What changed in this filing

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Item 1. Financial Statements

2024-07-17 compared with 2024-01-17 · 56 added, 169 removed, 173 unchanged (57% of the section changed)

2 unchanged sentences

BALANCE SHEETS

June 30, 2024

March 31, 2024*

1 unchanged sentence

Cash and cash equivalents

Marketable securities, short-term (amortized cost of $ 14,556,450

as of December 31, 2023, and $ 15,696,135 as of March 31, 2023)

Accounts receivable, net of allowance for credit losses of $ 15,000

Marketable securities, short-term (amortized cost of $ 16,022,057 as of June 30, 2024,

and $ 12,283,630 as of March 31, 2024)

Accounts receivable, net of allowance for credit losses of $ 15,000 as of June 30, and March 31, 2024

Prepaid expenses and other assets

2 unchanged sentences

Leasehold improvements

Less accumulated depreciation and amortization

Less accumulated depreciation

Net fixed assets

Deferred tax assets

Marketable securities, long-term (amortized cost of $ 36,414,391

as of December 31, 2023, and $ 37,495,846 as of March 31, 2023)

Marketable securities, long-term (amortized cost of $ 32,112,822 as of June 30, 2024, and $ 31,417,890 as of March 31, 2024)

Right-of-use asset – operating lease

3 unchanged sentences

Accrued payroll and other

Operating lease

Operating lease liability

Total current liabilities

Operating lease

Long-term operating lease liability

Total liabilities

1 unchanged sentence

Common stock, $ 0.01 par value, 6,000,000 shares authorized;

4,833,401 issued and outstanding as of December 31, 2023, and 4,830,826 as of March 31, 2023

4,833,676 issued and outstanding as of June 30 and March 31, 2024

Additional paid-in capital

7 unchanged sentences

STATEMENTS OF INCOME

Quarter Ended December 31,

Product sales

Contract research and development

Total revenue

Cost of sales

Research and development

Selling, general, and administrative

Total expenses

Income from operations

Interest income

Income before taxes

Provision for income taxes

Net income per share – basic

Net income per share – diluted

Cash dividends declared per common share

Weighted average shares outstanding

STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended December 31,

Unrealized gain on marketable securities, net of tax

Comprehensive income

See accompanying notes.

NVE CORPORATION

STATEMENTS OF INCOME

Nine Months Ended December 31,

Quarter Ended June 30,

Product sales

4 unchanged sentences

Selling, general, and administrative

Provision for credit losses

Credit loss expense

Total expenses

8 unchanged sentences

STATEMENTS OF COMPREHENSIVE INCOME

Nine Months Ended December 31,

Unrealized gain (loss) on marketable securities, net of tax

Quarter Ended June 30,

Unrealized gain (loss) from marketable securities, net of tax

Comprehensive income

5 unchanged sentences

Balance as of March 31, 2024

Exercise of stock options

Comprehensive income:

Unrealized loss on marketable securities, net of tax

Total comprehensive income

Stock-based compensation

Cash dividends declared ($1.00 per share of common stock)

Balance as of June 30, 2023

Comprehensive income:

Unrealized loss on marketable securities, net of tax

Total comprehensive income

Stock-based compensation

Cash dividends declared ($1.00 per share of common stock)

Balance as of September 30, 2023

Comprehensive income:

Unrealized gain on marketable securities, net of tax

2 unchanged sentences

Cash dividends declared ($1.00 per share of common stock)

Balance as of December 31, 2023

Balance as of June 30, 2024

See accompanying notes.

4 unchanged sentences

Balance as of March 31, 2023

Exercise of stock options

Comprehensive income:

4 unchanged sentences

Balance as of June 30, 2023

Comprehensive income:

Unrealized loss on marketable securities, net of tax

Total comprehensive income

Stock-based compensation

Cash dividends declared ($1.00 per share of common stock)

Balance as of September 30, 2022

Comprehensive income:

Unrealized gain on marketable securities, net of tax

Total comprehensive income

Stock-based compensation

Cash dividends declared ($1.00 per share of common stock)

Balance as of December 31, 2022

See accompanying notes.

1 unchanged sentence

STATEMENTS OF CASH FLOWS

Nine Months Ended December 31,

Quarter Ended June 30,

OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Corporate bonds discount amortization

Provision for current estimate of credit losses

10 unchanged sentences

Proceeds from maturities of marketable securities

Receipt of tenant improvement allowance

Net cash provided (used) by investing activities

( 8,676,229 )

Net cash used in investing activities

FINANCING ACTIVITIES

1 unchanged sentence

Payment of dividends to shareholders

Cash used in financing activities

Increase (decrease) in cash and cash equivalents

Net cash used in financing activities

Decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

11 unchanged sentences

In the opinion of management, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements.

Although we believe that the disclosures are adequate to make the information presented not misleading, certain disclosures have been omitted as allowed, and it is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and the notes included in our latest Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

The results of operations for the quarter ended December 31, 2023, are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2024.

Although we believe that the disclosures are adequate to make the information presented not misleading, certain disclosures have been omitted as allowed, and the Notes to Financial Statements have been condensed as permitted.

It is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and Notes included in our latest Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

The results of operations for the quarter ended June 30, 2024, are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2025.

Significant accounting policies

A description of our significant accounting policies is provided in Note 2 to the Financial Statements in our Annual Report on Form 10-K for the year ended March 31, 2023.

As of December 31, 2023, there were no changes to our significant accounting policies except for changes resulting from the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No.

2016-13, Financial Instruments—Credit Losses (ASC Topic 326) as described in the “Marketable securities and credit losses” section below and in Note 3.

Marketable securities and credit losses

Our marketable securities consist of corporate bonds and money market funds.

Marketable securities are initially recognized at cost.

Marketable securities considered to be “purchased financial assets with credit deterioration” are initially recognized at cost, less any allowance for expected credit losses.

Unrealized holding gains and losses are reported in other comprehensive income, net of applicable taxes, until realized.

All marketable securities are carried on the balance sheet at fair value.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

We use a three-level fair value hierarchy in estimating and reporting fair values of our marketable securities:

Level 1 – Securities whose fair values are determined using quoted prices in active markets for identical securities.

Level 2 – Securities whose fair values are determined using quoted prices for similar securities in active markets or quoted prices for identical securities in markets that are not active.

Level 3 – Securities whose fair values are determined using unobservable inputs.

Corporate bonds with remaining maturities of less than one year are classified as short-term and those with remaining maturities of one year or more are classified as long-term.

We consider all highly liquid investments with maturities of three months or less when purchased, including money market funds, to be cash equivalents.

We measure credit losses on our marketable securities at the individual security level, using the present value of expected cash flows method.

Credit losses are measured as the amount by which the amortized cost basis of the security exceeds the present value of expected cash flows (discounted at the effective interest rate implicit in the security at the date of acquisition), limited by the amount by which the fair value of the security is less than its amortized cost basis.

When estimating expected cash flows, we consider available information relating to past events, current conditions, and reasonable and supportable forecasts such as, past incidences of default, credit quality as reported by credit rating agencies, extent of impairment, length of time the security has been in a continuous unrealized loss position, and adverse conditions forecasted by industry, financial and economic experts that are relevant to the collectability of expected cash flows.

We do not include accrued interest receivables in amortized cost and in fair value when measuring expected credit losses.

We will write off uncollectible accrued interest receivable to net income in a timely manner, by reversing interest income, and therefore do not measure credit losses for accrued interest receivable.

Timely manner means one year from the date the accrued interest receivable becomes past due.

Accrued interest receivables are included in the balance sheet in “prepaid expenses and other assets.”

Accounts Receivable and Allowance for Credit Losses

We grant credit to customers in the normal course of business and at times require customers to pay for orders before shipment.

Accounts receivable are presented on the balance sheet net of any allowance for credit losses.

We measure credit losses on our trade accounts receivable on a pool basis, and in some cases, on an individual basis, using the loss-rate method.

Accounts receivable are pooled based on geographical locations because we believe accounts originating from the same geographical location share risk characteristics.

When estimating expected credit losses on our trade accounts receivable, we consider available information relating to past events, current conditions, and reasonable and supportable forecasts such as historical loss rate, current age and remaining term of the receivable relative to our current days sales outstanding ratio, pending orders of the customer relative to accounts receivable balance as of the reporting date and amounts paid by the customers subsequent to the reporting period end but before the financial statements are issued.

RECENTLY ISSUED ACCOUNTING STANDARDS

Recently Adopted Accounting Standard

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements .

ASU 2016-13 requires a financial asset (or a group of financial assets) to be presented at the net amount expected to be collected.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset.

In November 2018 the FASB issued ASU No.

2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses , which clarifies codification and corrects unintended application of the guidance, and in November 2019, the FASB issued ASU No.

2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses , which clarifies or addresses specific issues about certain aspects of ASU 2016-13.

In November 2019 the FASB issued ASU No.

2019-10, Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

Effective Dates , and in February 2020 the FASB issued ASU No.

2020-02, Financial Instruments — Credit Losses (Topic 326) and Leases (Topic 842):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No.

2016-02, Leases (Topic 842) , both of which delay the effective date of ASU 2016-13 by three years for certain Smaller Reporting Companies such as us.

In March 2020, the FASB issued ASU No.

2020-03, Codification Improvements to Financial Instruments ;

which modifies the measurement of expected credit losses of certain financial instruments.

We adopted ASU

2016-13 beginning with the quarter ended June 30, 2023.

The adoption resulted in disclosure changes and required us to consider the likelihood of default and to measure our allowance for credit losses over the contractual term of our receivables.

The adoption did not have a material impact on the financial statements as of December 31 or April 1, 2023.

New Accounting Standard Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

ASU 2023-09 requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024, which will be fiscal 2026 for us.

We expect the adoption to result in disclosure changes only.

We do not expect the adoption of other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date to have a material impact on our financial statements when they are adopted.

A description of our significant accounting policies and estimates is provided in Note 2 to the Financial Statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

As of June 30, 2024, there were no changes to our significant accounting policies .

NEW ACCOUNTING STANDARDS NOT YET ADOPTED

There were no additions to the new accounting standards not yet adopted as described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

We do not expect the adoption of accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date to have a material impact on our financial statements when they are adopted.

NET INCOME PER SHARE

2 unchanged sentences

The following tables show the components of diluted shares:

Quarter Ended December 31,

Weighted average common shares outstanding – basic

Dilutive effect of stock options

Shares used in computing net income per share – diluted

Nine Months Ended December 31,

Quarter Ended June 30,

Weighted average common shares outstanding – basic

2 unchanged sentences

MARKETABLE SECURITIES

The following table shows the major categories of our marketable securities and their contractual maturities as of December 31, 2023:

The following table shows the major categories of our marketable securities and their contractual maturities as of June 30, 2024:

Money market funds

Corporate bonds

Total marketable securities represent approximately 80% of our total assets as of December 31, 2023.

Marketable securities as of December 31, 2023, had remaining maturities between one day and 64 months.

Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included on the balance sheets in “Marketable securities, short term” and “Marketable securities, long term.” Accrued interest receivables were $ 366,452 as of December 31, 2023, and $ 425,372 as of March 31, 2023, and are included in the balance sheets in “Prepaid expenses and other assets.”

Total marketable securities represented approximately 80% of our total assets as of June 30, 2024.

Marketable securities as of June 30, 2024, had remaining maturities between four and 58 months.

Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included on the balance sheets in “Marketable securities, short term” and “Marketable securities, long term.” Accrued interest receivables were $ 334,757 as of June 30, 2024, and $ 460,627 as of March 31, 2024, and are included in the balance sheets in “Prepaid expenses and other assets.”

We monitor the credit ratings of our marketable securities at least quarterly as reported by Standard & Poor’s.

The following table summarizes the fair values of our marketable securities as of December 31, 2023, aggregated by credit rating:

The following table summarizes the fair values of our marketable securities as of June 30, 2024, aggregated by credit rating:

Credit Rating

The following table shows the estimated fair value of our marketable securities, aggregated by fair value hierarchy inputs used in estimating their fair values:

As of December 31, 2023

As of June 30, 2024

As of March 31, 2024

1 unchanged sentence

Corporate bonds

The following table shows the amortized cost, fair value, and gross unrealized holding gains and losses of our marketable securities as of December 31 and March 31, 2023:

As of December 31, 2023

The following table shows the amortized cost, fair value and gross unrealized holding gains and losses of our marketable securities as of June 30 and March 31, 2024:

As of June 30, 2024

As of March 31, 2024

1 unchanged sentence

Corporate bonds

The following table shows the gross unrealized holding losses and estimated fair value of our marketable securities for which an allowance for credit losses has not been recorded, aggregated by category of securities and length of time that individual securities had been in a continuous unrealized loss position as of December 31 and March 31, 2023.

Less Than 12 Months

12 Months or Greater

As of December 31, 2023

As of June 30, 2024

Corporate bonds

7 unchanged sentences

Unrealized losses on our marketable securities and their tax effects are as follows:

Quarter Ended December 31,

Unrealized gain from marketable securities

Unrealized gain on marketable securities, net of tax

Nine Months Ended December 31,

Unrealized loss from marketable securities

Unrealized gain (loss) on marketable securities, net of tax

Quarter Ended June 30,

Unrealized gain (loss) from marketable securities

Unrealized gain (loss) from marketable securities, net of tax

ALLOWANCE FOR CREDIT LOSSES ON ACCOUNTS RECEIVABLES

1 unchanged sentence

Allowance for credit losses as of March 31, 2024

Provision for credit losses

Change in provision for credit losses

Specific accounts deemed uncollectible

Allowance for credit losses as of December 31, 2023

Change in provision for current expected credit losses

Allowance for credit losses as of June 30, 2024

Inventories are shown in the following table:

June 30, 2024

March 31, 2024

4 unchanged sentences

STOCK-BASED COMPENSATION

Stock-based compensation expense was $ 12,544 for the third quarter of fiscal 2024, $ 7,133 for the third quarter of fiscal 2023, $ 129,392 for the first nine months of fiscal 2024, and $ 54,218 for the first nine months of fiscal 2023.

Stock-based compensation expense was $ 18,442 for the first quarter of fiscal 2025 and $ 10,536 for the first quarter of fiscal 2024.

We calculate share-based compensation expense using the Black-Scholes-Merton standard option-pricing model .

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

As of December 31, 2023, federal and state estimated tax overpayments of $ 90,387 were included in the balance sheet in “Prepaid expenses and other assets.”

We had no unrecognized tax benefits as of December 31, 2023, and we do no t expect any significant unrecognized tax benefits within 12 months of the reporting date.

As of June 30, 2024, federal and state estimated tax liabilities of $ 912,411 were included in the balance sheet in “Accrued payroll and other.”

We had no unrecognized tax benefits as of June 30, 2024, and we do no t expect any significant unrecognized tax benefits within 12 months of the reporting date.

We recognize interest and penalties related to income tax matters in income tax expense.

As of December 31, 2023, we had no accrued interest related to uncertain tax positions.

As of June 30, 2024, we had no accrued interest related to uncertain tax positions.

The tax years 2020 through 2023 remain open to examination by the major taxing jurisdictions to which we are subject.

3 unchanged sentences

Details of our operating lease are as follows:

Quarter Ended

Nine Months Ended

Quarter Ended June 30, 2024

Operating lease cost

Cash paid for amounts included

in the measurement of lease liabilities

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows for leases

1 unchanged sentence

Discount rate

The following table shows the maturities of lease liabilities as of December 31, 2023:

The following table shows the maturities of lease liabilities as of June 30, 2024:

Year Ending March 31,

10 unchanged sentences

We intend to finance any stock repurchases with cash provided by operating activities or maturing marketable securities.

The remaining authorization was $ 3,520,369 as of December 31, 2023.

We have no t repurchased any of our Common Stock during fiscal 2024.

The remaining authorization was $ 3,520,369 as of June 30, 2024.

We did no t repurchase any of our Common Stock during the first quarter of fiscal 2025.

INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS

2 unchanged sentences

We make matching contributions of 100 % of the first 3 % of participants’ salary deferral contributions.

Our matching contributions were $ 27,904 for the third quarter of fiscal 2024, $ 21,484 for the third quarter of fiscal 2023, $79,388 for the first nine months of fiscal 2024 , and $ 73,661 for the first nine months of fiscal 2023.

Our matching contributions were $ 28,767 for the first quarter of fiscal 2025 and $ 27,078 for the first quarter of fiscal 2024.

SUBSEQUENT EVENTS

On January 17, 2024 , we announced that our Board of Directors had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid February 28, 2024 , to shareholders of record as of the close of business January 29, 2024 .

On July 17, 2024 , we announced that our Board of Directors had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid August 30, 2024 , to shareholders of record as of the close of business July 29, 2024 .

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-Q

Item 1. Financial Statements