NVE CORP /NEW/ 10-Q

Item 1A. Risk Factors. There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020, except the following two risk factors are replaced in their entirety by the following to reflect the expiration of certain COVID-19 related restrictions: Public health crises could have an adverse effect on our operations and financial results. Public health crises could adversely affect our ongoing business operations. In particular, the COVID-19 pandemic has severely impacted global economic activity and caused many of our important customers to delay or cancel orders. We were allowed to operate under Minnesota Emergency Executive Orders because the Company is in several “Critical Sectors” as defined in the Orders, however there can be no assurance we will be exempted from any future restrictions imposed by Federal, State, or local authorities in response to possible future surges or “waves” of COVID-19. Such restrictions could limit or prohibit our operations. Furthermore, if one or more of our employees become infected with COVID-19, we could be forced to curtail or cease operations to protect the health of our employees or to prevent the spread of the disease. Additionally, any customer or supplier disruptions could affect our ability to operate. These and other impacts of COVID-19 pandemic or other public health crises could have a material adverse effect on our results of operations or our financial condition. The loss of supply from any of our packaging vendors could impact our ability to produce and deliver products and cause loss of revenue. We are dependent on our packaging vendors. Because of the unique materials our products use, the complexity of some of our products, unique magnetic requirements, and high isolation voltage specifications, many of our products are more challenging to package than conventional integrated circuits. Some of our products use processes or tooling unique to a particular packaging vendor, and it might be expensive, time-consuming, or impractical to convert to another vendor in the event of a supply interruption due to vendors’ business decisions, business condition, or acts of God, including floods, typhoons, earthquakes, or pandemics. One of our packaging vendors was forced to suspend its factory operations from late March 2020 until mid-May, and has been permitted only limited operation since mid-May pursuant to COVID-19 government orders. The COVID-19 pandemic has also caused shortages of materials and subassemblies our packaging vendors need for the packaging process. Additionally, certain of our packaging vendors are in flood-susceptible areas. Flooding risks to such vendors may increase in the future due to possible higher ocean levels, extreme weather, and other potential effects of climate change. We have alternate vendors or potential alternate vendors for the majority of our products, but it can be expensive, time-consuming, and technically challenging to convert to alternate vendors. Furthermore, we may not be able to recover work in process or finished goods at a packaging vendor in the event of a disruption. Any supply interruptions or loss of inventory could seriously jeopardize our ability to provide products that are critical to our business and operations and may cause us to lose revenue. Item 4. Mine Safety Disclosures. Not applicable. 15 Table of Contents Item 6. Exhibits. Exhibit # Description 31.1 Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a). 31.2 Certification by Curt A. Reynders pursuant to Rule 13a-14(a)/15d-14(a). 32 Certification by Daniel A. Baker and Curt A. Reynders pursuant to 18 U.S.C. Section 1350. 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document SIGNATURES 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. NVE CORPORATION (Registrant) July 22, 2020 /s/ DANIEL A. BAKER Date Daniel A. Baker President and Chief Executive Officer July 22, 2020 /s/ CURT A. REYNDERS Date Curt A. Reynders Chief Financial Officer 16