NVE CORP /NEW/ 10-Q

Item 1. Financial Statements. NVE CORPORATION BALANCE SHEETS (Unaudited) Sept. 30, 2026 March 31, 2026 * ASSETS Current assets Cash and cash equivalents $ 3,969,958 $ 1,714,040 Marketable securities, short-term 19,678,659 18,125,060 Accounts receivable, net of allowance for credit losses of $ 15,000 3,005,928 3,408,941 Inventories, net 6,860,310 7,082,821 Prepaid expenses and other assets 1,541,483 1,860,415 Total current assets 35,056,338 32,191,277 Fixed assets Machinery and equipment 13,925,767 13,843,799 Leasehold improvements 2,059,853 2,059,853 15,985,620 15,903,652 Less accumulated depreciation and amortization 12,652,165 12,187,643 Net fixed assets 3,333,455 3,716,009 Marketable securities, long-term 20,739,953 23,678,452 Right-of-use asset – operating lease 732,004 793,794 Total assets $ 59,861,750 $ 60,379,532 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable $ 252,399 $ 278,599 Accrued payroll and other 751,695 697,611 Operating lease 202,612 165,116 Total current liabilities 1,206,706 1,141,326 Deferred tax liabilities 9,990 248,284 Long-term operating lease liability 668,708 740,423 Total liabilities 1,885,404 2,130,033 Shareholders’ equity Common stock, $ 0.01 par value, 6,000,000 shares authorized; 4,844,079 issued and outstanding as of September 30, 2026 and 4,837,166 as of March 31, 2026 48,441 48,372 Additional paid-in capital 20,175,512 19,914,769 Accumulated other comprehensive loss ( 452,080 ) ( 32,010 ) Retained earnings 38,204,473 38,318,368 Total shareholders’ equity 57,976,346 58,249,499 Total liabilities and shareholders’ equity $ 59,861,750 $ 60,379,532 *The March 31, 2026 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, 2026. See accompanying notes. 3 Table of Contents NVE CORPORATION STATEMENTS OF INCOME (Unaudited ) Quarter Ended September 30, 2026 2025 Revenue Product sales $ 5,575,282 $ 6,138,772 Contract research and development 259,420 208,220 Total revenue, net 5,834,702 6,346,992 Cost of sales 1,270,805 1,378,494 Gross profit 4,563,897 4,968,498 Expenses Research and development 727,345 873,470 Selling, general, and administrative 630,314 436,919 Total expenses 1,357,659 1,310,389 Income from operations 3,206,238 3,658,109 Interest income 474,727 484,330 Other income - 3,094 Income before taxes 3,680,965 4,145,533 Provision for income taxes 507,806 834,695 Net income $ 3,173,159 $ 3,310,838 Net income per share – basic $ 0.66 $ 0.68 Net income per share – diluted $ 0.65 $ 0.68 Cash dividends declared per common share $ 1.00 $ 1.00 Weighted average shares outstanding Basic 4,842,050 4,837,166 Diluted 4,850,910 4,839,243 STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Quarter Ended September 30, 2026 2025 Net income $ 3,173,159 $ 3,310,838 Unrealized gain (loss) from marketable securities, net of tax ( 379,287 ) 83,348 Comprehensive income $ 2,793,872 $ 3,394,186 See accompanying notes. 4 Table of Contents NVE CORPORATION STATEMENTS OF INCOME (Unaudited ) Six Months Ended September 30, 2026 2025 Revenue Product sales $ 16,310,017 $ 12,047,342 Contract research and development 558,742 404,294 Total revenue, net 16,868,759 12,451,636 Cost of sales 3,336,850 2,561,017 Gross profit 13,531,909 9,890,619 Expenses Research and development 1,673,927 1,593,701 Selling, general, and administrative 1,385,908 855,559 Total expenses 3,059,835 2,449,260 Income from operations 10,472,074 7,441,359 Interest income 924,647 982,538 Other income - 3,905 Income before taxes 11,396,721 8,427,802 Provision for income taxes 1,829,371 1,541,146 Net income $ 9,567,350 $ 6,886,656 Net income per share – basic $ 1.98 $ 1.42 Net income per share – diluted $ 1.97 $ 1.42 Cash dividends declared per common share $ 2.00 $ 2.00 Weighted average shares outstanding Basic 4,839,621 4,837,166 Diluted 4,848,187 4,839,049 STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Six Months Ended September 30, 2026 2025 Net income $ 9,567,350 $ 6,886,656 Unrealized gain (loss) from marketable securities, net of tax ( 420,070 ) 158,710 Comprehensive income $ 9,147,280 $ 7,045,366 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, 2026* 4,837,166 $ 48,372 $ 19,914,769 $ ( 32,010 ) $ 38,318,368 $ 58,249,499 Comprehensive income: Unrealized loss on marketable securities, net of tax ( 40,783 ) ( 40,783 ) Net income 6,394,191 6,394,191 Total comprehensive income 6,353,408 Stock-based compensation 14,049 14,049 Cash dividends paid ($ 1.00 per share of common stock) ( 4,837,166 ) ( 4,837,166 ) Balance as of June 30, 2026 4,837,166 $ 48,372 $ 19,928,818 $ ( 72,793 ) $ 39,875,393 $ 59,779,790 Exercise of stock options 6,913 69 ( 237 ) ( 168 ) Comprehensive income: Unrealized loss on marketable securities, net of tax ( 379,287 ) ( 379,287 ) Net income 3,173,159 3,173,159 Total comprehensive income 2,793,872 Stock-based compensation 246,931 246,931 Cash dividends ($ 1.00 per share of common stock) ( 4,844,079 ) ( 4,844,079 ) Balance as of September 30, 2026 4,844,079 $ 48,441 $ 20,175,512 $ ( 452,080 ) $ 38,204,473 $ 57,976,346 *Balances as of March 31, 2026 are derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. See accompanying notes. 6 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 Comprehensive income: Unrealized gain on marketable securities, net of tax 83,348 83,348 Net income 3,310,838 3,310,838 Total comprehensive income 3,394,186 Stock-based compensation 66,312 66,312 Cash dividends ($ 1.00 per share of common stock) ( 4,837,166 ) ( 4,837,166 ) Balance as of September 30, 2025 4,837,166 $ 48,372 $ 19,894,256 $ 90,166 $ 39,680,161 $ 59,712,955 *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. 7 Table of Contents NVE CORPORATION STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended September 30, 2026 2025 OPERATING ACTIVITIES Net income $ 9,567,350 $ 6,886,656 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 464,522 174,451 Bonds discount amortization ( 44,753 ) ( 175,895 ) Stock-based compensation 260,980 73,150 Deferred income taxes ( 120,640 ) 742,885 Non-cash operating lease expense 27,571 103,931 Changes in operating assets and liabilities: Accounts receivable 403,013 1,148,412 Inventories 222,511 30,240 Prepaid expenses and other assets 318,932 ( 729,679 ) Accounts payable ( 26,200 ) 14,835 Accrued payroll and other 54,084 ( 285,774 ) Net cash provided by operating activities 11,127,370 7,983,212 INVESTING ACTIVITIES Purchases of fixed assets ( 81,968 ) ( 1,128,981 ) Purchases of marketable securities ( 8,108,071 ) ( 10,108,982 ) Proceeds from maturities of marketable securities 9,000,000 10,000,000 Net cash provided by (used in) investing activities 809,961 ( 1,237,963 ) FINANCING ACTIVITIES Payments on exercise of stock options ( 168 ) - Payment of dividends to shareholders ( 9,681,245 ) ( 9,674,332 ) Net cash used in financing activities ( 9,681,413 ) ( 9,674,332 ) Increase (decrease) in cash and cash equivalents 2,255,918 ( 2,929,083 ) Cash and cash equivalents at beginning of period 1,714,040 8,036,564 Cash and cash equivalents at end of period $ 3,969,958 $ 5,107,481 Supplemental disclosures of cash flow information: Cash paid during the period for income taxes $ 1,641,360 $ 1,680,555 See accompanying notes. 8 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, 2026. Sales, expenses, cash flows, assets, and liabilities can and do vary throughout the year, therefore they are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2027 . 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, 2026. As of September 30, 2026, there were no changes to our significant accounting policies or estimates. NOTE 3. NEW ACCOUNTING STANDARDS Recently Adopted Accounting Standards In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-05, Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses for Accounts Receivable and Contract Assets . ASU 2025-05 aims to reduce the cost and complexity of estimating credit losses while maintaining decision-useful information for financial statement users. The guidance allows a practical expedient of assuming current conditions as of the balance sheet date remain unchanged for the remaining life of the assets. We adopted this practical expedient as permitted by ASU 2025-05. ASU 2025-05 was effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods, which was fiscal 2027 for us. Adoption of ASU 2025-05 has not had a material impact on our Financial Statements. 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. 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. 9 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 the exercise of all stock options. The following tables show the components of diluted shares: Quarter Ended September 30, 2026 2025 Weighted average common shares outstanding – basic 4,842,050 4,837,166 Dilutive effect of stock options 8,860 2,077 Shares used in computing net income per share – diluted 4,850,910 4,839,243 Six Months Ended September 30, 2026 2025 Weighted average common shares outstanding – basic 4,839,621 4,837,166 Dilutive effect of stock options 8,566 1,883 Shares used in computing net income per share – diluted 4,848,187 4,839,049 NOTE 5. MARKETABLE SECURITIES The following table shows the major categories of our marketable securities and their contractual maturities as of September 30, 2026: Total <1 Year 1–3 Years 3–5 Years Money market funds $ 3,663,146 $ 3,663,146 $ - $ - Treasury securities 4,697,185 4,697,185 - - Corporate bonds 35,721,427 14,981,474 12,888,258 7,851,695 Total $ 44,081,758 $ 23,341,805 $ 12,888,258 $ 7,851,695 Total marketable securities and money market funds represented approximately 74 % of our total assets as of September 30, 2026. Marketable securities as of September 30, 2026, had remaining maturities between seven weeks and 53 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, short-term.” Accrued interest receivables were $ 485,332 as of September 30, 2026, and $ 455,566 as of March 31, 2026, 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 shows the estimated fair value of our marketable securities, aggregated by fair value hierarchy inputs used in estimating their fair values: As of September 30, 2026 As of March 31, 2026 Level 1 Level 2 Total Level 1 Level 2 Total Money market funds $ 3,663,146 $ - $ 3,663,146 $ 1,121,096 $ - $ 1,121,096 Treasury securities - 4,697,185 4,697,185 - 4,714,688 4,714,688 Corporate bonds - 35,721,427 35,721,427 - 37,088,824 37,088,824 Total $ 3,663,146 $ 40,418,612 $ 44,081,758 $ 1,121,096 $ 41,803,512 $ 42,924,608 10 Table of Contents Our available-for-sale securities as of September 30 and March 31, 2026, aggregated into classes of securities, were as follows: As of September 30, 2026 As of March 31, 2026 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 $ 3,663,146 $ - $ - $ 3,663,146 $ 1,121,096 $ - $ - $ 1,121,096 Treasury securities 4,699,937 - ( 2,752 ) 4,697,185 4,699,853 14,835 - 4,714,688 Corporate bonds 36,297,374 - ( 575,947 ) 35,721,427 37,144,634 16,583 ( 72,393 ) 37,088,824 Total $ 44,660,457 $ - $ ( 578,699 ) $ 44,081,758 $ 42,965,583 $ 31,418 $ ( 72,393 ) $ 42,924,608 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 September 30 and March 31, 2026. 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 September 30, 2026 Treasury Securities 4,697,185 ( 2,752 ) - - 4,697,185 ( 2,752 ) Corporate bonds $ 31,232,244 $ ( 571,453 ) $ 4,489,184 $ ( 4,494 ) $ 35,721,428 $ ( 575,947 ) Total $ 35,929,429 $ ( 574,205 ) $ 4,489,184 $ ( 4,494 ) $ 40,418,613 $ ( 578,699 ) As of March 31, 2026 Corporate bonds $ 23,221,061 $ ( 51,668 ) $ 4,447,243 $ ( 20,725 ) $ 27,668,304 $ ( 72,393 ) Total $ 23,221,061 $ ( 51,668 ) $ 4,447,243 $ ( 20,725 ) $ 27,668,304 $ ( 72,393 ) 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 (losses) on our marketable securities and their tax effects are as follows: Quarter Ended September 30, 2026 2025 Unrealized gain (loss) on marketable securities $ ( 485,518 ) $ 106,692 Tax effects 106,231 ( 23,344 ) Unrealized gain (loss) on marketable securities, net of tax $ ( 379,287 ) $ 83,348 Six Months Ended September 30, 2026 2025 Unrealized gain (loss) on marketable securities $ ( 537,724 ) $ 203,162 Tax effects 117,654 ( 44,452 ) Unrealized gain (loss) on marketable securities, net of tax $ ( 420,070 ) $ 158,710 NOTE 6. INVENTORIES Inventories are shown in the following table: Sept. 30, 2026 March 31, 2026 Raw materials $ 1,469,938 $ 1,357,842 Work in process 3,419,079 3,282,430 Finished goods 1,971,293 2,442,549 Total inventories $ 6,860,310 $ 7,082,821 11 Table of Contents NOTE 7. STOCK-BASED COMPENSATION Stock-based compensation expense was $ 246,931 for the second quarter of fiscal 2027 , $ 66,312 for the second quarter of fiscal 2026, $ 260,980 for the first six months of fiscal 2027, and $ 73,150 for the first six months of fiscal 2026. We calculate share-based compensation expense using the Black-Scholes-Merton standard option-pricing model. Quarter Ended September 30, Six Months Ended September 30, 2026 2025 2026 2025 Stock options grant 5,000 4,000 7,500 6,500 Stock options exercised 16,500 - 16,500 - 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 September 30, 2026, federal and state estimated tax overpayments of $ 883,203 were included in the balance sheet in “Prepaid expenses and other assets.” We had no unrecognized tax benefits as of September 30, 2026, and we do not 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 September 30, 2026, we had no accrued interest related to uncertain tax positions. The tax years ended March 31, 2023 through March 31, 2026 remain open to examination by the major taxing jurisdictions to which we are subject. The One Big Beautiful Tax law enacted on July 4, 2025 allows companies to exclude U.S. research and development expenses from its Foreign-Derived Deduction Eligible Income (FDDEI) calculation for tax years beginning after December 31, 2025. This resulted in a $466,000 increase in our FDDEI deduction and a $ 98,000 decrease in our income tax provision for the quarter ended September 30, 2026. For the six months ended September 30, 2026, the more favorable tax treatment of FDDEI resulted in a $1,100,000 increase in our FDDEI deduction and a $ 224,000 decrease in our tax provision. 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 Sept. 30 Six Months Ended Sept. 30 2026 2025 2026 2025 Operating lease cost $ 48,214 48,214 $ 96,429 96,429 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows for leases $ ( 51,643 ) ( 53,751 ) $ ( 68,857 ) ( 7,502 ) Remaining lease term 56 mos. 68 mos. 56 mos. 68 mos. Discount rate 7.8 % 7.8 % 7.8 % 7.8 % 12 Table of Contents The following table shows the maturities of lease liabilities as of September 30, 2026: Year Ending March 31, Operating Lease Liabilities 2027 103,285 2028 213,284 2029 220,216 2030 227,373 2031 234,762 2032 40,399 Total lease payments 1,039,319 Imputed lease interest ( 167,999 ) Total lease liabilities $ 871,320 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 are 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 September 30, 2026. We did not repurchase any of our Common Stock in the first six months of fiscal 2027. 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 $ 20,818 for the second quarter of fiscal 2027, $ 23,742 for the second quarter of fiscal 2026, $ 48,896 for the first six months of fiscal 2027, and $ 52,575 for the first six months of fiscal 2026. NOTE 12. SUBSEQUENT EVENTS On October 21, 2026 , we announced that our Board of Directors had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid November 30, 2026 , to shareholders of record as of the close of business on November 2, 2026 . 13 Table of Contents