NVE CORP /NEW/ 10-Q

Item 1. Financial Statements. NVE CORPORATION BALANCE SHEETS (Unaudited) June 30, 2025 March 31, 2025 ASSETS Current assets Cash and cash equivalents $ 3,222,552 $ 8,036,564 Marketable securities, short-term (amortized cost of $ 12,610,115 as of June 30, 2025, and $ 13,730,266 as of March 31, 2025) 12,607,242 13,691,593 Accounts receivable, net of allowance for credit losses of $ 15,000 2,253,821 3,589,268 Inventories, net 7,453,369 7,449,083 Prepaid expenses and other assets 630,171 433,414 Total current assets 26,167,155 33,199,922 Fixed assets Machinery and equipment 12,816,729 11,758,205 Leasehold improvements 1,956,309 1,956,309 14,773,038 13,714,514 Less accumulated depreciation and amortization 11,813,014 11,727,615 Net fixed assets 2,960,024 1,986,899 Deferred tax assets 1,849,001 1,867,069 Marketable securities, long-term (amortized cost of $ 31,679,330 as of June 30, 2025, and $ 26,353,692 as of March 31, 2025) 31,690,932 26,304,623 Right-of-use asset – operating lease 886,451 917,349 Total assets $ 63,553,563 $ 64,275,862 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable $ 177,214 $ 214,691 Accrued payroll and other 1,394,428 871,169 Operating lease 53,817 83,010 Total current liabilities 1,625,459 1,168,870 Long-term operating lease liability 838,481 838,221 Total liabilities 2,463,940 2,007,091 Shareholders’ equity Common stock, $ 0.01 par value, 6,000,000 shares authorized; 4,837,166 issued and outstanding as of June 30, 2025 and March 31, 2025 48,372 48,372 Additional paid-in capital 19,827,944 19,821,106 Accumulated other comprehensive income (loss) 6,818 ( 68,544 ) Retained earnings 41,206,489 42,467,837 Total shareholders’ equity 61,089,623 62,268,771 Total liabilities and shareholders’ equity $ 63,553,563 $ 64,275,862 * The March 31, 2025 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025. See accompanying notes. 3 Table of Contents NVE CORPORATION STATEMENTS OF INCOME (Unaudited ) Quarter Ended June 30, 2025 2024 Revenue Product sales $ 5,908,570 $ 6,615,859 Contract research and development 196,074 167,385 Total revenue, net 6,104,644 6,783,244 Cost of sales 1,182,523 975,494 Gross profit 4,922,121 5,807,750 Expenses Research and development 720,231 878,528 Selling, general, and administrative 418,640 540,404 Total expenses 1,138,871 1,418,932 Income from operations 3,783,250 4,388,818 Interest income 498,208 493,959 Other income 811 - Income before taxes 4,282,269 4,882,777 Provision for income taxes 706,451 785,190 Net income $ 3,575,818 $ 4,097,587 Net income per share – basic $ 0.74 $ 0.85 Net income per share – diluted $ 0.74 $ 0.85 Cash dividends declared per common share $ 1.00 $ 1.00 Weighted average shares outstanding Basic 4,837,166 4,833,676 Diluted 4,838,877 4,838,995 STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Quarter Ended June 30, 2025 2024 Net income $ 3,575,818 $ 4,097,587 Unrealized gain on marketable securities, net of tax 75,362 28,710 Comprehensive income $ 3,651,180 $ 4,126,297 See accompanying notes. 4 Table of Contents NVE CORPORATION STATEMENTS OF SHAREHOLDERS ’ EQUITY (Unaudited) Accumulated Additional Other Common Stock Paid-In Comprehensive Retained Shares Amount Capital Income (Loss) Earnings Total Balance as of March 31, 2025* 4,837,166 $ 48,372 $ 19,821,106 $ ( 68,544 ) $ 42,467,837 $ 62,268,771 Comprehensive income: Unrealized gain on marketable securities, net of tax 75,362 75,362 Net income 3,575,818 3,575,818 Total comprehensive income 3,651,180 Stock-based compensation 6,838 6,838 Cash dividends paid ($1.00 per share of common stock) ( 4,837,166 ) ( 4,837,166 ) Balance as of June 30, 2025 4,837,166 $ 48,372 $ 19,827,944 $ 6,818 $ 41,206,489 $ 61,089,623 * Balances as of March 31, 2025 are derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025. See accompanying notes. 5 Table of Contents NVE CORPORATION STATEMENTS OF SHAREHOLDERS ’ EQUITY (Unaudited) Accumulated Additional Other Common Stock Paid-In Comprehensive Retained Shares Amount Capital Income (Loss) Earnings Total Balance as of March 31, 2024* 4,833,676 $ 48,337 $ 19,554,812 $ ( 777,637 ) $ 46,743,005 $ 65,568,517 Comprehensive income: Unrealized gain on marketable securities, net of tax 28,710 28,710 Net income 4,097,587 4,097,587 Total comprehensive income 4,126,297 Stock-based compensation 18,442 18,442 Cash dividends paid ($1.00 per share of common stock) ( 4,833,676 ) ( 4,833,676 ) Balance as of June 30, 2024 4,833,676 $ 48,337 $ 19,573,254 $ ( 748,927 ) $ 46,006,916 $ 64,879,580 * Balances as of March 31, 2024 are derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025. See accompanying notes. 6 Table of Contents NVE CORPORATION STATEMENTS OF CASH FLOWS (Unaudited) Quarter Ended June 30, 2025 2024 OPERATING ACTIVITIES Net income $ 3,575,818 $ 4,097,587 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 85,399 75,594 Bonds discount amortization ( 96,506 ) ( 53,219 ) Stock-based compensation 6,838 18,442 Deferred income taxes ( 3,040 ) ( 147,844 ) Non-cash operating lease expense (credit) 1,965 ( 7,587 ) Changes in operating assets and liabilities: Accounts receivable 1,335,447 1,044,815 Inventories ( 4,286 ) ( 6,047 ) Prepaid expenses and other assets ( 196,757 ) 173,966 Accounts payable ( 37,477 ) 47,089 Accrued payroll and other 523,259 609,596 Net cash provided by operating activities 5,190,660 5,852,392 INVESTING ACTIVITIES Purchases of fixed assets ( 1,058,524 ) ( 916,634 ) Purchases of marketable securities ( 10,108,982 ) ( 6,580,140 ) Proceeds from maturities of marketable securities 6,000,000 2,200,000 Net cash used in investing activities ( 5,167,506 ) ( 5,296,774 ) FINANCING ACTIVITIES Payment of dividends to shareholders ( 4,837,166 ) ( 4,833,676 ) Net cash used in financing activities ( 4,837,166 ) ( 4,833,676 ) Decrease in cash and cash equivalents ( 4,814,012 ) ( 4,278,058 ) Cash and cash equivalents at beginning of period 8,036,564 10,283,550 Cash and cash equivalents at end of period $ 3,222,552 $ 6,005,492 Supplemental disclosures of cash flow information: Cash paid during the period for income taxes $ - $ - See accompanying notes. 7 Table of Contents NVE CORPORATION NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1. DESCRIPTION OF BUSINESS We develop and sell devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store, and transmit information. NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial statements of NVE Corporation are prepared consistent with accounting principles generally accepted in the United States and in accordance with Securities and Exchange Commission rules and regulations. 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 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, 2025. The results of operations for the quarter ended June 30, 2025, are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2026. Significant accounting policies 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, 2025. As of June 30, 2025, there were no changes to our significant accounting policies or estimates. NOTE 3. NEW ACCOUNTING STANDARDS NOT YET ADOPTED In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 aims to enhance transparency for users of financial statements by requiring public business entities to disaggregate specific expense categories. In January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date , which clarified the effective date for non-calendar year-end entities such as us. ASU 2024-03 mandates disclosures in the notes to financial statements detailing the composition and trends of key expense categories within major income statement captions. These enhanced disclosures are intended to help investors more effectively assess the entity’s performance, understand its cost structure, and make more accurate forecasts of future cash flows. For public business entities, ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, which for us will be for fiscal 2028 and for interim reporting periods beginning with the first quarter of fiscal 2029. The adoption will result in disclosure changes only. 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 to 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 for us will be for fiscal 2026. The adoption will 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. 8 Table of Contents NOTE 4. NET INCOME PER SHARE Net income per basic share is computed based on the weighted-average number of common shares issued and outstanding during each period. Net income per diluted share amounts assume exercise of all stock options. The following tables show the components of diluted shares: Quarter Ended June 30, 2025 2024 Weighted average common shares outstanding – basic 4,837,166 4,833,676 Dilutive effect of stock options 1,711 5,319 Shares used in computing net income per share – diluted 4,838,877 4,838,995 NOTE 5. MARKETABLE SECURITIES The following table shows the major categories of our marketable securities and their contractual maturities as of June 30, 2025: Total <1 Year 1–3 Years 3–4 Years Money market funds $ 2,782,189 $ 2,782,189 $ - $ - Treasury securities 4,722,215 - 4,722,215 - Corporate bonds 39,575,959 12,607,242 20,000,771 6,967,946 Total $ 47,080,363 $ 15,389,431 $ 24,722,986 $ 6,967,946 Total marketable securities and money market funds represented approximately 74% of our total assets as of June 30, 2025. Marketable securities as of June 30, 2025, had remaining maturities between two and 46 months. Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included in “Marketable securities, short term” and “Marketable securities, long term.” Treasury securities are included in “Marketable securities, long term.” Accrued interest receivables were $ 455,810 as of June 30, 2025, and $ 340,241 as of March 31, 2025, 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 June 30, 2025, aggregated by credit rating: Credit Rating Fair Value AAA $ 7,504,403 AA+ 3,931,449 AA 4,869,192 AA- 17,686,530 A+ 13,088,789 Total $ 47,080,363 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 June 30, 2025 As of March 31, 2025 Level 1 Level 2 Total Level 1 Level 2 Total Money market funds $ 2,782,189 $ - $ 2,782,189 $ 7,905,042 $ - $ 7,905,042 Treasury securities - 4,722,215 4,722,215 - 4,715,238 4,715,238 Corporate bonds - 39,575,959 39,575,959 - 35,280,978 35,280,978 Total $ 2,782,189 $ 44,298,174 $ 47,080,363 $ 7,905,042 $ 39,996,216 $ 47,901,258 9 Table of Contents Our available-for-sales securities as of June 30 and March 31, 2025, aggregated into classes of securities, were as follows: As of June 30, 2025 As of March 31, 2025 Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value Amortized Cost Gross Unrealized Holding Gains Gross Unrealized Holding Losses Estimated Fair Value Money market funds $ 2,782,189 $ - $ - $ 2,782,189 $ 7,905,042 $ - $ - $ 7,905,042 Treasury securities 4,699,728 22,487 - 4,722,215 4,699,686 15,552 - 4,715,238 Corporate bonds 39,589,717 93,290 ( 107,048 ) 39,575,959 35,384,272 55,858 ( 159,152 ) 35,280,978 Total $ 47,071,634 $ 115,777 $ ( 107,048 ) $ 47,080,363 $ 47,989,000 $ 71,410 $ ( 159,152 ) $ 47,901,258 The following table shows the gross unrealized holding losses and estimated fair value of our marketable securities, aggregated by category of securities and length of time that individual securities had been in a continuous unrealized loss position as of June 30 and March 31, 2025. Less Than 12 Months 12 Months or Greater Total Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses Estimated Fair Value Gross Unrealized Holding Losses As of June 30, 2025 Corporate bonds $ 13,470,630 $ ( 42,269 ) $ 16,117,601 $ ( 64,779 ) $ 29,588,231 $ ( 107,048 ) Total $ 13,470,630 $ ( 42,269 ) $ 16,117,601 $ ( 64,779 ) $ 29,588,231 $ ( 107,048 ) As of March 31, 2025 Corporate bonds $ 7,323,059 $ ( 31,808 ) $ 21,020,717 $ ( 127,344 ) $ 28,343,776 $ ( 159,152 ) Total $ 7,323,059 $ ( 31,808 ) $ 21,020,717 $ ( 127,344 ) $ 28,343,776 $ ( 159,152 ) None of the securities were impaired at acquisition, and subsequent declines in fair value are attributable to interest rate increases. We do not intend to sell, and it is not more likely than not that we will be required to sell, these securities before recovery of their amortized cost basis. The issuers continue to make timely interest payments on these securities. Unrealized gains on our marketable securities and their tax effects are as follows: Quarter Ended June 30, 2025 2024 Unrealized gain on marketable securities $ 96,471 $ 36,751 Tax effects ( 21,109 ) ( 8,041 ) Unrealized gain on marketable securities, net of tax $ 75,362 $ 28,710 NOTE 6. INVENTORIES Inventories are shown in the following table: June 30, 2025 March 31, 2025 Raw materials $ 1,575,409 $ 1,608,632 Work in process 3,680,533 3,609,273 Finished goods 2,197,427 2,231,178 Total inventories $ 7,453,369 $ 7,449,083 10 Table of Contents NOTE 7. STOCK-BASED COMPENSATION Stock-based compensation expense was $ 6,838 for the first quarter of fiscal 2026 and $ 18,442 for the first quarter of fiscal 2025. We calculate share-based compensation expense using the Black-Scholes-Merton standard option-pricing model . Quarter Ended June 30, 2025 2024 Stock options granted 2,500 2,500 Stock options exercised - - NOTE 8. INCOME TAXES 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 June 30, 2025, federal and state estimated tax liabilities of $ 952,884 were included in the balance sheet in “Accrued payroll and other.” We had no unrecognized tax benefits as of June 30, 2025, 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 June 30, 2025, we had no accrued interest related to uncertain tax positions. The tax years ended March 31, 2021 through March 31, 2025 remain open to examination by the major taxing jurisdictions to which we are subject. NOTE 9. LEASES We conduct our operations in a leased facility under a non-cancellable lease expiring May 31, 2031. Our lease does not provide an implicit interest rate, so we used our incremental borrowing rate to determine the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Details of our operating lease are as follows: Quarter Ended June 30, 2025 2024 Operating lease cost $ 48,214 $ 37,754 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for leases $ 46,249 $ 45,341 Right-of-use assets obtained in exchange for new lease liabilities: Operating lease $ 710,665 $ - Remaining lease term 71 months 21 months Discount rate 7.8 % 3.5 % 11 Table of Contents The following table shows the maturities of lease liabilities as of June 30, 2025: Year Ending March 31, Operating Lease Liabilities 2026 38,746 2027 172,142 2028 213,284 2029 220,216 2030 227,373 2031 234,762 2032 40,399 Total lease payments 1,146,922 Imputed lease interest ( 254,624 ) Total lease liabilities $ 892,298 NOTE 10. STOCK REPURCHASE PROGRAM On January 21, 2009, we announced that our Board of Directors authorized the repurchase of up to $ 2,500,000 of our Common Stock from time to time in open market, block, or privately negotiated transactions. The timing and extent of any repurchases depend on market conditions, the trading price of the company’s stock, and other factors, and subject to the restrictions relating to volume, price, and timing under applicable law. On August 27, 2015, we announced that our Board of Directors authorized up to $5,000,000 of additional repurchases. Our repurchase program does not have an expiration date and does not obligate us to purchase any shares. The Program may be modified or discontinued at any time without notice. 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 June 30, 2025. We did no t repurchase any of our Common Stock during the first quarter of fiscal 2026. NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS All of our employees are eligible to participate in our 401(k) savings plan the first quarter after reaching age 18. Employees may contribute up to the Internal Revenue Code maximum. We make matching contributions of 100 % of the first 3 % of participants’ salary deferral contributions. Our matching contributions were $ 28,834 for the first quarter of fiscal 2026 and $ 28,767 for the first quarter of fiscal 2025. NOTE 12. SUBSEQUENT EVENTS On July 23, 2025 , 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 29, 2025 , to shareholders of record as of the close of business August 4, 2025 . 12 Table of Contents