and other comprehensive loss		)		)		)		)		)		)		)		)
Basic and diluted net loss per common share				)		)						)		)		)

All values are in US Dollars.

Liquidity,Capital Resources and Sources of Financing

The Company has operating losses currently. To date, the Company has been financed primarily through private placements and unsecured loans.

As of March 31, 2023, the Company had a cash position of $7.552 and the Company has a deficit working capital of $772,262. The Company believes it will not have sufficient liquidity to fund its operations and capital needs for the next 12 months and consequently intends to raise capital to generate cash in sufficient amounts to meet its planned business objectives, while the Company does not have any commitments.

Informationon Outstanding Securities

The following table sets out the number of common shares and warrants outstanding as of the date hereof:

Common shares issued and outstanding	193,807,620
Potential issuance of common shares
Warrants	4,663,177
Stock options	-
Fully diluted shares	203,627,677

RelatedParty Transactions

The Company has not entered any other related party transaction except as disclosed in Note 9 of the interim condensed consolidated financial statements for the three month period ended March 31, 2023.

Off-BalanceSheet Arrangements

The Company has no off-balance sheet arrangements.

| Page **5** of **8** |

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Estimates,Judgments and Assumptions

The Company prepares its financial statements in accordance with US GAAP, which require management to make estimates and assumptions that affect the amounts of its assets and liabilities, the information provided regarding future assets and liabilities as well as the amounts of revenues and expenses for the relevant periods. Readers are invited to refer to Note 4 of the financial statements for the year ended December 31, 2022 for details.

FutureChanges in Accounting Policies

At the date of authorization of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the Financial Accounting Standards Board (FASB) but are not yet effective and have not been adopted early by the Company.

Management anticipates that all the relevant pronouncements will be adopted in the Company’s accounting policies for the first period beginning after the effective date of the pronouncement. Readers are invited to refer to the financial statements for the year ended December 31, 2022 for a full description of these new standards.

GoingConcern Assumption

The Company’s financial statements were prepared according to US GAAP and under the going concern assumptions. They do not reflect adjustments that should be made to the book value of assets and liabilities, the reported amounts of income and expenses and the classification of balance sheet postings if the going concern assumptions were unfounded. These adjustments could be important.

Risksrelated to financial instruments

Capital market conditions and other unforeseeable events may impact on the Company’s ability to finance and develop its projects.

The Company intends to continue the evaluation and development of its energy business subject to the availability of financing on acceptable terms. The Company intends to finance these activities either through existing financial resources or through additional equity or quasi-equity financing. However, there can be no assurance that the Company will be able to raise such additional equity.

We are dependent on the continued services of our Chief Executive Officer and Chairman, President, CFO, and COO, and if we fail to keep them or fail to attract and retain qualified senior executives and key technical personnel, our business will not be able to expand.

Our personnel may voluntarily terminate their relationship with us at any time, and competition for qualified personnel is intense. The process of locating additional personnel with the combination of skills and attributes required to carry out our strategy could be lengthy, costly and disruptive.

All filings we make with the Securities and Exchange Commission (“SEC”), including additional information on the Company, can be found on EDGAR of the Securities and Exchange Commission (www.sec.gov/edgar.shtml).

Item3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Company’s market risk during the three months period ended March 31, 2023. For a discussion of the Company’s exposure to market risk, refer to the Company’s market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2022 Form 10-K.

| Page **6** of **8** |

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Item4. Controls and Procedures

Evaluationof Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) were effective as of November 10, 2022 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changesin Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the first three months of 2023, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART

II — OTHER INFORMATION

Item1. Legal Proceedings

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. As of this Form 10-Q, we are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows.

Item1A. Risk Factors

The Company’s business, reputation, results of operations and financial condition can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the 2022 Form 10-K under the heading “Risk Factors.” When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations and financial condition can be materially and adversely affected. There have been no material changes to the Company’s risk factors since the 2022 Form 10-K.

Item2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item3. Defaults Upon Senior Securities

None.

Item4. Mine Safety Disclosures

Not applicable.

Item5. Other Information

None.

Item6. Exhibits

31.1*	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2*	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1*	Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer.
101**	Inline<br> XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial<br> Statements” of this Quarterly Report on Form 10-Q.
104**	Inline<br> XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

*Filed herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

May 15, 2023	ZRCN<br> Inc.
	By:	/s/ John Stauss
		John<br> Stauss
		Chief<br> Executive Officer

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Exhibit31.1

Quarterended March 31, 2023

Rule13a-14(a)/15d-14(a) Certifications

CERTIFICATIONS

I, John Stauss, certify that:

1.	I<br> have reviewed this quarterly report on Form 10-Q of ZRCN Inc..
2.	Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to<br> the period covered by this report;
3.	Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material<br> respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report;
4.	As<br> the registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as<br> defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have:
a.	designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to<br> ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others<br> within those entities, particularly during the period for which this report is being prepared;
---	---
b.	designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles;
c.	evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report conclusions about the<br> effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and
d.	disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered<br> by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control<br> over financial reporting.
5.	As<br> the registrant’s certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial<br> reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing<br> the equivalent function):
---	---
a.	all<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and
---	---
b.	any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.
Date:<br> May 15, 2023
---	---
	/s/ John Stauss
	John<br> Stauss
	Chief<br> Executive Officer

Exhibit31.2

Quarterended March 31, 2023

Rule13a-14(a)/15d-14(a) Certifications

CERTIFICATIONS

I, Ron Bourque, certify that:

1.	I<br> have reviewed this quarterly report on Form 10-Q of ZRCN Inc.
2.	Based<br> on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary<br> to make the statements made not misleading with respect to the period covered by this report, in light of the circumstances under<br> which such statements were made,;
3.	Based<br> on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material<br> respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in<br> this report;
4.	As<br> the registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as<br> defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have:
a.	designed<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to<br> ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others<br> within those entities, particularly during the period for which this report is being prepared;
---	---
b.	designed<br> such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my<br> supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements<br> for external purposes in accordance with generally accepted accounting principles;
c.	evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report conclusions about the<br> effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and
d.	disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered<br> by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control<br> over financial reporting.
5.	As<br> the registrant’s certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial<br> reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing<br> the equivalent function):
---	---
a.	all<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and
---	---
b.	any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.
Date:<br> May 15, 2023
---	---
	/s/ Ron Bourque
	Ron<br> Bourque
	Chief<br> Financial Officer

Exhibit32.1

CERTIFICATIONSOF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANTTO

18U.S.C. SECTION 1350,

ASADOPTED PURSUANT TO

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

I, John Stauss, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of ZRCN Inc. on Form 10-Q for the period ended March 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of ZRCN Inc. at the dates and for the periods indicated.

Date:<br> May 15, 2023
	/s/ John Stauss
	John<br> Stauss
	Chief<br> Executive Officer

I, Ron Bourque, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of ZRCN Inc. on Form 10-Q for the period ended March 31, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-Q fairly presents in all material respects the financial condition and results of operations of ZRCN Inc. at the dates and for the periods indicated.

Date:<br> May 15, 2023
	/s/ Ron Bourque
	Ron<br> Bourque
	Chief<br> Financial Officer

A signed original of this written statement required by Section 906 has been provided ZRCN Inc. and will be retained by ZRCN Inc. and furnished to the Securities and Exchange Commission or its staff upon request.