10QSB 1 tenq1-02.txt 10QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10QSB [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: June 30, 2001 [ ] Transition report under Section 13 or 15(d) of the Securities Exchange Act. NVE Corporation --------------- (Exact name of registrant as specified in its charter) Minnesota --------- (State or other jurisdiction of incorporation) 000-12196 41-1424202 -------------------------------- ------------------------ Commission File Number I.R.S. Employer Identification number 11409 Valley View Road, Eden Prairie, Minnesota 55344 ----------------------------------------------- ---------- (Address of principal executive offices) (Zip code) Issuer's telephone number, including area code: (952) 829-9217 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Common Stock, $.01 Par Value - 16,998,861 shares outstanding as of June 30, 2001. PART I - FINANCIAL INFORMATION ITEM 1. - FINANCIAL STATEMENTS NVE CORPORATION BALANCE SHEET JUNE 30, 2001
ASSETS Current assets: Cash $ 735,818 Grants and contracts receivable 1,178,706 Inventories 1,086,393 Prepaid expenses and other assets 92,888 ----------- Total current assets 3,093,805 Fixed assets: Machinery and equipment 1,562,199 Furniture and fixtures 35,499 Leasehold improvements 354,426 Construction in progress 569,471 ----------- 2,521,595 Less accumulated depreciation 1,421,688 ----------- Assets 1,099,907 ----------- Total $4,193,712 =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Note payable $ 254,397 Accounts payable 326,537 Accrued expenses 184,532 Deferred revenue 978,837 ----------- Total current liabilities 1,744,303 Shareholders' equity: Common Stock 169,999 Additional paid-in capital 5,727,842 Accumulated Deficit (3,448,432) ----------- Total shareholders' equity 2,449,409 ----------- Total liabilities and shareholders' equity $4,193,712 ===========
SEE ACCOMPANYING NOTES. NVE CORPORATION STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2001 AND 2000
THREE MONTHS ENDED JUNE 30, 2001 2000 --------------------------- Revenues Research and development $1,112,596 $1,191,187 Product sales 369,045 148,985 License fees 181,249 181,250 -------------------------- 1,662,890 1,521,422 Expenses Research and development 1,240,147 1,288,333 Cost of sales 239,007 66,983 Selling, general & administrative 359,956 237,181 -------------------------- Total expenses 1,839,110 1,592,497 -------------------------- Income (loss) from operations (176,220) (71,075) Royalty expense (4,245) - Interest income 10,376 6,895 Interest expense (6,410) (8,141) Other income 81,963 500 -------------------------- Net income (loss) (94,536) (71,821) ========================== Net income (loss) per basic and diluted share (.01) - ========================== Weighted average shares outstanding: Basic 16,945,607 16,775,035 Diluted 16,945,607 16,775,035
SEE ACCOMPANYING NOTES. NVE CORPORATION CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 2001 2000 --------------------------- OPERATING ACTIVITIES Net income (loss) $ (94,536) $ (71,821) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation 65,219 60,449 Changes in operating assets and liabilities: Grants and contracts receivable 138,022 (480,100) Inventories 1,423 (86,649) Prepaid expenses and other (19,009) (7,793) Accounts payable and accrued expenses (110,475) 43,146 Deferred revenues (336,585) 853,534 ------------------------- Net cash provided by operating activities (355,941) 310,766 INVESTING ACTIVITIES Purchases of fixed assets (466,831) (6,976) ------------------------ Net cash used in investing activities (466,831) (6,976) FINANCING ACTIVITIES Net proceeds from sale of common stock 80,001 1,849 Net proceeds from (repayment of) note payable (13,491) (9,196) ------------------------- Net cash provided by financing activities 66,510 (38,514) ------------------------- Increase (Decrease) in cash (756,262) 296,443 Cash at beginning of period 1,492,080 382,273 ------------------------- Cash at end of period $ 735,818 $ 678,716 =========================
SEE ACCOMPANYING NOTES. NVE CORPORATION NOTES TO FINANCIAL STATEMENTS June 30, 2001 1. INTERIM FINANCIAL INFORMATION The accompanying unaudited condensed financial statements of NVE Corporation (the "Company") are consistent with generally accepted principles for financial reporting with SEC 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 the Company believes that the disclosures are adequate to make the information presented not misleading, it is suggested that that these condensed financial statements be read in conjunction with the audited financial statements and the notes there to included in the company's latest annual financial statements included in its report on Form 10-KSB. The results of operations for the three-month period ended June 30, 2001 are not necessarily indicative of the results that may be expected for the full year ending March 31, 2002. Merger On November 21, 2000, then privately-owned Nonvolatile Electronics, Incorporated ("NVE") and publicly-held Premis Corporation completed a merger with Premis surviving under the new name NVE Corporation. The Company issued new shares of Common Stock in exchange for outstanding shares of NVE capital stock. The shares of Common Stock issued to NVE shareholders represented 94% of the common shares outstanding immediately following the consummation of the merger. In applying generally-accepted accounting principles ("GAAP"), the Merger has been deemed to be equivalent, for accounting purposes, to NVE's issuance of capital stock in exchange for the fair-market value of the assets and liabilities of the Company. As a result, no goodwill has been recorded, and the assets of NVE are recorded at their historic values. Revenue Recognition In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. SAB 101 requires that license and other up-front fees received from research collaborators be recognized over the term of the agreement unless the fee is in exchange for products delivered or services performed that represent the culmination of a separate earnings process. Effective January 1, 2000, the Company adopted SAB 101. The Company recognized $83,333 of revenue that was included in the cumulative effect adjustment for the three months ended June 30, 2000 and 2001. The effect of that revenue was to increase income by the amount reported. Earnings Per Share The Company calculates its income (loss) per share pursuant to Statement of Financial Accounting Standards No. 128 ("SFAS 128"), Earnings Per Share. Basic earnings per share is computed based upon the weighted average number of common shares issued and outstanding during each year. Diluted net income per share amounts assume conversion, exercise or issuance of all potential common stock instruments (stock options, warrants and convertible preferred stock). Potentially dilutive securities including warrants and stock options are excluded from diluted earnings per share during net loss periods because these securities would be anti-dilutive. All per share amounts have been restated, based on the same conversion resulting from the Merger. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2001. RESULTS FROM OPERATIONS Results reported herein are for prior periods and not necessarily indicative of results which may be expected in the future. Management has made no predictions or estimates as to future operations, and no inferences as to future operations should be drawn. Revenues for the three months ended June 30, 2001 were $1,663,000, an increase of 9% from revenues of $1,521,000 for the three months ended June 30, 2000. The increase in revenue was due primarily to a 148% increase in product sales, partially offset by a decline in research and development revenues. Research and development expenses decreased by 4% to $1,240,000 for the quarter ended June 30, 2001 as compared to $1,288,000 in the prior year's quarter. The decrease was due to a lower volume of research contracts as the Company emphasized product sales rather than contract research and development. Selling, general and administrative expenses for the quarter ended June 30, 2001 increased by 52% to $360,000 compared to $237,000 in the prior year. The increase is due in part to higher expenses associated with commercial selling activities and additional expenses associated with being publicly-held. The Company had a net loss in the quarter ended June 30, 2001 of $95,000 compared to a net loss of $72,000 for the quarter ended June 30, 2000. The increased loss was due primarily to higher selling, general and administrative expenses, which were partially offset by other income from a dispute settlement. LIQUIDITY AND CAPITAL RESOURCES Cash flow for the quarter ended June 30, 2001 shows a decrease of $756,000. The Company had cash on June 30, 2001 of $736,000. The decrease in cash is primarily due to the purchase of equipment and investment in commercial selling activities. Management believes working capital is adequate for its current needs, but is exploring various methods of meeting the Company's long-term capital needs. PART II--OTHER INFORMATION Item #6 Exhibits and Reports of Form 8-K a. Exhibits None. b. Reports on Form 8-K The Company submitted a Form 8-K dated April 16, 2001, relating to Regulation FD disclosure of information regarding a review of a new NVE device. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf of the undersigneds thereunto duly authorized. NVE CORPORATION Dated: July 27, 2001 By /s/ Daniel A. Baker ------------------------------------- Daniel A. Baker President and Chief Executive Officer By /s/ Richard George ------------------------------------- Richard George Chief Financial Officer