What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-05-04 compared with 2021-05-05 · 130 added, 263 removed, 38 unchanged (91% of the section changed)

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.

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.

NVE History and Background

NVE is a Minnesota corporation headquartered in

a suburb of Minneapolis.

We were founded in 1989 by James M.

Daughton, Ph.D.,

a spintronics pioneer.

Our common stock became publicly traded in 2000 through

a reverse merger and became NASDAQ listed in 2003.

Since our founding, we have

been awarded more than $50 million in government research contracts.

contracts have helped us develop products and build our intellectual property

We have adopted a March 31 fiscal year, so fiscal years referenced

in this report end March 31.

NVE is a Minnesota corporation headquartered in a suburb of Minneapolis.

We were founded in 1989 by James M.

Daughton, Ph.D., a spintronics pioneer.

Our common stock became publicly traded in 2000 through a reverse merger and became NASDAQ listed in 2003.

Since our founding, we have been awarded more than $50 million in government research contracts.

These contracts have helped us develop products and build our intellectual property portfolio.

We have adopted a March 31 fiscal year, so fiscal years referenced in this report end March 31.

Industry Background

Much of the electronics industry is devoted to the

acquisition, storage, and transmission of information.

We have focused on three

applications for our spintronic technology:

Much of the electronics industry is devoted to the acquisition, storage, and transmission of information.

We have focused on three applications for our spintronic technology:

magnetic sensors, couplers, and memories.

Sensors acquire information, couplers transmit information, and memories store

In that sense, our technology can provide the eyes, nerves, and brains

of electronic systems.

Magnetic sensors can be used for a number of purposes

including detecting the position or speed of robotics and mechanisms, or for communicating

with implantable medical devices.

We believe our spintronic sensors are smaller,

more precise, and more reliable than competing devices.

Couplers are widely used in factory automation,

providing reliable digital communication between electronic subsystems in factories.

For example, couplers are used to send high-speed data between robots and central

As manufacturing automation expands, there is a need for higher speed

data and more channel density.

Because of their unique properties, we believe

our couplers transmit more data at higher speeds and over longer distances than

conventional devices.

Near-term potential MRAM applications include mission-critical

storage such as military, industrial, and antitamper applications.

MRAM could address the market for ubiquitous high-density memory.

Sensors acquire information, couplers transmit information, and memories store information.

In that sense, our technology can provide the eyes, nerves, and brains of electronic systems.

Magnetic sensors can be used for a number of purposes including detecting the position or speed of robotics and mechanisms, or for communicating with implantable medical devices.

We believe our spintronic sensors are smaller, more precise, and more reliable than competing devices.

Couplers are widely used in factory automation, providing reliable digital communication between electronic subsystems in factories.

For example, couplers are used to send high-speed data between robots and central controllers.

As manufacturing automation expands, there is a need for higher speed data and more channel density.

Because of their unique properties, we believe our couplers transmit more data at higher speeds and over longer distances than conventional devices.

Near-term potential MRAM applications include mission-critical storage such as military, industrial, and antitamper applications.

Long term, MRAM could address the market for ubiquitous high-density memory.

Our Enabling Technology

Our designs are generally based on either giant

magnetoresistance or tunneling magnetoresistance.

These structures produce a large

change in electrical resistance depending on the electron spin orientation in

a free layer.

In giant magnetoresistance (GMR) devices, resistance

changes due to conduction electrons scattering at interfaces within the devices.

The GMR effect is only significant if the layer thicknesses are less than the

mean free path of conduction electrons, which is approximately five nanometers.

Our critical GMR conductor layers may be less than two nanometers, or five atomic

layers, thick.

The second type of spintronic structure we use is

based on tunneling magnetoresistance (TMR).

Such devices are known as Spin-Dependent

Tunnel (SDT) junctions or Magnetic Tunnel Junctions (MTJs).

SDT junctions use

tunnel barriers that are so thin that electrons can tunnel through

a normally insulating material to cause a resistance change.

SDT barrier thicknesses

can be in the range of one to four nanometers (less than ten molecular layers).

In our products, the spintronic elements are connected

to integrated circuitry and encapsulated (packaged) in much the same way

as conventional integrated circuits.

Our vision is to become the leading developer of

practical spintronics technology and devices.

Our spintronic technology provides

eyes, nerves, and brains for electronic systems, breathing life and intelligence

into inanimate objects.

Our unique products support global trends of smart, low-power

end nodes for the Internet of Things. We plan to monetize our technology

by selling the products described below and licensing our MRAM technology.

grow product sales, we plan to broaden our sensor and coupler product lines, and

longer term to target larger markets such as automotive electronics.

Our designs are generally based on either giant magnetoresistance or tunneling magnetoresistance.

These structures produce a large change in electrical resistance depending on the electron spin orientation in a free layer.

In giant magnetoresistance (GMR) devices, resistance changes due to conduction electrons scattering at interfaces within the devices.

The GMR effect is only significant if the layer thicknesses are less than the mean free path of conduction electrons, which is approximately five nanometers.

Our critical GMR conductor layers may be less than two nanometers, or five atomic layers, thick.

The second type of spintronic structure we use is based on tunneling magnetoresistance (TMR).

Such devices are known as Spin-Dependent Tunnel (SDT) junctions or Magnetic Tunnel Junctions (MTJs).

SDT junctions use tunnel barriers that are so thin that electrons can “tunnel”

through a normally insulating material to cause a resistance change.

SDT barrier thicknesses can be in the range of one to four nanometers (less than ten molecular layers).

In our products, the spintronic elements are connected to integrated circuitry and encapsulated (“packaged”) in much the same way as conventional integrated circuits.

Our vision is to become the leading developer of practical spintronics technology and devices.

Our spintronic technology provides eyes, nerves, and brains for electronic systems, breathing life and intelligence into inanimate objects.

Our unique products support global trends of smart, low-power end nodes for the “Internet of Things.”

We plan to monetize our technology by selling the products described below and licensing our MRAM technology.

To grow product sales, we plan to broaden our sensor and coupler product lines, and longer term to target larger markets such as automotive electronics.

Our Products and Markets

Sensor Products and Markets

Our sensor products detect the strength or gradient

of magnetic fields and are often used to determine position or speed.

changes its electrical resistance depending on the magnetic field.

In our devices,

GMR is combined with conventional foundry integrated circuitry and packaged in

much the same way as conventional integrated circuits.

We sell standard or catalog

sensors, and custom sensors designed to meet customers exact requirements.

Our sensor products detect the strength or gradient of magnetic fields and are often used to determine position or speed.

The GMR changes its electrical resistance depending on the magnetic field.

In our devices, GMR is combined with conventional foundry integrated circuitry and packaged in much the same way as conventional integrated circuits.

We sell standard or catalog sensors, and custom sensors designed to meet customers’

exact requirements.

Our sensors are quite small, very sensitive to magnetic fields, precise, and reliable.

Standard sensors

Our standard, or catalog, sensors are generally

used to detect the presence of a magnetic or metallic material to determine position

We believe our spintronic sensors are smaller, more precise, more reliable,

and lower power than competing devices.

Our major market for standard sensors

is the Industrial Internet of Things (IIoT) for factory automation.

Our standard, or catalog, sensors are generally used to detect the presence of a magnetic or metallic material to determine position or speed.

We believe our spintronic sensors are smaller, more precise, more reliable, and lower power than competing devices.

Our major market for standard sensors is the Industrial Internet of Things (IIoT) for factory automation.

Custom and medical sensors

Our primary custom products are sensors for medical

devices, which are customized to our customers requirements and manufactured

under stringent medical device quality standards.

Most are used to replace electromechanical

magnetic switches.

We believe our sensors have important advantages in medical

devices compared to electromechanical switches, including no moving parts for

inherent reliability, and being smaller, more sensitive, and more precise.

sensors can be customized using customer-specific integrated signal processing

and design variations that can include the range and sensitivity to magnetic fields,

electrical resistance, and multisensor elements configuration.

Future custom sensor

target markets include consumer electronics, automotive electronics, and biosensors.

Our primary custom products are sensors for medical devices, which are customized to our customers’

requirements and manufactured under stringent medical device quality standards.

Most are used to replace electromechanical magnetic switches.

We believe our sensors have important advantages in medical devices compared to electromechanical switches, including no moving parts for inherent reliability, and being smaller, more sensitive, and more precise.

Our sensors can be customized using customer-specific integrated signal processing and design variations that can include the range and sensitivity to magnetic fields, electrical resistance, and multisensor elements configuration.

Future custom sensor target markets include consumer electronics, automotive electronics, and biosensors.

Coupler Products and Markets

Our spintronic couplers combine a GMR sensor element

and an integrated microscopic coil.

The coil creates a small magnetic field that

is picked up by the spintronic sensor, transmitting data almost instantly.

are also known as isolators because they electrically isolate the

coupled systems.

Our spintronic couplers combine a GMR sensor element and an integrated microscopic coil.

The coil creates a small magnetic field that is picked up by the spintronic sensor, transmitting data almost instantly.

Couplers are also known as “isolators”

because they electrically isolate the coupled systems.

Our IsoLoop couplers are faster than the fastest optical couplers.

Our major coupler market is currently the Industrial Internet of Things (IIoT)

for factory automation.

Our major coupler market is currently the Industrial Internet of Things (IIoT) for factory automation.

We are targeting the automotive market longer term.

1 unchanged sentence

MRAM uses spintronics to store data.

called the ideal or universal memory because of its potential to combine the speed

of SRAM, the density of DRAM, and the nonvolatility of flash memory.

Data is stored

in the spin of the electrons in thin metal alloy films, and read with spin-dependent

tunnel junctions.

Unlike electrical charge, the spin of an electron is inherently

We have invented several types of MRAM memory cells including inventions

related to advanced MRAM designs and MRAM for tamper prevention or detection.

Our strategy is to develop, manufacture, and sell

low bit-density MRAM for applications such as tamper prevention and detection.

For high bit-density MRAM, our strategy is to license our technology to companies

with large-scale memory manufacturing capabilities.

It has been called the ideal or universal memory because of its potential to combine the speed of SRAM, the density of DRAM, and the nonvolatility of flash memory.

Data is stored in the spin of the electrons in thin metal alloy films, and read with spin-dependent tunnel junctions.

Unlike electrical charge, the spin of an electron is inherently permanent.

We have invented several types of MRAM memory cells including inventions related to advanced MRAM designs and MRAM for tamper prevention or detection.

Our strategy is to develop, manufacture, and sell low bit-density MRAM for applications such as tamper prevention and detection.

For high bit-density MRAM, our strategy is to license our technology to companies with large-scale memory manufacturing capabilities.

Product Manufacturing

The heart of our fabrication facility is a cleanroom

area with specialized equipment to deposit, pattern, etch, and process spintronic

Most of our products are fabricated in our facility using either raw

silicon wafers or foundry wafers.

Foundry wafers contain conventional electronics

that perform housekeeping functions such as voltage regulation and signal conditioning

in our products.

The heart of our fabrication facility is a cleanroom area with specialized equipment to deposit, pattern, etch, and process spintronic materials.

Most of our products are fabricated in our facility using either raw silicon wafers or foundry wafers.

Foundry wafers contain conventional electronics that perform housekeeping functions such as voltage regulation and signal conditioning in our products.

Each wafer may include thousands of devices.

build spintronics structures on wafers in our fabrication facility.

saw wafers to be sold in die form, or send wafers to Asia for dicing and packaging.

We build spintronics structures on wafers in our fabrication facility.

We either saw wafers to be sold in die form, or send wafers to Asia for dicing and packaging.

Other production operations include wafer-level inspection and testing.

parts are returned to us to be tested, inventoried, and shipped.

Packaged parts are returned to us to be tested, inventoried, and shipped.

Sales and Product Distribution

We rely on distributors who stock our products and

sell them in more than 75 countries.

Distributors of our products include

America II Electronics, Inc., Angst+Pfister

Sensors and Power , Avnet companies, and Digi-Key

We rely on distributors who stock our products and sell them in more than 75 countries.

Distributors of our products include America II Electronics, Inc., Angst+Pfister Sensors and Power, Avnet companies, and Digi-Key Corporation.

Our distributor agreements generally renew annually.

we distribute versions of some of our products under private-brand partnerships

with large integrated device manufacturers.

These private-brand partnerships broaden

our distribution and enhance our sales support, technical support, and brand awareness.

In addition, we distribute versions of some of our products under private-brand partnerships with large integrated device manufacturers.

These private-brand partnerships broaden our distribution and enhance our sales support, technical support, and brand awareness.

New Product Status

In the past year we began marketing a number of

new and improved products, including:

In the past year we began marketing a number of new and improved products, including:

a new type of current sensor;

new smart sensors for the Internet of Things;

new TMR magnetic sensors and magnetic switches;

data couplers with isolated power convertors;

couplers with improved Common-Mode Transient Immunity for more efficient

power control.

Long-term product development programs in fiscal

2021 included:

new TMR sensors;

custom integrated circuits for smart sensors;

power conversion integrated circuits.

ulraprecise rotational sensors for fine motion control and robotics;

data couplers with isolated power convertors to transmit power as well as data;

high-sensitivity TMR magnetic sensors.

Long-term product development programs in fiscal 2022 focussed on even more accurate TMR sensors and Magnetoresistive Random Access Memory (MRAM).

Our Competition

Industrial Sensor Competition

Several other companies either make or may have

the capability to make GMR or TMR sensors.

Also, several competitors make solid-state

industrial magnetic sensors including silicon Hall-effect sensors and anisotropic

magnetoresistive (AMR) sensors.

We believe those types of sensors are not as sensitive

or power-efficient as our GMR or TMR sensors.

Several other companies either make or may have the capability to make GMR or TMR sensors.

Also, several competitors make solid-state industrial magnetic sensors including silicon Hall-effect sensors and anisotropic magnetoresistive (AMR) sensors.

We believe those types of sensors are not as sensitive or power-efficient as our GMR or TMR sensors.

Medical Sensor Competition

Our sensors for medical devices face competition

from electromechanical magnetic sensors and from other solid-state magnetic sensors.

Electromechanical magnetic sensors such as reed and micro-electromechanical system

(MEMS) switches have been in use for several decades.

Because our sensors have

no moving parts, we believe they are inherently more reliable than electromechanical

magnetic sensors.

We also believe our sensors are smaller than the smallest electromechanical

magnetic sensors, more precise in their magnetic switch points, and more sensitive.

Compared to other solid-state sensors, our medical sensors may have advantages

in size, sensitivity to small magnetic fields, or electrical interface simplicity.

Our sensors for medical devices face competition from electromechanical magnetic sensors and from other solid-state magnetic sensors.

Electromechanical magnetic sensors such as reed and micro-electromechanical system (MEMS) switches have been in use for several decades.

Because our sensors have no moving parts, we believe they are inherently more reliable than electromechanical magnetic sensors.

We also believe our sensors are smaller than the smallest electromechanical magnetic sensors, more precise in their magnetic switch points, and more sensitive.

Compared to other solid-state sensors, our medical sensors may have advantages in size, sensitivity to small magnetic fields, or electrical interface simplicity.

Coupler Competition

Competing coupler technologies include optical couplers,

inductive couplers (transformers), capacitive couplers, and radio-frequency modulation

Prominent optical coupler suppliers include Broadcom Limited, Fairchild

Semiconductor International, Lite-On Technology Corporation, Renesas Electronics

Corporation, Toshiba Corporation, and Vishay Intertechnology.

Our strategy is to compete based on product features

rather than to compete solely on price.

IsoLoop couplers are smaller and therefore

require less circuit board space per channel than most competing couplers.

other advantages over competing technologies may include less signal distortion,

longer product life, and lower power consumption.

Competing coupler technologies include optical couplers, inductive couplers (transformers), capacitive couplers, and radio-frequency modulation couplers.

Prominent optical coupler suppliers include Broadcom Limited, Fairchild Semiconductor International, Lite-On Technology Corporation, Renesas Electronics Corporation, Toshiba Corporation, and Vishay Intertechnology.

Our strategy is to compete based on product features rather than to compete solely on price.

IsoLoop couplers are smaller and therefore require less circuit board space per channel than most competing couplers.

Our other advantages over competing technologies may include less signal distortion, longer product life, and lower power consumption.

MRAM Competition

A number of companies compete or may compete with

us for MRAM research and development or service business, or may be attempting

to develop MRAM intellectual property for licensing to others.

Emerging technologies

that could compete with MRAM include graphene and carbon nanotubes, phase-change

also known as chalcogenide, 3D XPoint, or Ovonic memory), resistive

RAM (ReRAM or RRAM), conductive bridge RAM (CBRAM), memory resistors (memristors),

and conductive metal oxide (CMOx) memory.

MRAM may have advantages over these

technologies in either manufacturability, speed, bit density, data retention,

or endurance.

A number of companies compete or may compete with us for MRAM research and development or service business, or may be attempting to develop MRAM intellectual property for licensing to others.

Emerging technologies that could compete with MRAM include graphene and carbon nanotubes, phase-change memory (PCM;

also known as chalcogenide, 3D XPoint, or Ovonic memory), resistive RAM (ReRAM or RRAM), conductive bridge RAM (CBRAM), memory resistors (“memristors”), and conductive metal oxide (CMOx) memory.

MRAM may have advantages over these technologies in either manufacturability, speed, bit density, data retention, or endurance.

Sources and Availability of Raw Materials

Our principal sources of raw materials include suppliers

of raw silicon and semiconductor foundry wafers that are incorporated into our

products, and suppliers of device packaging services.

Our wafers sources are based

around the world;

Our principal sources of raw materials include suppliers of raw silicon and semiconductor foundry wafers that are incorporated into our products, and suppliers of device packaging services.

Our wafers sources are based around the world;

most of our packaging services take place in Asia.

Intellectual Property

As of March 31, 2021 we had more than 50

As of March 31, 2022 we had more than 50 issued U.S.

patents assigned to us.

We also have a number of foreign patents,

a number of U.S.

and foreign patents pending, and we have licensed patents from

There are no patents we regard as critical to our current business owned

by us or licensed to us that expire in the next 12 months.

We have patents on advanced MRAM designs

that we believe are important, including patents that relate to magnetothermal

MRAM, spin-momentum MRAM, and synthetic antiferromagnetic storage.

it is not critical to our current business, we have identified U.S.

patent 6,744,086

titled Current switched magnetoresistive memory cell as particularly

important for successful high-density, high-performance MRAMs.

The patent has

been reissued as RE 44,878 and expires May 15, 2022.

Much of our intellectual property has been developed

We also have a number of foreign patents, a number of U.S.

and foreign patents pending, and we have licensed patents from others.

There are no patents we regard as critical to our current business owned by us or licensed to us that expire in the next 12 months.

We have patents on advanced MRAM designs that we believe are important, including patents that relate to magnetothermal MRAM, spin-momentum MRAM, and synthetic antiferromagnetic storage.

Although it is not critical to our current business, we have identified U.S.

patent 6,744,086 titled “Current switched magnetoresistive memory cell”

as particularly important for successful high-density, high-performance MRAMs.

The patent has been reissued as RE 44,878 and expires May 15, 2022.

Much of our intellectual property has been developed with U.S.

Government support.

Under federal legislation, companies normally

may retain the principal worldwide patent rights to any invention developed

Under federal legislation, companies normally may retain the principal worldwide patent rights to any invention developed with U.S.

Government support.

NVE and IsoLoop are our

registered trademarks.

Other trademarks we claim include GMR Switch

and GT Sensor.

“NVE”

and “IsoLoop”

are our registered trademarks.

Other trademarks we claim include “GMR Switch”

and “GT Sensor.”

Dependence on Major Customers

We rely on several large customers for a significant

percentage of our revenue, including Abbott Laboratories,

Sonova AG, certain other medical device manufacturers, and certain distributors.

The loss of one or more of these customers could have a material adverse effect

We rely on several large customers for a significant percentage of our revenue, including Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors.

The loss of one or more of these customers could have a material adverse effect on us.

Government Regulations

We are subject to government regulations including,

but not limited to, regulations related to environment, tax matters, securities,

conflict minerals, ethics and foreign corrupt practices, import and export controls,

product safety and liability, workplace health and safety, labor and employment,

and data privacy.

We incur and expect to continue to incur costs and expenses

to comply with these regulations and may incur penalties for any failure to

Additionally, certain contracts required us maintain

facilities and personnel security clearances to protect classified information.

Such clearances are subject Government audits and investigations, and any deficiencies

or illegal activities identified during the audits or investigations could result

in the forfeiture or suspension of payments and civil or criminal penalties.

We are subject to government regulations including, but not limited to, regulations related to environment, tax matters, securities, conflict minerals, ethics and foreign corrupt practices, import and export controls, product safety and liability, workplace health and safety, labor and employment, and data privacy.

We incur and expect to continue to incur costs and expenses to comply with these regulations and may incur penalties for any failure to do so.

Additionally, certain contracts required us maintain facilities and personnel security clearances to protect classified information.

Such clearances are subject Government audits and investigations, and any deficiencies or illegal activities identified during the audits or investigations could result in the forfeiture or suspension of payments and civil or criminal penalties.

Environmental Matters

We are subject to environmental laws and regulations

particularly state and local laws and regulations relating to industrial waste

and emissions.

Compliance with these laws and regulations has not had a material

impact on our capital expenditures, earnings, or competitive position to date.

Existing and future environmental laws and regulations could result in expenses

related to emission abatement or remediation, but we are currently unable to

estimate such expenses.

We are subject to environmental laws and regulations particularly state and local laws and regulations relating to industrial waste and emissions.

Compliance with these laws and regulations has not had a material impact on our capital expenditures, earnings, or competitive position to date.

Existing and future environmental laws and regulations could result in expenses related to emission abatement or remediation, but we are currently unable to estimate such expenses.

Human Capital Resources

We had 44 employees as of March 31, 2021,

all of whom were full-time.

We have policies to prevent discrimination based

on gender, race, disability, ethnicity, nationality, religion, sexual orientation,

gender identity, or gender expression.

We take affirmative action to ensure

that applicants are employed, and that employees are treated during employment,

without regard to their race, color, religion, sex, or national origin.

take affirmative action to employ and advance veterans in employment.

We offer employees free health risk assessments,

wellness programs, and financial incentives for healthy biometrics.

None of our employees are represented by a labor

union or are subject to a collective bargaining agreement, and we believe we

maintain good relations with our employees.

We had 49 employees as of March 31, 2022, 47 of whom were full-time.

We have policies to prevent discrimination based on gender, race, disability, ethnicity, nationality, religion, sexual orientation, gender identity, or gender expression.

We take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, or national origin.

We also take affirmative action to employ and advance veterans in employment.

We offer employees free wellness programs.

None of our employees are represented by a labor union or are subject to a collective bargaining agreement, and we believe we maintain good relations with our employees.

Available Information

All reports we file with the SEC, including our

annual reports on Form 10-K , quarterly

reports on Form 10-Q , current reports

on Form 8-K , and proxy statements

and additional proxy materials on Schedule 14A, as well as any amendments

to those reports and schedules, are accessible at no cost through the Investors

All reports we file with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy statements and additional proxy materials on Schedule 14A, as well as any amendments to those reports and schedules, are accessible at no cost through the “Investors”

section of our Website (www.nve.com).

These filings are also accessible through

the SECs Website (www.sec.gov).

These filings are also accessible through the SEC’s Website (www.sec.gov).

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-K

Item 1. Business