What changed in this filing

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Item 1. Financial Statements

2021-10-20 compared with 2021-07-21 · 213 added, 203 removed, 366 unchanged (53% of the section changed)

2 unchanged sentences

BALANCE SHEETS

June 30, 2021

ASSETS  

Current assets  

September 30, 2021

Current assets

Cash and cash equivalents

15 unchanged sentences

24,362,633  

Fixed assets  

Machinery and equipment

25 unchanged sentences

LIABILITIES AND SHAREHOLDERS’

EQUITY  

Current liabilities  

Accounts payable

4 unchanged sentences

540,474  

Income taxes payable

834,483  

Operating lease

11 unchanged sentences

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

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

48,332  

15 unchanged sentences

$ 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.

*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. 

NVE CORPORATION

STATEMENTS OF INCOME

Quarter Ended September 30

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 –

Cash dividends declared per common share

Weighted average shares outstanding

STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended September 30

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

Comprehensive income

See accompanying notes.

1 unchanged sentence

STATEMENTS OF INCOME

Quarter Ended June 30

Revenue  

Six Months Ended September 30

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

Income from operations

Interest income

Income before taxes

Provision for income taxes

Net income per share –

Cash dividends declared per common share

Weighted average shares outstanding

STATEMENTS OF COMPREHENSIVE INCOME

Six Months Ended September 30

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

Comprehensive income

See accompanying notes.

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS ’

Comprehensive

Balance as of March 31, 2021

4,833,232  

$ 48,332  

Income from operations

$ 19,338,127  

$ 1,101,119  

Interest income

$ 50,404,364  

$ 70,891,942  

Income before taxes

Comprehensive income:

Unrealized loss on marketable securities, net of tax

3,579,566  

Provision for income taxes

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

4,833,232  

1 unchanged sentence

19,345,365  

Net income per share –

1,010,954  

49,150,698  

Net income per share –

69,555,349  

Comprehensive income:

Unrealized loss on marketable securities, net of tax

( 197,034 )  

Cash dividends declared per common share

3,646,507  

Weighted average shares outstanding  

Total comprehensive income

3,449,473  

Stock-based compensation

56,999  

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

( 4,833,232 )  

STATEMENTS OF COMPREHENSIVE INCOME

Quarter Ended June 30

( 4,833,232 )

Balance as of September 30, 2021

4,833,232  

$ 48,332  

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

$ 19,402,364  

Comprehensive income

$ 813,920  

$ 47,963,973  

See accompanying notes.

$ 68,228,589  

See accompanying notes. 

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS ’

Additional  

Common Stock  

Paid-In  

Comprehen sive  

Retained  

Amount  

Capital  

Income  

Earnings  

Comprehensive

Balance as of March 31, 2020

6 unchanged sentences

Comprehensive income:

Unrealized loss on marketable securities, net of tax

Unrealized gain on marketable securities, net of tax

1,242,662  

1 unchanged sentence

2,411,865  

Total comprehensive income  

2,411,865  

Stock-based compensation  

Total comprehensive income

3,654,527  

Stock-based compensation

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

8 unchanged sentences

76,817,545  

See accompanying notes.

NVE CORPORATION

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  

Repurchase of common stock

Comprehensive income:

Unrealized gain on marketable securities, net of tax

Unrealized loss on marketable securities, net of tax

2,222,340  

Total comprehensive income

2,092,016  

Stock-based compensation

34,315  

Total comprehensive income  

34,315  

Stock-based compensation  

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

1 unchanged sentence

( 4,835,038 )

Balance as of June 30, 2020

Balance as of September 30, 2020

4,833,232  

4 unchanged sentences

$ 74,017,419  

See accompanying notes.

NVE CORPORATION

STATEMENTS OF CASH FLOWS

Quarter Ended June 30

OPERATING ACTIVITIES  

$ 3,579,566  

$ 2,411,865  

Six Months Ended September 30 

OPERATING ACTIVITIES

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 )  

Deferred income taxes

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

3,300,394  

3,172,427  

INVESTING ACTIVITIES  

Purchases of fixed assets

Purchases of marketable securities

Proceeds from maturities of marketable securities

Cash used in investing activities

FINANCING ACTIVITIES  

Repurchase of common stock

Payment of dividends to shareholders

( 4,833,232 )

( 4,835,038 )

Cash used in financing activities

( 4,833,232 )

( 4,835,038 )

Decrease in cash and cash equivalents

( 1,558,517 )

( 1,662,611 )

Increase in cash and cash equivalents

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:

Cash paid during the period for income taxes

See accompanying notes.

NVE CORPORATION

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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.

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 

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 

The results of operations for the quarter and six months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2022.

Significant accounting policies

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

As of June 

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

A description of our significant accounting policies is provided in Note 2 to the Financial Statements in our Annual Report on Form 10 -K for the year ended March 31, 2021.

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

RECENTLY ISSUED ACCOUNTING STANDARDS

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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.

We adopted ASU 2019 - 12 beginning with 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 —

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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 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.

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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

Quarter Ended September 30

Weighted average common shares outstanding –

5 unchanged sentences

4,834,809  

Six Months Ended September 30

Weighted average common shares outstanding –

4,833,232  

4,834,872  

Dilutive effect of stock options

Shares used in computing net income per share –

4,836,621  

4,834,986  

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.

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

2 unchanged sentences

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:

Contractual maturities of available-for-sale securities as of September 30, 2021 are as follows: 

1–3 Years

3–5 Years

$ 60,647,982  

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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.

Marketable securities as of September 30, 2021 had remaining maturities between 16 weeks and 41  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.

4 unchanged sentences

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 –

Level 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

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

As of September 30, 2021

As of March 31, 2021

15 unchanged sentences

$ 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

Our available-for-sale securities as of September 30 and March 31, 2021, aggregated into classes of securities, were as follows:

As of September 30, 2021

As of March 31, 2021

13 unchanged sentences

$ 1,152,671  

$ ( 110,789 )

$ 60,647,982  

3 unchanged sentences

$ 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 

30, 2021 and March 

Less Than 12 Months

12 Months or Greater

As of June 30, 2021  

As of September 30, 2021

Corporate bonds

$ 10,306,776  

$ ( 110,789 )

$ 10,306,776  

$ ( 110,789 )

$ 10,306,776  

$ ( 110,789 )

$ 10,306,776  

As of March 31, 2021  

$ ( 110,789 )

As of March 31, 2021

Corporate bonds

7 unchanged sentences

$ ( 160,674 )

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

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

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

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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:

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 September 30, 2021.

Inventories are shown in the following table:

September 30,

Raw materials

11 unchanged sentences

STOCK-BASED COMPENSATION

     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.

Stock-based compensation expense was $ 56,999 for the second quarter of fiscal 2022, $ 34,315 for the second quarter of fiscal 2021, $ 64,237 for the first six months of fiscal 2022, and $ 37,022 for the first six months of fiscal 2021.

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

We had no unrecognized tax benefits as of September 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.

As of September 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.

1 unchanged sentence

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

June 30, 2021

Operating lease cost

30, 2021  

Variable lease cost

Six Months Ended

30, 2021  

Operating lease cost  

$ 42,515  

$ 85,030  

Variable lease cost  

31,029  

62,058  

$ 73,544  

$ 147,088  

Cash paid for amounts included in the measurement of lease liabilities  

1 unchanged sentence

$ 37,962  

Remaining lease term (in months)  

Discount rate

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

Year Ending March 31

Operating Leases

$ 75,924  

Remaining lease term  

54 months  

Discount rate  

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

Year Ending March 31  

Operating Leases  

76,779  

2 unchanged sentences

163,224  

Total lease payments

165,947  

Imputed lease interest

Total lease liabilities

Total lease payments  

721,663  

Imputed lease interest  

Total lease liabilities  

$ 667,928  

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 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.

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.

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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.

The remaining authorization was $ 3,762,040 as of September 30, 2021.

We did not repurchase any of our Common Stock during the first or second 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 

All of our employees are eligible to participate in our 401 (k) savings plan the first quarter after reaching age 21.

Employees may contribute up to the Internal Revenue Code maximum.

1 unchanged sentence

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.

Our matching contributions were $ 26,831 for the second quarter of fiscal 2022, $ 21,275 for the second quarter of fiscal 2021, $ 55,415 for the first six months of fiscal 2022, and $ 46,656 for the first six months of fiscal 2021.

SUBSEQUENT EVENTS

     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 

On October 20, 2021 we announced that our Board had declared a quarterly cash dividend of $ 1.00 per share of Common Stock to be paid November 30, 2021 to shareholders of record as of the close of business November 1, 2021 . 

Management ’

1 unchanged sentence

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.

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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.

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.

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 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:

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

Quarter ended September  

30, 2021 compared to quarter ended September  

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

Percentage of Revenue

Quarter Ended June 30

Quarter Ended September 30

Product sales

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Provision for income taxes

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).

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

The increase was due to a 59% increase in product sales partially offset by a 13% 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 increase in product sales in the second 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.

Gross profit as a percentage of revenue decreased to 77% the second quarter of fiscal 2022 from 79% the second quarter of fiscal 2021 primarily due to revenue mix.

Total expenses increased 1% in the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021 due to a 35% increase in selling, general, and administrative expense, partially offset by an 13% 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.

Interest income for the second 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 64% increase in net income in the second quarter of fiscal 2022 compared to the prior-year quarter was primarily due to an increase in product sales. 

Six Months ended September 30, 2021 compared to six Months ended September 30, 2020

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

Percentage of Revenue

Six Months Ended Sep.

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 six months ended September 30, 2021 increased 56% compared to the six months ended September 30, 2020.

The increase was due to a 59% increase in product sales partially offset by a 13% decrease in contract research and development revenue.

The increase in product sales from the prior-year period 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 76% for the first six months of fiscal 2022 from 80% for the first six months of fiscal 2021 primarily due to revenue mix.

Total expenses increased 2% for the first six months of fiscal 2022 compared to the first six months of fiscal 2021 due to a 33% increase in selling, general, and administrative expense, partially offset by an 11% 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 six months 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 56% increase in net income in the first six months 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

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.

We believe the impact of the COVID-19 pandemic on total revenue and net income was significantly less in the quarter and six months ended September 30, 2021 compared to the prior-year periods.

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.

Cash and cash equivalents were $11,145,156 as of September 30, 2021 compared to $10,427,340 as of March 31, 2021.

The $717,816 increase in cash and cash equivalents during first six months of fiscal 2022 was due to $6,458,196 in net cash provided by operating activities and $3,926,084 of cash provided by investing activities, partially offset by $9,666,464 of cash used in financing 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.

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 $6,458,196 for first six months of fiscal 2022 and $5,540,971 for the first six months of fiscal 2021.

Accounts receivable increased by $911,821 during first six months of fiscal 2022 primarily due to the timing of sales to and payments from customers.

Prepaid expenses and other assets increased by $298,099 due to the timing of estimated tax payments.

Investing Activities

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

Cash used in investing activities during the six months ended September 30, 2021 consisted of $73,916 in capital expenditures offset by $4,000,000 in proceeds from maturities of marketable securities.

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

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Financing Activities

     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.

Cash used in financing activities during the six months ended September 30, 2021 consisted of $9,666,464 of cash dividends paid to shareholders.

In addition to cash dividends to shareholders paid in first six months of fiscal 2022, on October 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 October 15, 2021, to be paid November 30, 2021.

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

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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.

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