10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended   September 30, 2020

or

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                   to                                    

Commission File Number: 000-12196
 

NVE CORPORATION
(Exact name of registrant as specified in its charter)

Minnesota	41-1424202
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11409 Valley View Road, Eden Prairie, Minnesota	55344
(Address of principal executive offices)	(Zip Code)
(952) 829-9217
(Registrant’s telephone number, including area code)

 
     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.

[X] Yes  [   ] No

     Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

[X] Yes  [   ] No

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [   ]	Accelerated filer [   ]
Non-accelerated filer [X]	Smaller reporting company [X]
	Emerging growth company [   ]

 
     If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]
 
     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     [   ] Yes  [X] No

     Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	NVEC	The NASDAQ Stock Market, LLC

 
     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, $0.01 Par Value – 4,833,232 shares outstanding as of October 16, 2020
 
 

NVE CORPORATION
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

     Item 1. Financial Statements

          Balance Sheets

          Statements of Income for the Quarters Ended September 30, 2020 and 2019

          Statements of Comprehensive Income for the Quarters Ended September 30, 2020 and 2019

          Statements of Income for the Six Months Ended September 30, 2020 and 2019

          Statements of Comprehensive Income for the Six Months Ended September 30, 2020 and 2019

          Statements of Shareholders’ Equity for the Period Ended September 30, 2020

          Statements of Shareholders’ Equity for the Period Ended September 30, 2019

          Statements of Cash Flows

          Notes to Financial Statements

     Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     Item 4. Controls and Procedures

PART II. OTHER INFORMATION

     Item 1. Legal Proceedings

     Item 1A. Risk Factors

     Item 4. Mine Safety Disclosures

     Item 6. Exhibits

SIGNATURES

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PART I–FINANCIAL INFORMATION

Item 1. Financial Statements.

NVE CORPORATION
BALANCE SHEETS
 

	(Unaudited) September 30, 2020		March 31, 2020*
ASSETS
Current assets
Cash and cash equivalents	$	3,845,070	$	8,065,594
Marketable securities, short-term		23,231,981		19,084,814
Accounts receivable, net of allowance for uncollectible accounts of $15,000		1,922,076		2,694,018
Inventories		3,928,524		3,884,450
Prepaid expenses and other assets	610,635		655,835
Total current assets		33,538,286		34,384,711
Fixed assets
Machinery and equipment		9,280,062		9,280,062
Leasehold improvements	1,797,245		1,797,245
		11,077,307		11,077,307
Less accumulated depreciation and amortization	10,648,191		10,494,840
Net fixed assets		429,116		582,467
Deferred tax assets	-		108,119
Marketable securities, long-term	40,777,322		43,606,495
Right-of-use asset – operating lease	752,861		816,358
Total assets	$	75,497,585	$	79,498,150
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	154,566	$	186,993
Accrued payroll and other	424,957		482,074
Operating lease	113,666		127,134
Total current liabilities		693,189		796,201
Deferred tax liabilities		141,990		-
Operating lease	644,987		706,600
Total liabilities	1,480,166		1,502,801
Shareholders’ equity
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,833,232 issued and outstanding as of September 30, 2020 and 4,835,038 as of March 31, 2020		48,332		48,350
Additional paid-in capital		19,329,577		19,383,956
Accumulated other comprehensive income		1,628,861		516,523
Retained earnings	53,010,649		58,046,520
Total shareholders’ equity	74,017,419		77,995,349
Total liabilities and shareholders’ equity	$	75,497,585	$	79,498,150

*The March 31, 2020 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

 

See accompanying notes.

 
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NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)

	Quarter Ended September 30
	2020		2019
Revenue
Product sales	$	4,159,173	$	6,187,708
Contract research and development	221,612		314,237
Total revenue		4,380,785		6,501,945
Cost of sales	941,287		1,346,098
Gross profit		3,439,498		5,155,847
Expenses
Research and development		815,965		926,596
Selling, general, and administrative	358,182		368,450
Total expenses	1,174,147		1,295,046
Income from operations		2,265,351		3,860,801
Interest income	401,392		456,309
Income before taxes		2,666,743		4,317,110
Provision for income taxes	444,403		495,048
Net income	$	2,222,340	$	3,822,062
Net income per share – basic	$	0.46	$	0.79
Net income per share – diluted	$	0.46	$	0.79
Cash dividends declared per common share	$	1.00	$	1.00
Weighted average shares outstanding
Basic		4,834,709		4,846,010
Diluted		4,834,809		4,847,881

STATEMENTS OF COMPREHENSIVE INCOME
     (Unaudited)

	Quarter Ended September 30
	2020			2019
Net income	$	2,222,340		$	3,822,062
Unrealized (loss) gain from marketable securities, net of tax	(130,324		)	178,716
Comprehensive income	$	2,092,016		$	4,000,778

 
 
See accompanying notes.


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NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)

 

	Six Months Ended Sept. 30
	2020		2019
Revenue
Product sales	$	8,517,808	$	12,273,072
Contract research and development	452,239		523,569
Total revenue		8,970,047		12,796,641
Cost of sales	1,777,709		2,438,135
Gross profit		7,192,338		10,358,506
Expenses
Research and development		1,696,948		1,899,663
Selling, general, and administrative	713,193		698,459
Total expenses	2,410,141		2,598,122
Income from operations		4,782,197		7,760,384
Interest income	800,604		915,348
Income before taxes		5,582,801		8,675,732
Provision for income taxes	948,596		1,246,251
Net income	$	4,634,205	$	7,429,481
Net income per share – basic	$	0.96	$	1.53
Net income per share – diluted	$	0.96	$	1.53
Cash dividends declared per common share	$	2.00	$	2.00
Weighted average shares outstanding
Basic		4,834,872		4,846,010
Diluted		4,834,986		4,849,357

STATEMENTS OF COMPREHENSIVE INCOME
     (Unaudited)
 

	Six Months Ended Sept. 30
	2020		2019
Net income	$	4,634,205	$	7,429,481
Unrealized gain from marketable securities, net of tax	1,112,338		748,779
Comprehensive income	$	5,746,543	$	8,178,260

 

See accompanying notes.

 
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NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)

 

						Additional Paid-In Capital			Accumulated Other Comprehen- sive Income				Retained Earnings
	Common Stock
	Shares		Amount													Total
Balance as of March 31, 2020	4,835,038		$	48,350		$	19,383,956		$	516,523			$	58,046,520		$	77,995,349
Comprehensive income:
Unrealized gain on marketable securities, net of tax										1,242,662		1,242,662
Net income														2,411,865			2,411,865
Total comprehensive income																	3,654,527
Stock-based compensation							2,707										2,707
Cash dividends declared ($1.00 per share of common stock)													(4,835,038		)	(4,835,038		)
Balance as of June 30, 2020	4,835,038		$	48,350		$	19,386,663		$	1,759,185			$	55,623,347		$	76,817,545
Repurchase of common stock	(1,806	)		(18	)		(91,401	)									(91,419	)
Comprehensive income:
Unrealized loss on marketable securities, net of tax										(130,324	)	(130,324						)
Net income														2,222,340			2,222,340
Total comprehensive income																	2,092,016
Stock-based compensation							34,315										34,315
Cash dividends declared ($1.00 per share of common stock)													(4,835,038		)	(4,835,038		)
Balance as of September 30, 2020	4,833,232		$	48,332		$	19,329,577		$	1,628,861			$	53,010,649		$	74,017,419

 
 
See accompanying notes.


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NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)

 

				Additional Paid-In Capital		Accumulated Other Comprehen- sive Income (Loss)				Retained Earnings
	Common Stock
	Shares	Amount											Total
Balance as of March 31, 2019	4,846,010	$	48,460	$	19,910,558	$	(82,725	)		$	62,903,918		$	82,780,211
Comprehensive income:
Unrealized gain on marketable securities, net of tax							570,063		570,063
Net income											3,607,419			3,607,419
Total comprehensive income														4,177,482
Cash dividends declared ($1.00 per share of common stock)										(4,846,010		)	(4,846,010		)
Balance as of June 30, 2019	4,846,010		48,460		19,910,558		487,338				61,665,327			82,111,683
Comprehensive income:
Unrealized gain on marketable securities, net of tax							178,716		178,716
Net income											3,822,062			3,822,062
Total comprehensive income														4,000,778
Stock-based compensation					48,360									48,360
Cash dividends declared ($1.00 per share of common stock)										(4,846,010		)	(4,846,010		)
Balance as of September 30, 2019	4,846,010	$	48,460	$	19,958,918	$	666,054			$	60,641,379		$	81,314,811

 
 
See accompanying notes.


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NVE CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)

 

	Six Months Ended Sept. 30
	2020			2019
OPERATING ACTIVITIES
Net income	$	4,634,205		$	7,429,481
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		259,241			266,916
Stock-based compensation		37,022			48,360
Deferred income taxes		(61,437	)		75,521
Changes in operating assets and liabilities:
Accounts receivable		771,942			(220,147	)
Inventories		(44,074	)		(90,456	)
Prepaid expenses and other assets		108,697			41,687
Accounts payable and other liabilities		(164,625	)		(130,726	)
Net cash provided by operating activities		5,540,971			7,420,636
INVESTING ACTIVITIES
Purchases of fixed assets		-			(16,100	)
Purchases of marketable securities		-			(3,013,530	)
Proceeds from maturities of marketable securities		-			12,500,000
Cash provided by investing activities		-			9,470,370
FINANCING ACTIVITIES
Repurchase of common stock		(91,419	)		-
Payment of dividends to shareholders		(9,670,076	)		(9,692,020	)
Cash used in financing activities		(9,761,495	)		(9,692,020	)
(Decrease) increase in cash and cash equivalents		(4,220,524	)		7,198,986
Cash and cash equivalents at beginning of period	8,065,594			6,877,304
Cash and cash equivalents at end of period	$	3,845,070		$	14,076,290
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	934,788		$	1,230,000

 
 
See accompanying notes.


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NVE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

NOTE 1. 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.

NOTE 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
     The accompanying unaudited financial statements of NVE Corporation are prepared consistent with accounting principles generally accepted in the United States and in accordance with Securities and Exchange Commission rules and regulations. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements. Although we believe that the disclosures are adequate to make the information presented not misleading, certain disclosures have been omitted as allowed, and it is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and the notes included in our latest annual financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020. The results of operations for the quarter and six months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2021.

Significant Accounting Policies
Revenue Recognition
    We recognize revenue when we satisfy performance obligations by the transfer of control of products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. Revenue is disaggregated into product sales and contract research and development to depict the nature, amount, timing of revenue recognition and economic characteristics of our business, and is represented within the financial statements.

     We recognize revenue from product sales to customers and distributors when we satisfy our performance obligation, at a point in time, upon product shipment or delivery to our customer or distributor as determined by agreed upon shipping terms. Shipping charges billed to customers are included in product sales and the related shipping costs are included in cost of sales. Under certain limited circumstances, our distributors may earn commissions for activities unrelated to their purchases of our products, such as for facilitating the sale of custom products or research and development contracts with third parties. We recognize any such commissions as selling, general, and administrative expenses. We recognize discounts provided to our distributors as reductions in revenue.

     We recognize contract research and development revenue over a period of time as the performance obligation is satisfied over a period of time rather than a point in time. Contracts have specifications unique to each customer and do not create an asset with an alternate use, and we have an enforceable right to payment for performance completed to date. We recognize revenue over a period of time using costs incurred as the measurement of progress towards completion.

     Accounts receivable is recognized when we have transferred a good or service to a customer and our right to receive consideration is unconditional through the completion of our performance obligation. A contract asset is recognized when we have a right to consideration from the transfer of goods or services to a customer but have not completed our performance obligation. A contract liability is recognized when we have been paid by a customer but have not yet satisfied the performance obligation by transferring goods or services. We had no material contract assets or contract liabilities as of September 30, 2020 or March 31, 2020.
 
     Our performance obligations related to product sales and contract research and development contracts are satisfied in one year or less. Unsatisfied performance obligations represent contracts with an original expected duration of one year or less. As permitted under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, we are using the practical expedient not to disclose the value of these unsatisfied performance obligations. We also use the practical expedient in which we do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
 

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NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS
New Accounting Standards Not Yet Adopted
     In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, which is fiscal 2022 for us, with early adoption permitted. We do not expect adoption of the new guidance to have a significant impact on our financial statements.

     In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. In November 2018 the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, which clarifies codification and corrects unintended application of the guidance, and in November 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which clarifies or addresses specific issues about certain aspects of ASU 2016-13. In November 2019 the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, and in February 2020 the FASB issued ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), both of which delay the effective date of ASU 2016-13 by three years for certain Smaller Reporting Companies such as us. We were unaffected by the change in the effective date of the ASU related to Leases (Topic 842) because we have already adopted that ASU. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments; which modifies the measurement of expected credit losses of certain financial instruments. In accordance with ASU 2019-10 and ASU 2020-02, ASU 2016-13 is effective for certain Smaller Reporting Companies for financial statements issued for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years, which will be fiscal 2024 for us if we continue to be classified as a Smaller Reporting Company, with early adoption permitted. We do not expect adoption of the new guidance to have a significant impact on our financial statements.
 
NOTE 4. 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 Sept. 30
	2020	2019
Weighted average common shares outstanding – basic	4,834,709	4,846,010
Dilutive effect of stock options	100	1,871
Shares used in computing net income per share – diluted	4,834,809	4,847,881

	Six Months Ended Sept. 30
	2020	2019
Weighted average common shares outstanding – basic	4,834,872	4,846,010
Dilutive effect of stock options	114	3,347
Shares used in computing net income per share – diluted	4,834,986	4,849,357

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NOTE 5. 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’ equity. Corporate bonds with remaining maturities less than one year are classified as short-term, and those with remaining maturities greater than one year are classified as long-term. We consider all highly-liquid investments with maturities of three months or less when purchased, including money market funds, to be cash equivalents. Gains and losses on marketable security transactions are reported on the specific-identification method.

     Contractual maturities of available-for-sale securities as of September 30, 2020 are as follows:
 

Total		<1 Year		1–3 Years		3–5 Years
$	67,555,355	$	26,778,033	$	34,271,054	$	6,506,268

 
     Total available-for-sale securities represented approximately 89% of our total assets. Marketable securities as of September 30, 2020 had remaining maturities between one 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. Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Generally accepted accounting principles utilize a valuation hierarchy for disclosure of fair value measurements. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The categories within the valuation hierarchy are described as follows:
 
     Level 1 – Financial instruments with quoted prices in active markets for identical assets or liabilities.

     Level 2 – Financial instruments with quoted prices in active markets for similar assets or liabilities. 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 September 30, 2020						As of March 31, 2020
	Level 1		Level 2		Total		Level 1		Level 2		Total
Money market funds	$	3,546,052	$	-	$	3,546,052	$	7,903,433	$	-	$	7,903,433
Corporate bonds		-		64,009,303		64,009,303		-		62,691,309		62,691,309
Total	$	3,546,052	$	64,009,303	$	67,555,355	$	7,903,433	$	62,691,309	$	70,594,742

     Our available-for-sale securities as of September 30 and March 31, 2020, aggregated into classes of securities, were as follows:

	As of September 30, 2020								As of March 31, 2020
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
Money market    funds	$	3,546,052	$	-	$	-	$	3,546,052	$	7,903,433	$	-	$	-		$	7,903,433
Corporate bonds		61,924,230		2,085,073		-		64,009,303		62,030,120		752,621		(91,432	)		62,691,309
Total	$	65,470,282	$	2,085,073	$	-	$	67,555,355	$	69,933,553	$	752,621	$	(91,432	)	$	70,594,742

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NOTE 6. INVENTORIES
     Inventories are shown in the following table:

	Sept. 30, 2020		March 31, 2020
Raw materials	$	953,050	$	1,017,451
Work in process		1,949,981		1,863,000
Finished goods	1,025,493		1,003,999
Total inventories	$	3,928,524	$	3,884,450

 
NOTE 7. STOCK-BASED COMPENSATION
     Stock-based compensation expense was $34,315 for the second quarter of fiscal 2021, $37,022 for the first six months of fiscal 2021, and $48,360 for the second quarter and first six months of fiscal 2020. We calculate the share-based compensation expense using the Black-Scholes standard option-pricing model.
 
NOTE 8. INCOME TAXES
     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 September 30, 2020, and we do not expect any significant unrecognized tax benefits within 12 months of the reporting date. We recognize interest and penalties related to income tax matters in income tax expense. As of September 30, 2020 we had no accrued interest related to uncertain tax positions. The tax years 2016 through 2019 remain open to examination by the major taxing jurisdictions to which we are subject.
 
NOTE 9. LEASES
     We conduct our operations in a leased facility under a non-cancellable lease expiring March 31, 2026. Our lease does not provide an implicit rate, so we used our incremental borrowing rate to determine the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Variable lease costs consist primarily of common area maintenance and real estate taxes which are paid based on actual costs incurred by the lessor. Details of our operating lease are as follows:
 

	Quarter Ended Sept. 30, 2020			Six Months Ended Sept. 30, 2020
Operating lease cost	$	38,641		$	77,282
Variable lease cost		30,608			61,216
Total	$	69,249		$	138,498
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for leases	$	44,433		$	88,866
Remaining lease term		66 months
Discount rate		3.5	%
The following table presents the maturities of lease liabilities as of September 30, 2020:
Year Ending March 31				Operating Leases
2021				$	39,671
2022					152,703
2023					156,121
2024					159,592
2025					163,224
2026					165,947
Total lease payments					837,258
Imputed lease interest					(78,605	)
Total lease liabilities				$	758,653

12

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NOTE 10. 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. Our repurchase program does not have an expiration date and does not obligate us to purchase any shares. The Program may be modified or discontinued at any time without notice. We intend to finance any stock repurchases with cash provided by operating activities or maturating marketable securities. The remaining authorization was $3,762,040 as of September 30, 2020. Common Stock repurchases during the second quarter of fiscal 2021, all of which were made as part of our publicly announced program, were as follows:
 

				Total number of	Max. approximate
Period	Total	Average		shares purchased	dollar value of
	number	price		as part of publicly	shares that may
	of shares	paid		announced	yet be purchased
	purchased	per share		program	under the program
July 1, 2020 – July 31, 2020	-	$	-	-	$	3,853,459
August 1, 2020 – August 31, 2020	-	$	-	-	$	3,853,459
September 1, 2020 – September 30, 2020	1,806	$	50.62	1,806	$	3,762,040
	1,806			1,806

NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS
     All of our employees are eligible to participate in our 401(k) savings plan the first quarter after reaching age 21. Employees may contribute up to the Internal Revenue Code maximum. We make matching contributions of 100% of the first 3% of participants’ salary deferral contributions. Our matching contributions were $21,275 for the second quarter of fiscal 2021, $21,990 for the second quarter of fiscal 2020, $46,656 for the first six months of fiscal 2021, and $46,056 for the first six months of fiscal 2020.

NOTE 12. SUBSEQUENT EVENTS
     On October 21, 2020 we announced that our Board had declared a quarterly cash dividend of $1.00 per share of Common Stock to be paid November 30, 2020 to shareholders of record as of the close of business November 2, 2020.
 

13

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
Forward-looking statements
     Some of the statements made in this Report or in the documents incorporated by reference in this Report and in other materials filed or to be filed by us with the Securities and Exchange Commission (“SEC”) as well as information included in verbal or written statements made by us constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to the safe harbor provisions of the reform act. Forward-looking statements may be identified by the use of the terminology such as may, will, expect, anticipate, intend, believe, estimate, should, or continue, or the negatives of these terms or other variations on these words or comparable terminology. To the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of NVE, you should be aware that our actual financial condition, operating results and business performance may differ materially from that projected or estimated by us in the forward-looking statements. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from their current expectations. These differences may be caused by a variety of factors, including but not limited to risks related to our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks related to the COVID-19 pandemic, risks and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report.

     Further information regarding our risks and uncertainties are contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, 2020 as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 and Item 1A herein.
 
General
     NVE Corporation, referred to as NVE, we, us, or our, develops and sells devices that use spintronics, a nanotechnology that relies on electron spin rather than electron charge to acquire, store and transmit information. We manufacture high-performance spintronic products including sensors and couplers that are used to acquire and transmit data.
 
Critical accounting policies
     A description of our critical accounting policies is provided in 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, 2020. As of September 30, 2020 our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.
 

14

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Quarter ended September 30, 2020 compared to quarter ended September 30, 2019
     The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:

	Percentage of Revenue Quarter Ended September 30				Quarter- to-Quarter Change
	2020		2019
Revenue
Product sales	94.9	%	95.2	%	(32.8	)%
Contract research and development	5.1	%	4.8	%	(29.5	)%
Total revenue	100.0	%	100.0	%	(32.6	)%
Cost of sales	21.5	%	20.7	%	(30.1	)%
Gross profit	78.5	%	79.3	%	(33.3	)%
Expenses
Research and development	18.6	%	14.2	%	(11.9	)%
Selling, general, and administrative	8.2	%	5.7	%	(2.8	)%
Total expenses	26.8	%	19.9	%	(9.3	)%
Income from operations	51.7	%	59.4	%	(41.3	)%
Interest income	9.2	%	7.0	%	(12.0	)%
Income before taxes	60.9	%	66.4	%	(38.2	)%
Provision for income taxes	10.2	%	7.6	%	(10.2	)%
Net income	50.7	%	58.8	%	(41.9	)%

 
     Total revenue for the quarter ended September 30, 2020 (the second quarter of fiscal 2021) decreased 33% compared to the quarter ended September 30, 2019 (the second quarter of fiscal 2020). The decrease was due to a 33% decrease in product sales and a 29% decrease in contract research and development revenue.

     The decrease in product sales from the prior-year quarter was primarily due to decreased purchases by existing customers. The decrease in contract research and development revenue the second quarter of fiscal 2021 was due to the completion of certain contracts.

     Total expenses decreased 9% in the second quarter of fiscal 2021 compared to the second quarter of fiscal 2020 due to a 12% decrease in research and development expense and a 3% decrease in selling, general, and administrative expense. The decrease in research and development expense was primarily due to the completion of certain product development activities.
 
     Interest income for the second quarter of fiscal 2021 decreased 12% due to a decrease in our marketable securities and money market funds and a decrease in the average interest rates on those securities and funds.

     The 42% decrease in net income in the second quarter of fiscal 2021 compared to the prior-year quarter was primarily due to a decrease in revenue.
 

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Six months ended September 30, 2020 compared to six months ended September 30, 2019
     The table shown below summarizes the percentage of revenue and period-to-period changes for various items:

	Percentage of Revenue Six Months Ended Sept. 30				Period- to-Period Change
	2020		2019
Revenue
Product sales	95.0	%	95.9	%	(30.6	)%
Contract research and development	5.0	%	4.1	%	(13.6	)%
Total revenue	100.0	%	100.0	%	(29.9	)%
Cost of sales	19.8	%	19.1	%	(27.1	)%
Gross profit	80.2	%	80.9	%	(30.6	)%
Expenses
Research and development	18.9	%	14.8	%	(10.7	)%
Selling, general, and administrative	8.0	%	5.5	%	2.1	%
Total expenses	26.9	%	20.3	%	(7.2	)%
Income from operations	53.3	%	60.6	%	(38.4	)%
Interest income	8.9	%	7.2	%	(12.5	)%
Income before taxes	62.2	%	67.8	%	(35.7	)%
Provision for income taxes	10.5	%	9.7	%	(23.9	)%
Net income	51.7	%	58.1	%	(37.6	)%

 
     Total revenue for the six months ended September 30, 2020 decreased 30% compared to the six months ended September 30, 2019, due to a 31% decrease in product sales and a 14% decrease in contract research and development revenue.

     The decrease in product sales from the prior-year period was due to decreased purchase volumes by existing customers. The decrease in contract research and development revenue was due to the completion of certain contracts.

     Total expenses decreased 7% for the first six months of fiscal 2021 compared to the first six months of fiscal 2020 due to an 11% decrease in research and development expense, partially offset by a 2% increase in selling, general, and administrative expense. The decrease in research and development expense was due to the completion of certain product development activities.

     Interest income for the first six months of fiscal 2021 decreased 13% due to a decrease in our marketable securities and money market funds and a decrease in the average interest rates on those securities and funds.

      The 38% decrease in net income in the first six months of fiscal 2021 compared to the prior-year period was primarily due to a decrease in revenue.
 
The Impact of the COVID-19 Pandemic
     We believe the COVID-19 pandemic had a significant impact on total revenue and net income for the quarter and six months ended September 30, 2020 compared to the prior-year period due to its effects on market conditions in certain industries, especially medical devices. Total revenue and net income will likely continue to decrease for the quarter ending December 31, 2020 compared to the prior-year quarter.
 

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Liquidity and Capital Resources
Overview
     Cash and cash equivalents were $3,845,070 as of September 30, 2020 compared to $8,065,594 as of March 31, 2020. The $4,220,524 decrease in cash and cash equivalents was due to $9,761,495 of cash used in financing activities consisting of cash dividends and Common Stock repurchases, partially offset by $5,540,971 in net cash provided by operating activities.

Investing Activities
     We had no maturities or purchases of debt securities and no capital expenditures during the six months ended September 30, 2020. Capital expenditures can vary from period to period depending on our needs and equipment purchasing opportunities.
 
Financing Activities
     We paid $9,670,076 in cash dividends and repurchased $91,419 of our Common Stock in the first six months of fiscal 2021. In addition to cash dividends paid in the first six months of fiscal 2021, on October 21, 2020 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 16, 2020, to be paid November 30, 2020. We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities. All future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, estimates of future cash requirements, the impacts of the COVID-19 pandemic, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.

     We currently believe our working capital and cash generated from operations will be adequate for our needs at least for the next 12 months.
 
Off-Balance-Sheet Arrangements
     Our off-balance sheet arrangements consist of purchase commitments. We believe such arrangements have no material current or anticipated future effect on our profitability, cash flows, or financial position.
 

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Table of Contents

Item 4. Controls and Procedures.
Disclosure Controls and Procedures
     Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has performed an evaluation of our disclosure controls and procedures that are defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this Report. This evaluation included consideration of the controls, processes, and procedures that are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as September 30, 2020, our disclosure controls and procedures were effective.

Changes in Internal Controls
     During the quarter ended September 30, 2020, there was no change in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
 

PART II–OTHER INFORMATION

Item 1. Legal Proceedings.
     In the ordinary course of business we may become involved in litigation. At this time we are not aware of any material pending or threatened legal proceedings or other proceedings contemplated by governmental authorities that we expect would have a material adverse impact on our future results of operation and financial condition.

Item 1A. Risk Factors.
     There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020 as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, except the following risk factor is replaced in its entirety by the following to update the effects of the COVID-19 pandemic on one of our packaging vendors:

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. 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. One of our packaging vendors 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. The vendor also cited personnel shortages related to the COVID-19 pandemic, and the pandemic has caused shortages of raw materials and subassemblies our packaging vendors need for the packaging process. 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. 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.

Item 4. Mine Safety Disclosures.
     Not applicable.
 

18

Table of Contents

Item 6. Exhibits.

Exhibit #	Description
31.1	Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).
31.2	Certification by Curt A. Reynders pursuant to Rule 13a-14(a)/15d-14(a).
32	Certification by Daniel A. Baker and Curt A. Reynders pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

19

Table of Contents
 

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NVE CORPORATION
	(Registrant)
October 21, 2020	/s/ DANIEL A. BAKER
Date	Daniel A. Baker
	President and Chief Executive Officer
October 21, 2020	/s/ CURT A. REYNDERS
Date	Curt A. Reynders
	Chief Financial Officer

 
 
 

20

EX-31

Exhibit 31.1

CERTIFICATION

I, Daniel A. Baker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of NVE Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 21, 2020

 

/s/ DANIEL A. BAKER

Daniel A. Baker

President and Chief Executive Officer

EX-31

Exhibit 31.2

CERTIFICATION

I, Curt A. Reynders, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of NVE Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; 

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 21, 2020

 

/s/ CURT A. REYNDERS

Curt A. Reynders

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

The undersigned certify pursuant to 18 U.S.C. Section 1350, that to the undersigned’s knowledge:

1.The accompanying Quarterly Report of NVE Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2020, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 21, 2020

/s/ DANIEL A. BAKER

Daniel A. Baker

President and Chief Executive Officer

/s/ CURT A. REYNDERS

Curt A. Reynders

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	6 Months Ended
	Sep. 30, 2020	Oct. 16, 2020
Document Information [Line Items]
Entity Registrant Name	NVE CORP /NEW/
Entity Central Index Key	0000724910
Trading Symbol	nvec
Current Fiscal Year End Date	--03-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		4,833,232
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false
Title of 12(b) Security	Common stock, $0.01 par value

XML

Balance Sheets (Current Period Unaudited) - USD ($)		Sep. 30, 2020	Mar. 31, 2020
Current assets
Cash and cash equivalents		$ 3,845,070	$ 8,065,594	[1]
Marketable securities, short-term		23,231,981	19,084,814	[1]
Accounts receivable, net of allowance for uncollectible accounts of $15,000		1,922,076	2,694,018	[1]
Inventories		3,928,524	3,884,450	[1]
Prepaid expenses and other assets		610,635	655,835	[1]
Total current assets		33,538,286	34,384,711	[1]
Fixed assets
Machinery and equipment		9,280,062	9,280,062	[1]
Leasehold improvements		1,797,245	1,797,245	[1]
Property, Plant and Equipment, Gross, Ending Balance		11,077,307	11,077,307	[1]
Less accumulated depreciation and amortization		10,648,191	10,494,840	[1]
Net fixed assets		429,116	582,467	[1]
Deferred tax assets			108,119	[1]
Marketable securities, long-term		40,777,322	43,606,495	[1]
Right-of-use asset – operating lease		752,861	816,358	[1]
Total assets		75,497,585	79,498,150	[1]
Current liabilities
Accounts payable		154,566	186,993	[1]
Accrued payroll and other		424,957	482,074	[1]
Operating lease		113,666	127,134	[1]
Total current liabilities		693,189	796,201	[1]
Deferred tax liabilities		141,990		[1]
Operating lease		644,987	706,600	[1]
Total liabilities	[1]	1,480,166	1,502,801
Shareholders’ equity
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,833,232 issued and outstanding as of September 30, 2020 and 4,835,038 as of March 31, 2020		48,332	48,350	[1]
Additional paid-in capital		19,329,577	19,383,956	[1]
Accumulated other comprehensive income		1,628,861	516,523	[1]
Retained earnings		53,010,649	58,046,520	[1]
Total shareholders’ equity		74,017,419	77,995,349	[1]
Total liabilities and shareholders’ equity		$ 75,497,585	$ 79,498,150	[1]

[1] The March 31, 2020 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

XML

Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Sep. 30, 2020	Mar. 31, 2020	[1]
Allowance for uncollectible accounts	$ 15,000	$ 15,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	6,000,000	6,000,000
Common stock, shares issued (in shares)	4,833,232	4,835,038
Common stock, shares outstanding (in shares)	4,833,232	4,835,038

[1] The March 31, 2020 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

XML

Statements of Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue
Revenue	$ 4,380,785	$ 6,501,945	$ 8,970,047	$ 12,796,641
Cost of sales	941,287	1,346,098	1,777,709	2,438,135
Gross profit	3,439,498	5,155,847	7,192,338	10,358,506
Expenses
Research and development	815,965	926,596	1,696,948	1,899,663
Selling, general, and administrative	358,182	368,450	713,193	698,459
Total expenses	1,174,147	1,295,046	2,410,141	2,598,122
Income from operations	2,265,351	3,860,801	4,782,197	7,760,384
Interest income	401,392	456,309	800,604	915,348
Income before taxes	2,666,743	4,317,110	5,582,801	8,675,732
Provision for income taxes	444,403	495,048	948,596	1,246,251
Net income	$ 2,222,340	$ 3,822,062	$ 4,634,205	$ 7,429,481
Net income per share – basic (in dollars per share)	$ 0.46	$ 0.79	$ 0.96	$ 1.53
Net income per share – diluted (in dollars per share)	0.46	0.79	0.96	1.53
Cash dividends declared per common share (in dollars per share)	$ 1	$ 1	$ 2	$ 2
Weighted average shares outstanding
Basic (in shares)	4,834,709	4,846,010	4,834,872	4,846,010
Diluted (in shares)	4,834,809	4,847,881	4,834,986	4,849,357
Product [Member]
Revenue
Revenue	$ 4,159,173	$ 6,187,708	$ 8,517,808	$ 12,273,072
Contract Research and Development [Member]
Revenue
Revenue	$ 221,612	$ 314,237	$ 452,239	$ 523,569

XML

Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Net income	$ 2,222,340	$ 3,822,062	$ 4,634,205	$ 7,429,481
Unrealized (loss) gain from marketable securities, net of tax	(130,324)	178,716	1,112,338	748,779
Comprehensive income	$ 2,092,016	$ 4,000,778	$ 5,746,543	$ 8,178,260

XML

Statements of Shareholders' Equity (Unaudited) - USD ($)		Cumulative Effect, Period of Adoption, Adjustment [Member] Common Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Unrealized (loss) gain from marketable securities, net of tax					$ 570,063		$ 570,063
Net income						3,607,419	3,607,419
Total comprehensive income							4,177,482
Cash dividends declared ($1.00 per share of common stock)						(4,846,010)	(4,846,010)
Balance (in shares) at Mar. 31, 2019			4,846,010
Balance at Mar. 31, 2019			$ 48,460	19,910,558	(82,725)	62,903,918	82,780,211
Balance (in shares) at Jun. 30, 2019			4,846,010
Balance at Jun. 30, 2019			$ 48,460	19,910,558	487,338	61,665,327	82,111,683
Unrealized (loss) gain from marketable securities, net of tax							748,779
Net income							7,429,481
Balance (in shares) at Mar. 31, 2019			4,846,010
Balance at Mar. 31, 2019			$ 48,460	19,910,558	(82,725)	62,903,918	82,780,211
Balance (in shares) at Sep. 30, 2019			4,846,010
Balance at Sep. 30, 2019			$ 48,460	19,958,918	666,054	60,641,379	81,314,811
Unrealized (loss) gain from marketable securities, net of tax					178,716		178,716
Net income						3,822,062	3,822,062
Total comprehensive income							4,000,778
Stock-based compensation				48,360			48,360
Cash dividends declared ($1.00 per share of common stock)						(4,846,010)	(4,846,010)
Balance (in shares) at Jun. 30, 2019			4,846,010
Balance at Jun. 30, 2019			$ 48,460	19,910,558	487,338	61,665,327	82,111,683
Balance (in shares) at Sep. 30, 2019			4,846,010
Balance at Sep. 30, 2019			$ 48,460	19,958,918	666,054	60,641,379	81,314,811
Unrealized (loss) gain from marketable securities, net of tax					1,242,662		1,242,662
Net income						2,411,865	2,411,865
Total comprehensive income							3,654,527
Stock-based compensation				2,707			2,707
Cash dividends declared ($1.00 per share of common stock)						(4,835,038)	(4,835,038)
Balance at Mar. 31, 2020	[1]						77,995,349
Balance (in shares) at Jun. 30, 2020			4,835,038
Balance at Jun. 30, 2020			$ 48,350	19,386,663	1,759,185	55,623,347	76,817,545
Unrealized (loss) gain from marketable securities, net of tax							1,112,338
Net income							4,634,205
Balance at Mar. 31, 2020	[1]						77,995,349
Balance (in shares) at Sep. 30, 2020		4,833,232
Balance at Sep. 30, 2020			48,332	19,329,577	1,628,861	53,010,649	74,017,419
Unrealized (loss) gain from marketable securities, net of tax					(130,324)		(130,324)
Net income						2,222,340	2,222,340
Total comprehensive income							2,092,016
Stock-based compensation				34,315			34,315
Cash dividends declared ($1.00 per share of common stock)						(4,835,038)	(4,835,038)
Balance (in shares) at Jun. 30, 2020			4,835,038
Balance at Jun. 30, 2020			$ 48,350	19,386,663	1,759,185	55,623,347	76,817,545
Repurchase of common stock (in shares)			(1,806)
Repurchase of common stock			$ (18)	(91,401)			(91,419)
Balance (in shares) at Sep. 30, 2020		4,833,232
Balance at Sep. 30, 2020			$ 48,332	$ 19,329,577	$ 1,628,861	$ 53,010,649	$ 74,017,419

[1] The March 31, 2020 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

XML

Statements of Shareholders' Equity (Unaudited) (Parentheticals) - $ / shares	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Jun. 30, 2019
Additional Paid-in Capital [Member]
Common Stock per share (in dollars per share)			$ 1	$ 1
Common Stock per share (in dollars per share)	$ 1	$ 1

XML

Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Net income	$ 4,634,205	$ 7,429,481
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	259,241	266,916
Stock-based compensation	37,022	48,360
Deferred income taxes	(61,437)	75,521
Changes in operating assets and liabilities:
Accounts receivable	771,942	(220,147)
Inventories	(44,074)	(90,456)
Prepaid expenses and other assets	108,697	41,687
Accounts payable and other liabilities	(164,625)	(130,726)
Net cash provided by operating activities	5,540,971	7,420,636
INVESTING ACTIVITIES
Purchases of fixed assets		(16,100)
Purchases of marketable securities		(3,013,530)
Proceeds from maturities of marketable securities		12,500,000
Cash provided by investing activities		9,470,370
FINANCING ACTIVITIES
Repurchase of common stock	(91,419)
Payment of dividends to shareholders	(9,670,076)	(9,692,020)
Cash used in financing activities	(9,761,495)	(9,692,020)
(Decrease) increase in cash and cash equivalents	(4,220,524)	7,198,986
Cash and cash equivalents at beginning of period	8,065,594	6,877,304
Cash and cash equivalents at end of period	3,845,070	14,076,290
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$ 934,788	$ 1,230,000

XML

Note 1 - Description of Business

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

NOTE

1.

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.

XML

Note 2 - Basis of Presentation and Significant Accounting Policies

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Basis of Presentation and Significant Accounting Policies [Text Block]

NOTE

2.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

     The accompanying unaudited financial statements of NVE Corporation are prepared consistent with accounting principles generally accepted in the United States and in accordance with Securities and Exchange Commission rules and regulations. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements. Although we believe that the disclosures are adequate to make the information presented

not

misleading, certain disclosures have been omitted as allowed, and it is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and the notes included in our latest annual financial statements included in our Annual Report on Form

10

-K for the fiscal year ended

March 

31,

2020.

The results of operations for the quarter and

six

months ended

September 

30,

2020

are

not

necessarily indicative of the results that

may

be expected for the full fiscal year ending

March 

31,

2021.

Significant Accounting Policies

Revenue Recognition

    We recognize revenue when we satisfy performance obligations by the transfer of control of products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. Revenue is disaggregated into product sales and contract research and development to depict the nature, amount, timing of revenue recognition and economic characteristics of our business, and is represented within the financial statements.

     We recognize revenue from product sales to customers and distributors when we satisfy our performance obligation, at a point in time, upon product shipment or delivery to our customer or distributor as determined by agreed upon shipping terms. Shipping charges billed to customers are included in product sales and the related shipping costs are included in cost of sales. Under certain limited circumstances, our distributors

may

earn commissions for activities unrelated to their purchases of our products, such as for facilitating the sale of custom products or research and development contracts with

third

parties. We recognize any such commissions as selling, general, and administrative expenses. We recognize discounts provided to our distributors as reductions in revenue.

     We recognize contract research and development revenue over a period of time as the performance obligation is satisfied over a period of time rather than a point in time. Contracts have specifications unique to each customer and do

not

create an asset with an alternate use, and we have an enforceable right to payment for performance completed to date. We recognize revenue over a period of time using costs incurred as the measurement of progress towards completion.

     Accounts receivable is recognized when we have transferred a good or service to a customer and our right to receive consideration is unconditional through the completion of our performance obligation. A contract asset is recognized when we have a right to consideration from the transfer of goods or services to a customer but have

not

completed our performance obligation. A contract liability is recognized when we have been paid by a customer but have

not

yet satisfied the performance obligation by transferring goods or services. We had

no

material contract assets or contract liabilities as of

September 

30,

2020

or

March 

31,

2020.

 
     Our performance obligations related to product sales and contract research and development contracts are satisfied in

one

year or less. Unsatisfied performance obligations represent contracts with an original expected duration of

one

year or less. As permitted under Accounting Standards Codification (“ASC”) Topic 

606,

Revenue from Contracts with Customers

, we are using the practical expedient

not

to disclose the value of these unsatisfied performance obligations. We also use the practical expedient in which we do

not

assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be

one

year or less.
 

XML

Note 3 - Recently Issued Accounting Standards

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

NOTE

3.

RECENTLY ISSUED ACCOUNTING STANDARDS

New Accounting Standards

Not

Yet Adopted

     In

December 2019,

the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No.

2019

-

12,

Income Taxes (Topic

740

)—Simplifying the Accounting for Income Taxes

. ASU 

2019

-

12

is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic

740

and amends existing guidance to improve consistent application. ASU

2019

-

12

is effective for fiscal years beginning after

December 15, 2020

and interim periods within those fiscal years, which is fiscal

2022

for us, with early adoption permitted. We do

not

expect adoption of the new guidance to have a significant impact on our financial statements.

     In

June 2016,

the FASB issued ASU

No.

 

2016

-

13,

Financial Instruments—Credit Losses (Topic

326

), Measurement of Credit Losses on Financial Statements

. ASU 

2016

-

13

requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. In

November 

2018

the FASB issued ASU

No.

 

2018

-

19,

Codification Improvements to Topic 

326,

Financial Instruments—Credit Losses

, which clarifies codification and corrects unintended application of the guidance, and in

November 2019,

the FASB issued ASU

No.

 

2019

-

11,

Codification Improvements to Topic

326,

Financial Instruments-Credit Losses

, which clarifies or addresses specific issues about certain aspects of ASU 

2016

-

13.

In

November 

2019

the FASB issued ASU

No.

 

2019

-

10,

Financial Instruments—Credit Losses (Topic 

326

), Derivatives and Hedging (Topic

815

), and Leases (Topic 

842

): Effective Dates

, and in

February 2020

the FASB issued ASU

No.

 

2020

-

02,

Financial Instruments—Credit Losses (Topic 

326

) and Leases (Topic

842

): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin

No.

 

119

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

No.

 

2016

-

02,

Leases (Topic 

842

)

, both of which delay the effective date of ASU 

2016

-

13

by

three

years for certain Smaller Reporting Companies such as us. We were unaffected by the change in the effective date of the ASU related to Leases (Topic 

842

) because we have already adopted that ASU. In

March 

2020,

the FASB issued ASU

No.

 

2020

-

03,

Codification Improvements to Financial Instruments

; which modifies the measurement of expected credit losses of certain financial instruments. In accordance with ASU 

2019

-

10

and ASU 

2020

-

02,

ASU 

2016

-

13

is effective for certain Smaller Reporting Companies for financial statements issued for fiscal years beginning after

December 

15,

2022

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

2024

for us if we continue to be classified as a Smaller Reporting Company, with early adoption permitted. We do

not

expect adoption of the new guidance to have a significant impact on our financial statements.
 

XML

Note 4 - Net Income Per Share

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE

4.

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 Sept. 30
	2020		2019
Weighted average common shares outstanding – basic		4,834,709		4,846,010
Dilutive effect of stock options		100		1,871
Shares used in computing net income per share – diluted		4,834,809		4,847,881

	Six Months Ended Sept. 30
	2020		2019
Weighted average common shares outstanding – basic		4,834,872		4,846,010
Dilutive effect of stock options		114		3,347
Shares used in computing net income per share – diluted		4,834,986		4,849,357

XML

Note 5 - Fair Value of Financial Instruments

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE

5.

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' equity. Corporate bonds with remaining maturities less than

one

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

one

year are classified as long-term. We consider all highly-liquid investments with maturities of

three

months or less when purchased, including money market funds, to be cash equivalents. Gains and losses on marketable security transactions are reported on the specific-identification method.

     Contractual maturities of available-for-sale securities as of

September 30, 2020

are as follows:
 

Total		<1 Year		1–3 Years		3–5 Years
$	67,555,355	$	26,778,033	$	34,271,054	$	6,506,268

 
     Total available-for-sale securities represented approximately

89%

of our total assets. Marketable securities as of

September 

30,

2020

had remaining maturities between

one

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. Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Generally accepted accounting principles utilize a valuation hierarchy for disclosure of fair value measurements. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The categories within the valuation hierarchy are described as follows:
 
     Level

1

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

     Level

2

– Financial instruments with quoted prices in active markets for similar assets or liabilities. 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 September 30, 2020						As of March 31, 2020
	Level 1		Level 2		Total		Level 1		Level 2		Total
Money market funds	$	3,546,052	$	-	$	3,546,052	$	7,903,433	$	-	$	7,903,433
Corporate bonds		-		64,009,303		64,009,303		-		62,691,309		62,691,309
Total	$	3,546,052	$	64,009,303	$	67,555,355	$	7,903,433	$	62,691,309	$	70,594,742

     Our available-for-sale securities as of

September 

30

and

March 

31,

2020,

aggregated into classes of securities, were as follows:

	As of September 30, 2020								As of March 31, 2020
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
Money market funds	$	3,546,052	$	-	$	-	$	3,546,052	$	7,903,433	$	-	$	-		$	7,903,433
Corporate bonds		61,924,230		2,085,073		-		64,009,303		62,030,120		752,621		(91,432	)		62,691,309
Total	$	65,470,282	$	2,085,073	$	-	$	67,555,355	$	69,933,553	$	752,621	$	(91,432	)	$	70,594,742

XML

Note 6 - Inventories

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Inventory Disclosure [Text Block]

NOTE

6.

INVENTORIES

     Inventories are shown in the following table:

	Sept. 30, 2020		March 31, 2020
Raw materials	$	953,050	$	1,017,451
Work in process		1,949,981		1,863,000
Finished goods		1,025,493		1,003,999
Total inventories	$	3,928,524	$	3,884,450

XML

Note 7 - Stock-based Compensation

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

NOTE

7.

STOCK-BASED COMPENSATION

     Stock-based compensation expense was

$34,315

for the

second

quarter of fiscal

2021,

$37,022

for the

first

six

months of fiscal

2021,

and

$48,360

for the

second

quarter and

first

six

months of fiscal

2020.

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

XML

Note 8 - Income Taxes

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE

8.

INCOME TAXES

     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

September 

30,

2020,

and we do

not

expect any significant unrecognized tax benefits within

12

 months of the reporting date. We recognize interest and penalties related to income tax matters in income tax expense. As of

September 

30,

2020

we had

no

accrued interest related to uncertain tax positions. The tax years

2016

through

2019

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

XML

Note 9 - Leases

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

NOTE

9.

LEASES

     We conduct our operations in a leased facility under a non-cancellable lease expiring

March 31, 2026.

Our lease does

not

provide an implicit rate, so we used our incremental borrowing rate to determine the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Variable lease costs consist primarily of common area maintenance and real estate taxes which are paid based on actual costs incurred by the lessor. Details of our operating lease are as follows:
 

	Quarter Ended Sept. 30, 2020			Six Months Ended Sept. 30, 2020
Operating lease cost	$	38,641		$	77,282
Variable lease cost		30,608			61,216
Total	$	69,249		$	138,498
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for leases	$	44,433		$	88,866
Remaining lease term (in months)		66
Discount rate		3.5	%

     The following table presents the maturities of lease liabilities as of

September 

30,

2020:

 

Year Ending March 31	Operating Leases
2021	$	39,671
2022		152,703
2023		156,121
2024		159,592
2025		163,224
2026		165,947
Total lease payments		837,258
Imputed lease interest		(78,605	)
Total lease liabilities	$	758,653

XML

Note 10 - Stock Repurchase Program

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Stock Repurchase Plan Disclosure [Text Block]

NOTE

10.

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. Our repurchase program does

not

have an expiration date and does

not

obligate us to purchase any shares. The Program

may

be modified or discontinued at any time without notice. We intend to finance any stock repurchases with cash provided by operating activities or maturating marketable securities. The remaining authorization was

$3,762,040

as of

September 

30,

 

2020.

Common Stock repurchases during the

second

quarter of fiscal

2021,

all of which were made as part of our publicly announced program, were as follows:
 

							Total number of		Max. approximate
			Total		Average		shares purchased		dollar value of
			number		price		as part of publicly		shares that may
			of shares		paid		announced		yet be purchased
Period			purchased		per share		program		under the program
July 1, 2020	–	July 31, 2020		-	$	-		-	$	3,853,459
August 1, 2020	–	August 31, 2020		-	$	-		-	$	3,853,459
September 1, 2020	–	September 30, 2020		1,806	$	50.62		1,806	$	3,762,040
				1,806				1,806

XML

Note 11 - Information as to Employee Stock Purchase, Savings, and Similar Plans

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Retirement Benefits [Text Block]

NOTE

11.

INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS

     All of our employees are eligible to participate in our

401

(k) savings plan the

first

quarter after reaching age 

21.

Employees

may

contribute up to the Internal Revenue Code maximum. We make matching contributions of

100%

of the

first

3%

of participants' salary deferral contributions. Our matching contributions were

$21,275

for the

second

quarter of fiscal 

2021,

$21,990

for the

second

quarter of fiscal 

2020,

$46,656

for the

first

six

months of fiscal 

2021,

and

$46,056

for the

first

six

months of fiscal 

2020.

XML

Note 12 - Subsequent Events

6 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

12.

SUBSEQUENT EVENTS

     On

October 

21,

2020

we announced that our Board had declared a quarterly cash dividend of

$1.00

per share of Common Stock to be paid

November 

30,

2020

to shareholders of record as of the close of business

November 

2,

2020.

 

XML

Significant Accounting Policies (Policies)

6 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

     The accompanying unaudited financial statements of NVE Corporation are prepared consistent with accounting principles generally accepted in the United States and in accordance with Securities and Exchange Commission rules and regulations. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements. Although we believe that the disclosures are adequate to make the information presented

not

misleading, certain disclosures have been omitted as allowed, and it is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and the notes included in our latest annual financial statements included in our Annual Report on Form

10

-K for the fiscal year ended

March 

31,

2020.

The results of operations for the quarter and

six

months ended

September 

30,

2020

are

not

necessarily indicative of the results that

may

be expected for the full fiscal year ending

March 

31,

2021.

Revenue from Contract with Customer [Policy Text Block]

Revenue Recognition

    We recognize revenue when we satisfy performance obligations by the transfer of control of products or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products or services. Revenue is disaggregated into product sales and contract research and development to depict the nature, amount, timing of revenue recognition and economic characteristics of our business, and is represented within the financial statements.

     We recognize revenue from product sales to customers and distributors when we satisfy our performance obligation, at a point in time, upon product shipment or delivery to our customer or distributor as determined by agreed upon shipping terms. Shipping charges billed to customers are included in product sales and the related shipping costs are included in cost of sales. Under certain limited circumstances, our distributors

may

earn commissions for activities unrelated to their purchases of our products, such as for facilitating the sale of custom products or research and development contracts with

third

parties. We recognize any such commissions as selling, general, and administrative expenses. We recognize discounts provided to our distributors as reductions in revenue.

     We recognize contract research and development revenue over a period of time as the performance obligation is satisfied over a period of time rather than a point in time. Contracts have specifications unique to each customer and do

not

create an asset with an alternate use, and we have an enforceable right to payment for performance completed to date. We recognize revenue over a period of time using costs incurred as the measurement of progress towards completion.

     Accounts receivable is recognized when we have transferred a good or service to a customer and our right to receive consideration is unconditional through the completion of our performance obligation. A contract asset is recognized when we have a right to consideration from the transfer of goods or services to a customer but have

not

completed our performance obligation. A contract liability is recognized when we have been paid by a customer but have

not

yet satisfied the performance obligation by transferring goods or services. We had

no

material contract assets or contract liabilities as of

September 

30,

2020

or

March 

31,

2020.

 
     Our performance obligations related to product sales and contract research and development contracts are satisfied in

one

year or less. Unsatisfied performance obligations represent contracts with an original expected duration of

one

year or less. As permitted under Accounting Standards Codification (“ASC”) Topic 

606,

Revenue from Contracts with Customers

, we are using the practical expedient

not

to disclose the value of these unsatisfied performance obligations. We also use the practical expedient in which we do

not

assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be

one

year or less.

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Note 4 - Net Income Per Share (Tables)

6 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Weighted Average Number of Shares [Table Text Block]

	Quarter Ended Sept. 30
	2020		2019
Weighted average common shares outstanding – basic		4,834,709		4,846,010
Dilutive effect of stock options		100		1,871
Shares used in computing net income per share – diluted		4,834,809		4,847,881

	Six Months Ended Sept. 30
	2020		2019
Weighted average common shares outstanding – basic		4,834,872		4,846,010
Dilutive effect of stock options		114		3,347
Shares used in computing net income per share – diluted		4,834,986		4,849,357

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Note 5 - Fair Value of Financial Instruments (Tables)

6 Months Ended

Sep. 30, 2020

Notes Tables

Investments Classified by Contractual Maturity Date [Table Text Block]

Total		<1 Year		1–3 Years		3–5 Years
$	67,555,355	$	26,778,033	$	34,271,054	$	6,506,268

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	As of September 30, 2020						As of March 31, 2020
	Level 1		Level 2		Total		Level 1		Level 2		Total
Money market funds	$	3,546,052	$	-	$	3,546,052	$	7,903,433	$	-	$	7,903,433
Corporate bonds		-		64,009,303		64,009,303		-		62,691,309		62,691,309
Total	$	3,546,052	$	64,009,303	$	67,555,355	$	7,903,433	$	62,691,309	$	70,594,742

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	As of September 30, 2020								As of March 31, 2020
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
Money market funds	$	3,546,052	$	-	$	-	$	3,546,052	$	7,903,433	$	-	$	-		$	7,903,433
Corporate bonds		61,924,230		2,085,073		-		64,009,303		62,030,120		752,621		(91,432	)		62,691,309
Total	$	65,470,282	$	2,085,073	$	-	$	67,555,355	$	69,933,553	$	752,621	$	(91,432	)	$	70,594,742

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Note 6 - Inventories (Tables)

6 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	Sept. 30, 2020		March 31, 2020
Raw materials	$	953,050	$	1,017,451
Work in process		1,949,981		1,863,000
Finished goods		1,025,493		1,003,999
Total inventories	$	3,928,524	$	3,884,450

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Note 9 - Leases (Tables)

6 Months Ended

Sep. 30, 2020

Notes Tables

Lease, Cost [Table Text Block]

	Quarter Ended Sept. 30, 2020			Six Months Ended Sept. 30, 2020
Operating lease cost	$	38,641		$	77,282
Variable lease cost		30,608			61,216
Total	$	69,249		$	138,498
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for leases	$	44,433		$	88,866
Remaining lease term (in months)		66
Discount rate		3.5	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Year Ending March 31	Operating Leases
2021	$	39,671
2022		152,703
2023		156,121
2024		159,592
2025		163,224
2026		165,947
Total lease payments		837,258
Imputed lease interest		(78,605	)
Total lease liabilities	$	758,653

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Note 10 - Stock Repurchase Program (Tables)

6 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Stock Repurchase Program [Table Text Block]

							Total number of		Max. approximate
			Total		Average		shares purchased		dollar value of
			number		price		as part of publicly		shares that may
			of shares		paid		announced		yet be purchased
Period			purchased		per share		program		under the program
July 1, 2020	–	July 31, 2020		-	$	-		-	$	3,853,459
August 1, 2020	–	August 31, 2020		-	$	-		-	$	3,853,459
September 1, 2020	–	September 30, 2020		1,806	$	50.62		1,806	$	3,762,040
				1,806				1,806

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Note 4 - Net Income Per Share - Components of Common Shares Outstanding (Details) - shares	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Basic (in shares)	4,834,709	4,846,010	4,834,872	4,846,010
Dilutive effect of stock options (in shares)	100	1,871	114	3,347
Shares used in computing net income per share – diluted (in shares)	4,834,809	4,847,881	4,834,986	4,849,357

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Note 5 - Fair Value of Financial Instruments (Details Textual)	6 Months Ended
	Sep. 30, 2020
Available for Sale Debt Securitites, Percent of Total Assets	89.00%
Minimum [Member]
Available for Sale Debt Securities, Remaining Maturity (Month)	30 days
Maximum [Member]
Available for Sale Debt Securities, Remaining Maturity (Month)	3 years 150 days

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Note 5 - Fair Value of Financial Instruments - Fair Value of Available-for-sale Securities (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Total	$ 67,555,355	$ 70,594,742
Less than 1 year	26,778,033
1-3 years	34,271,054
3-5 years	$ 6,506,268

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Note 5 - Fair Value of Financial Instruments - Assets Measured on Recurring Basis (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Total	$ 67,555,355	$ 70,594,742
Money Market Funds [Member]
Total	3,546,052	7,903,433
Corporate Bond Securities [Member]
Total	64,009,303	62,691,309
Fair Value, Recurring [Member]
Total	67,555,355	70,594,742
Fair Value, Recurring [Member] | Money Market Funds [Member]
Total	3,546,052	7,903,433
Fair Value, Recurring [Member] | Corporate Bond Securities [Member]
Total	64,009,303	62,691,309
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Total	3,546,052	7,903,433
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member]
Total	3,546,052	7,903,433
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Corporate Bond Securities [Member]
Total
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Total	64,009,303	62,691,309
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member]
Total
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Corporate Bond Securities [Member]
Total	$ 64,009,303	$ 62,691,309

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Note 5 - Fair Value of Financial Instruments - Reconciliation of Available-for-sale Securities (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Amortized Cost	$ 65,470,282	$ 69,933,553
Gross Unrealized Holding Gains	2,085,073	752,621
Gross Unrealized Holding Losses		(91,432)
Estimated Fair Value	67,555,355	70,594,742
Money Market Funds [Member]
Amortized Cost	3,546,052	7,903,433
Gross Unrealized Holding Gains
Gross Unrealized Holding Losses
Estimated Fair Value	3,546,052	7,903,433
Corporate Bond Securities [Member]
Amortized Cost	61,924,230	62,030,120
Gross Unrealized Holding Gains	2,085,073	752,621
Gross Unrealized Holding Losses		(91,432)
Estimated Fair Value	$ 64,009,303	$ 62,691,309

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Note 6 - Inventories - Summary of Inventories (Details) - USD ($)	Sep. 30, 2020	Mar. 31, 2020
Raw materials	$ 953,050	$ 1,017,451
Work in process	1,949,981	1,863,000
Finished goods	1,025,493	1,003,999
Total inventories	$ 3,928,524	$ 3,884,450	[1]

[1] The March 31, 2020 Balance Sheet is derived from the audited financial statements contained in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

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Note 7 - Stock-based Compensation (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Payment Arrangement, Expense	$ 34,315	$ 48,360	$ 37,022	$ 48,360

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Note 8 - Income Taxes (Details Textual) $ in Thousands	6 Months Ended
	Sep. 30, 2020 USD ($)
Unrecognized Tax Benefits, Ending Balance	$ 0
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit	0
Unrecognized Tax Benefits, Interest on Income Taxes Accrued	$ 0
Open Tax Year	2016 2017 2018 2019

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Note 9 - Leases - Operating Lease (Details)	3 Months Ended	6 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)
Operating lease cost	$ 38,641	$ 77,282
Variable lease cost	30,608	61,216
Total	69,249	138,498
Operating cash flows for leases	$ 44,433	$ 88,866
Remaining lease term (Month)	5 years 180 days	5 years 180 days
Discount rate	3.50%	3.50%

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Note 9 - Leases - Maturities of Lease Liabilities (Details)	Sep. 30, 2020 USD ($)
2021	$ 39,671
2022	152,703
2023	156,121
2024	159,592
2025	163,224
2026	165,947
Total lease payments	837,258
Imputed lease interest	(78,605)
Total lease liabilities	$ 758,653

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Note 10 - Stock Repurchase Program (Details Textual) - Repurchase Program 2009 [Member] - USD ($)	Sep. 30, 2020	Aug. 27, 2015	Jan. 21, 2009
Stock Repurchase Program, Authorized Amount			$ 2,500,000
Stock Repurchase Program Authorized Additional Amount		$ 5,000,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 3,762,040

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Note 10 - Stock Repurchase Program - Schedule of Stock Repurchase Program (Details) - Common Stock [Member] - USD ($)	1 Months Ended			3 Months Ended
	Sep. 30, 2020	Aug. 31, 2020	Jul. 31, 2020	Sep. 30, 2020
Total Shares Purchased (in shares)				1,806
Average price per Share (in dollars per share)	$ 50.62			$ 50.62
Max Dollar Amount of Remaining Shares	$ 3,762,040	$ 3,853,459	$ 3,853,459	$ 3,762,040
Total number of shares purchased during the period [Member]
Total Shares Purchased (in shares)	1,806			1,806
Total number of shares purchased under the Repurchase Program [Member]
Total Shares Purchased (in shares)	1,806			1,806

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Note 11 - Information as to Employee Stock Purchase, Savings, and Similar Plans (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay			100.00%
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent			3.00%
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 21,275	$ 21,990	$ 46,656	$ 46,056

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Note 12 - Subsequent Events (Details Textual) - $ / shares		3 Months Ended		6 Months Ended
	Oct. 21, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Common Stock, Dividends, Per Share, Declared (in dollars per share)		$ 1	$ 1	$ 2	$ 2
Subsequent Event [Member]
Common Stock, Dividends, Per Share, Declared (in dollars per share)	$ 1
Subsequent Event [Member] | Common Stock [Member]
Dividends Payable, Date to be Paid	Nov. 30, 2000
Dividends Payable, Date of Record	Nov. 02, 2020