(Unaudited)

Nine Months Ended December 31,

2023

2022

Revenue

Product sales

$
22,183,223

$
24,787,885

Contract research and development

537,727

668,024

Total revenue

22,720,950

25,455,909

Cost of sales

5,034,556

5,533,000

Gross profit

17,686,394

19,922,909

Expenses

Research and development

1,920,095

1,972,505

Selling, general, and administrative

1,298,211

1,210,395

Provision for credit losses

9,514

-

Total expenses

3,227,820

3,182,900

Income from operations

14,458,574

16,740,009

Interest income

1,440,289

1,040,528

Income before taxes

15,898,863

17,780,537

Provision for income taxes

2,587,145

3,318,723

Net income

$
13,311,718

$
14,461,814

Net income per share – basic

$
2.75

$
2.99

Net income per share – diluted

$
2.75

$
2.99

Cash dividends declared per common share

$
3.00

$
3.00

Weighted average shares outstanding

Basic

4,832,992

4,830,826

Diluted

4,839,725

4,831,168

STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

Nine Months Ended Dec. 31
2017 2016
Net income $ 10,030,252 $ 9,921,486
Unrealized loss from marketable securities, net of tax (227,693 ) (587,068 )
Comprehensive income $ 9,802,559 $ 9,334,418

	Nine Months Ended December 31,
	2023		2022
Net income	$	13,311,718	$	14,461,814
Unrealized gain (loss) on marketable securities, net of tax		460,541		(1,133,242	)
Comprehensive income	$	13,772,259	$	13,328,572

See accompanying notes.

Table of Contents

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

							Accumulated
					Additional		Other
	Common Stock				Paid-In		Comprehensive			Retained
	Shares		Amount		Capital		Income (Loss)			Earnings			Total
Balance as of March 31, 2023		4,830,826	$	48,308	$	19,295,442	$	(1,213,858	)	$	48,949,610		$	67,079,502
Exercise of stock options		2,575		26		117,501								117,527
Comprehensive income:
Unrealized loss on marketable securities, net of tax								(234,701	)					(234,701	)
Net income											4,403,730			4,403,730
Total comprehensive income														4,169,029
Stock-based compensation						10,536								10,536
Cash dividends declared ($1.00 per share of common stock)											(4,830,826	)		(4,830,826	)
Balance as of June 30, 2023		4,833,401	$	48,334	$	19,423,479	$	(1,448,559	)	$	48,522,514		$	66,545,768
Comprehensive income:
Unrealized loss on marketable securities, net of tax								(53,588	)					(53,588	)
Net income											4,723,566			4,723,566
Total comprehensive income														4,669,978
Stock-based compensation						106,312								106,312
Cash dividends declared ($1.00 per share of common stock)											(4,833,401	)		(4,833,401	)
Balance as of September 30, 2023		4,833,401	$	48,334	$	19,529,791	$	(1,502,147	)	$	48,412,679		$	66,488,657
Comprehensive income:
Unrealized gain on marketable securities, net of tax								748,830						748,830
Net income											4,184,422			4,184,422
Total comprehensive income														4,933,252
Stock-based compensation						12,544								12,544
Cash dividends declared ($1.00 per share of common stock)											(4,833,401	)		(4,833,401	)
Balance as of December 31, 2023		4,833,401	$	48,334	$	19,542,335	$	(753,317	)	$	47,763,700		$	66,601,052

See accompanying notes.

Table of Contents

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

							Accumulated
					Additional		Other
	Common Stock				Paid-In		Comprehensive			Retained
	Shares		Amount		Capital		Income (Loss)			Earnings			Total
Balance as of March 31, 2022		4,830,826	$	48,308	$	19,256,485	$	(318,120	)	$	45,578,456		$	64,565,129
Comprehensive income:
Unrealized loss on marketable securities, net of tax								(338,553	)					(338,553	)
Net income											4,140,116			4,140,116
Total comprehensive income														3,801,563
Stock-based compensation						7,134								7,134
Cash dividends declared ($1.00 per share of common stock)											(4,830,826	)		(4,830,826	)
Balance as of June 30, 2022		4,830,826		48,308		19,263,619		(656,673	)		44,887,746			63,543,000
Comprehensive income:
Unrealized loss on marketable securities, net of tax								(1,127,362	)					(1,127,362	)
Net income											6,090,373			6,090,373
Total comprehensive income														4,963,011
Stock-based compensation						39,951								39,951
Cash dividends declared ($1.00 per share of common stock)											(4,830,826	)		(4,830,826	)
Balance as of September 30, 2022		4,830,826		48,308		19,303,570		(1,784,035	)		46,147,293			63,715,136
Comprehensive income:
Unrealized gain on marketable securities, net of tax								332,673						332,673
Net income											4,231,324			4,231,324
Total comprehensive income														4,563,997
Stock-based compensation						7,133								7,133
Cash dividends declared ($1.00 per share of common stock)											(4,830,826	)		(4,830,826	)
Balance as of December 31, 2022		4,830,826	$	48,308	$	19,310,703	$	(1,451,362	)	$	45,547,791		$	63,455,440

See accompanying notes.

Table of Contents

NVE CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)

Nine Months Ended Dec. 31
2017 2016
OPERATING ACTIVITIES
Net income $ 10,030,252 $ 9,921,486
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 726,842 868,218
Stock-based compensation 40,920 22,000
Excess tax deficiencies - 293
Deferred income taxes 153,954 (61,076 )
Changes in operating assets and liabilities:
Accounts receivable 1,270,936 782,427
Inventories (238,028 ) 42,755
Prepaid expenses and other assets (360,675 ) (16,909 )
Accounts payable and accrued expenses (159,525 ) 162,906
Deferred revenue (142,733 ) (714,805 )
Net cash provided by operating activities 11,321,943 11,007,295

INVESTING ACTIVITIES
Purchases of fixed assets (604,755 ) (200,447 )
Purchases of marketable securities (16,256,210 ) (11,528,240 )
Proceeds from maturities of marketable securities 16,540,000 11,400,000
Net cash used in investing activities (320,965 ) (328,687 )

FINANCING ACTIVITIES
Proceeds from sale of common stock 51,040 92,310
Excess tax (deficiencies) - (293 )
Payment of dividends to shareholders (14,523,030 ) (14,506,030 )
Net cash used in financing activities (14,471,990 ) (14,414,013 )

Decrease in cash and cash equivalents (3,471,012 ) (3,735,405 )
Cash and cash equivalents at beginning of period 8,199,364 7,534,593

Cash and cash equivalents at end of period $ 4,728,352 $ 3,799,188

Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes $ 4,615,019 $ 4,720,000

	Nine Months Ended December 31,
	2023			2022
OPERATING ACTIVITIES
Net income	$	13,311,718		$	14,461,814
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		156,073			187,781
Provision for current estimate of credit losses		9,514			-
Stock-based compensation		129,392			54,218
Deferred income taxes		(847,235	)		(61,972	)
Changes in operating assets and liabilities:
Accounts receivable		4,268,102			2,607,555
Inventories		(932,801	)		(1,370,592	)
Prepaid expenses and other assets		167,546			(502,423	)
Accounts payable and accrued expenses		(1,147,278	)		(627,470	)
Net cash provided by operating activities		15,115,031			14,748,911

INVESTING ACTIVITIES
Purchases of fixed assets		(16,731	)		(907,612	)
Purchases of marketable securities		(6,103,185	)		(26,618,617	)
Proceeds from maturities of marketable securities		8,400,000			18,750,000
Receipt of tenant improvement allowance		-			100,000
Net cash provided (used) by investing activities		2,280,084			(8,676,229)	)

FINANCING ACTIVITIES
Proceeds from exercise of stock options		117,527			-
Payment of dividends to shareholders		(14,497,628	)		(14,492,478	)
Cash used in financing activities		(14,380,101	)		(14,492,478	)
Increase (decrease) in cash and cash equivalents		3,015,014			(8,419,796	)

Cash and cash equivalents at beginning of period		1,669,896			10,449,510

Cash and cash equivalents at end of period	$	4,684,910		$	2,029,714

Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	3,685,861		$	4,130,278

See accompanying notes.

Table of Contents

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. ~~INTERIM FINANCIAL INFORMATION~~
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements of NVE Corporation are prepared consistent with accounting principles generally accepted in the United States and in accordance with Securities and Exchange Commission rules and regulations. In the opinion of management, these financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the financial statements. Although we believe that the disclosures are adequate to make the information presented not misleading, certain disclosures have been omitted as allowed, and it is suggested that these unaudited financial statements be read in conjunction with the audited financial statements and the notes included in our latest ~~annual financial statements included in our~~ Annual Report on Form 10-K for the fiscal year ended March 31, ~~2017.~~2023. The results of operations for the quarter ~~or nine months~~ ended December 31, ~~2017~~2023, are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, ~~2018.~~

~~NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS~~
~~Accounting Pronouncements Recently Adopted~~
~~In July 2015,~~2024.

Significant accounting policies

A description of our significant accounting policies is provided in Note 2 to the Financial ~~Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11,~~ ~~Simplifying the Measurement of Inventory.~~ ASU 2015-11 requires inventory that is recorded using the first-in, first-out method to be measured at the lower of cost or net realizable value. We adopted ASU 2015-11 prospectively in the first quarter of the current fiscal year, and the adoption has not had a significant impact on our financial statements.

     ~~In March 2016, the FASB issued ASU No. 2016-09,~~ ~~Compensation—Stock Compensation~~, which simplifies the accounting for the taxes related to stock based compensation, including adjustments to how excess tax benefits and a company’s payments for tax withholdings should be classified. We adopted ASU 2016-09 prospectively in the first quarter of the fiscal year ending March 31, 2018. The adoption did not have a significant impact on our financial statements.

~~Future Accounting Pronouncements~~
     ~~In May 2014, the FASB issued ASU No. 2014-09, which supersedes the revenue recognition requirements in Accounting Standards Codification 605,~~ ~~Revenue Recognition~~. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. In August 2015, the FASB issued ASU No. 2015-14, ~~Revenue from Contracts with Customers: Deferral of the Effective Date~~, which deferred the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, which will be fiscal 2019 for us. We plan to adopt the guidance retrospectively with any effect of initially applying the guidance recognized at the date of initial application. Under this approach, we would not restate prior financial statements presented. Based on an evaluation, we do not expect there to be a material impact on our financial statements, because we do not expect to change the manner or timing of recognizing revenue. We have evaluated each of our revenue streams, product sales and contract research and development. We recognize revenue on product sales to customers and distributors when we satisfy our performance obligations as the products are shipped. We recognize contract research and development revenue pro-rata as work progresses using costs incurred relative to the total expected costs as the measurement basis for progress toward completion. We are currently evaluating the impact of new disclosure requirements required under the guidance.

     Information regarding all other applicable recently issued accounting standards, on which our position have not changed since our latest annual financial statements, are contained in the financial statements includedStatements in our Annual Report on Form 10-K for the year ended March 31, ~~2017.~~

2023. As of December 31, 2023, there were no changes to our significant accounting policies except for changes resulting from the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (ASC Topic 326) as described in the “Marketable securities and credit losses” section below and in Note 3.

Marketable securities and credit losses

Our marketable securities consist of corporate bonds and money market funds. Marketable securities are initially recognized at cost. Marketable securities considered to be “purchased financial assets with credit deterioration” are initially recognized at cost, less any allowance for expected credit losses. Unrealized holding gains and losses are reported in other comprehensive income, net of applicable taxes, until realized. All marketable securities are carried on the balance sheet at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We use a three-level fair value hierarchy in estimating and reporting fair values of our marketable securities:

Level 1 – Securities whose fair values are determined using quoted prices in active markets for identical securities.

Level 2 – Securities whose fair values are determined using quoted prices for similar securities in active markets or quoted prices for identical securities in markets that are not active.

Level 3 – Securities whose fair values are determined using unobservable inputs.

Corporate bonds with remaining maturities of less than one year are classified as short-term and those with remaining maturities of one year or more 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.

We measure credit losses on our marketable securities at the individual security level, using the present value of expected cash flows method. Credit losses are measured as the amount by which the amortized cost basis of the security exceeds the present value of expected cash flows (discounted at the effective interest rate implicit in the security at the date of acquisition), limited by the amount by which the fair value of the security is less than its amortized cost basis. When estimating expected cash flows, we consider available information relating to past events, current conditions, and reasonable and supportable forecasts such as, past incidences of default, credit quality as reported by credit rating agencies, extent of impairment, length of time the security has been in a continuous unrealized loss position, and adverse conditions forecasted by industry, financial and economic experts that are relevant to the collectability of expected cash flows. We do not include accrued interest receivables in amortized cost and in fair value when measuring expected credit losses. We will write off uncollectible accrued interest receivable to net income in a timely manner, by reversing interest income, and therefore do not measure credit losses for accrued interest receivable. Timely manner means one year from the date the accrued interest receivable becomes past due. Accrued interest receivables are included in the balance sheet in “prepaid expenses and other assets.”

Table of Contents
Accounts Receivable and Allowance for Credit Losses
We grant credit to customers in the normal course of business and at times require customers to pay for orders before shipment. Accounts receivable are presented on the balance sheet net of any allowance for credit losses. We measure credit losses on our trade accounts receivable on a pool basis, and in some cases, on an individual basis, using the loss-rate method. Accounts receivable are pooled based on geographical locations because we believe accounts originating from the same geographical location share risk characteristics. When estimating expected credit losses on our trade accounts receivable, we consider available information relating to past events, current conditions, and reasonable and supportable forecasts such as historical loss rate, current age and remaining term of the receivable relative to our current days sales outstanding ratio, pending orders of the customer relative to accounts receivable balance as of the reporting date and amounts paid by the customers subsequent to the reporting period end but before the financial statements are issued.
NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS
Recently Adopted Accounting Standard

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) 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 Topic326, 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 (Topic326) 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. 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. We adopted ASU
No. 2016-13 beginning with the quarter ended June 30, 2023. The adoption resulted in disclosure changes and required us to consider the likelihood of default and to measure our allowance for credit losses over the contractual term of our receivables. The adoption did not have a material impact on the financial statements as of December 31 or April 1, 2023.
New Accounting Standard Not Yet Adopted
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires additional quantitative and qualitative income tax disclosures to enable financial statements users better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows. For public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024, which will be fiscal 2026 for us. We expect the adoption to result in disclosure changes only.
We do not expect the adoption of other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date to have a material impact on our financial statements when they are adopted.

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. Stock options totaling 4,000 for the quarter and 6,000 for the nine months ended December 31, 2016 were not included in the computation of diluted earnings per share because the exercise prices were greater than the market price of the common stock. The following tables show the components of diluted shares:

	Quarter Ended December 31,
	2023	2022
Weighted average common shares outstanding – basic	4,833,401	4,830,826
Dilutive effect of stock options	3,829	1,542
Shares used in computing net income per share – diluted	4,837,230	4,832,368

	Nine Months Ended December 31,
	2023	2022
Weighted average common shares outstanding – basic	4,832,992	4,830,826
Dilutive effect of stock options	6,733	342
Shares used in computing net income per share – diluted	4,839,725	4,831,168

Quarter Ended Dec. 31
2017 2016
Weighted average common shares outstanding – basic 4,841,369 4,836,336
Dilutive effect of stock options 5,921 3,441
Shares used in computing net income per share – diluted 4,847,290 4,839,777

Nine Months Ended Dec. 31
2017 2016
Weighted average common shares outstanding – basic 4,841,130 4,835,639
Dilutive effect of stock options 4,906 2,176
Shares used in computing net income per share – diluted 4,846,036 4,837,815

Table of Contents

NOTE 5. MARKETABLE SECURITIES

The following table shows the major categories of our marketable securities and their contractual maturities as of December 31, 2023:

	Total		<1 Year		1–3 Years		3–6 Years
Money market funds	$	4,259,340	$	4,259,340	$	-	$	-
Corporate bonds		50,006,533		14,335,619		27,222,387		8,448,527
Total	$	54,265,873	$	18,594,959	$	27,222,387	$	8,448,527

Total marketable securities represent approximately 80% of our total assets as of December 31, 2023. Marketable securities ~~with~~as of December 31, 2023, had remaining maturities ~~less than~~between one ~~year~~day and 64 months.

Money market funds are ~~classified~~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.” Accrued interest receivables were $366,452 as ~~short-term,~~of December 31, 2023, and ~~those with remaining maturities greater than one year~~$425,372 as of March 31, 2023, and are ~~classified~~included in the balance sheets in “Prepaid expenses and other assets.”

We monitor the credit ratings of our marketable securities at least quarterly as ~~long-term.~~reported by Standard & Poor’s. The following table summarizes the fair ~~value~~values of our marketable securities as of December 31, ~~2017,~~2023, aggregated by ~~maturity, were~~credit rating:

Credit Rating		Fair Value
AAA	$	5,559,340
AA+		2,179,443
AA		6,745,419
AA-		21,194,039
A+		2,954,497
A		9,650,572
A-		5,982,563
Total	$	54,265,873

The following table shows the estimated fair value of our marketable securities, aggregated by fair value hierarchy inputs used in estimating their fair values:

	As of December 31, 2023						As of March 31, 2023
	Level 1		Level 2		Total		Level 1		Level 2		Total
Money market funds	$	4,259,340	$	-	$	4,259,340	$	906,141	$	-	$	906,141
Corporate bonds		-		50,006,533		50,006,533		-		51,638,142		51,638,142
Total	$	4,259,340	$	50,006,533	$	54,265,873	$	906,141	$	51,638,142	$	52,544,283

The following table shows the amortized cost, fair value, and gross unrealized holding gains and losses of our marketable securities as ~~follows:~~
Total <1 Year 1–3 Years 3–5 Years
$ 75,537,933 $ 18,808,203 $ 29,512,416 $ 27,217,314

As of December 31 and March 31, ~~2017, our marketable securities were as follows:~~2023:

	As of December 31, 2023									As of March 31, 2023
	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	$	4,259,340	$	-	$	-		$	4,259,340	$	906,141	$	-	$	-		$	906,141
Corporate bonds		50,970,841		7,965		(972,273	)		50,006,533		53,191,981		1,007		(1,554,846	)		51,638,142
Total	$	55,230,181	$	7,965	$	(972,273	)	$	54,265,873	$	54,098,122	$	1,007	$	(1,554,846	)	$	52,544,283

As of December 31, 2017 As of March 31, 2017

Adjusted
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Market
Value
Adjusted
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair
Market
Value
Corporate bonds $ 75,955,697    $ 27,442    $ (445,206 )    $ 75,537,933    $ 75,158,087    $ 187,001    $ (246,935 )    $ 75,098,153
Municipal bonds   - - - - 1,304,817 - (214 ) 1,304,603
Total $ 75,955,697 $ 27,442 $ (445,206 ) $ 75,537,933 $ 76,462,904 $ 187,001 $ (247,149 ) $ 76,402,756

     ~~Fifteen securities were in unrealized loss positions as~~

Table of ~~December 31, 2017.~~ Contents

The following table shows the gross unrealized holding losses and estimated fair value of our ~~investments with unrealized~~marketable securities for which an allowance for credit losses has not been recorded, aggregated by ~~investment~~ category of securities and length of time that individual securities had been in a continuous unrealized loss position as of December 31 and March 31, ~~2017:~~

Less Than 12 Months 12 Months or Greater Total
Fair
Market
Value Gross
Unrealized
Losses Fair
Market
Value Gross
Unrealized
Losses Fair
Market
Value Gross
Unrealized
Losses
As of December 31, 2017
Corporate bonds $ 44,282,521 $ (325,912 ) $ 9,224,878 $ (119,294 ) $ 53,507,399 $ (445,206 )
Municipal bonds   - - - - - -
Total $ 44,282,521 $ (325,912 ) $ 9,224,878 $ (119,294 ) $ 53,507,399 $ (445,206 )
As of March 31, 2017
Corporate bonds $ 32,198,766 $ (246,935 ) $ - $ - $ 32,198,766 $ (246,935 )
Municipal bonds   1,304,603 (214 ) - - 1,304,603 (214 )
Total $ 33,503,369 $ (247,149 ) $ - $ - $ 33,503,369 $ (247,149 )

     ~~Three bonds, with a total~~2023.

	Less Than 12 Months					12 Months or Greater					Total
	Estimated Fair Value		Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Losses

As of December 31, 2023
Corporate bonds	$	1,848,307	$	(17,747	)	$	40,715,403	$	(954,526	)	$	42,563,710	$	(972,273	)
Total	$	1,848,307	$	(17,747	)	$	40,715,403	$	(954,526	)	$	42,563,710	$	(972,273	)

As of March 31, 2023
Corporate bonds	$	37,084,628	$	(590,967	)	$	13,294,817	$	(963,879	)	$	50,379,445	$	(1,554,846	)
Total	$	37,084,628	$	(590,967	)	$	13,294,817	$	(963,879	)	$	50,379,445	$	(1,554,846	)

None of the securities were impaired at acquisition, and subsequent declines in fair ~~market~~ value ~~of $9,224,878, had been in continuous unrealized loss positions for 12 months or greater as of December 31, 2017. For~~are attributable to interest rate increases. We do not intend to sell, and it is not more likely than not that we will be required to sell, these securities ~~we also considered the severity~~before recovery of ~~unrealized losses, which were less than 2% of adjusted~~their amortized cost ~~for each security.~~

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basis. The issuers continue to make timely interest payments on these securities. Because we ~~expect to~~believe it is more likely than not we will recover the cost basis of our investments, ~~held,~~ we dodid not ~~consider~~record any impairment attributable to credit losses.

None of the marketable securities purchased during the period had experienced more-than-insignificant deterioration in credit quality since its origination and were therefore not considered “Purchased Financial Assets with Credit Deterioration.”

Unrealized losses on our marketable securities ~~to be impaired~~and their tax effects are as ~~of December 31, 2017.~~

follows:

Quarter Ended December 31,

2023

2022

Unrealized gain from marketable securities

$
958,564

$
425,849

Tax effects

(209,734
)

(93,176
)
Unrealized gain on marketable securities, net of tax

$
748,830

$
332,673

Nine Months Ended December 31,

2023

2022

Unrealized loss from marketable securities

$
589,530

$
(1,450,643
)
Tax effects

(128,989
)

317,401

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

$
460,541

$
(1,133,242
)
NOTE 6. ALLOWANCE FOR CREDIT LOSSES ON ACCOUNTS RECEIVABLES
The following table shows a roll forward of the allowance for credit losses on our accounts receivable:

Allowance for credit losses as of March 31, 2023

$
15,000

Provision for credit losses

212,440

Change in provision for credit losses

(202,926
)
Specific accounts deemed uncollectible

(9,514
)
Allowance for credit losses as of December 31, 2023

$
15,000

NOTE 7. INVENTORIES

Inventories are shown in the following table:

		Dec. 31, 2023		March 31, 2023
Raw materials	$	2,068,092	$	1,601,962
Work in process		2,995,391		3,781,894
Finished goods		2,286,328		1,033,154
Total inventories	$	7,349,811	$	6,417,010

December 31,
2017 March 31,
2017
Raw materials $ 1,044,845 $ 786,775
Work in process 1,710,799 1,968,990
Finished goods 840,682 602,533
Total inventories $ 3,596,326 $ 3,358,298

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NOTE 7.8. STOCK-BASED COMPENSATION

Stock-based compensation expense was ~~$40,920~~$12,544 for the third quarter of fiscal 2024, $7,133 for the third quarter of fiscal 2023, $129,392 for the first nine months of fiscal ~~2018~~2024, and ~~$22,000~~$54,218 for the first nine months of fiscal ~~2017. The stock-based compensation expenses were due to the automatic issuance to our non-employee directors of options to purchase 1,000 shares of stock on their reelection to our Board.~~2023. We calculate ~~the~~ share-based compensation expense using the ~~Black-Scholes~~Black-Scholes-Merton standard option-pricing model. ~~The increase in stock-based compensation expense for fiscal 2018 compared to fiscal 2017 was due to an increase in the model valuation for the same number of options to purchase shares.~~

NOTE 8.9. 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.

The Act “To provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018” (the “Tax Reform Act”) was enacted December 22, 2017. The Tax Reform Act reduced certain Federal corporate income tax rates effective January 1, 2018 and changed certain other provisions. Effective tax rates for the quarter and nine months ended December 31, 2017 are blended rates reflecting the estimated benefit of one quarter of Federal tax rate reductions for fiscal 2018. These benefits were partially offset by a one-time $206,693 unfavorable impact of a revaluation of our deferred tax assets that increased income tax provisions for the quarter and nine months ended December 31, 2017 and reduced long-term deferred tax assets as As of December 31, ~~2017. As a result of the Tax Reform Act, our~~2023, federal and state estimated tax ~~rate decreased from 32% to 29% for fiscal 2018.~~

overpayments of $90,387 were included in the balance sheet in “Prepaid expenses and other assets.”

We had no unrecognized tax benefits as of December 31, ~~2017,~~2023, 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 December 31, ~~2017~~2023, we had no accrued interest related to uncertain tax positions. The tax years ~~1999 and 2013~~2019 through ~~2016~~2023 remain open to examination by the major taxing jurisdictions to which we are subject.

NOTE ~~9. FAIR VALUE MEASUREMENTS~~
~~Generally accepted accounting principles establish~~10. LEASES

We conduct our operations in a ~~framework for measuring fair~~leased facility under a non-cancellable lease expiring March 31, 2026. Our lease does not provide an implicit interest rate, so we used our incremental borrowing rate to determine the present value ~~provide~~of lease payments. Lease expense is recognized on a ~~definition~~straight-line basis over the lease term. Details 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 hierarchyour operating lease are ~~described~~ as follows:

~~Level 1 – Financial instruments with quoted prices in active markets for identical assets or liabilities. Our Level 1 financial instruments consist~~

	Quarter Ended Dec. 31, 2023			Nine Months Ended Dec. 31, 2023
Operating lease cost	$	37,754		$	113,261

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for leases	$	44,433		$	133,299
Remaining lease term		27 months
Discount rate		3.5	%

The following table shows the maturities of publicly-traded marketable corporate debt securities, which are classified as available-for-sale. On the balance sheets, these securities are included in “Marketable securities, short term” and “Marketable securities, long term.” All of our marketable securities were Level 1lease liabilities as of December 31, ~~2017. The fair value of these securities was $75,537,933 as of December 31, 2017 and $75,098,153 as of March 31, 2017.~~

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. We had no Level 2 financial instruments as of December 31, 2017. We had one Level 2 instrument, a municipal debt security with a fair value of $1,304,603, as of March 31, 2017. This security was classified as available-for-sale and included in “Marketable securities, short term” on the March 31, 2017 balance sheet.

Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques. We do not have any financial assets or liabilities being measured at fair value that are classified as Level 3 financial instruments.

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2023:
Year Ending March 31,
Operating Lease Liabilities

2024
$
45,341

2025

182,271

2026

184,995

Total lease payments

412,607

Imputed lease interest

(15,332
)
Total lease liabilities
$
397,275

NOTE ~~10.~~11. 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 depend 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. ~~We did~~Our repurchase program does not ~~repurchase~~have an expiration date and does not obligate us to purchase any ~~of our Common Stock under the program during the quarter ended December 31, 2017.~~shares. The ~~remaining authorization was $4,540,806 as of December 31, 2017. The Repurchase~~ 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 maturing marketable securities. The remaining authorization was $3,520,369 as of December 31, 2023. We have not repurchased any of our Common Stock during fiscal 2024.

NOTE ~~11.~~12. 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 18. 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 $27,904 for the third quarter of fiscal 2024, $21,484 for the third quarter of fiscal 2023, $79,388 for the first nine months of fiscal 2024, and $73,661 for the first nine months of fiscal 2023.

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NOTE 13. SUBSEQUENT EVENTS

On January 17, ~~2018~~2024, we announced that our Board of Directors had declared a quarterly cash dividend of $1.00 per share of Common Stock to be paid February 28, ~~2018~~2024, to shareholders of record as of the close of business January 29, ~~2018.~~

2024.

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, our dependence on critical suppliers and packaging vendors, uncertainties related to the economic environments in the industries we serve, uncertainties related to future ~~contract research~~sales and ~~development revenue,~~revenues, risks of credit losses, risks and uncertainties related to future stock repurchases and dividend payments, ~~uncertainties related to the future impact of Federal tax reform,~~ 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~~is contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, ~~2017,~~2023, as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 and Part II, Item 1A of this ~~Quarterly Report on~~ ~~Form 10-Q~~.

report.

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. ~~We have also licensed our spintronic magnetoresistive random access memory technology, commonly known as MRAM.~~

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, ~~2017.~~2023. As of December 31, ~~2017~~2023, our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.

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Quarter ended December 31, ~~2017~~2023, compared to quarter ended December 31, ~~2016~~
2022

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

Percentage of Revenue
Quarter Ended Dec. 31 Quarter-
to-Quarter
Change
2017 2016
Revenue
Product sales 87.6 % 95.4 % (9.4 )%
Contract research and development 12.4 % 4.6 % 163.8 %
Total revenue 100.0 % 100.0 % (1.4 )%
Cost of sales 22.5 % 20.1 % 10.3 %
Gross profit 77.5 % 79.9 % (4.3 )%
Expenses
Selling, general, and administrative 4.3 % 5.2 % (18.5 )%
Research and development 11.6 % 11.1 % 3.1 %
Total expenses 15.9 % 16.3 % (3.7 )%
Income from operations 61.6 % 63.6 % (4.5 )%
Interest income 5.5 % 5.3 % 2.4 %
Income before taxes 67.1 % 68.9 % (3.9 )%
Provision for income taxes 18.6 % 22.2 % (17.5 )%
Net income 48.5 % 46.7 % 2.5 %

	Percentage of Revenue Quarter Ended December 31,				Quarter- to-Quarter
	2023		2022		Change
Revenue
Product sales	94.2	%	97.3	%	(11.6	)%
Contract research and development	5.8	%	2.7	%	93.9
Total revenue	100.0	%	100.0	%	(8.7	)%
Cost of sales	20.1	%	20.0	%	(8.3	)%
Gross profit	79.9	%	80.0	%	(8.8	)%
Expenses
Research and development	8.0	%	9.5	%	(22.8	)%
Selling, general, and administrative	5.8	%	5.4	%	(3.5	)%
Total expenses	13.8	%	14.9	%	(15.7	)%
Income from operations	66.1	%	65.1	%	(7.2	)%
Interest income	7.3	%	5.5	%	21.1	%
Income before taxes	73.4	%	70.6	%	(5.0	)%
Provision for income taxes	11.5	%	13.4	%	(21.7	)%
Net income	61.9	%	57.2	%	(1.1	)%

Total revenue for the quarter ended December 31, ~~2017~~2023 (the third quarter of fiscal ~~2018)~~2024) decreased 1%9% compared to the quarter ended December 31, ~~2016~~2022 (the third quarter of fiscal ~~2017)~~2023). The decrease was due to a 9%12% decrease in product sales partially offset by a ~~164%~~94% increase 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.~~customers, particularly in the defense industry, and a semiconductor industry downturn. The increase in contract research and development revenue was due to new customer-funded research and development contracts.

Total expenses decreased 16% for the third quarter of fiscal ~~2018 was due to new contracts.~~

~~Gross profit margin decreased to 77% of revenue for the third quarter of fiscal 2018 compared to 80% for the third quarter of fiscal 2017 due to a less profitable revenue mix.~~

~~Total expenses decreased 4% for the third quarter of fiscal 2018~~2024 compared to the third quarter of fiscal ~~2017,~~2023 primarily due to a ~~19%~~23% decrease in research and development expense and a 4% decrease in selling, general, and administrative ~~expense, partially offset by a 3% increase~~expense. The decrease in research and development ~~expense.~~expense was primarily due to the redeployment of resources to customer-funded research and development projects. The decrease in selling, general, and administrative expense was primarily due to decreased performance-based compensation ~~and decreased legal expenses. The increase in research and development expense was due to increased new product development activities.~~

accruals.

Interest income for the third quarter of fiscal ~~2018~~2024 increased 2%21% due to increased yields on securities purchased after December 31, 2022.

Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 16% for the third quarter of fiscal 2024 compared to 19% for the third quarter of fiscal 2023. The decrease was primarily due to an increase in ~~the average interest rates on our marketable securities, partially offset by a decrease in our securities.~~

certain tax deductions. Our effective tax rate ~~was 27.7% of net income before taxes for the~~can vary from quarter ~~compared~~ to ~~32.3% in the prior-year~~ quarter. The decrease was due to the blended effect of a decrease in the Federal tax rate with the enactment of the Tax Reform Act, partially offset by a $206,693 one-time increase in our provision for income taxes from the effect of the new rate on our deferred tax assets. Although we have not yet fully assessed the impact of the Tax Reform Act on our future taxes or net income, we currently expect ourOur effective tax rate toin future quarters may be ~~approximately 29% for~~higher than the effective tax rate in the quarter ~~ending March~~ended December 31, ~~2018. See Note 8 to the financial statements for more information on income taxes.~~

2023.

The ~~3% increase~~1% decrease in net income infor the third quarter of fiscal ~~2018~~2024 compared to the prior-year quarter was primarily due to ~~increased contract research and development~~decreased revenue, ~~decreased selling, general, and administrative expense, and a decrease in the provision for income taxes, partially~~which was nearly offset by decreased ~~product sales, decreased gross profit margin,~~expenses, increased interest income, and ~~increased research and development expense.~~

a lower effective tax rate.

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Nine months ended December 31, ~~2017~~2023, compared to nine months ended December 31, ~~2016~~
2022

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

Percentage of Revenue
Nine Months Ended Dec. 31 Period-
to-Period
Change
2017 2016
Revenue
Product sales 89.8 % 92.1 % (0.3 )%
Contract research and development 10.2 % 7.9 % 32.9 %
Total revenue 100.0 % 100.0 % 2.3 %
Cost of sales 21.9 % 21.6 % 3.9 %
Gross profit 78.1 % 78.4 % 1.8 %
Expenses
Selling, general, and administrative 4.8 % 5.2 % (5.1 )%
Research and development 12.7 % 10.9 % 18.5 %
Total expenses 17.5 % 16.1 % 10.9 %
Income from operations 60.6 % 62.3 % (0.5 )%
Interest income 5.2 % 5.9 % (8.7 )%
Income before taxes 65.8 % 68.2 % (1.2 )%
Provision for income taxes 20.1 % 22.0 % (6.1 )%
Net income 45.7 % 46.2 % 1.1 %

	Percentage of Revenue Nine Months Ended Dec. 31,				Period- to-Period
	2023		2022		Change
Revenue
Product sales	97.6	%	97.4	%	(10.5	)%
Contract research and development	2.4	%	2.6	%	(19.5	)%
Total revenue	100.0	%	100.0	%	(10.7	)%
Cost of sales	22.2	%	21.7	%	(9.0	)%
Gross profit	77.8	%	78.3	%	(11.2	)%
Expenses
Research and development	8.5	%	7.7	%	(2.7	)%
Selling, general, and administrative	5.7	%	4.8	%	7.3	%
Provision for credit losses	0.0	%	-		-
Total expenses	14.2	%	12.5	%	1.4	%
Income from operations	63.6	%	65.8	%	(13.6	)%
Interest income	6.3	%	4.1	%	38.4	%
Income before taxes	69.9	%	69.9	%	(10.6	)%
Provision for income taxes	11.3	%	13.1	%	(22.0	)%
Net income	58.6	%	56.8	%	(8.0	)%

Total revenue for the nine months ended December 31, ~~2017 increased 2%~~2023, decreased 11% compared to the nine months ended December 31, ~~2016.~~2022. The ~~increase~~decrease was due to an 11% decrease in product sales and a ~~33% increase~~20% decrease in contract research and development revenue. The ~~increase~~decrease in product sales was primarily due to decreased purchases by existing customers, particularly in the defense industry, and a semiconductor industry downturn. The decrease in contract research and development revenue ~~from the prior-year period~~ was due to ~~new~~the completion of certain contracts.

Total expenses increased ~~11%~~1% for the first nine months of fiscal ~~2018~~2024 compared to the first nine months of fiscal ~~2017,~~2023 due to a ~~19%~~7% increase ~~in research and development expense, partially offset by a 5% decrease in selling, general, and administrative expense. The decrease~~ in selling, general, and administrative expense partially offset by a 3% decrease in research and development expense. The increase in selling, general, and administrative expenses was primarily due to ~~decreased sales commissions.~~increased staffing and increased employee compensation expenses. The ~~increase~~decrease in research and development expense was due to ~~increased new product development activities.~~

variations in staffing.

Interest income for the first nine months of fiscal ~~2018 decreased 9%~~2024 increased 38% due to ~~a decrease in marketable securities.~~

higher yields on securities purchased after December 31, 2022.

Our effective tax rate, ~~was 30.6%~~which is the provision for income taxes as a percentage of ~~net~~ income before taxes, decreased to 16% for the first nine months of fiscal 2018, compared to 32.2% in the prior-year period. The decreased rate was due to a decrease in the Federal tax rate with the enactment of the Tax Reform Act, partially offset by a $206,693 one-time increase in our provision2024 from 19% for income taxes from the effect of the new rate on our deferred tax assets. Although we have not yet fully assessed the impact of the Tax Reform Act on our future taxes or net income, we currently expect our effective tax rate to decrease to approximately 29% for the full fiscal year ending March 31, 2018, and to approximately 22% for the fiscal year ending March 31, 2019. The lower Federal tax rate is effective for one quarter of fiscal 2018 and all of fiscal 2019. See Note 8 to the financial statements for more information on income taxes.

~~The 1% increase in net income in~~ the first nine months of fiscal ~~2018~~2023. The decrease was primarily due to an increase in certain tax deductions.

The 8% decrease in net income for the first nine months of fiscal 2024 compared to the prior-year period was primarily due to ~~increased contract research and development~~decreased revenue and ~~a decrease in the provision for income taxes,~~increased expenses, partially offset by increased ~~research~~interest income and ~~development expense and decreased interest income.~~

a lower effective tax rate.

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Liquidity and ~~capital resources~~Capital Resources

Overview

Cash and cash equivalents were ~~$4,728,352~~$4,684,910 as of December 31, ~~2017~~2023, compared to ~~$8,199,364~~$1,669,896 as of March 31, ~~2017.~~2023. The ~~$3,471,012 decrease~~$3,015,014 increase in cash and cash equivalents during the first nine months ~~ended December 31, 2017~~of fiscal 2024 was due to ~~$14,471,990~~$15,115,031 of cash ~~used in financing~~provided by operating activities and ~~$320,965~~$2,280,084 of cash ~~used in~~provided by investing activities, partially offset by ~~$11,321,943~~$14,380,101 of cash used in ~~net cash provided by operating~~financing activities. ~~We currently believe our working capital and cash generated from operations will be adequate for our needs at least for the next 12 months.~~

Operating Activities

Net cash provided by operating activities related to product sales was our primary source of working capital for the current and prior-year quarters. Net cash provided by operating activities was $15,115,031 for the first nine months of fiscal 2024 compared to $14,748,911 for the first nine months of fiscal 2023.

Accounts receivable asdecreased by $4,268,102 during the first nine months of ~~December 31, 2017 decreased $1,270,936 compared to March 31, 2017, primarily~~fiscal 2024 due to the timing of ~~sales~~customer payments and decreased revenue.

Inventories increased by $932,801 during the first nine months of fiscal 2024 primarily due to our decision to increase inventories to mitigate longer vendor lead times and ~~payments from certain customers.~~

to support growth.

Accounts payable and accrued expenses decreased $1,147,278 during the first nine months of fiscal 2024 primarily due to decreases in income tax payable, long-term operating lease liability, and accruals for performance-based compensation.

Investing Activities

Cash provided by investing activities during the first nine months of fiscal 2024 consisted of $8,400,000 in proceeds from maturities of marketable securities, partially offset by $16,731 of fixed assets purchases and $6,103,185 of marketable securities purchases. Purchases of fixed assets can vary from period to period depending on our needs, strategic goals, and equipment purchasing opportunities. Such purchases are likely to increase significantly in future periods.

Financing Activities

Cash used in ~~investing~~financing activities induring the nine months ended December 31, ~~2017 was due to $16,256,210 in purchases~~2023, consisted of ~~marketable securities and $604,755 in purchases of fixed assets, partially offset by $16,540,000 of marketable security maturities.~~

~~Financing Activities~~
~~Cash used in financing activities in the first nine months of fiscal 2018 was primarily due to $14,523,030~~$14,497,628 of cash dividends paid to ~~shareholders.~~ shareholders, partially offset by $117,527 in proceeds from the exercise of stock options.

In addition to cash dividends to shareholders paid in the ~~first nine months~~third quarter of fiscal ~~2018,~~2024, on January 17, ~~2018~~2024, we announced that our Board of Directors had declared a cash ~~quarterly~~ dividend of $1.00 per share of ~~common stock,~~Common Stock, or ~~$4,842,010~~$4,833,401 based on shares outstanding as of January 12, ~~2018,~~2024, to be paid February 28, ~~2018.~~ 2024, to shareholders of record as of the close of business January 29, 2024.

We plan to fund dividends through cash provided by operating activities and proceeds from maturities ~~and sales~~ 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, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.

~~Item 3. Quantitative and Qualitative Disclosures About Market Risk.~~
~~As discussed in our Annual Report on~~ ~~Form 10-K~~ ~~for the fiscal year ended March 31, 2017, we are exposed to financial market risks, primarily marketable securities and, to a lesser extent, changes in currency exchange rates.~~

~~Marketable Securities~~
The primary objective of our investment activities is to preserve principal while at the same time maximizing after-tax yields without significantly increasing risk. To achieve this objective, we maintain our portfolio of cash equivalents and marketable securities in securities including municipal obligations, corporate obligations, and money market funds. Short-term and long-term marketable securities are generally classified as available-for-sale and consequently are recorded on the balance sheet at fair value with unrealized gains or losses reported as a separate component of accumulated other comprehensive income or loss, net of estimated tax. Our marketable securities as of December 31, 2017 had remaining maturities between 12 days and 56 months. Marketable securities had a market value of $75,537,933 as of December 31, 2017, representing approximately 85% of our total assets. We have not used derivative financial instruments in our investment portfolio.

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Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Management, with the participation of the Chief Executive Officer and ~~Chief~~Principal 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~~Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. ~~Based on such evaluation, our Chief Executive Officer and Chief Financial Officer~~Our management concluded that, as of December 31, ~~2017,~~2023, our disclosure controls and procedures were effective.

Changes in Internal Controls
During the quarter ended December 31, ~~2017,~~2023, 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–~~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, ~~2017,~~2023, as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, except the following risk factor is ~~added:~~

~~The impacts~~replaced in its entirety by the following to reflect an amendment to our Supplier Partnering Agreement with Abbott Laboratories that extended the term of the ~~Tax Reform Act~~Agreement through December 31, 2024:
We may lose revenue if we are unable to renew customer agreements
We have agreements with certain customers, including a Supplier Partnering Agreement, as amended, with Abbott Laboratories, which expires December 31, 2024. We cannot predict if these agreements will be renewed, or if renewed, under what terms. Although it is possible we could ~~be materially different from our current estimates.~~
     ~~The Act “To provide for reconciliation pursuant~~continue to ~~titles II and V of the concurrent resolution~~sell products to these customers without formal agreements, an inability to agree on the budget for fiscal year 2018” (the “Tax Reform Act”) was enacted December 22, 2017. The Tax Reform Act reduced Federal corporate income tax rates effective January 1, 2018 and changed certain other provisions. We expect the new law to significantly reduce our tax rate in future periods, and we expect our fourth-quarter tax provision to reflect the benefit ofmutually acceptable terms could have a ~~Federal tax rate reduction. Our estimated impacts of the new law are based~~significant adverse impact on our current knowledge and assumptions, and recognized impacts could be materially different from current estimates based on our actual results in the fourth quarter of fiscal 2018 and our further analysis of the Act.

revenue or profitability.”
Item 4. Mine Safety Disclosures.
     ~~Not applicable.~~

None.

Table of Contents

Item 6. Exhibits.

Exhibit #
Description
10
Amendment No. 10 to Supplier Partnering Agreement between Abbott and the company (incorporated by reference to the Form 8-K/A filed January 3, 2024).
~~31.1~~
31.1
Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).
~~31.2~~
31.2
Certification by ~~Curt A. Reynders~~Daniel Nelson 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~~
32
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document
(the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH
Inline XBRL Taxonomy Extension Schema Document
~~101.CAL~~
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
~~101.DEF~~
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
~~101.LAB~~
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
~~101.PRE~~
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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)

January 17, ~~2018~~2024
/s/ DANIEL A. BAKER
Date
Daniel A. Baker
President and Chief Executive Officer

January 17, ~~2018~~2024
/s/ ~~CURT A. REYNDERS~~ DANIEL NELSON
Date
~~Curt A. Reynders~~
Daniel Nelson
~~Chief~~
Principal Financial Officer

15
20

Minnesota		41-1424202
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~11409~~11409 Valley View Road, Eden Prairie, Minnesota		55344
(Address of principal executive offices)		(Zip Code)

~~(952)~~ (952) 829-9217
(Registrant’s telephone number, including area code)

	Large accelerated filer ~~[ ]~~☐	Accelerated filer ~~[X]~~☐
	Non-accelerated filer ~~[ ] (Do not check if a smaller reporting company)~~☒	Smaller reporting company ~~[ ]~~☒
		Emerging growth company ~~[ ]~~ ☐

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

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets

Statements of Income for the Quarters Ended December 31 , 202 3 and 202 2

Statements of Comprehensive Income for the Quarters Ended December 31 , 202 3 and 202 2

Statements of Income for the Nine Month s Ended December 31 , 202 3 and 202 2

Statements of Comprehensive Income for the Nine Month s Ended December 31 , 202 3 and 202 2

Statements of Shareholders’ Equity for the Nine Months Ended December 31 , 202 3

Statements of Shareholders’ Equity for the Nine Months Ended December 31 , 202 2

Statements of Cash Flows for the Nine Months Ended December 31 , 202 3 and 202 2

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

	(Unaudited) December 31, 2017			March 31, 2017*
ASSETS
Current assets
Cash and cash equivalents	$	4,728,352		$	8,199,364
Marketable securities, short-term		18,808,203			19,591,833
Accounts receivable, net of allowance for uncollectible accounts of $15,000		2,165,866			3,436,802
Inventories		3,596,326			3,358,298
Prepaid expenses and other assets	967,958			607,283
Total current assets		30,266,705			35,193,580
Fixed assets
Machinery and equipment		9,504,983			9,007,455
Leasehold improvements	1,751,646			1,644,419
		11,256,629			10,651,874
Less accumulated depreciation and amortization	9,742,050			9,238,626
Net fixed assets		1,514,579			1,413,248
Long-term deferred tax assets	333,023			357,055
Marketable securities, long-term	56,729,730			56,810,923
Total assets	$	88,844,037		$	93,774,806

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	258,869		$	376,275
Accrued payroll and other	534,194			576,313
Deferred revenue	-			142,733
Total current liabilities		793,063			1,095,321

Shareholders’ equity
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,842,010 issued and outstanding as of December 31, 2017 and 4,841,010 issued and outstanding as of March 31, 2017		48,420			48,410
Additional paid-in capital		19,599,298			19,507,348
Accumulated other comprehensive loss		(265,991	)		(38,298	)
Retained earnings	68,669,247			73,162,025
Total shareholders’ equity	88,050,974			92,679,485
Total liabilities and shareholders’ equity	$	88,844,037		$	93,774,806

	(Unaudited) Dec. 31, 2023			March 31, 2023*
ASSETS
Current assets
Cash and cash equivalents	$	4,684,910		$	1,669,896
Marketable securities, short-term (amortized cost of $14,556,450 as of December 31, 2023, and $15,696,135 as of March 31, 2023)		14,335,619			15,513,095
Accounts receivable, net of allowance for credit losses of $15,000		2,245,728			6,523,344
Inventories		7,349,811			6,417,010
Prepaid expenses and other assets		597,305			663,459
Total current assets		29,213,373			30,786,804
Fixed assets
Machinery and equipment		10,501,096			10,484,365
Leasehold improvements		1,956,309			1,956,309
		12,457,405			12,440,674
Less accumulated depreciation and amortization		11,326,985			11,095,236
Net fixed assets		1,130,420			1,345,438
Deferred tax assets		1,290,284			572,038
Marketable securities, long-term (amortized cost of $36,414,391 as of December 31, 2023, and $37,495,846 as of March 31, 2023)		35,670,914			36,125,047
Right-of-use asset – operating lease		324,451			425,843
Total assets	$	67,629,442		$	69,255,170

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	170,701		$	281,712
Accrued payroll and other		460,414			1,375,250
Operating lease		178,490			175,798
Total current liabilities		809,605			1,832,760
Operating lease		218,785			342,908
Total liabilities		1,028,390			2,175,668

Shareholders’ equity
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,833,401 issued and outstanding as of December 31, 2023, and 4,830,826 as of March 31, 2023		48,334			48,308
Additional paid-in capital		19,542,335			19,295,442
Accumulated other comprehensive loss		(753,317	)		(1,213,858	)
Retained earnings		47,763,700			48,949,610
Total shareholders’ equity		66,601,052			67,079,502
Total liabilities and shareholders’ equity	$	67,629,442		$	69,255,170

	Quarter Ended Dec. 31
	2017		2016
Revenue
Product sales	$	6,448,831	$	7,116,931
Contract research and development	911,958		345,748
Total revenue		7,360,789		7,462,679
Cost of sales	1,657,700		1,502,848
Gross profit		5,703,089		5,959,831
Expenses
Selling, general, and administrative		313,033		384,322
Research and development	852,739		826,816
Total expenses	1,165,772		1,211,138
Income from operations		4,537,317		4,748,693
Interest income	404,665		395,207
Income before taxes		4,941,982		5,143,900
Provision for income taxes	1,370,380		1,660,156
Net income	$	3,571,602	$	3,483,744
Net income per share – basic	$	0.74	$	0.72
Net income per share – diluted	$	0.74	$	0.72
Cash dividends declared per common share	$	1.00	$	1.00
Weighted average shares outstanding
Basic		4,841,369		4,836,336
Diluted		4,847,290		4,839,777

	Nine Months Ended Dec. 31
	2017		2016
Revenue
Product sales	$	19,718,584	$	19,782,529
Contract research and development	2,246,105		1,690,461
Total revenue		21,964,689		21,472,990
Cost of sales	4,809,235		4,628,840
Gross profit		17,155,454		16,844,150
Expenses
Selling, general, and administrative		1,060,757		1,117,925
Research and development	2,788,968		2,353,372
Total expenses	3,849,725		3,471,297
Income from operations		13,305,729		13,372,853
Interest income	1,154,303		1,263,924
Income before taxes		14,460,032		14,636,777
Provision for income taxes	4,429,780		4,715,291
Net income	$	10,030,252	$	9,921,486
Net income per share – basic	$	2.07	$	2.05
Net income per share – diluted	$	2.07	$	2.05
Cash dividends declared per common share	$	3.00	$	3.00
Weighted average shares outstanding
Basic		4,841,130		4,835,639
Diluted		4,846,036		4,837,815

	As of December 31, 2017									As of March 31, 2017
	Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value		Adjusted Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Market Value
Corporate bonds	$	75,955,697	$	27,442	$	(445,206	)	$	75,537,933	$	75,158,087	$	187,001	$	(246,935	)	$	75,098,153
Municipal bonds	-		-		-			-		1,304,817		-		(214		)	1,304,603
Total	$	75,955,697	$	27,442	$	(445,206	)	$	75,537,933	$	76,462,904	$	187,001	$	(247,149	)	$	76,402,756


Allowance for credit losses as of March 31, 2023	$	15,000
Provision for credit losses		212,440
Change in provision for credit losses		(202,926	)
Specific accounts deemed uncollectible		(9,514	)
Allowance for credit losses as of December 31, 2023	$	15,000

	December 31, 2017		March 31, 2017
Raw materials	$	1,044,845	$	786,775
Work in process		1,710,799		1,968,990
Finished goods	840,682		602,533
Total inventories	$	3,596,326	$	3,358,298

Year Ending March 31,	Operating Lease Liabilities
2024	$	45,341
2025		182,271
2026		184,995
Total lease payments		412,607
Imputed lease interest		(15,332	)
Total lease liabilities	$	397,275

	Percentage of Revenue Quarter Ended Dec. 31				Quarter- to-Quarter Change
	2017		2016		Quarter- to-Quarter Change
Revenue
Product sales	87.6	%	95.4	%	(9.4	)%
Contract research and development	12.4	%	4.6	%	163.8	%
Total revenue	100.0	%	100.0	%	(1.4	)%
Cost of sales	22.5	%	20.1	%	10.3	%
Gross profit	77.5	%	79.9	%	(4.3	)%
Expenses
Selling, general, and administrative	4.3	%	5.2	%	(18.5	)%
Research and development	11.6	%	11.1	%	3.1	%
Total expenses	15.9	%	16.3	%	(3.7	)%
Income from operations	61.6	%	63.6	%	(4.5	)%
Interest income	5.5	%	5.3	%	2.4	%
Income before taxes	67.1	%	68.9	%	(3.9	)%
Provision for income taxes	18.6	%	22.2	%	(17.5	)%
Net income	48.5	%	46.7	%	2.5	%

	Percentage of Revenue Nine Months Ended Dec. 31				Period- to-Period Change
	2017		2016		Period- to-Period Change
Revenue
Product sales	89.8	%	92.1	%	(0.3	)%
Contract research and development	10.2	%	7.9	%	32.9	%
Total revenue	100.0	%	100.0	%	2.3	%
Cost of sales	21.9	%	21.6	%	3.9	%
Gross profit	78.1	%	78.4	%	1.8	%
Expenses
Selling, general, and administrative	4.8	%	5.2	%	(5.1	)%
Research and development	12.7	%	10.9	%	18.5	%
Total expenses	17.5	%	16.1	%	10.9	%
Income from operations	60.6	%	62.3	%	(0.5	)%
Interest income	5.2	%	5.9	%	(8.7	)%
Income before taxes	65.8	%	68.2	%	(1.2	)%
Provision for income taxes	20.1	%	22.0	%	(6.1	)%
Net income	45.7	%	46.2	%	1.1	%

Exhibit #	Description
10	Amendment No. 10 to Supplier Partnering Agreement between Abbott and the company (incorporated by reference to the Form 8-K/A filed January 3, 2024).
~~31.1~~
31.1	Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).
~~31.2~~
31.2	Certification by ~~Curt A. Reynders~~Daniel Nelson 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~~ 32	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH	Inline XBRL Taxonomy Extension Schema Document
~~101.CAL~~
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
~~101.DEF~~
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
~~101.LAB~~
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
~~101.PRE~~
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

		NVE CORPORATION
		(Registrant)


January 17, ~~2018~~2024		/s/ DANIEL A. BAKER
Date		Daniel A. Baker
		President and Chief Executive Officer


January 17, ~~2018~~2024		/s/ ~~CURT A. REYNDERS~~ DANIEL NELSON
Date	~~Curt A. Reynders~~	Daniel Nelson
	~~Chief~~	Principal Financial Officer