What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-05-03 compared with 2022-05-04 · 56 added, 70 removed, 98 unchanged (56% of the section changed)

3 unchanged sentences

NVE is a Minnesota corporation headquartered in a suburb of Minneapolis.

We were founded in 1989 by James M.

We were founded in 1989 by James M.

Daughton, Ph.D., a spintronics pioneer.

Our common stock became publicly traded in 2000 through a reverse merger and became NASDAQ listed in 2003.

Since our founding, we have been awarded more than $50 million in government research contracts.

Since our founding, we have been awarded more than $50 million in government research contracts.

These contracts have helped us develop products and build our intellectual property portfolio.

We have adopted a March 31 fiscal year, so fiscal years referenced in this report end March 31.

We have adopted a March 31 fiscal year, so fiscal years referenced in this report end March 31.

Industry Background

20 unchanged sentences

Such devices are known as Spin-Dependent Tunnel (SDT) junctions or Magnetic Tunnel Junctions (MTJs).

SDT junctions use tunnel barriers that are so thin that electrons can “tunnel”

through a normally insulating material to cause a resistance change.

SDT junctions use tunnel barriers that are so thin that electrons can “tunnel” through a normally insulating material to cause a resistance change.

SDT barrier thicknesses can be in the range of one to four nanometers (less than ten molecular layers).

In our products, the spintronic elements are connected to integrated circuitry and encapsulated (“packaged”) in much the same way as conventional integrated circuits.

Our vision is to become the leading developer of practical spintronics technology and devices.

Our spintronic technology provides eyes, nerves, and brains for electronic systems, breathing life and intelligence into inanimate objects.

Our unique products support global trends of smart, low-power end nodes for the “Internet of Things.”

We plan to monetize our technology by selling the products described below and licensing our MRAM technology.

To grow product sales, we plan to broaden our sensor and coupler product lines, and longer term to target larger markets such as automotive electronics.

Our unique products support global trends of efficient energy conversion and smart, low-power end nodes for the “Internet of Things.” To grow product sales, we plan to broaden our sensor and coupler product lines and enhance our product benefits in target markets.

Our Products and Markets

1 unchanged sentence

Our sensor products detect the strength or gradient of magnetic fields and are often used to determine position or speed.

The GMR changes its electrical resistance depending on the magnetic field.

In our devices, GMR is combined with conventional foundry integrated circuitry and packaged in much the same way as conventional integrated circuits.

We sell standard or catalog sensors, and custom sensors designed to meet customers’

exact requirements.

Our sensors are quite small, very sensitive to magnetic fields, precise, and reliable.

GMR or TMR elements change electrical resistance depending on the magnetic field.

In many of our devices, sensor elements are combined with foundry integrated circuitry or digital cores, and packaged in much the same way as conventional integrated circuits.

Our sensors are small, highly sensitive to magnetic fields, precise, and reliable.

We sell standard (“catalog”) sensors, and custom sensors designed to meet customers’ exact requirements.

Standard sensors

Our standard, or catalog, sensors are generally used to detect the presence of a magnetic or metallic material to determine position or speed.

Our standard, or catalog sensors are generally used to detect the presence of a magnetic or metallic material to determine position, rotation, or speed.

We believe our spintronic sensors are smaller, more precise, more reliable, and lower power than competing devices.

1 unchanged sentence

Custom and medical sensors

Our primary custom products are sensors for medical devices, which are customized to our customers’

requirements and manufactured under stringent medical device quality standards.

Most are used to replace electromechanical magnetic switches.

Our primary custom products are sensors for medical devices, which are customized to our customers’ requirements and manufactured under stringent medical device quality standards.

Many are used to replace electromechanical magnetic switches.

We believe our sensors have important advantages in medical devices compared to electromechanical switches, including no moving parts for inherent reliability, and being smaller, more sensitive, and more precise.

Our sensors can be customized using customer-specific integrated signal processing and design variations that can include the range and sensitivity to magnetic fields, electrical resistance, and multisensor elements configuration.

Future custom sensor target markets include consumer electronics, automotive electronics, and biosensors.

Our sensors can be customized for size, range and sensitivity to magnetic fields, electrical resistance, and embedded software.

Coupler Products and Markets

Our spintronic couplers combine a GMR sensor element and an integrated microscopic coil.

The coil creates a small magnetic field that is picked up by the spintronic sensor, transmitting data almost instantly.

Couplers are also known as “isolators”

because they electrically isolate the coupled systems.

Our IsoLoop couplers are faster than the fastest optical couplers.

Our major coupler market is currently the Industrial Internet of Things (IIoT) for factory automation.

We are targeting the automotive market longer term.

The coil creates a small magnetic field that is detected by the spintronic sensor, transmitting data almost instantly.

Couplers are also known as “isolators” because they electrically isolate the coupled systems.

Our major coupler markets are power conversion and the IIoT.

Our couplers enable more efficient power conversion and interconnections to implement the IIoT for advanced factory automation.

DC-to-DC Convertor Products and Markets

Our isolated DC-to-DC convertors transfer energy between systems without direct electrical connections.

These components are used in power conversion systems and industrial networks for the IIoT.

We also make products that combine couplers and DC-to-DC convertors to transmit power as well as data.

MRAM Products and Markets

MRAM uses spintronics to store data.

It has been called the ideal or universal memory because of its potential to combine the speed of SRAM, the density of DRAM, and the nonvolatility of flash memory.

Data is stored in the spin of the electrons in thin metal alloy films, and read with spin-dependent tunnel junctions.

Unlike electrical charge, the spin of an electron is inherently permanent.

We have invented several types of MRAM memory cells including inventions related to advanced MRAM designs and MRAM for tamper prevention or detection.

Our strategy is to develop, manufacture, and sell low bit-density MRAM for applications such as tamper prevention and detection.

For high bit-density MRAM, our strategy is to license our technology to companies with large-scale memory manufacturing capabilities.

We have invented several types of memory cells including inventions related to advanced MRAM designs and MRAM for tamper prevention or detection.

Our MRAM strategy has been focused on low bit density for applications such as tamper prevention and detection.

Product Manufacturing

The heart of our fabrication facility is a cleanroom area with specialized equipment to deposit, pattern, etch, and process spintronic materials.

Our product manufacturing includes “front-end” wafer production and “back-end” product testing.

Wafer production is a cleanroom area with specialized equipment to deposit, pattern, etch, and process spintronic materials.

Most of our products are fabricated in our facility using either raw silicon wafers or foundry wafers.

5 unchanged sentences

Packaged parts are returned to us to be tested, inventoried, and shipped.

Our facility has been certified under the ISO 9001:2015 quality management standard and is an Approved Place of Manufacture under ECS/CIG 021-024:

We believe having our own U.S.

wafer production and test capabilities are an advantage over competitors that outsource such operations.

We significantly increased our product testing capacity in the two most recent fiscal years in response to increased demand for our products.

Sales and Product Distribution

We rely on distributors who stock our products and sell them in more than 75 countries.

Distributors of our products include America II Electronics, Inc., Angst+Pfister Sensors and Power, Avnet companies, and Digi-Key Corporation.

We rely on distributors who stock and resell our products in more than 75 countries.

Distributors of our products include America II Electronics, Inc., Angst+Pfister Sensors and Power, Avnet companies, and Digi-Key Corporation.

Our distributor agreements generally renew annually.

In addition, we distribute versions of some of our products under private-brand partnerships with large integrated device manufacturers.

These private-brand partnerships broaden our distribution and enhance our sales support, technical support, and brand awareness.

These private-brand partnerships broaden our distribution and enhance our sales support, technical support, and product awareness.

New Product Status

In the past year, we began marketing a number of new and improved products, including:

a new type of current sensor;

new smart sensors for the Internet of Things;

ulraprecise rotational sensors for fine motion control and robotics;

data couplers with isolated power convertors to transmit power as well as data;

high-sensitivity TMR magnetic sensors.

Long-term product development programs in fiscal 2022 focussed on even more accurate TMR sensors and Magnetoresistive Random Access Memory (MRAM).

additional ultraminiature isolated DC-to-DC convertor models;

an ultraminiature TMR magnetic sensor;

an ultrahigh-sensitivity TMR magnetic sensor;

more products combining data couplers with isolated DC-to-DC convertors to transmit power as well as data.

Long-term product development programs in fiscal 2023 focused on even higher sensitivity TMR sensors and Magnetoresistive Random Access Memory (MRAM) for antitamper applications.

Our Competition

4 unchanged sentences

Medical Sensor Competition

Our sensors for medical devices face competition from electromechanical magnetic sensors and from other solid-state magnetic sensors.

Our sensors for medical devices face competition from electromechanical magnetic sensors and other solid-state magnetic sensors.

Electromechanical magnetic sensors such as reed and micro-electromechanical system (MEMS) switches have been in use for several decades.

4 unchanged sentences

Competing coupler technologies include optical couplers, inductive couplers (transformers), capacitive couplers, and radio-frequency modulation couplers.

Prominent optical coupler suppliers include Broadcom Limited, Fairchild Semiconductor International, Lite-On Technology Corporation, Renesas Electronics Corporation, Toshiba Corporation, and Vishay Intertechnology.

Our strategy is to compete based on product features rather than to compete solely on price.

IsoLoop couplers are smaller and therefore require less circuit board space per channel than most competing couplers.

Our other advantages over competing technologies may include less signal distortion, longer product life, and lower power consumption.

Our couplers are smaller and therefore require less circuit board space per channel than most competing couplers.

Our other advantages over competing technologies may include smaller size, higher immunity to transients, and longer product life.

MRAM Competition

A number of companies compete or may compete with us for MRAM research and development or service business, or may be attempting to develop MRAM intellectual property for licensing to others.

Emerging technologies that could compete with MRAM include graphene and carbon nanotubes, phase-change memory (PCM;

also known as chalcogenide, 3D XPoint, or Ovonic memory), resistive RAM (ReRAM or RRAM), conductive bridge RAM (CBRAM), memory resistors (“memristors”), and conductive metal oxide (CMOx) memory.

MRAM may have advantages over these technologies in either manufacturability, speed, bit density, data retention, or endurance.

Several emerging technologies could compete with MRAM.

Sources and Availability of Raw Materials

3 unchanged sentences

Intellectual Property

As of March 31, 2022 we had more than 50 issued U.S.

As of March 31, 2023, we had more than 50 issued U.S.

patents assigned to us.

3 unchanged sentences

We have patents on advanced MRAM designs that we believe are important, including patents that relate to magnetothermal MRAM, spin-momentum MRAM, and synthetic antiferromagnetic storage.

Although it is not critical to our current business, we have identified U.S.

patent 6,744,086 titled “Current switched magnetoresistive memory cell”

as particularly important for successful high-density, high-performance MRAMs.

The patent has been reissued as RE 44,878 and expires May 15, 2022.

Much of our intellectual property has been developed with U.S.

Some of our intellectual property has been developed with U.S.

Government support.

1 unchanged sentence

Government support.

“NVE”

and “IsoLoop”

are our registered trademarks.

Other trademarks we claim include “GMR Switch”

and “GT Sensor.”

“NVE” and “IsoLoop” are our registered trademarks.

Other trademarks we claim include “GMR Switch” and “GT Sensor.”

Dependence on Major Customers

We rely on several large customers for a significant percentage of our revenue, including Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors.

We rely on several large customers for a significant percentage of our revenue, including Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors.

The loss of one or more of these customers could have a material adverse effect on us.

Government Regulations

We are subject to government regulations including, but not limited to, regulations related to environment, tax matters, securities, conflict minerals, ethics and foreign corrupt practices, import and export controls, product safety and liability, workplace health and safety, labor and employment, and data privacy.

We are subject to government regulations including, but not limited to, regulations related to environmental matters, tax matters, securities, conflict minerals, ethics and foreign corrupt practices, import and export controls, product safety and liability, workplace health and safety, labor and employment, and data privacy.

We incur and expect to continue to incur costs and expenses to comply with these regulations and may incur penalties for any failure to do so.

Additionally, certain contracts required us maintain facilities and personnel security clearances to protect classified information.

Such clearances are subject Government audits and investigations, and any deficiencies or illegal activities identified during the audits or investigations could result in the forfeiture or suspension of payments and civil or criminal penalties.

Additionally, certain contracts require us to maintain facilities and personnel security clearances to protect classified information.

Such clearances are subject to Government audits and investigations, and any deficiencies or illegal activities identified during the audits or investigations could result in the forfeiture or suspension of payments and civil or criminal penalties.

Environmental Matters

3 unchanged sentences

Human Capital Resources

We had 49 employees as of March 31, 2022, 47 of whom were full-time.

We had 56 employees as of March 31, 2023, 51 of whom were full-time.

We have policies to prevent discrimination based on gender, race, disability, ethnicity, nationality, religion, sexual orientation, gender identity, or gender expression.

We take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin.

We take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their gender, race, disability, ethnicity, nationality, religion, sexual orientation, gender identity, or gender expression.

We also take affirmative action to employ and advance veterans in employment.

We offer employees free wellness programs.

We offer employees excellent fringe benefits, including medical insurance coverage paid for mostly by the Company, dental insurance, Company-paid life and accidental death and dismemberment insurance, Company-paid long-term disability insurance, free wellness programs, Company-funded Health Savings Accounts, generous 401(k) matches, ample holidays and Paid Time Off, tuition reimbursement, and free coffee.

In the past fiscal year, we significantly increased average pay and fringe benefit expenditures to attract, retain, and motivate top-performing employees.

None of our employees are represented by a labor union or are subject to a collective bargaining agreement, and we believe we maintain good relations with our employees.

Available Information

All reports we file with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy statements and additional proxy materials on Schedule 14A, as well as any amendments to those reports and schedules, are accessible at no cost through the “Investors”

section of our Website (www.nve.com).

These filings are also accessible through the SEC’s Website (www.sec.gov).

All reports we file with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy statements and additional proxy materials on Schedule 14A, as well as any amendments to those reports and schedules, are accessible at no cost through the “Investors” section of our Website (www.nve.com).

These filings are also accessible through the SEC’s Website ( www.sec.gov ).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business