What changed in this filing

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Item 1A. Risk Factors

2022-05-04 compared with 2021-05-05 · 133 added, 383 removed, 15 unchanged (97% of the section changed)

RISK FACTORS.

We caution readers that the following important

factors, among others, could affect our financial condition, operating results,

business prospects or any other aspect of NVE, and could cause our actual results

to differ materially from that projected or estimated by us in the forward-looking

statements made by us or on our behalf.

Although we have attempted to list below

the important factors that do or may affect our financial condition, operating

results, business prospects, or any other aspect of NVE, other factors may in

the future prove to be more important.

New factors emerge from time to time and

it is not possible for us to predict all of such factors.

Similarly, we cannot

necessarily assess or quantify the impact of each such factor on the business

or the extent to which any factor, or combination of factors, may cause actual

results to differ materially from those contained in forward-looking statements.

We caution readers that the following important factors, among others, could affect our financial condition, operating results, business prospects or any other aspect of NVE, and could cause our actual results to differ materially from that projected or estimated by us in the forward-looking statements made by us or on our behalf.

Although we have attempted to list below the important factors that do or may affect our financial condition, operating results, business prospects, or any other aspect of NVE, other factors may in the future prove to be more important.

New factors emerge from time to time and it is not possible for us to predict all of such factors.

Similarly, we cannot necessarily assess or quantify the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in forward-looking statements.

Risks Related to our Business

We may lose revenue if any of our large customers cancel, postpone, or reduce

their purchases.

We rely on several large customers for a significant

percentage of our revenue.

These large customers include Abbott Laboratories,

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

Although we have agreements with certain large customers, these agreements do

not obligate customers to purchase from us and may not prevent price reductions.

Furthermore, orders from our large customers can generally be reduced, postponed,

or canceled, and some orders were delayed or canceled due to the effects of the

COVID-19 pandemic.

Any decreases in purchases,

or the loss of any of our large customers, could have a significant impact on

our revenue and our profitability.

We may lose revenue if any of our large customers cancel, postpone, or reduce their purchases.

We rely on several large customers for a significant percentage of our revenue.

These large customers include Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors.

Although we have agreements with certain large customers, these agreements do not obligate customers to purchase from us and may not prevent price reductions.

Furthermore, orders from our large customers can generally be reduced, postponed, or canceled.

Any decreases in purchases, or the loss of any of our large customers, could have a significant impact on our revenue and our profitability.

We risk losing business to our competitors.

We have a number of competitors and potential competitors,

many of whom have significantly greater financial, technical, and marketing resources

We believe that our competition is increasing as the technology and markets

We have a number of competitors and potential competitors, many of whom have significantly greater financial, technical, and marketing resources than us.

We believe that our competition is increasing as the technology and markets mature.

This has meant more competitors and more severe pricing pressure.

our competitors may be narrowing or eliminating our performance advantages.

expect these trends to continue, and we may lose business to competitors or it

may be necessary to significantly reduce our prices in order to acquire or retain

These factors could cause a material adverse impact on our financial

condition, revenue, gross profit margins, or income.

Failure to meet stringent customer requirements could result in the loss

of key customers and reduce our sales.

Some of our customers, including certain medical

device manufacturers, have stringent technical and quality requirements that require

our products to meet certain test and qualification criteria or to adopt and comply

with specific quality standards.

Certain customers also periodically audit our

Failure to meet technical or quality requirements or a negative customer

audit could result in the loss of current sales revenue, customers, and future

In addition, our competitors may be narrowing or eliminating our performance advantages.

We expect these trends to continue, and we may lose business to competitors or it may be necessary to significantly reduce our prices in order to acquire or retain business.

These factors could cause a material adverse impact on our financial condition, revenue, gross profit margins, or income.

Failure to meet stringent customer requirements could result in the loss of key customers and reduce our sales.

Some of our customers, including certain medical device manufacturers, have stringent technical and quality requirements that require our products to meet certain test and qualification criteria or to adopt and comply with specific quality standards.

Certain customers also periodically audit our performance.

Failure to meet technical or quality requirements or a negative customer audit could result in the loss of current sales revenue, customers, and future sales.

We may lose revenue if we are unable to renew customer agreements.

We have agreements with certain customers, including

a Supplier Partnering Agreement, as amended, with Abbott Laboratories, which expires

November 30, 2021, and Supply Agreement, as amended, with Sonova AG,

which expires March 31, 2025.

We cannot predict if these agreements will

be renewed, or if renewed, under what terms.

Although it is possible we could

continue to sell products to these customers without formal agreements, an inability

to agree on mutually acceptable terms or the loss of these customers could have

a significant adverse impact on our revenue and our profitability.

Changes in tax law, in our tax rates or in exposure to additional income

tax liabilities may materially and adversely affect our financial condition, results

of operations, and cash flows.

Changes in law and policy relating to taxes

may materially and adversely affect our financial condition, results of operations

and cash flows.

For example, the 2017 Federal Tax Reform Act significantly decreased

our Federal income tax rate.

The current administration and Congress could make

changes to existing tax law such as an increase in the corporate tax rate.

to existing Federal or state tax laws could adversely affect our financial condition

and results of operations.

We will lose revenue if government contract funding is reduced, delayed,

or eliminated.

A decrease in U.S.

Government funded research or

disqualification as a vendor to the U.S.

Government for any reason could hamper

future research and development activity and decrease related revenue.

to direct Government funding, certain of our non-Government customers and prospective

customers depend on Government support to fund their contracts with us.

and indirect Government funding depends on adequate continued funding of the agencies

and their programs.

Such funding is subject to the availability of Congressional

appropriations and that, as a result, long-term government contracts are partially

funded initially with additional funds committed only as Congress makes further

appropriations.

Certain contracts require us to 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.

Furthermore, some of

our Government funding has been through Small Business Innovation Research (SBIR)

or Small Business Technology Transfer Research (STTR) contracts.

SBIR and STTR

budgets, eligibility, or funding limits may be changed by legislation or by agencies

such as the Department of Defense.

If we were barred for any reason from U.S.

government contracts there could

be a significant adverse impact on our revenue and our ability to make research

and development progress.

If we were to be charged with violation of certain

laws or if the U.S.

Government were to determine that we are not a presently

responsible contractor, we could be temporarily suspended or, in the event

of a violation, barred for up to three years from receiving new U.S.

contracts or government-approved subcontracts.

Additionally, we are subject to

routine government audits and may be subject to investigations, and any deficiencies

or illegal activities identified during the audits or investigations may result

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

barred for any reason from U.S.

Government contracts could have a material adverse

effect on our revenue, profits, and research and development efforts.

Some of our products are incorporated into medical devices, which could

expose us to a risk of product liability claims and such claims could seriously

harm our business and financial condition.

Certain of our products are used in medical devices,

including devices that help sustain human life.

We are also marketing our technology

to other manufacturers of cardiac pacemakers and ICDs.

Although we have indemnification

agreements with certain customers including provisions designed to limit our exposure

to product liability claims, there can be no assurance that we will not be subject

to losses, claims, damages, liabilities, or expenses resulting from bodily injury

or property damage arising from the incorporation of our products in devices sold

by our customers.

Our indemnifying customers may not have the financial resources

to cover all liability.

Existing or future laws or unfavorable judicial decisions

could limit or invalidate the provisions of our indemnification agreements, or

the agreements may not be enforceable in all instances.

A successful product liability

claim could require us to pay, or contribute to payment of, substantial damage

awards, which would have a significant negative effect on our business and financial

We have agreements with certain customers, including a Supplier Partnering Agreement, as amended, with Abbott Laboratories, which expires December 31, 2022.

We cannot predict if these agreements will be renewed, or if renewed, under what terms.

Although it is possible we could continue to sell products to these customers without formal agreements, an inability to agree on mutually acceptable terms or the loss of these customers could have a significant adverse impact on our revenue and our profitability.

Changes in tax law, in our tax rates or in exposure to additional income tax liabilities may materially and adversely affect our financial condition, results of operations, and cash flows.

Changes in law and policy relating to taxes or changes in tax rates may materially and adversely affect our financial condition, results of operations and cash flows.

Some of our products are incorporated into medical devices, which could expose us to a risk of product liability claims and such claims could seriously harm our business and financial condition.

Certain of our products are used in medical devices, including devices that help sustain human life.

We are also marketing our technology to other manufacturers of cardiac pacemakers and ICDs.

Although we have indemnification agreements with certain customers including provisions designed to limit our exposure to product liability claims, there can be no assurance that we will not be subject to losses, claims, damages, liabilities, or expenses resulting from bodily injury or property damage arising from the incorporation of our products in devices sold by our customers.

Our indemnifying customers may not have the financial resources to cover all liability.

Existing or future laws or unfavorable judicial decisions could limit or invalidate the provisions of our indemnification agreements, or the agreements may not be enforceable in all instances.

A successful product liability claim could require us to pay, or contribute to payment of, substantial damage awards, which would have a significant negative effect on our business and financial condition.

We may lose revenue if we are unable to maintain important certifications.

Our quality management system is certified to the

ISO 9001 standard, and we have received a letter of conformance for the International

Automotive Task Force (IATF) 16949 automotive sector-specific standard.

products are also subject to independent certification and listings including

by the VDE Institute and UL LLC.

These certifications are subject to

a number of rigorous conditions.

Failure to achieve or maintain any of these certifications

or listings could cause us to be disqualified by one or more of our customers,

and could have a material adverse impact on our business and revenue.

Federal legislation may not protect us against liability for the use of

our products in medical devices and a successful liability claim could seriously

harm our business and financial condition.

Although the Biomaterials Access Assurance Act of

1998 may provide us some protection against potential liability claims, that Act

includes significant exceptions to supplier immunity provisions, including limitations

relating to negligence or willful misconduct.

A successful product liability claim

could require us to pay, or contribute to payment of, substantial damage awards,

which would have a significant negative effect on our business and financial condition.

Any product liability claim against us, with or without merit, could result in

costly litigation, divert the time, attention, and resources of our management

and have a material adverse impact on our business.

The malfunction of our products in medical devices could lead to the need

to recall devices incorporating our products from the market, which may be harmful

to our reputation and cause a significant loss of revenue.

The malfunction of our products that are incorporated

in medical devices could lead to the recall of existing medical devices incorporating

our products.

Such a recall could be harmful to our reputation for product safety

and efficacy.

Even if assertions that our products caused or contributed to device

failure do not lead to product liability or contract claims, such assertions could

harm our reputation and customer relationships.

Any damage to our reputation and/or

the reputation of our products, or the reputation of our customers or their products

could limit the market for our and our customers products and harm our results

of operations.

Our quality management system is certified to the ISO 9001 standard, and some of our products are also subject to independent certification and listings including by the VDE Institute and UL LLC.

These certifications are subject to a number of rigorous conditions.

Failure to achieve or maintain any of these certifications or listings could cause us to be disqualified by one or more of our customers, and could have a material adverse impact on our business and revenue.

Federal legislation may not protect us against liability for the use of our products in medical devices and a successful liability claim could seriously harm our business and financial condition.

Although the Biomaterials Access Assurance Act of 1998 may provide us some protection against potential liability claims, that Act includes significant exceptions to supplier immunity provisions, including limitations relating to negligence or willful misconduct.

Any product liability claim against us, with or without merit, could result in costly litigation, divert the time, attention, and resources of our management and have a material adverse impact on our business.

The malfunction of our products in medical devices could lead to the need to recall devices incorporating our products from the market, which may be harmful to our reputation and cause a significant loss of revenue.

The malfunction of our products that are incorporated in medical devices could lead to the recall of existing medical devices incorporating our products.

Such a recall could be harmful to our reputation for product safety and efficacy.

Even if assertions that our products caused or contributed to device failure do not lead to product liability or contract claims, such assertions could harm our reputation and customer relationships.

Any damage to our reputation and/or the reputation of our products, or the reputation of our customers or their products could limit the market for our and our customers’

products and harm our results of operations.

We may lose business and revenue if our critical production equipment fails.

Our production process relies on certain critical

pieces of equipment for defining, depositing, and modifying the magnetic properties

of thin films.

Some of this equipment was designed or customized by us, and some

may no longer be in production.

While we have an in-house maintenance staff, maintenance

agreements for certain equipment, some critical spare parts, and back-ups for

some of the equipment, we cannot be sure we could repair or replace critical manufacturing

equipment were it to fail.

The loss of supply from any of our key single-source wafer suppliers could substantially

impact our ability to produce and deliver products and seriously harm our business

and financial condition.

Our critical suppliers include suppliers of certain

raw silicon and semiconductor foundry wafers that are incorporated in our products.

We maintain inventory of some critical wafers, but we have not identified or qualified

alternate suppliers for many of the wafers now being obtained from single sources.

In the past fiscal year there have been industry-wide semiconductor

wafer shortages and leadtimes have increased for certain of our foundry wafers.

Wafer supply interruptions for any reason, including acts of God such as floods,

typhoons, cyclones, earthquakes, or pandemics could seriously jeopardize our ability

to provide products that are critical to our business and operations, and may

cause us to lose revenue.

The loss of supply of any critical chemicals or supplies could impact our

ability to produce and deliver products and cause loss of revenue.

There are a number of critical chemicals and supplies

that we require to make products.

These include certain gases, photoresists, polymers,

metals, and specialized alloys.

We maintain inventory of critical chemicals and

materials, but in many cases we are dependent on single sources, and some of the

materials could be subject to shortages or be discontinued by their suppliers

Supply interruptions or shortages for any reason could seriously

jeopardize our ability to provide products that are critical to our business and

operations and may cause us to lose revenue.

The loss of supply from any of our packaging vendors could impact our ability

to produce and deliver products and cause loss of revenue.

Our production process relies on certain critical pieces of equipment for defining, depositing, and modifying the magnetic properties of thin films.

Some of this equipment was designed or customized by us, and some may no longer be in production.

While we have an in-house maintenance staff, maintenance agreements for certain equipment, some critical spare parts, and back-ups for some of the equipment, we cannot be sure we could repair or replace critical manufacturing equipment were it to fail.

The loss of supply from any of our key single-source wafer suppliers could substantially impact our ability to produce and deliver products and seriously harm our business and financial condition.

Our critical suppliers include suppliers of certain raw silicon and semiconductor foundry wafers that are incorporated in our products.

We maintain inventory of some critical wafers, but we have not identified or qualified alternate suppliers for many of the wafers now being obtained from single sources.

In the past fiscal year there have been industry-wide semiconductor wafer shortages and leadtimes have increased for certain of our foundry wafers.

Wafer supply interruptions for any reason, including acts of God such as floods, typhoons, cyclones, earthquakes, or pandemics could seriously jeopardize our ability to provide products that are critical to our business and operations, and may cause us to lose revenue.

Risks related to extreme weather may be exacerbated by the effects of climate change.

The loss of supply of any critical chemicals or supplies could impact our ability to produce and deliver products and cause loss of revenue.

There are a number of critical chemicals and supplies that we require to make products.

These include certain gases, photoresists, polymers, metals, and specialized alloys.

We maintain inventory of critical chemicals and materials, but in many cases we are dependent on single sources, and some of the materials could be subject to shortages or be discontinued by their suppliers at any time.

The Russia-Ukraine crisis could cause or exacerbate shortages.

Sanctions against Russia could affect supplies or prices of materials supplied by Russia, including materials we use such as aluminum, copper, helium, magnesium, manganese, nickel, palladium, platinum, and titanium.

Materials supplied by Ukraine include neon, which may be used to produce some of our foundry warfers.

Supply interruptions or shortages for any reason could seriously jeopardize our ability to provide products that are critical to our business and operations and may cause us to lose revenue.

The loss of supply from any of our packaging vendors could impact our ability to produce and deliver products and cause loss of revenue.

We are dependent on our packaging vendors.

of the unique materials our products use, the complexity of some of our products,

unique magnetic requirements, and high isolation voltage specifications, many

of our products are more challenging to package than conventional integrated circuits.

Some of our products use processes or tooling unique to a particular packaging

vendor, and it might be expensive, time-consuming, or impractical to convert to

another vendor in the event of a supply interruption due to vendors business

decisions, business condition, or acts of God, including floods, typhoons, earthquakes,

or pandemics.

Leadtimes for packaging services have increased during the COVID-19

pandemic and there have been shortages of raw materials and equipment our packaging

vendors need for their process.

One of our packaging vendors in India was forced

to suspend its factory operations from late March 2020 until mid-May 2020 and

was permitted only limited operation from mid-May through August 2020 pursuant

to COVID-19 government orders, and is still not fully operational.

on our packaging vendors could be reimposed in the future.

Additionally, certain

of our packaging vendors are in flood-susceptible areas.

Flooding risks to such

vendors may increase in the future due to possible higher ocean levels, extreme

weather, and other potential effects of climate change.

We have alternate vendors

or potential alternate vendors for the majority of our products, but it can be

expensive, time-consuming, and technically challenging to convert to alternate

Furthermore, we may not be able to recover work in process or finished

goods at a packaging vendor in the event of a disruption.

Any supply interruptions

or loss of inventory could seriously jeopardize our ability to provide products

that are critical to our business and operations and may cause us to lose revenue.

We are subject to risks inherent in doing business in foreign countries

that could impair our results of operations.

Foreign sales are a significant portion of our revenue

and we rely on suppliers in China, India, Taiwan, Thailand, and other foreign

Risks relating to operating in foreign markets that could impair our

results of operations include economic and political instability;

including floods, typhoons, cyclones and earthquakes;

public health crises including,

but not limited to, the COVID-19 pandemic;

difficulties in enforcement of contractual

obligations and intellectual property rights;

changes in regulatory requirements,

tariffs, customs, duties, and other trade barriers;

Because of the unique materials our products use, the complexity of some of our products, unique magnetic requirements, and high isolation voltage specifications, many of our products are more challenging to package than conventional integrated circuits.

Some of our products use processes or tooling unique to a particular packaging vendor, and it might be expensive, time-consuming, or impractical to convert to another vendor in the event of a supply interruption due to vendors' business decisions, business condition, or acts of God, including floods, typhoons, earthquakes, or pandemics.

Leadtimes for packaging services have increased during the COVID-19 pandemic and there have been shortages of raw materials and equipment our packaging vendors need for their process.

Government lockdown restrictions, labor shortages, and raw-material shortages have reduced our vendors' capacity and increased their lead-times.

These conditions could continue, worsen, or recur.

Additionally, certain of our packaging vendors are in flood-susceptible areas.

Flooding risks to such vendors may increase in the future due to possible higher ocean levels, extreme weather, and other potential effects of climate change.

We have alternate vendors or potential alternate vendors for the majority of our products, but it can be expensive, time-consuming, and technically challenging to convert to alternate vendors.

Furthermore, we may not be able to recover work in process or finished goods at a packaging vendor in the event of a disruption.

Supply delays, interruptions, or loss of inventory could seriously jeopardize our ability to provide products that are critical to our business and operations and may cause us to lose revenue.

We are subject to risks inherent in doing business in foreign countries that could impair our results of operations.

Foreign sales are a significant portion of our revenue and we rely on suppliers in China, India, Taiwan, Thailand, and other foreign countries.

Risks relating to operating in foreign markets that could impair our results of operations include economic and political instability;

acts of God, including floods, typhoons, cyclones and earthquakes;

public health crises including, but not limited to, the COVID-19 pandemic;

difficulties in enforcement of contractual obligations and intellectual property rights;

changes in regulatory requirements, tariffs, customs, duties, and other trade barriers;

transportation delays;

other uncertainties relating to the administration of, or changes in, or new interpretation

of, the laws, regulations, and policies of jurisdictions where we do business.

Public health crises could have an adverse effect on our operations and

financial results.

Public health crises could adversely affect our

ongoing business operations.

In particular, the COVID-19 pandemic has impacted

global economic activity, caused many of our important customers to delay or cancel

orders, and disrupted our supply chains.

Any customer or supplier disruptions

could affect our ability to operate.

These and other impacts of COVID-19 pandemic

or other public health crises could have a material adverse effect on our results

of operations or our financial condition.

We may not be able to enforce our intellectual property rights.

We protect our proprietary technology and intellectual

property by seeking patents, trademarks, and copyrights, and by maintaining trade

secrets through entering into confidentiality agreements with employees, suppliers,

customers, and prospective customers depending on the circumstances.

We hold patents

or are the licensee of others owning patented technology covering certain aspects

of our products and technology.

These patent rights may be challenged, rendered

unenforceable, invalidated, or circumvented.

Additionally, rights granted under

the patents or under licensing agreements may not provide a competitive advantage

Efforts to enforce patent rights can involve substantial expense and may

not be successful.

Furthermore, others may independently develop similar, superior,

or parallel technologies to any technology developed by us, or our technology

may prove to infringe on patents or rights owned by others.

Thus the patents held

by or licensed to us may not afford us any meaningful competitive advantage.

our confidentiality agreements may not provide meaningful protection of our proprietary

Our inability to maintain our proprietary rights could have a material

adverse effect on our business, financial condition, and results of operations.

Our business success may be adversely affected if we are unable to attract

and retain highly qualified employees.

We have employment agreements with certain employees,

including our Chief Executive Officer and Chief Financial Officer, but those agreements

do not prevent employees from leaving the company.

Competition for highly qualified

management and technical personnel can be intense and we may not be able to attract

and retain the personnel necessary for the development and operation of our business.

The loss of the services of key personnel could have a material adverse effect

on our business, financial condition, and results of operations.

could be negatively impacted by cyber security events or information technology

We face various cyber security threats, including

threats to our information technology infrastructure and attempts to gain access

to our proprietary or classified information, and denial-of-service attacks.

Additionally,

there is a risk of disruptions due to failures of our information technology infrastructure

or service provider outages.

We maintain policies and procedures for the mitigation

of information technology risks, and we maintain data backups, backup hardware,

and some redundant systems.

We have experienced cyber security events and disruptions

such as viruses, ransomware, hacker attacks, and limited server, Website, and

e-mail outages.

Although these events did not materially impact our business,

future events could disrupt our operations, harm our reputation, expose us to

liability, compromise our eligibility for research and development contracts involving

sensitive or classified information, or have other effects including unpredictable

and other uncertainties relating to the administration of, or changes in, or new interpretation of, the laws, regulations, and policies of jurisdictions where we do business.

Public health crises could have an adverse effect on our operations and financial results.

Public health crises could adversely affect our ongoing business operations.

In particular, the COVID-19 pandemic has disrupted our supply chains and caused employee absences.

These and other impacts of COVID-19 pandemic or other public health crises could have a material adverse effect on our results of operations or our financial condition.

Our business could be negatively impacted by cyber security events or information technology disruptions.

We face various cyber security threats, including threats to our information technology infrastructure and attempts to gain access to our proprietary or classified information, and denial-of-service attacks.

Additionally, there is a risk of disruptions due to failures of our information technology infrastructure or service provider outages.

We maintain policies and procedures for the mitigation of information technology risks, and we maintain data backups, backup hardware, and some redundant systems.

We have experienced cyber security events and disruptions such as viruses, ransomware, hacker attacks, and limited server, Website, and e-mail outages.

Although these events did not materially impact our business, future events could disrupt our operations, harm our reputation, expose us to liability, compromise our eligibility for research and development contracts involving sensitive or classified information, or have other effects including unpredictable effects.

We could incur losses on our marketable securities.

As of March 31, 2021, we held $54,717,626 in

short-term and long-term marketable securities, representing approximately 75%

of our total assets.

Conditions and circumstances beyond our control or ability

to anticipate, including the effects of the COVID-19 pandemic, can cause downgrades

and increased default risk, and such downgrades

or increases in default risk are possible at any time.

Additionally, the assignment

of a high credit rating does not preclude the risk of default on any marketable

Defaults, default risks, or changes in market conditions could cause

us to incur losses on our marketable securities, which could have a material adverse

impact on our financial condition, income, or cash flows, and our ability to pay

As of March 31, 2022, we held $45,153,894 in short-term and long-term marketable securities, representing approximately 67% of our total assets.

Conditions and circumstances beyond our control or ability to anticipate can cause downgrades and increased default risk, and such downgrades or increases in default risk are possible at any time.

Additionally, the assignment of a high credit rating does not preclude the risk of default on any marketable security.

Defaults, default risks, or changes in market conditions could cause us to incur losses on our marketable securities, which could have a material adverse impact on our financial condition, income, or cash flows, and our ability to pay dividends.

We may not be able to enforce our intellectual property rights.

We protect our proprietary technology and intellectual property by seeking patents, trademarks, and copyrights, and by maintaining trade secrets through entering into confidentiality agreements with employees, suppliers, customers, and prospective customers depending on the circumstances.

We hold patents or are the licensee of others owning patented technology covering certain aspects of our products and technology.

These patent rights may be challenged, rendered unenforceable, invalidated, or circumvented.

Additionally, rights granted under the patents or under licensing agreements may not provide a competitive advantage to us.

Efforts to enforce patent rights can involve substantial expense and may not be successful.

Furthermore, others may independently develop similar, superior, or parallel technologies to any technology developed by us, or our technology may prove to infringe on patents or rights owned by others.

Thus the patents held by or licensed to us may not afford us any meaningful competitive advantage.

Also, our confidentiality agreements may not provide meaningful protection of our proprietary information.

Our inability to maintain our proprietary rights could have a material adverse effect on our business, financial condition, and results of operations.

Risks Related to our Industry

We face an uncertain economic environment in the industries we serve, which

could adversely affect our business.

We sell our products into the semiconductor market,

which is highly cyclical.

We cannot predict the timing, strength, or duration

of any economic slowdown or subsequent recovery, worldwide or in the industries

The economic environment could have a material adverse impact on our

business and revenue.

Our business and our reliance on intellectual property exposes us to litigation

If patent infringement claims or actions are asserted

against us, we may be required to obtain a license or cross-license, modify our

existing technology or design a new noninfringing technology.

Such licenses or

design modifications can be costly or could increase the cost of our products.

In addition, we may decide to settle a claim or action against us, which settlement

could be costly.

We may also be liable for any past infringement, and we may be

required to indemnify our customers against expenses relating to possible infringement.

If there is an adverse ruling against us in an infringement lawsuit, an injunction

could be issued barring production or sale of any infringing product.

also result in a damage award equal to a reasonable royalty or lost profits or,

if there is a finding of willful infringement, treble damages.

Any of these results

would increase our costs or harm our operating results.

We face an uncertain economic environment in the industries we serve, which could adversely affect our business.

We sell our products into the semiconductor market, which is highly cyclical.

We cannot predict the timing, strength, or duration of any economic slowdown or subsequent recovery, worldwide or in the industries we serve.

The economic environment could have a material adverse impact on our business and revenue.

Our business and our reliance on intellectual property exposes us to litigation risks.

If patent infringement claims or actions are asserted against us, we may be required to obtain a license or cross-license, modify our existing technology or design a new noninfringing technology.

Such licenses or design modifications can be costly or could increase the cost of our products.

In addition, we may decide to settle a claim or action against us, which settlement could be costly.

We may also be liable for any past infringement, and we may be required to indemnify our customers against expenses relating to possible infringement.

If there is an adverse ruling against us in an infringement lawsuit, an injunction could be issued barring production or sale of any infringing product.

It could also result in a damage award equal to a reasonable royalty or lost profits or, if there is a finding of willful infringement, treble damages.

Any of these results would increase our costs or harm our operating results.

Risks Related to our Stock

Any decisions to reduce or discontinue paying cash dividends to our shareholders

could cause the market price of our common stock to decline.

Future dividends will be subject to Board approval

and will take into account factors including our results of operations,

cash and marketable security balances, the timing of

securities maturations, estimates of future cash requirements, fixed asset requirements,

the impacts of the COVID-19 pandemic, and other factors our Board may deem relevant.

Because they are generally more than our current cash flow from operations, recent

and declared dividend amounts may be unsustainable.

Any reduction or discontinuance

by us of cash dividends could cause the market price of our common stock to decline.

The price of our common stock may be adversely affected by significant price

fluctuations due to a number of factors, many of which are beyond our control.

From time to time our stock price has decreased

sharply, and could decline in the future.

The market price of our common stock

may be significantly affected by many factors, some of which are beyond our control,

the announcement of new products, product enhancements, or contracts by us

or our competitors;

delays in our introduction of new products or technologies or market acceptance

of these products or technologies;

loss of customers, decreases in customers purchases, or decreases in

customers purchase prices;

changes in demand for our customers products;

quarterly variations in our financial results, revenue, or revenue growth

speculation in the press or analyst community about our business, potential

revenue, or potential earnings;

general economic conditions or market conditions specific to industries we

or our customers serve or may serve;

legal proceedings involving us, including intellectual property litigation

or class action litigation;

Any decisions to reduce or discontinue paying cash dividends to our shareholders could cause the market price of our common stock to decline.

Future dividends will be subject to Board approval and will take into account factors including our results of operations, cash and marketable security balances, the timing of securities maturations, estimates of future cash requirements, fixed asset requirements, the impacts of the COVID-19 pandemic, and other factors our Board may deem relevant.

Because they are generally more than our current cash flow from operations, recent and declared dividend amounts may be unsustainable.

Any reduction or discontinuance by us of cash dividends could cause the market price of our common stock to decline.

The price of our common stock may be adversely affected by significant price fluctuations due to a number of factors, many of which are beyond our control.

From time to time our stock price has decreased sharply, and could decline in the future.

The market price of our common stock may be significantly affected by many factors, some of which are beyond our control, including:

the announcement of new products, product enhancements, or contracts by us or our competitors;

delays in our introduction of new products or technologies or market acceptance of these products or technologies;

loss of customers, decreases in customers’ purchases, or decreases in customers’ purchase prices;

changes in demand for our customers’ products;

quarterly variations in our financial results, revenue, or revenue growth rates;

speculation in the press or analyst community about our business, potential revenue, or potential earnings;

general economic conditions or market conditions specific to industries we or our customers serve or may serve;

legal proceedings involving us, including intellectual property litigation or class action litigation;

changes in Federal corporate income tax rates or changes in other tax provisions;

changes in tariffs, customs, duties, or other trade barriers in foreign jurisdictions

where we purchase raw materials or sell our products;

the impact or perceived impact of the COVID-19 pandemic on general economic

conditions, our industry, or our revenues or net income;

changes in tariffs, customs, duties, or other trade barriers in foreign jurisdictions where we purchase raw materials or sell our products;

the impact or perceived impact of the COVID-19 pandemic on general economic conditions, our industry, or our supply chain;

our stock repurchase and dividend policies and decisions.

1 unchanged sentence

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What changed 10-K

Item 1A. Risk Factors