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Item 1. Financial Statements

2021-07-21 compared with 2021-01-20 · 449 added, 512 removed, 120 unchanged (89% of the section changed)

2 unchanged sentences

BALANCE SHEETS

December 31, 2020

Current assets

June 30, 2021

ASSETS  

Current assets  

Cash and cash equivalents

$ 8,868,823  

$ 10,427,340  

Marketable securities, short-term

Accounts receivable, net of allowance for uncollectible

accounts of $15,000

17,061,711  

7,678,957  

Accounts receivable, net of allowance for uncollectible accounts of $ 15,000

3,319,838  

1,964,281  

3,670,026  

3,900,777  

Prepaid expenses and other assets

658,238  

391,278  

Total current assets

33,578,636  

24,362,633  

Fixed assets  

Machinery and equipment

9,280,343  

9,254,664  

Leasehold improvements

1,810,872  

11,091,215  

11,065,536  

Less accumulated depreciation and amortization

10,791,821  

10,728,853  

Net fixed assets

299,394  

336,683  

Deferred tax assets

101,660  

73,538  

Marketable securities, long-term

Right-of-use asset operating lease

LIABILITIES AND SHAREHOLDERS EQUITY

Current liabilities

37,463,037  

47,038,669  

Right-of-use asset –

operating lease

657,662  

689,216  

$ 72,100,389  

$ 72,500,739  

LIABILITIES AND SHAREHOLDERS’

EQUITY  

Current liabilities  

Accounts payable

$ 359,394  

$ 336,591  

Accrued payroll and other

651,194  

540,474  

Income taxes payable

834,483  

Operating lease

151,110  

150,273  

Total current liabilities

Deferred tax liabilities

1,996,181  

1,027,338  

Operating lease

548,859  

581,459  

Total liabilities

Shareholders equity

Common stock, $0.01 par value,

6,000,000 shares authorized;

4,833,232 issued

and outstanding as of December 31, 2020 and 4,835,038 as of March 31,

2,545,040  

1,608,797  

Shareholders’

equity  

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

4,833,232 issued and outstanding as of June 30 and March 31, 2021

48,332  

Additional paid-in capital

19,345,365  

19,338,127  

Accumulated other comprehensive income

1,010,954  

1,101,119  

Retained earnings

Total shareholders equity

Total liabilities and shareholders equity

*The March 31, 2020 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, 2020.

49,150,698  

50,404,364  

Total shareholders’

69,555,349  

70,891,942  

Total liabilities and shareholders’

$ 72,100,389  

$ 72,500,739  

*The March 31, 2021 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, 2021.

See accompanying notes.

1 unchanged sentence

STATEMENTS OF INCOME

Quarter Ended December 31

Quarter Ended June 30

Revenue  

Product sales

$ 6,953,766  

$ 4,358,635  

Contract research and development

199,397  

230,627  

Total revenue

7,153,163  

4,589,262  

Cost of sales

1,769,581  

836,422  

5,383,582  

3,752,840  

Expenses  

Research and development

808,142  

880,983  

Selling, general, and administrative

466,618  

355,011  

Total expenses

1,274,760  

1,235,994  

Income from operations

4,108,822  

2,516,846  

Interest income

289,720  

399,212  

Income before taxes

4,398,542  

2,916,058  

Provision for income taxes

Net income per share basic

Net income per share diluted

818,976  

504,193  

$ 3,579,566  

$ 2,411,865  

Net income per share –

$ 0.74  

$ 0.50  

Net income per share –

$ 0.74  

$ 0.50  

Cash dividends declared per common share

Weighted average shares outstanding

$ 1.00  

Weighted average shares outstanding  

4,833,232  

4,835,038  

4,836,821  

4,835,157  

STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended December 31

Quarter Ended June 30

$ 3,579,566  

$ 2,411,865  

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

Comprehensive income

See accompanying notes.

NVE CORPORATION

STATEMENTS OF INCOME

Nine Months Ended Dec.

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

Nine Months Ended Dec.

Unrealized gain from marketable securities, net of tax

1,242,662  

Comprehensive income

$ 3,489,401  

$ 3,654,527  

See accompanying notes.

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS EQUITY

STATEMENTS OF SHAREHOLDERS ’

Additional  

Common Stock  

Paid-In  

Comprehen sive  

Retained  

Amount  

Capital  

Income  

Earnings  

Balance as of March 31, 2021

4,833,232  

$ 48,332  

$ 19,338,127  

$ 1,101,119  

$ 50,404,364  

$ 70,891,942  

Comprehensive income:

Unrealized gain on

marketable securities,

Total comprehensive income

Stock-based compensation

Cash dividends declared

($1.00 per share of

common stock)

Unrealized loss on marketable securities, net of tax

( 90,165 )  

3,579,566  

Total comprehensive income  

3,489,401  

Stock-based compensation  

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

( 4,833,232 )

Balance as of June 30, 2021

Repurchase of common stock

Comprehensive income:

Unrealized loss on

marketable securities,

Total comprehensive income

Stock-based compensation

Cash dividends declared

($1.00 per share of

common stock)

Balance as of September 30, 2020

Comprehensive income:

Unrealized loss on

marketable securities,

Total comprehensive income

Stock-based compensation

Cash dividends declared

($1.00 per share of

common stock)

Balance as of December 31, 2020

4,833,232  

$ 48,332  

$ 19,345,365  

$ 1,010,954  

$ 49,150,698  

$ 69,555,349  

See accompanying notes.

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS EQUITY

STATEMENTS OF SHAREHOLDERS ’

Accumulated  

Additional  

Common Stock  

Paid-In  

Comprehen sive  

Retained  

Amount  

Capital  

Income  

Earnings  

Balance as of March 31, 2020

4,835,038  

$ 48,350  

$ 19,383,956  

$ 516,523  

$ 58,046,520  

$ 77,995,349  

Comprehensive income:

Unrealized gain on

marketable securities,

Total comprehensive income

Cash dividends declared

($1.00 per share of

common stock)

Unrealized gain on marketable securities, net of tax

1,242,662  

2,411,865  

Total comprehensive income  

3,654,527  

Stock-based compensation  

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

( 4,835,038 )

Balance as of June 30, 2020

Comprehensive income:

Unrealized gain on

marketable securities,

Total comprehensive income

Stock-based compensation

Cash dividends declared

($1.00 per share of

common stock)

Balance as of September 30, 2019

Comprehensive income:

Unrealized gain on

marketable securities,

Total comprehensive income

Cash dividends declared

($1.00 per share of

common stock)

Balance as of December 31, 2019

4,835,038  

$ 48,350  

$ 19,386,663  

$ 1,759,185  

$ 55,623,347  

$ 76,817,545  

See accompanying notes.

1 unchanged sentence

STATEMENTS OF CASH FLOWS

Months Ended Dec.

OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash

provided by operating activities:

Quarter Ended June 30

OPERATING ACTIVITIES  

$ 3,579,566  

$ 2,411,865  

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

Depreciation and amortization

140,427  

129,620  

Stock-based compensation

Deferred income taxes

( 2,868 )  

Changes in operating assets and liabilities:

Accounts receivable

( 1,355,557 )

396,168  

230,751  

Prepaid expenses and other assets

Accounts payable and other liabilities

936,243  

372,463  

Net cash provided by operating activities

INVESTING ACTIVITIES

3,300,394  

3,172,427  

INVESTING ACTIVITIES  

Purchases of fixed assets

1 unchanged sentence

Proceeds from maturities of marketable securities

Cash provided by investing activities

FINANCING ACTIVITIES

Repurchase of common stock

Cash used in investing activities

FINANCING ACTIVITIES  

Payment of dividends to shareholders

( 4,833,232 )

( 4,835,038 )

Cash used in financing activities

Increase in cash and cash equivalents

( 4,833,232 )

( 4,835,038 )

Decrease in cash and cash equivalents

( 1,558,517 )

( 1,662,611 )

Cash and cash equivalents at beginning of period

10,427,340  

8,065,594  

Cash and cash equivalents at end of period

$ 8,868,823  

$ 6,402,983  

Supplemental disclosures of cash flow information:

4 unchanged sentences

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.

 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.

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 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 financial statements included

in our Annual Report on Form 10-K for

the fiscal year ended March 31, 2020.

The results of operations for the quarter

and nine months ended December 31, 2020 are not necessarily indicative of

the results that may be expected for the full fiscal year ending March 31,

     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 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 financial statements included in our Annual Report on Form 10 -K for the fiscal year ended March 

The results of operations for the quarter ended June 

30, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 

Significant accounting policies

Revenue Recognition

We recognize revenue when we satisfy performance obligations

by the transfer of control of products or services to our customers, in an amount

that reflects the consideration we expect to be entitled to in exchange for those

products or services.

Revenue is disaggregated into product sales and contract

research and development to depict the nature, amount, timing of revenue recognition

and economic characteristics of our business, and is represented within the financial

We recognize revenue from product sales to customers

and distributors when we satisfy our performance obligation, at a point in time,

upon product shipment or delivery to our customer or distributor as determined

by agreed upon shipping terms.

Shipping charges billed to customers are included

in product sales and the related shipping costs are included in cost of sales.

Under certain limited circumstances, our distributors may earn commissions for

activities unrelated to their purchases of our products, such as for facilitating

the sale of custom products or research and development contracts with third parties.

We recognize any such commissions as selling, general, and administrative expenses.

We recognize discounts provided to our distributors as reductions in revenue.

We recognize contract research and development revenue

over a period of time as the performance obligation is satisfied over a period

of time rather than a point in time.

Contracts have specifications unique to each

customer and do not create an asset with an alternate use, and we have an enforceable

right to payment for performance completed to date.

We recognize revenue over

a period of time using costs incurred as the measurement of progress towards completion.

Accounts receivable is recognized when we have transferred

a good or service to a customer and our right to receive consideration is unconditional

through the completion of our performance obligation.

A contract asset is recognized

when we have a right to consideration from the transfer of goods or services to

a customer but have not completed our performance obligation.

A contract liability

is recognized when we have been paid by a customer but have not yet satisfied

the performance obligation by transferring goods or services.

We had no material

contract assets or contract liabilities as of December 31, 2020 or March 31,

Our performance obligations related to product sales

and contract research and development contracts are satisfied in one year or less.

Unsatisfied performance obligations represent contracts with an original expected

duration of one year or less.

As permitted under Accounting Standards Codification

(ASC) Topic 606, Revenue from Contracts with Customers ,

we are using the practical expedient not to disclose the value of these unsatisfied

performance obligations.

We also use the practical expedient in which we do not

assess whether a contract has a significant financing component if the expectation

at contract inception is such that the period between payment by the customer

and the transfer of the promised goods or services to the customer will be one

year or less.

     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 

As of June 

30, 2021, there were no changes to our significant accounting policies.

RECENTLY ISSUED ACCOUNTING STANDARDS

New Accounting Standards Not Yet Adopted

In December 2019, the Financial Accounting Standards

Board (FASB) issued Accounting Standards Update (ASU)

2019-12, Income Taxes (Topic 740)Simplifying the Accounting for Income

ASU 2019-12 is intended to simplify accounting for income taxes.

It removes certain exceptions to the general principles in Topic 740 and amends

existing guidance to improve consistent application.

ASU 2019-12 is effective

for fiscal years beginning after December 15, 2020 and interim periods within

those fiscal years, which is fiscal 2022 for us, with early adoption permitted.

We do not expect adoption of the new guidance to have a significant impact on

our financial statements.

In June 2016, the FASB issued ASU No.

Financial InstrumentsCredit Losses (Topic 326), Measurement of Credit

Losses on Financial Statements .

ASU 2016-13 requires a financial asset

(or a group of financial assets) measured at amortized cost basis 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.

Codification Improvements to Topic 326, Financial InstrumentsCredit

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 InstrumentsCredit Losses

(Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842):

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

Financial InstrumentsCredit Losses (Topic 326) and Leases (Topic

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

and Update to SEC Section on Effective Date Related to Accounting Standards Update

2016-02, Leases (Topic 842) , both of which delay the effective

date of ASU 2016-13 by three years for certain Smaller Reporting Companies

We were unaffected by the change in the effective date of the ASU

related to Leases (Topic 842) because we have already adopted that ASU.

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.

In accordance with ASU 2019-10 and

ASU 2020-02, ASU 2016-13 is effective for certain Smaller Reporting

Companies for financial statements issued for fiscal years beginning after December 15,

2022 and interim periods within those fiscal years, which will be fiscal 2024

for us if we continue to be classified as a Smaller Reporting Company, with early

adoption permitted.

We do not expect adoption of the new guidance to have a significant

impact on our financial statements.

Recently Adopted Accounting Standard

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2019 - 12, Income Taxes (Topic 740 )—Simplifying the Accounting for Income Taxes.

ASU 2019 - 12 simplifies accounting for income taxes, removes certain exceptions to the general principles in Topic 740, and amends existing guidance to improve consistent application.

We adopted ASU 2019 - 12 for this Quarterly Report on Form 10 -Q for the quarter ended June 30, 2021.

The adoption had no material impact on our financial statements.

New Accounting Standard Not Yet Adopted

     In May 2021, the FASB issued ASU No.

2021 - 04, Earnings Per Share (Topic 260 ), Debt —

Modifications and Extinguishments (Subtopic 470 - 50 ), Compensation —

Stock Compensation (Topic 718 ), and Derivatives and Hedging —

Contracts in Entity ’

s Own Equity (Subtopic 815 - 40 ) Issuer ’

s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options .

2021 - 04 addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options.

ASU 2021 - 04 is effective for fiscal years beginning after December 15, 2021 and interim periods within those fiscal years, which is fiscal 2023 for us, with early adoption permitted.

We do not expect adoption of the new guidance to have a significant impact on our financial statements.

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

     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 Dec.

Weighted average common shares outstanding basic

Dilutive effect of stock options

Shares used in computing net income per share

Nine Months Ended Dec.

Weighted average common shares outstanding basic

Quarter Ended June 30

Weighted average common shares outstanding –

4,833,232  

4,835,038  

Dilutive effect of stock options

Shares used in computing net income per share

Shares used in computing net income per share –

4,836,821  

4,835,157  

FAIR VALUE OF FINANCIAL INSTRUMENTS

Our corporate bonds and money market funds are classified

as available-for-sale securities and carried at estimated fair value.

holding gains and losses are included in accumulated other comprehensive income

(loss) in the statement of shareholders equity.

Corporate bonds with remaining

maturities less than one year are classified as short-term, and those with remaining

maturities greater than one year 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.

Gains and losses on marketable

security transactions are reported on the specific-identification method.

Contractual maturities of available-for-sale securities

as of December 31, 2020 are as follows:

Total available-for-sale securities represented

approximately 88% of our total assets.

Marketable securities as of

December 31, 2020 had remaining maturities between eight

weeks and 38 months.

Generally accepted accounting principles establish

a framework for measuring fair value, provide a definition of fair value, and

prescribe required disclosures about fair-value measurements.

Generally accepted

accounting principles define fair value as the price that would be received to

sell an asset or paid to transfer a liability.

Fair value is a market-based measurement

that should be determined using assumptions that market participants would use

in pricing an asset or liability.

Generally accepted accounting principles utilize

a valuation hierarchy for disclosure of fair value measurements.

The categorization

within the valuation hierarchy is based on the lowest level of input that is significant

to the fair value measurement.

The categories within the valuation hierarchy are

described as follows:

1 Financial instruments with quoted prices in active markets for identical

assets or liabilities.

Level 2 Financial instruments with quoted

prices in active markets for similar assets or liabilities.

value measurements are determined using either prices for similar instruments

or inputs that are either directly or indirectly observable, such as interest

Level 3 Inputs to the fair value measurement

are unobservable inputs or valuation techniques.

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.

The following table shows the estimated fair value

of assets that were accounted for at fair value on a recurring basis:

December 31, 2020

March 31, 2020

     Our corporate bonds and money market funds are classified as available-for-sale securities and carried at estimated fair value.

Unrealized holding gains and losses are included in accumulated other comprehensive income (loss) in the statement of shareholders’

Corporate bonds with remaining maturities less than one year are classified as short-term, and those with remaining maturities greater than one year 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.

Gains and losses on marketable security transactions are reported on the specific-identification method.

     Contractual maturities of available-for-sale securities as of June 

30, 2021 are as follows:

$ 62,756,448  

$ 25,293,411  

$ 27,108,299  

$ 10,354,738  

Total available-for-sale securities represented approximately 87 % of our total assets.

Marketable securities as of June 

30, 2021 had remaining maturities between six weeks and 44  months.

Generally accepted accounting principles establish a framework for measuring fair value, provide a definition of fair value, and prescribe required disclosures about fair-value measurements.

Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability.

Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability.

Generally accepted accounting principles utilize a valuation hierarchy for disclosure of fair value measurements.

The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The categories within the valuation hierarchy are described as follows:

     Level 1 –

Financial instruments with quoted prices in active markets for identical assets or liabilities.

     Level 2 –

Financial instruments with quoted prices in active markets for similar assets or liabilities.

2 fair value measurements are determined using either prices for similar instruments or inputs that are either directly or indirectly observable, such as interest rates.

     Level 3 –

Inputs to the fair value measurement are unobservable inputs or valuation techniques.

     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.”

     The following table shows the estimated fair value of assets that were accounted for at fair value on a recurring basis:

As of June 30, 2021

As of March 31, 2021

Money market funds

$ 8,231,700  

$ 10,143,196  

Corporate bonds

Our available-for-sale securities as of December 31

and March 31, 2020, aggregated into classes of securities, were as follows:

of December 31, 2020

of March 31, 2020

Holding Gains

Holding Losses

Holding Gains

Holding Losses

54,524,748  

54,717,626  

$ 8,231,700  

$ 54,524,748  

$ 62,756,448  

$ 10,143,196  

$ 54,717,626  

$ 64,860,822  

Our available-for-sale securities as of June 

30 and March 

31, 2021, aggregated into classes of securities, were as follows:

As of June 30, 2021

As of March 31, 2021

Money market funds

$ 8,231,700  

$ 10,143,196  

Corporate bonds

Inventories are shown in the following table:

53,230,646  

1,389,752  

54,524,748  

53,308,105  

1,570,195  

54,717,626  

$ 61,462,346  

$ 1,389,752  

$ 62,756,448  

$ 63,451,301  

$ 1,570,195  

$ ( 160,674 )

$ 64,860,822  

The following table shows the gross unrealized holding losses and fair value of our available-for-sale securities with unrealized holding losses, aggregated by class of securities and length of time that individual securities had been in a continuous unrealized loss position as of June 30, 2021 and March 

Less Than 12 Months

12 Months or Greater

As of June 30, 2021  

Corporate bonds

$ 10,354,738  

As of March 31, 2021  

Corporate bonds

$ 10,322,539  

$ ( 160,674 )

$ 10,322,539  

$ ( 160,674 )

$ 10,322,539  

$ ( 160,674 )

$ 10,322,539  

$ ( 160,674 )

We did not consider any of our available-for-sale securities to be impaired as of June 30, 2021.

None of the securities were impaired at acquisition, and subsequent declines in fair value are not attributed to declines in credit quality.

The effects of the COVID- 19 pandemic, however, have degraded outlooks for some of our marketable securities’

issuers, which could lead to credit-quality downgrades in the future.

When evaluating for impairment we assess indicators that include, but are not limited to, earnings performance, changes in underlying credit ratings, market conditions, bona fide offers to purchase or sell, and ability to hold until maturity.

Because we believe it is more likely than not we will recover the cost basis of our investments, we did not consider any of our marketable securities to be impaired as of June 

     Inventories are shown in the following table:

Raw materials

$ 696,047  

$ 660,678  

Work in process

2,399,064  

2,220,723  

Finished goods

574,915  

1,019,376  

Total inventories

$ 3,670,026  

$ 3,900,777  

STOCK-BASED COMPENSATION

Stock-based compensation expense was $4,275 for

the third quarter of fiscal 2021, $41,297 for the first nine months of fiscal

2021, and $48,360 for the first nine months of fiscal 2020.

There was no Stock-based

compensation expense in the third quarter of fiscal 2020.

We calculate the share-based

compensation expense using the Black-Scholes 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.

We had no unrecognized tax benefits as of December 31,

2020, 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 December 31, 2020 we had no accrued

interest related to uncertain tax positions.

The tax years 2016 through 2019 remain

open to examination by the major taxing jurisdictions to which we are subject.

We conduct our operations in a leased facility under a

non-cancellable lease expiring March 31, 2026.

Our lease does not provide an implicit rate,

so we used our incremental borrowing rate to determine the present value of lease payments.

     Stock-based compensation expense was $ 7,238 for the first quarter of fiscal 2022 and $ 2,707 for the first quarter of fiscal 2021.

We calculate the share-based compensation expense using the Black-Scholes 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.

     We had no unrecognized tax benefits as of June 

30, 2021, 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 June 

30, 2021 we had no accrued interest related to uncertain tax positions.

The tax years 2016 through 2020 remain open to examination by the major taxing jurisdictions to which we are subject.

     We conduct our operations in a leased facility under a non-cancellable lease expiring March 31, 2026.

Our lease does not provide an implicit 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.

Variable lease costs

consist primarily of common area maintenance and real estate taxes which are paid

based on actual costs incurred by the lessor.

Details of our operating lease are

Variable lease costs consist primarily of common area maintenance and real estate taxes which are paid based on actual costs incurred by the lessor.

Details of our operating lease are as follows:

Quarter Ended

Nine Months Ended

June 30, 2021

Operating lease cost

$ 42,516  

Variable lease cost

Cash paid for amounts included in the measurement of lease liabilities

31,028  

$ 73,544  

Cash paid for amounts included in the measurement of lease liabilities  

Operating cash flows for leases

Remaining lease term

$ 37,962  

Remaining lease term (in months)  

Discount rate

The following table presents the maturities of lease

liabilities as of December 31, 2020:

The following table presents the maturities of lease liabilities as of June 

Year Ending March 31

Operating Leases

114,740  

156,121  

159,592  

163,224  

165,947  

Total lease payments

759,624  

Imputed lease interest

Total lease liabilities

$ 699,969  

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 depends on market conditions, the trading

price of the companys 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 maturating marketable securities.

The remaining authorization was $3,762,040 as of December 31, 2020.

     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 depends 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 maturating marketable securities.

The remaining authorization was $ 3,762,040 as of June 

We did not repurchase any of our Common Stock during the first quarter of fiscal 2022.

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 21.

may contribute up to the Internal Revenue Code maximum.

We make matching contributions

of 100% of the first 3% of participants salary deferral contributions.

matching contributions were $22,571 for the

third quarter of fiscal 2021, $22,456 for the third quarter of fiscal 2020,

$69,227 for the first nine months of fiscal 2021, and $68,512 for the first

nine months of fiscal 2020.

     All of our employees are eligible to participate in our 401 (k) savings plan the first quarter after reaching age 

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 $ 28,584 for the first quarter of fiscal 2022 and $ 25,381 for the first quarter of fiscal 2021.

SUBSEQUENT EVENTS

On January 20, 2021 we announced that our Board

had declared a quarterly cash dividend of $1.00 per share of Common Stock to be

paid February 26, 2021 to shareholders of record as of the close of business

February 1, 2021.

Managements Discussion and Analysis of Financial

Condition and Results of Operations.

     On July 

21, 2021 we announced that our Board had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid August 

31, 2021 to shareholders of record as of the close of business August 

Management ’

s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-looking statements

Some of the statements made in this Report or in

the documents incorporated by reference in this Report and in other materials

filed or to be filed by us with the Securities and Exchange Commission (SEC)

as well as information included in verbal or written statements made by us constitute

forward-looking statements within the meaning of the Private Securities Litigation

Reform Act of 1995.

These statements are subject to the safe harbor provisions

of the reform act.

Forward-looking statements may be identified by the use of

the terminology such as may, will, expect, anticipate, intend, believe, estimate,

should, or continue, or the negatives of these terms or other variations on these

words or comparable terminology.

To the extent that this Report contains forward-looking

statements regarding the financial condition, operating results, business prospects

or any other aspect of NVE, you should be aware that our actual financial condition,

operating results and business performance may differ materially from that projected

or estimated by us in the forward-looking statements.

We have attempted to identify,

in context, some of the factors that we currently believe may cause actual future

experience and results to differ from their current expectations.

These differences

may be caused by a variety of factors, including but not limited to risks related

to our reliance on several large customers for a significant percentage of revenue,

uncertainties related to the economic environments in the industries we serve,

uncertainties related to future sales and revenues, risks related to the COVID-19

pandemic, risks and uncertainties related to future stock repurchases and dividend

payments, and other specific risks that may be alluded to in this Report or in

the documents incorporated by reference in this Report.

Further information regarding our risks and uncertainties

are contained in Part I, Item 1A Risk Factors of our Annual Report

on Form 10-K for the year ended March 31,

2020 as updated in our Quarterly Reports on Form 10-Q for the quarters ended June 30,

2020, September 30, 2020, and Item 1A herein.

NVE Corporation, referred to as NVE, we, us, or

our, develops and sells devices that use spintronics, a nanotechnology that relies

on electron spin rather than electron charge to acquire, store and transmit information.

We manufacture high-performance spintronic products including sensors and couplers

that are used to acquire and transmit data.

     Some of the statements made in this Report or in the documents incorporated by reference in this Report and in other materials filed or to be filed by us with the Securities and Exchange Commission (“SEC”) as well as information included in verbal or written statements made by us constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

These statements are subject to the safe harbor provisions of the reform act.

Forward-looking statements may be identified by the use of the terminology such as may, will, expect, anticipate, intend, believe, estimate, should, or continue, or the negatives of these terms or other variations on these words or comparable terminology.

To the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of NVE, you should be aware that our actual financial condition, operating results and business performance may differ materially from that projected or estimated by us in the forward-looking statements.

We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from their current expectations.

These differences may be caused by a variety of factors, including but not limited to risks related to our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report.

     Further information regarding our risks and uncertainties are contained in Part I, Item 1A “Risk Factors”

of our Annual Report on Form 10-K for the year ended March 31, 2021 as updated in Item 1A of this report.

     NVE Corporation, referred to as NVE, we, us, or our, develops and sells devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store and transmit information.

We manufacture high-performance spintronic products including sensors and couplers that are used to acquire and transmit data.

Critical accounting policies

A description of our critical accounting policies

is provided in Managements Discussion and Analysis of Financial Condition

and Results of Operations in our Annual Report on Form

10-K for the year ended March 31, 2020.

As of December 31, 2020

our critical accounting policies and estimates continued to include investment

valuation, inventory valuation, and deferred tax assets estimation.

Quarter ended December 31, 2020 compared to quarter ended December 30,

The table shown below summarizes the percentage

of revenue and quarter-to-quarter changes for various items:

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

Total revenue for the quarter ended December 31,

2020 (the third quarter of fiscal 2021) increased 1% compared to the quarter ended

December 31, 2019 (the third quarter of fiscal 2020).

The increase was due

to a 3% increase in product sales, partially offset by a 34% decrease in contract

research and development revenue.

The increase in product sales from the prior-year

quarter was primarily due to increased purchases by existing customers.

in contract research and development revenue in the third quarter of fiscal 2021

was due to the completion of certain contracts.

Gross profit margin increased to 84% of revenue

for the third quarter of fiscal 2021 compared to 80% of revenue for the third

quarter of fiscal 2020 due to a more profitable revenue mix.

Total expenses decreased 8% in the third quarter

of fiscal 2021 compared to the third quarter of fiscal 2020 due to a 9% decrease

in research and development expense and a 5% decrease in selling, general, and

administrative expense.

The decrease in research and development expense was primarily

due to the completion of certain product development activities.

in selling, general, and administrative expense was primarily due to staffing

Interest income for the third quarter of fiscal

2021 decreased 18% due to a decrease in our marketable securities and money market

funds and a decrease in the average interest rates on those securities and funds.

The 5% increase in net income in the third quarter

of fiscal 2021 compared to the prior-year quarter was primarily due to increased

product sales, increased gross profit margin, and decreased expenses, partially

offset by decreased contract research and development revenue and decreased interest

ended December 31, 2020 compared to nine months ended December 31, 2019

The table shown below summarizes the percentage

of revenue and period-to-period changes for various items:

Nine Months Ended Dec.

     A description of our critical accounting policies is provided in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended March 31, 2021.

As of June 30, 2021 our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.

Quarter ended June  

30, 2021 compared to quarter ended June  

     The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:

Percentage of Revenue

Quarter Ended June 30

Product sales

9 unchanged sentences

Provision for income taxes

Total revenue for the nine months ended December 31,

2020 decreased 20% compared to the nine months ended December 31, 2019, due

to a 19% decrease in product sales and a 21% decrease in contract research and

development revenue.

The decrease in product sales from the prior-year

period was due to decreased purchase volumes by existing customers.

in contract research and development revenue was due to the completion of certain

Total expenses decreased 7% for the first nine months

of fiscal 2021 compared to the first nine months of fiscal 2020 primarily due

to a 10% decrease in research and development expense.

The decrease in research

and development expense was due to the completion of certain product development

Interest income for the first nine months of fiscal

2021 decreased 14% due to a decrease in our marketable securities and money market

funds and a decrease in the average interest rates on those securities and funds.

The 23% decrease in net income in the first

nine months of fiscal 2021 compared to the prior-year period was primarily due

to a decrease in revenue.

Total revenue for the quarter ended June 30, 2021 (the first quarter of fiscal 2022) increased 56% compared to the quarter ended June 30, 2020 (the first quarter of fiscal 2021).

The increase was due to a 60% increase in product sales partially offset by a 14% decrease in contract research and development revenue.

The increase in product sales in the first quarter of fiscal 2022 from the prior-year quarter was primarily due to increased purchases by existing customers, and sales increased in most of our markets and product lines.

The decrease in contract research and development revenue was due to the completion of certain contracts.

Gross profit as a percentage of revenue decreased to 75% the first quarter of fiscal 2022 from 82% the first quarter of fiscal 2021 primarily due to revenue mix.

Total expenses increased 3% in the first quarter of fiscal 2022 compared to the first quarter of fiscal 2021 due to a 31% increase in selling, general, and administrative expense, partially offset by an 8% decrease in research and development expense.

The increase in selling, general, and administrative expense was primarily due to increased employee compensation expense.

The decrease in research and development expense was primarily due to staffing changes and the completion of certain product development activities.

Interest income for the first quarter of fiscal 2022 decreased 27% due to a decrease in our available-for-sale securities and a decrease in the average interest rates on those securities.

The 48% increase in net income in the first quarter of fiscal 2022 compared to the prior-year quarter was primarily due to an increase in product sales.

The Impact of the COVID-19 Pandemic

The pandemic had a significant impact on total revenue

and net income for the nine months ended December 31, 2020 compared to the

prior-year period due to its effects on market conditions in certain industries,

especially medical devices.

We believe the effects of the pandemic on our business

subsided in the quarter ended December 31, 2020, however.

and Capital Resources

Cash and cash equivalents were $13,988,308 as of

December 31, 2020 compared to $8,065,594 as of March 31, 2020.

The $5,922,714

increase in cash and cash equivalents was due to $8,531,068 in net cash provided

by operating activities and $11,986,373 of cash provided by investing activities,

partially offset by $14,594,727 of cash used in financing activities.

We believe the impact of the COVID-19 pandemic on total revenue and net income was significantly less in the quarter ended June 30, 2021 than in the quarter ended June 30, 2020.

Liquidity and Capital Resources

     Cash and cash equivalents were $8,868,823 as of June 30, 2021 compared to $10,427,340 as of March 31, 2021.

The $1,558,517 decrease in cash and cash equivalents during first quarter of fiscal 2022 was due to $4,833,232 of cash used in financing activities and $25,679 of cash used investing activities, partially offset by $3,300,394 in net cash provided by operating activities.

Operating Activities

     Net cash provided by operating activities related to product sales and research and development contract revenue as our primary source of working capital for the current and prior year quarters.

Net cash provided by operating activities was $3,300,394 for first quarter of fiscal 2022 and $3,172,427 for the first quarter of fiscal 2021.

     Accounts receivable increased by $1,355,557 during first quarter of fiscal 2022 primarily due to the timing of sales to and payments from customers.

Investing Activities

Cash provided by investing activities in the nine

months ended December 31, 2020 was due to $12,000,000 of marketable security

maturities, partially offset by $13,627 of fixed asset purchases.

Capital expenditures

can vary from period to period depending on our needs and equipment purchasing

opportunities.

      Cash used in investing activities during the quarter ended June 30, 2021 consisted of $25,679 in capital expenditures.

Capital expenditures can vary from quarter to quarter depending on our needs and equipment purchasing opportunities.

We currently plan significantly more capital expenditures during fiscal 2022 than the $62,727 we invested in fiscal 2021.

Financing Activities

We paid $14,503,308 in cash dividends and repurchased

$91,419 of our Common Stock in the first nine months of fiscal 2021.

to cash dividends paid in the first nine months of fiscal 2021, on January 20,

2021 we announced that our Board had declared a cash dividend of $1.00 per share

of Common Stock, or $4,833,232 based on shares outstanding as of January 15,

2021, to be paid February 26, 2021.

We plan to fund dividends through cash

provided by operating activities and proceeds from maturities of marketable securities.

All future dividends will be subject to Board approval and subject to the companys

results of operations, cash and marketable security balances, estimates of future

cash requirements, the impacts of the COVID-19 pandemic, and other factors the

Board may deem relevant.

Furthermore, dividends may be modified or discontinued

at any time without notice.

We currently believe our working capital and cash

generated from operations will be adequate for our needs at least for the next

Off-Balance-Sheet Arrangements

Our off-balance sheet arrangements consist of purchase

We believe such arrangements have no material current or anticipated

future effect on our profitability, cash flows, or financial position.

     Cash used in financing activities during the quarter ended June 30, 2021 consisted of $4,833,232 of cash dividends paid to shareholders.

In addition to cash dividends to shareholders paid in first quarter of fiscal 2022, on July 21, 2021 we announced that our Board had declared a cash dividend of $1.00 per share of Common Stock, or $4,833,232 based on shares outstanding as of July 16, 2021, to be paid August 31, 2021.

We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities.

All future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, estimates of future cash requirements, and other factors the Board may deem relevant.

Furthermore, dividends may be modified or discontinued at any time without notice.

     We currently believe our working capital and cash generated from operations will be adequate for our needs at least for the next 12 months.

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