UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2022September 30, 2023
or
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.) | |
| 55344 | |
(Address of principal executive | (Zip Code) | |
(952) 829-9217 | ||
(Registrant’s telephone number, including area |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒Yes Yes ☐ No 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).
☒Yes Yes ☐ No 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☒ | Smaller reporting company ☒ | |
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 ☒ ☒No 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 – 4,830,826 shares outstanding as of January 20,October 13, 2023
NVE CORPORATION
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
2
PART I–FINANCIAL INFORMATION
Item 1. Financial Statements.
NVE CORPORATION
BALANCE SHEETS
(Unaudited) September 30, | March 31, 2023* | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 6,953,448 | $ | 1,669,896 | ||||
Marketable securities, short-term (amortized cost of $7,302,714 as of September 30, 2023, and $15,696,135 as of March 31, 2023) | 7,224,056 | 15,513,095 | ||||||
Accounts receivable, net of allowance for credit losses of $15,000 | 2,915,762 | 6,523,344 | ||||||
Inventories | 6,967,766 | 6,417,010 | ||||||
Prepaid expenses and other assets | 1,064,853 | 663,459 | ||||||
Total current assets | 25,125,885 | 30,786,804 | ||||||
Fixed assets | ||||||||
Machinery and equipment | 10,501,096 | 10,484,365 | ||||||
Leasehold improvements | 1,956,309 | 1,956,309 | ||||||
Total fixed assets | 12,457,405 | 12,440,674 | ||||||
Less accumulated depreciation and amortization | 11,250,170 | 11,095,236 | ||||||
Net fixed assets | 1,207,235 | 1,345,438 | ||||||
Deferred tax assets | 1,395,430 | 572,038 | ||||||
Marketable securities, long-term (amortized cost of $41,467,512 as of September 30, 2023, and $37,495,846 as of March 31, 2023) | 39,623,299 | 36,125,047 | ||||||
Right-of-use asset – operating lease | 358,590 | 425,843 | ||||||
Total assets | $ | 67,710,439 | $ | 69,255,170 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 244,236 | $ | 281,712 | ||||
Accrued payroll and other | 539,452 | 1,375,250 | ||||||
Operating lease | 177,585 | 175,798 | ||||||
Total current liabilities | 961,273 | 1,832,760 | ||||||
Operating lease | 260,509 | 342,908 | ||||||
Total liabilities | 1,221,782 | 2,175,668 | ||||||
Shareholders’ equity | ||||||||
Common stock, $ | par value, shares authorized; issued and outstanding as of September 30, 2023, and as of March 31, 202348,334 | 48,308 | ||||||
Additional paid-in capital | 19,529,791 | 19,295,442 | ||||||
Accumulated other comprehensive loss | (1,502,147 | ) | (1,213,858 | ) | ||||
Retained earnings | 48,412,679 | 48,949,610 | ||||||
Total shareholders’ equity | 66,488,657 | 67,079,502 | ||||||
Total liabilities and shareholders’ equity | $ | 67,710,439 | $ | 69,255,170 |
* | The March 31, 2023 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, 2023. |
NVE CORPORATION
BALANCE SHEETS
|
| (Unaudited) December 31, 2022 |
|
| March 31, 2022* |
| ||
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| $ | 2,029,714 |
|
| $ | 10,449,510 |
|
Marketable securities, short-term |
|
| 10,337,621 |
|
|
| 20,839,683 |
|
Accounts receivable, net of allowance for uncollectible accounts of $15,000 |
|
| 2,097,274 |
|
|
| 4,704,829 |
|
Inventories |
|
| 6,459,227 |
|
|
| 5,088,635 |
|
Prepaid expenses and other assets |
|
| 924,161 |
|
|
| 420,520 |
|
Total current assets |
|
| 21,847,997 |
|
|
| 41,503,177 |
|
Fixed assets |
|
|
|
|
|
|
|
|
Machinery and equipment |
|
| 10,486,161 |
|
|
| 9,739,244 |
|
Leasehold improvements |
|
| 1,926,334 |
|
|
| 1,810,872 |
|
|
|
| 12,412,495 |
|
|
| 11,550,116 |
|
Less accumulated depreciation and amortization |
|
| 11,018,857 |
|
|
| 10,943,731 |
|
Net fixed assets |
|
| 1,393,638 |
|
|
| 606,385 |
|
Deferred tax assets |
|
| 862,424 |
|
|
| 483,469 |
|
Marketable securities, long-term |
|
| 41,167,242 |
|
|
| 24,314,211 |
|
Right-of-use asset – operating lease |
|
| 459,032 |
|
|
| 560,250 |
|
Total assets |
| $ | 65,730,333 |
|
| $ | 67,467,492 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 470,929 |
|
| $ | 943,535 |
|
Accrued payroll and other |
|
| 1,245,390 |
|
|
| 1,356,689 |
|
Operating lease |
|
| 161,271 |
|
|
| 156,121 |
|
Total current liabilities |
|
| 1,877,590 |
|
|
| 2,456,345 |
|
Operating lease |
|
| 397,303 |
|
|
| 446,018 |
|
Total liabilities |
|
| 2,274,893 |
|
|
| 2,902,363 |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,830,826 issued and outstanding as of December 31 and March 31, 2022 |
|
| 48,308 |
|
|
| 48,308 |
|
Additional paid-in capital |
|
| 19,310,703 |
|
|
| 19,256,485 |
|
Accumulated other comprehensive loss |
|
| (1,451,362 | ) |
|
| (318,120 | ) |
Retained earnings |
|
| 45,547,791 |
|
|
| 45,578,456 |
|
Total shareholders’ equity |
|
| 63,455,440 |
|
|
| 64,565,129 |
|
Total liabilities and shareholders’ equity |
| $ | 65,730,333 |
|
| $ | 67,467,492 |
|
*The March 31, 2022 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, 2022.
See accompanying notes.
3
NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)
|
| Quarter Ended December 31, |
| Quarter Ended September 30, | ||||||||||||
|
| 2022 |
| 2021 |
| 2023 | 2022 | |||||||||
Revenue |
|
|
|
| ||||||||||||
Product sales |
| $ | 7,200,385 |
|
| $ | 5,916,790 |
| $ | 7,117,122 | $ | 10,514,539 | ||||
Contract research and development |
|
| 201,293 |
|
| 374,019 |
| 16,154 | 203,285 | |||||||
Total revenue |
| 7,401,678 |
|
| 6,290,809 |
| 7,133,276 | 10,717,824 | ||||||||
Cost of sales |
|
| 1,478,372 |
|
| 1,385,006 |
| 1,599,866 | 2,402,781 | |||||||
Gross profit |
| 5,923,306 |
|
| 4,905,803 |
| 5,533,410 | 8,315,043 | ||||||||
Expenses |
|
|
|
| ||||||||||||
Research and development |
| 700,609 |
|
| 596,492 |
| 683,208 | 669,978 | ||||||||
Selling, general, and administrative |
|
| 403,449 |
|
| 272,159 |
| 433,785 | 435,625 | |||||||
Provision for credit losses | (202,926 | ) | — | |||||||||||||
Total expenses |
|
| 1,104,058 |
|
| 868,651 |
| 914,067 | 1,105,603 | |||||||
Income from operations |
| 4,819,248 |
|
| 4,037,152 |
| 4,619,343 | 7,209,440 | ||||||||
Interest income |
|
| 406,092 |
|
| 283,940 |
| 512,092 | 351,375 | |||||||
Income before taxes |
| 5,225,340 |
|
| 4,321,092 |
| 5,131,435 | 7,560,815 | ||||||||
Provision for income taxes |
|
| 994,016 |
|
| 855,685 |
| 407,869 | 1,470,442 | |||||||
Net income |
| $ | 4,231,324 |
| $ | 3,465,407 |
| $ | 4,723,566 | $ | 6,090,373 | |||||
Net income per share – basic |
| $ | 0.88 |
| $ | 0.72 |
| $ | 0.98 | $ | 1.26 | |||||
Net income per share – diluted |
| $ | 0.88 |
| $ | 0.72 |
| $ | 0.98 | $ | 1.26 | |||||
Cash dividends declared per common share |
| $ | 1.00 |
| $ | 1.00 |
| $ | 1.00 | $ | 1.00 | |||||
Weighted average shares outstanding |
|
|
|
| ||||||||||||
Basic |
| 4,830,826 |
|
| 4,833,604 |
| 4,833,401 | 4,830,826 | ||||||||
Diluted |
| 4,832,368 |
|
| 4,835,770 |
| 4,840,770 | 4,830,956 |
STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
| Quarter Ended December 31, |
| Quarter Ended September 30, | ||||||||||||
|
| 2022 |
| 2021 |
| 2023 | 2022 | |||||||||
Net income |
| $ | 4,231,324 |
|
| $ | 3,465,407 |
| $ | 4,723,566 | $ | 6,090,373 | ||||
Unrealized gain (loss) from marketable securities, net of tax |
|
| 332,673 |
|
| (380,161 | ) | |||||||||
Unrealized loss from marketable securities, net of tax | (53,588 | ) | (1,127,362 | ) | ||||||||||||
Comprehensive income |
| $ | 4,563,997 |
| $ | 3,085,246 |
| $ | 4,669,978 | $ | 4,963,011 |
See accompanying notes.
4
NVE CORPORATION
STATEMENTS OF INCOME
(Unaudited)
| Nine Months Ended December 31, | Six Months Ended September 30, | ||||||||||||
| 2022 |
| 2021 | 2023 | 2022 | |||||||||
Revenue |
| |||||||||||||
Product sales | $ | 24,787,885 |
| $ | 19,500,567 | $ | 15,817,214 | $ | 17,587,500 | |||||
Contract research and development |
| 668,024 |
|
| 766,866 | 147,476 | 466,731 | |||||||
Total revenue |
| 25,455,909 |
| 20,267,433 | 15,964,690 | 18,054,231 | ||||||||
Cost of sales |
| 5,533,000 |
|
| 4,698,720 | 3,679,489 | 4,054,628 | |||||||
Gross profit |
| 19,922,909 |
| 15,568,713 | 12,285,201 | 13,999,603 | ||||||||
Expenses |
| |||||||||||||
Research and development |
| 1,972,505 |
| 2,112,630 | 1,379,200 | 1,271,896 | ||||||||
Selling, general, and administrative |
| 1,210,395 |
|
| 1,221,893 | 908,900 | 806,946 | |||||||
Provision for credit losses | 9,514 | — | ||||||||||||
Total expenses |
| 3,182,900 |
|
| 3,334,523 | 2,297,614 | 2,078,842 | |||||||
Income from operations |
| 16,740,009 |
| 12,234,190 | 9,987,587 | 11,920,761 | ||||||||
Interest income |
| 1,040,528 |
|
| 868,519 | 948,618 | 634,436 | |||||||
Income before taxes |
| 17,780,537 |
| 13,102,709 | 10,936,205 | 12,555,197 | ||||||||
Provision for income taxes |
| 3,318,723 |
|
| 2,411,228 | 1,808,909 | 2,324,707 | |||||||
Net income | $ | 14,461,814 |
| $ | 10,691,481 | $ | 9,127,296 | $ | 10,230,490 | |||||
Net income per share – basic | $ | 2.99 |
| $ | 2.21 | $ | 1.89 | $ | 2.12 | |||||
Net income per share – diluted | $ | 2.99 |
| $ | 2.21 | $ | 1.89 | $ | 2.12 | |||||
Cash dividends declared per common share | $ | 3.00 |
| $ | 3.00 | $ | 2.00 | $ | 2.00 | |||||
Weighted average shares outstanding |
| |||||||||||||
Basic |
| 4,830,826 |
| 4,833,356 | 4,832,786 | 4,830,826 | ||||||||
Diluted |
| 4,831,168 |
| 4,835,781 | 4,840,688 | 4,830,927 |
STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
|
| Nine Months Ended December 31, |
| Six Months Ended September 30, | ||||||||||||
|
| 2022 |
| 2021 |
| 2023 | 2022 | |||||||||
Net income |
| $ | 14,461,814 |
|
| $ | 10,691,481 |
| $ | 9,127,296 | $ | 10,230,490 | ||||
Unrealized loss from marketable securities, net of tax |
|
| (1,133,242 | ) |
|
| (667,361 | ) | (288,289 | ) | (1,465,915 | ) | ||||
Comprehensive income |
| $ | 13,328,572 |
| $ | 10,024,120 |
| $ | 8,839,007 | $ | 8,764,575 |
See accompanying notes.
5
NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’EQUITY
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
|
|
|
| Accumulated | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| Additional |
| Other |
|
|
|
|
|
|
|
| Additional | Other | ||||||||||||||||||||||||||
|
| Common Stock |
| Paid-In |
| Comprehensive |
| Retained |
|
|
|
| Common Stock | Paid-In | Comprehensive | Retained | ||||||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Income (Loss) |
|
| Earnings |
|
| Total |
| 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 |
| |||||||||||||||||||||||||||||
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 |
| (338,553 | ) |
| (338,553 | ) | - | (234,701 | ) | (234,701 | ) | |||||||||||||||||||||||||||||||||||||
Net income |
| 4,140,116 |
|
| 4,140,116 |
| 4,403,730 | 4,403,730 | ||||||||||||||||||||||||||||||||||||||||
Total comprehensive income |
|
| 3,801,563 |
| 4,169,029 | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation |
| 7,134 |
| 7,134 |
| 10,536 | 10,536 | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($1.00 per share of common stock) |
|
|
|
|
|
|
|
|
|
| (4,830,826 | ) |
|
| (4,830,826 | ) | (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 |
| ||||||||||||||||||||||||||||
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 |
| (1,127,362 | ) |
|
|
| (1,127,362 | ) | - | - | (53,588 | ) | (53,588 | ) | ||||||||||||||||||||||||||||||||||
Net income |
|
|
|
| 6,090,373 |
| 6,090,373 |
| 4,723,566 | 4,723,566 | ||||||||||||||||||||||||||||||||||||||
Total comprehensive income |
| 4,963,011 |
| 4,669,978 | ||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation |
| 39,951 |
| 39,951 |
| 106,312 | 106,312 | |||||||||||||||||||||||||||||||||||||||||
Cash dividends declared ($1.00 per share of common stock) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (4,830,826 | ) |
|
| (4,830,826 | ) | (4,833,401 | ) | (4,833,401 | ) | ||||||||||||||||||||
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 |
| ||||||||||||||||||||||||
Balance as of September 30, 2023 | 4,833,401 | $ | 48,334 | $ | 19,529,791 | $ | (1,502,147 | ) | $ | 48,412,679 | $ | 66,488,657 |
See accompanying notes.
6
NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’EQUITY
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| Additional |
| Other |
|
|
|
|
|
|
|
| Accumulated | |||||||||||||||||||||||||||
|
| Common Stock |
| Paid-In |
| Comprehensive |
| Retained |
|
|
|
| Additional | Other | ||||||||||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| Income (Loss) |
|
| Earnings |
|
| Total |
| Common Stock | Paid-In | Comprehensive | Retained | ||||||||||||||||||||||||||
Balance as of March 31, 2021 |
| 4,833,232 |
| $ | 48,332 |
| $ | 19,338,127 |
| $ | 1,101,119 |
| $ | 50,404,364 |
| $ | 70,891,942 |
| ||||||||||||||||||||||||||||||
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 |
|
|
|
|
|
|
|
|
| (90,165 | ) |
|
|
|
|
| (90,165 | ) | - | - | (338,553 | ) | (338,553 | ) | ||||||||||||||||||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
| 3,579,566 |
|
|
| 3,579,566 |
| 4,140,116 | 4,140,116 | |||||||||||||||||||||||||||||
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
| 3,489,401 |
| 3,801,563 | ||||||||||||||||||||||||||||||||
Stock-based compensation |
|
|
|
|
|
|
| 7,238 |
|
|
|
|
|
|
|
| 7,238 |
| 7,134 | 7,134 | ||||||||||||||||||||||||||||
Cash dividends declared ($1.00 per share of common stock) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (4,833,232 | ) |
|
| (4,833,232 | ) | (4,830,826 | ) | (4,830,826 | ) | ||||||||||||||||||||||
Balance as of June 30, 2021 |
|
| 4,833,232 |
|
| 48,332 |
|
|
| 19,345,365 |
|
|
| 1,010,954 |
|
| 49,150,698 |
|
|
| 69,555,349 |
| ||||||||||||||||||||||||||
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 |
|
|
|
|
|
|
|
|
|
| (197,034 | ) |
|
|
|
|
| (197,034 | ) | - | - | (1,127,362 | ) | (1,127,362 | ) | |||||||||||||||||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
| 3,646,507 |
|
|
| 3,646,507 |
| 6,090,373 | 6,090,373 | ||||||||||||||||||||||||||||
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,449,473 |
| 4,963,011 | |||||||||||||||||||||||||||||
Stock-based compensation |
|
|
|
|
|
|
| 56,999 |
|
|
|
|
|
|
|
| 56,999 |
| 39,951 | 39,951 | ||||||||||||||||||||||||||||
Cash dividends declared ($1.00 per share of common stock) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (4,833,232 | ) |
|
| (4,833,232 | ) | (4,830,826 | ) | (4,830,826 | ) | ||||||||||||||||||||||
Balance as of September 30, 2021 |
|
| 4,833,232 |
|
|
| 48,332 |
|
|
| 19,402,364 |
|
|
| 813,920 |
|
|
| 47,963,973 |
|
|
| 68,228,589 |
| ||||||||||||||||||||||||
Exercise of stock options |
| 482 |
| 5 |
|
|
| (5 | ) |
|
|
|
|
|
|
|
| - |
| |||||||||||||||||||||||||||||
Comprehensive income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||
Unrealized loss on marketable securities, net of tax |
|
|
|
|
|
|
|
|
|
| (380,161 | ) |
|
|
|
|
| (380,161 | ) | |||||||||||||||||||||||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
|
| 3,465,407 |
|
|
| 3,465,407 |
| ||||||||||||||||||||||||||||||
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3,085,246 |
| ||||||||||||||||||||||||||||||
Stock-based compensation |
|
|
|
|
|
|
| 8,799 |
|
|
|
|
|
|
|
| 8,799 |
| ||||||||||||||||||||||||||||||
Cash dividends declared ($1.00 per share of common stock) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (4,833,232 | ) |
|
| (4,833,232 | ) | ||||||||||||||||||||||||
Balance as of December 31, 2021 |
|
| 4,833,714 |
|
| $ | 48,337 |
|
| $ | 19,411,158 |
|
| $ | 433,759 |
|
| $ | 46,596,148 |
|
| $ | 66,489,402 |
| ||||||||||||||||||||||||
Balance as of September 30, 2022 | 4,830,826 | $ | 48,308 | $ | 19,303,570 | $ | (1,784,035 | ) | $ | 46,147,293 | $ | 63,715,136 |
See accompanying notes.
7
NVE CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Nine Months Ended December 31, |
| Six Months Ended September 30, | ||||||||||||
|
| 2022 |
|
| 2021 |
| 2023 | 2022 | ||||||||
OPERATING ACTIVITIES |
| |||||||||||||||
Net income |
| $ | 14,461,814 |
|
| $ | 10,691,481 |
| $ | 9,127,296 | $ | 10,230,490 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
| |||||||||||||||
Depreciation and amortization |
|
| 187,781 |
|
|
| 358,828 |
| 114,524 | 158,851 | ||||||
Provision for current estimate of credit losses | 9,514 | — | ||||||||||||||
Stock-based compensation |
|
| 54,218 |
|
|
| 73,036 |
| 116,848 | 47,085 | ||||||
Deferred income taxes |
|
| (61,972 | ) |
|
| 319 |
| (742,649 | ) | — | |||||
Changes in operating assets and liabilities: |
| |||||||||||||||
Accounts receivable |
|
| 2,607,555 |
|
|
| (1,073,922 | ) | 3,598,068 | (1,155,585 | ) | |||||
Inventories |
|
| (1,370,592 | ) |
|
| (466,898 | ) | (550,756 | ) | (706,214 | ) | ||||
Prepaid expenses and other assets |
|
| (502,423 | ) |
|
| (435,067 | ) | (334,141 | ) | (114,213 | ) | ||||
Accounts payable and accrued expenses |
|
| (627,470 | ) |
|
| (49,447 | ) | (953,886 | ) | 890,824 | |||||
Net cash provided by operating activities |
|
| 14,748,911 |
|
|
| 9,098,330 |
| 10,384,818 | 9,351,238 | ||||||
|
| |||||||||||||||
INVESTING ACTIVITIES |
|
| ||||||||||||||
Purchases of fixed assets |
|
| (907,612 | ) |
|
| (58,317 | ) | (16,731 | ) | (24,500 | ) | ||||
Purchases of marketable securities |
|
| (26,618,617 | ) |
|
| - |
| (3,937,835 | ) | (25,381,057 | ) | ||||
Proceeds from maturities of marketable securities |
|
| 18,750,000 |
|
|
| 4,000,000 |
| 8,400,000 | 18,750,000 | ||||||
Receipt of tenant improvement allowance |
|
| 100,000 |
|
|
| - |
| — | 100,000 | ||||||
Net cash provided (used) by investing activities |
|
| (8,676,229) |
|
|
| 3,941,683 |
| 4,445,434 | (6,555,557 | ) | |||||
|
| |||||||||||||||
FINANCING ACTIVITIES |
| |||||||||||||||
Proceeds from exercise of stock options | 117,527 | — | ||||||||||||||
Payment of dividends to shareholders |
|
| (14,492,478 | ) |
|
| (14,499,696 | ) | (9,664,227 | ) | (9,661,652 | ) | ||||
Cash used in financing activities |
|
| (14,492,478 | ) |
|
| (14,499,696 | ) | (9,546,700 | ) | (9,661,652 | ) | ||||
Decrease in cash and cash equivalents |
|
| (8,419,796 | ) |
|
| (1,459,683 | ) | ||||||||
Increase (decrease) in cash and cash equivalents | 5,283,552 | (6,865,971 | ) | |||||||||||||
|
| |||||||||||||||
Cash and cash equivalents at beginning of period |
|
| 10,449,510 |
|
|
| 10,427,340 |
| 1,669,896 | 10,449,510 | ||||||
|
| |||||||||||||||
Cash and cash equivalents at end of period |
| $ | 2,029,714 |
|
| $ | 8,967,657 |
| $ | 6,953,448 | $ | 3,583,539 | ||||
|
| |||||||||||||||
Supplemental disclosures of cash flow information: |
| |||||||||||||||
Cash paid during the period for income taxes |
| $ | 4,130,278 |
|
| $ | 2,490,000 |
| $ | 3,120,830 | $ | 1,281,629 |
See accompanying notes.
8
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, 2022.2023. The results of operations for the quarter and nine months ended December 31, 2022September 30, 2023, are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2023.2024.
Significant accounting policies
A description of our significant accounting policies is provided in Note 2 to the Financial Statements in our Annual Report on Form 10-K for the year ended March 31, 2022.2023. As of December 31, 2022,September 30, 2023, there were no changes to our significant accounting policies.
NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS
Recently Adopted Accounting Standard
In May 2021,policies except for changes resulting from the adoption of Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-04,2016-13, Earnings Per Share (Topic 260), Debt—ModificationsFinancial Instruments—Credit Losses (ASC Topic 326) as described in the “Marketable securities and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718),credit losses” section below and Derivativesin Note 3.
Marketable securities and Hedging—Contractscredit losses
Our marketable securities consist of corporate bonds and money market funds. Marketable 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 Entity’s Own Equity (Subtopic 815-40) Issuer’s Accountingother 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 Certain Modificationsidentical securities.
Level 2 – Securities whose fair values are determined using quoted prices for similar securities in active markets or Exchangesquoted 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 Freestanding Equity-Classified Written Call Options. ASU 2021-04 addresses issuers’ accounting for certain modificationsless than one year are classified as short-term and those with remaining maturities of one year or exchangesmore are classified as long-term. We consider all highly liquid investments with maturities of freestanding equity-classified written call options. three months or less when purchased, including money market funds, to be cash equivalents.
We adopted ASU 2021-04 beginning with the quarter ended June 30, 2022. The adoption had no material impactmeasure 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 statements.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.”
New Accounting Standard Not Yet Adopted
9
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 (“DSO”) 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 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) 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. 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 accordanceWe adopted ASU
No. 2016-13 beginning with ASU 2019-10the quarter ended June 30, 2023.
The adoption resulted in disclosure changes and ASU 2020-02, ASU 2016-13 is effectiverequired us to consider the likelihood of default and to measure our allowance for certain Smaller Reporting Companies forcredit losses over the contractual term of our receivables. The adoption did not have a material impact on the 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 are evaluating the potential impact of ASU 2016-13 on our financial statements.
Table of ContentsSeptember 30 or April 1, 2023.
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 September 30, | ||||||||
2023 | 2022 | |||||||
Weighted average common shares outstanding – basic | 4,833,401 | 4,830,826 | ||||||
Dilutive effect of stock options | 7,369 | 130 | ||||||
Shares used in computing net income per share – diluted | 4,840,770 | 4,830,956 |
| Quarter Ended December 31, | ||||||||||
2022 |
| 2021 | |||||||||
Weighted average common shares outstanding – basic | 4,830,826 |
| 4,833,604 | ||||||||
Dilutive effect of stock options | 1,542 |
| 2,166 | ||||||||
Shares used in computing net income per share – diluted | 4,832,368 |
| 4,835,770 | ||||||||
|
| ||||||||||
| Nine Months Ended December 31, | Six Months Ended September 30, | |||||||||
| 2022 |
| 2021 | 2023 | 2022 | ||||||
Weighted average common shares outstanding – basic | 4,830,826 |
| 4,833,356 | 4,832,786 | 4,830,826 | ||||||
Dilutive effect of stock options | 342 |
| 2,425 | 7,902 | 101 | ||||||
Shares used in computing net income per share – diluted | 4,831,168 |
| 4,835,781 | 4,840,688 | 4,830,927 |
10
NOTE 5. FAIR VALUE OF FINANCIAL INSTRUMENTSMARKETABLE SECURITIES
Our corporate bonds and money market funds are classified as available-for-saleThe following table shows the major categories of our marketable securities and carried at estimated fair value. Unrealized holding gains and losses are included in accumulated other comprehensive income (loss) in the statementtheir contractual maturities as 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.September 30, 2023:
Contractual maturities of available-for-salemarketable securities as of December 31, 2022 are as follows:
Total | <1 Year | 1–3 Years | 3–6 Years | ||||||||||||||||||||||||
Money market funds | $ | 6,853,047 | $ | 6,853,047 | $ | — | $ | — | |||||||||||||||||||
Corporate bonds | 46,847,355 | 7,224,056 | 27,387,122 | 12,236,177 | |||||||||||||||||||||||
Total | Total |
| <1 Year |
| 1–3 Years |
| 3–7 Years |
| $ | 53,700,402 | $ | 14,077,103 | $ | 27,387,122 | $ | 12,236,177 | |||||||||||
$ | 52,020,382 |
| $ | 10,853,140 |
| $ | 25,270,655 |
| $ | 15,896,587 |
|
Total available-for-salemarketable securities representedrepresent approximately 79% of our total assets as of December 31, 2022.September 30, 2023. Marketable securities as of December 31, 2022September 30, 2023, had remaining maturities between six daysone and 7667 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.” Accrued interest receivables were $436,932 as of September 30, 2023, and $425,372 as of March 31, 2023, and are included in the balance sheets in “Prepaid expenses and other assets.”
TableWe monitor the credit ratings of Contentsour marketable securities at least quarterly as reported by Standard & Poor’s. The following table summarizes the fair values of our marketable securities as of September 30, 2023, aggregated by credit rating:
Fair values of our marketable securities aggregated by credit rating
Credit Rating | Fair Value | |||
AAA | $ | 8,134,255 | ||
AA | 6,622,847 | |||
AA- | 20,699,684 | |||
A+ | 2,833,709 | |||
A | 9,467,058 | |||
A- | 5,942,849 | |||
Total | $ | 53,700,402 |
The following table shows the estimated fair value of assets that were accounted for atour marketable securities, aggregated by fair value on a recurring basis:hierarchy inputs used in estimating their fair values:
|
| As of December 31, 2022 |
| As of March 31, 2022 | As of September 30, 2023 | As of March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||
| Level 1 |
| Level 2 |
| Total |
| Level 1 |
| Level 2 |
| Total | Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||||||||||||||||||||
Money market funds |
| $ | 515,519 |
|
| $ | - |
|
| $ | 515,519 |
|
| $ | 6,756,993 |
|
| $ | - |
|
| $ | 6,756,993 | $ | 6,853,047 | $ | — | $ | 6,853,047 | $ | 906,141 | $ | — | $ | 906,141 | ||||||||||||
Corporate bonds |
|
| - |
|
| 51,504,863 |
|
| 51,504,863 |
|
| - |
|
| 45,153,894 |
|
| 45,153,894 | — | 46,847,355 | 46,847,355 | — | 51,638,142 | 51,638,142 | |||||||||||||||||||||||
Total |
| $ | 515,519 |
| $ | 51,504,863 |
| $ | 52,020,382 |
| $ | 6,756,993 |
| $ | 45,153,894 |
| $ | 51,910,887 | $ | 6,853,047 | $ | 46,847,355 | $ | 53,700,402 | $ | 906,141 | $ | 51,638,142 | $ | 52,544,283 |
Our available-for-saleThe following table shows the amortized cost, fair value, and gross unrealized holding gains and losses of our marketable securities as of December 31September 30 and March 31, 2022, aggregated into classes of securities, were as follows:2023:
As of September 30, 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 | $ | 6,853,047 | $ | — | $ | — | $ | 6,853,047 | $ | 906,141 | $ | — | $ | — | $ | 906,141 | ||||||||||||||||
Corporate bonds | 48,770,226 | 1 | (1,922,872 | ) | 46,847,355 | 53,191,981 | 1,007 | (1,554,846 | ) | 51,638,142 | ||||||||||||||||||||||
Total | $ | 55,623,273 | $ | 1 | $ | (1,922,872 | ) | $ | 53,700,402 | $ | 54,098,122 | $ | 1,007 | $ | (1,554,846 | ) | $ | 52,544,283 |
11
|
| As of December 31, 2022 |
|
| As of March 31, 2022 | ||||||||||||||||||||||||||
|
| 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 |
| $ | 515,519 |
|
| $ | - |
|
| $ | - |
|
| $ | 515,519 |
|
| $ | 6,756,993 |
|
| $ | - |
|
| $ | - |
|
| $ | 6,756,993 |
Corporate bonds |
|
| 53,362,727 |
|
|
| 372 |
|
|
| (1,858,236 | ) |
|
| 51,504,863 |
|
|
| 45,561,114 |
|
|
| 230,085 |
|
|
| (637,305 | ) |
|
| 45,153,894 |
Total |
| $ | 53,878,246 |
|
| $ | 372 |
|
| $ | (1,858,236 | ) |
| $ | 52,020,382 |
|
| $ | 52,318,107 |
|
| $ | 230,085 |
|
| $ | (637,305 | ) |
| $ | 51,910,887 |
The following table shows the gross unrealized holding losses and estimated fair value of our available-for-salemarketable securities with unrealized holdingfor which an allowance for credit losses has not been recorded, aggregated by classcategory of securities and length of time that individual securities had been in a continuous unrealized loss position as of December 31September 30 and March 31, 2022.2023.
Gross unrealized holding losses and estimated fair value of marketable securities for which an allowance for credit losses has not been recorded
|
| Less Than 12 Months |
| 12 Months or Greater |
| Total |
| 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 |
| 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, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
As of September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds |
| $ | 38,850,214 |
| $ | (1,014,674 | ) |
| $ | 9,410,692 |
| $ | (843,562 | ) |
| $ | 48,260,906 |
| $ | (1,858,236 | ) | $ | 6,998,824 | $ | (86,868 | ) | $ | 39,848,531 | $ | (1,836,004 | ) | $ | 46,847,355 | $ | (1,922,872 | ) | ||||||||||||
Total |
| $ | 38,850,214 |
| $ | (1,014,674 | ) |
| $ | 9,410,692 |
| $ | (843,562 | ) |
| $ | 48,260,906 |
| $ | (1,858,236 | ) | $ | 6,998,824 | $ | (86,868 | ) | $ | 39,848,531 | $ | (1,836,004 | ) | $ | 46,847,355 | $ | (1,922,872 | ) | ||||||||||||
|
| |||||||||||||||||||||||||||||||||||||||||||||||
As of March 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||
As of March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||
Corporate bonds |
| $ | 6,306,750 |
| $ | (23,727 | ) |
| $ | 9,738,338 |
| $ | (613,578 | ) |
| $ | 16,045,088 |
| $ | (637,305 | ) | $ | 37,084,628 | $ | (590,967 | ) | $ | 13,294,817 | $ | (963,879 | ) | $ | 50,379,445 | $ | (1,554,846 | ) | ||||||||||||
Total |
| $ | 6,306,750 |
| $ | (23,727 | ) |
| $ | 9,738,338 |
| $ | (613,578 | ) |
| $ | 16,045,088 |
| $ | (637,305 | ) | $ | 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 value are attributable to interest rate increases. We do not attributedintend to declines in credit quality. When evaluating for impairment we assess indicators that include, but are not limited to, earnings performance, changes in underlying credit ratings, market conditions, bona fide offers to purchase or sell, and abilityit is not more likely than not that we will be required to hold until maturity.sell, these securities before recovery of their amortized cost basis. The issuers continue to make timely interest payments on these securities. Because we believe it is more likely than not we will recover the cost basis of our investments, we did not considerrecord 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 impairedand their tax effects are as of December 31, 2022.follows:
Quarter Ended September 30, | ||||||||
2023 | 2022 | |||||||
Unrealized loss from marketable securities | $ | (68,597 | ) | $ | (252,894 | ) | ||
Tax effects | 15,009 | 55,333 | ||||||
Unrealized loss from marketable securities, net of tax | $ | (53,588 | ) | $ | (197,561 | ) |
Six Months Ended September 30, | ||||||||
2023 | 2022 | |||||||
Unrealized loss from marketable securities | $ | (369,034 | ) | $ | (1,876,491 | ) | ||
Tax effects | 80,745 | 410,576 | ||||||
Unrealized loss from marketable securities, net of tax | $ | (288,289 | ) | $ | (1,465,915 | ) |
NOTE 6. INVENTORIESALLOWANCE 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 recorded in the quarter ended June 30, 2023 | 212,440 | |||
Change in provision for credit losses in the quarter ended September 30, 2023 | (202,926 | ) | ||
Specific accounts deemed uncollectible | (9,514 | ) | ||
Allowance for credit losses as of September 30, 2023 | $ | 15,000 |
NOTE 7. INVENTORIES
Inventories are shown in the following table:
|
| December 31, 2022 |
|
| March 31, 2022 | September 30, 2023 | March 31, 2023 | ||||||
Raw materials | $ | 1,340,276 |
| $ | 987,062 | $ | 2,066,047 | $ | 1,601,962 | ||||
Work in process |
| 4,153,063 |
| 3,355,838 | 3,104,015 | 3,781,894 | |||||||
Finished goods |
| 965,888 |
|
| 745,735 | 1,797,704 | 1,033,154 | ||||||
Total inventories | $ | 6,459,227 |
| $ | 5,088,635 | $ | 6,967,766 | $ | 6,417,010 |
NOTE 7. 8. STOCK-BASED COMPENSATION
Stock-based compensation expense was $7,133$ for the thirdsecond quarter of fiscal 2024, $ for the second quarter of fiscal 2023, $8,799 for the third quarter of fiscal 2022, $54,218$ for the first ninesix months of fiscal 2023,2024, and $73,036$ for the first ninesix months of fiscal 2022.2023. We calculate the share-based compensation expense using the Black-Scholes Merton standard option-pricing model.
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. As of December 31, 2022,September 30, 2023, federal and state estimated tax overpayments of $291,000$408,184 were included in prepaidthe balance sheet in “Prepaid expenses and other assets.”
We had no unrecognized tax benefits as of December 31, 2022,September 30, 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, 2022September 30, 2023, we had no accrued interest related to uncertain tax positions. The tax years 20182019 through 20222023 remain open to examination by the major taxing jurisdictions to which we are subject.
NOTE 9. 10. 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 interest 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:
Lease, Cost
| Quarter Ended December 31, 2022 |
| Nine Months Ended December 31, 2022 | Quarter Ended Sept. 30, 2023 | Six Months Ended Sept. 30, 2023 | |||||||||
Operating lease cost | $ | 4,419 |
| $ | 89,450 |
| $ | 37,754 | $ | 75,507 | ||||
Variable lease cost |
| 33,460 |
|
| 94,775 |
| ||||||||
Total | $ | 37,879 |
| $ | 184,225 |
| ||||||||
|
|
|
|
|
| |||||||||
Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
| |||||||||
Operating cash flows for leases | $ | 43,578 |
| 130,735 |
| $ | 44,433 | $ | 88,866 | |||||
Remaining lease term | 39 months |
|
|
| 30 months | |||||||||
Discount rate |
| 3.5 | % |
|
|
| 3.5 | % |
The following table presentsshows the maturities of lease liabilities as of December 31, 2022:September 30, 2023:
Lessee, Operating Lease, Liability, Maturity
As of December 31, 2022 | Operating Leases |
| |
Fiscal 2023 |
| 44,433 |
|
Fiscal 2024 |
| 178,640 |
|
Fiscal 2025 |
| 182,271 |
|
Fiscal 2026 |
| 184,995 |
|
Total lease payments |
| 590,339 |
|
Imputed lease interest |
| (31,765 | ) |
Total lease liabilities | $ | 558,574 |
|
Year Ending March 31, | Operating Lease Liabilities | ||||
2024 | $ | 89,774 | |||
2025 | 182,271 | ||||
2026 | 184,995 | ||||
Total lease payments | 457,040 | ||||
Imputed lease interest | (18,946 | ) | |||
Total lease liabilities | $ | 438,094 |
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$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 dependsdepend 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$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 maturatingmaturing marketable securities. The remaining authorization was $3,598,519$3,520,369 as of December 31, 2022.September 30, 2023. We did repurchase any of our Common Stock during the first nine months of fiscal 2023.
Table of Contents2024.
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 21.18. Employees may contribute up to the Internal Revenue Code maximum. We make matching contributions of 100%100% of the first 3%3% of participants’ salary deferral contributions. Our matching contributions were $21,484 $24,406for the second quarter of fiscal 2024, $23,751for the thirdsecond quarter of fiscal 2023, $21,579 for the third quarter of fiscal 2022, $73,661$51,483 for the first ninesix months of fiscal 2023,2024, and $76,995$52,177 for the first ninesix months of fiscal 2022.2023.
NOTE 12. 13. SUBSEQUENT EVENTS
On January 25,October 18, 2023, 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,November 30, 2023, to shareholders of record as of the close of business JanuaryOctober 30, 2023.2023.
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 sales and revenues, risks of credit losses, 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 areis contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, 20222023, as updated in Item 1A of this 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.
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, 2022.2023. As of December 31, 2022September 30, 2023, our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.
14
Quarter ended December 31, 2022September 30, 2023, compared to quarter ended December 31, 2021September 30, 2022
The table shown below summarizes the percentage of revenue and quarter-to-quarter changes for various items:
| Percentage of Revenue Quarter Ended December 31, |
|
| Quarter- to-Quarter |
| Percentage of Revenue Quarter Ended September 30, | Quarter- to-Quarter | |||||||||||||
| 2022 |
|
| 2021 |
|
| Change |
| 2023 | 2022 | Change | |||||||||
Revenue |
|
|
|
|
|
|
| |||||||||||||
Product sales | 97.3 | % |
| 94.1 | % |
| 21.7 | % | 99.8 | % | 98.1 | % | (32.3 | )% | ||||||
Contract research and development | 2.7 | % |
| 5.9 | % |
| (46.2) | % | 0.2 | % | 1.9 | % | (92.1 | )% | ||||||
Total revenue | 100.0 | % |
| 100.0 | % |
| 17.7 | % | 100.0 | % | 100.0 | % | (33.4 | )% | ||||||
Cost of sales | 20.0 | % |
| 22.0 | % |
| 6.7 | % | 22.4 | % | 22.4 | % | (33.4 | )% | ||||||
Gross profit | 80.0 | % |
| 78.0 | % |
| 20.7 | % | 77.6 | % | 77.6 | % | (33.5 | )% | ||||||
Expenses |
| |||||||||||||||||||
Research and development | 9.5 | % |
| 9.5 | % |
| 17.5 | % | 9.6 | % | 6.2 | % | 2.0 | % | ||||||
Selling, general, and administrative | 5.4 | % |
| 4.3 | % |
| 48.2 | % | 6.0 | % | 4.1 | % | (0.4 | )% | ||||||
Provision for credit losses | (2.8 | )% | — | % | — | % | ||||||||||||||
Total expenses | 14.9 | % |
| 13.8 | % |
| 27.1 | % | 12.8 | % | 10.3 | % | (17.3 | )% | ||||||
Income from operations | 65.1 | % |
| 64.2 | % |
| 19.4 | % | 64.8 | % | 67.3 | % | (35.9 | )% | ||||||
Interest income | 5.5 | % |
| 4.5 | % |
| 43.0 | % | 7.2 | % | 3.2 | % | 45.7 | % | ||||||
Income before taxes | 70.6 | % |
| 68.7 | % |
| 20.9 | % | 72.0 | % | 70.5 | % | (32.1 | )% | ||||||
Provision for income taxes | 13.4 | % |
| 13.6 | % |
| 16.2 | % | 5.8 | % | 13.7 | % | (72.3 | )% | ||||||
Net income | 57.2 | % |
| 55.1 | % |
| 22.1 | % | 66.2 | % | 56.8 | % | (22.4 | )% |
Total revenue for the quarter ended December 31, 2022September 30, 2023 (the thirdsecond quarter of fiscal 2023) increased 18%2024) decreased 33% compared to the quarter ended December 31, 2021September 30, 2022 (the thirdsecond quarter of fiscal 2022)2023). The increasedecrease was due to a 22% increase32% decrease in product sales partially offset byand a 46%92% decrease in contract research and development revenue. The increasedecrease in product sales was primarily due to increaseddecreased purchases by existing customers, particularly in the defense industry, and new customers. Sales increased in most of our markets and product lines.a semiconductor industry downturn. The decrease in contract research and development revenue was due to the completion of certainmost contracts.
Gross profit as a percentage of revenue increased to 80%Total expenses decreased 17% for the thirdsecond quarter of fiscal 2024 compared to the second quarter of fiscal 2023 from 78% for the third quarter of fiscal 2022. The increase was primarily due to increased prices and economies of scale due to increased revenue,a $202,926 credit loss provision reversal, partially offset by increased costs.
Total expenses increased 27% for the third quarter of fiscal 2023 compared to the third quarter of fiscal 2022 due to an 18%a 2% increase in research and development expense and a 48% increase in selling, general, and administrative expense. The increaseschange in expenses were primarilythe provision for credit losses was due to increased employee compensation expensesa reassessment of our allowance for credit losses based on payments and increased staffing.debtor customer information as of September 30, 2023.
Interest income for the thirdsecond quarter of fiscal 20232024 increased 43%46% due to an increasehigher yields on securities purchased after September 30, 2022.
Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 8% for the second quarter of fiscal 2024 compared to 19% for the second quarter of fiscal 2023. The decrease was due to the impact of the $202,926 credit loss provision reversal and changes in our available-for-sale securitiesthe amounts and an increasetiming of tax deductions and credits. Our effective tax rate can vary from quarter to quarter. Our effective tax rate in their average interest rate.subsequent quarters will likely be higher than the effective tax rate in the quarter ended September 30, 2023.
The 22% increasedecrease in net income infor the thirdsecond quarter of fiscal 20232024 compared to the prior-year quarter was primarily due to increaseddecreased revenue, andpartially offset by decreased expenses, increased interest income, partially offset by increased expenses.and a lower effective tax rate.
15
NineSix months ended December 31, 2022September 30, 2023, compared to ninesix months ended December 31, 2021September 30, 2022
The table shown below summarizes the percentage of revenue and period-to-period changes for various items:
| Percentage of Revenue Nine Months Ended December 31 | , |
| Period- to-Period |
| Percentage of Revenue Six Months Ended Sept. 30, | Period- to-Period | |||||||||||||
| 2022 |
|
| 2021 |
|
| Change |
| 2023 | 2022 | Change | |||||||||
Revenue |
|
|
|
|
|
|
|
| ||||||||||||
Product sales | 97.4 | % |
| 96.2 | % |
| 27.1 | % | 99.1 | % | 97.4 | % | (10.1 | )% | ||||||
Contract research and development | 2.6 | % |
| 3.8 | % |
| (12.9) | % | 0.9 | % | 2.6 | % | (68.4 | )% | ||||||
Total revenue | 100.0 | % |
| 100.0 | % |
| 25.6 | % | 100.0 | % | 100.0 | % | (11.6 | )% | ||||||
Cost of sales | 21.7 | % |
| 23.2 | % |
| 17.8 | % | 23.0 | % | 22.5 | % | (9.3 | )% | ||||||
Gross profit | 78.3 | % |
| 76.8 | % |
| 28.0 | % | 77.0 | % | 77.5 | % | (12.2 | )% | ||||||
Expenses |
| |||||||||||||||||||
Research and development | 7.7 | % |
| 10.4 | % |
| (6.6) | % | 8.6 | % | 7.0 | % | 8.4 | % | ||||||
Selling, general, and administrative | 4.8 | % |
| 6.0 | % |
| (0.9) | % | 5.7 | % | 4.5 | % | 12.6 | % | ||||||
Provision for credit losses | 0.1 | % | — | % | — | % | ||||||||||||||
Total expenses | 12.5 | % |
| 16.4 | % |
| (4.5) | % | 14.4 | % | 11.5 | % | 10.5 | % | ||||||
Income from operations | 65.8 | % |
| 60.4 | % |
| 36.8 | % | 62.6 | % | 66.0 | % | (16.2 | )% | ||||||
Interest income | 4.1 | % |
| 4.2 | % |
| 19.8 | % | 5.9 | % | 3.5 | % | 49.5 | % | ||||||
Income before taxes | 69.9 | % |
| 64.6 | % |
| 35.7 | % | 68.5 | % | 69.5 | % | (12.9 | )% | ||||||
Provision for income taxes | 13.1 | % |
| 11.8 | % |
| 37.6 | % | 11.3 | % | 12.8 | % | (22.2 | )% | ||||||
Net income | 56.8 | % |
| 52.8 | % |
| 35.3 | % | 57.2 | % | 56.7 | % | (10.8 | )% |
Total revenue for the ninesix months ended December 31, 2022 (the first nine months of fiscal 2023) increased 26%September 30, 2023, decreased 12% compared to the ninesix months ended December 31, 2021 (the first nine months of fiscal 2022).September 30, 2022. The increasedecrease was due to a 27% increase10% decrease in product sales partially offset byand a 13%68% decrease in contract research and development revenue. The increasedecrease in product sales was primarily due to increaseddecreased purchases by existing customers, particularly in the defense industry, and new customers. Sales increased in most of our markets and product lines.a semiconductor industry downturn. The decrease in contract research and development revenue was due to the completion of certainmost contracts.
Gross profit as a percentage of revenueTotal expenses increased to 78%11% for the first ninesix months of fiscal 2024 compared to the first six months of fiscal 2023 from 77% for the first nine months of fiscal 2022. The increase was primarily due to increased prices and economies of scale due to increased revenue, partially offset by increased costs.
Total expenses decreased 5% for the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022 due to an 7% decrease8% increase in research and development expense and a 1% decrease13% increase in selling, general, and administrative expense. The decreaseincreases in research and development expense wasand selling, general, and administrative expenses were primarily due to the reallocation of resources to revenue-generating activities.increased staffing and increased employee compensation expenses.
Interest income for the first ninesix months of fiscal 20232024 increased 20%50% due to an increasehigher yields on securities purchased after September 30, 2022.
Our effective tax rate, which is the provision for income taxes as a percentage of income before taxes, decreased to 17% for the first six months of fiscal 2024 from 19% for the first six months of fiscal 2023. The decrease was due to changes in our available-for-sale securitiesthe amount and an increase in their average interest rate.timing of tax deductions and tax credits.
The 35% increase11% decrease in net income infor the first ninesix months of fiscal 20232024 compared to the prior-year period was primarily due to increaseddecreased revenue and increased expenses, partially offset by increased interest income.income and a lower effective tax rate.
16
Supply Chain Disruptions
Supply chain disruptions may have favorably affected product sales in the quarter and nine months ended December 31, 2022 since we believe the disruptions may have been less severe for us than for our competitors. We may be less susceptible to supply chain disruptions because we have our own wafer fabrication and product test operations. We believe supply chain disruptions had an unfavorable impact on our costs of sales.
Liquidity and Capital Resources
Overview
Cash and cash equivalents were $2,029,714$6,953,448 as of December 31, 2022September 30, 2023, compared to $10,449,510$1,669,896 as of March 31, 2022.2023. The $8,419,796 decrease$5,283,552 increase in cash and cash equivalents during the first ninesix months of fiscal 20232024 was due to $14,492,478$10,384,818 of cash used in financingprovided by operating activities for dividend payments and $8,676,229$4,445,434 of cash usedprovided by investing activities, partially offset by $14,748,911$9,546,700 of cash used in net cash provided by operatingfinancing activities.
Operating Activities
Net cash provided by operating activities related to product sales and research and development contract revenue aswas our primary source of working capital for the current and prior-year quarters. Net cash provided by operating activities was $14,748,911$10,384,818 for the first ninesix months of fiscal 20232024 compared to $9,098,330$9,351,238 for the first ninesix months of fiscal 2022.2023.
Accounts receivable decreased $2,607,555$3,598,068 during the first ninesix months of fiscal 2023 primarily2024 due to the timing of customer payments.payments and decreased revenue.
Inventories increased $1,370,592$550,756 during the first six months of fiscal 2024 primarily due primarily to our decision to increase inventories to support increased product salesmitigate longer vendor lead times and to mitigate longer supplier lead-timessupport growth.
Accounts payable and supply-chain risks.accrued expenses decreased $953,886 during the first six months of fiscal 2024 primarily due to decreases in income tax payable, long-term operating lease, and a decrease in accruals for performance-based compensation.
Investing Activities
Cash usedprovided by investing activities during the ninefirst six months ended December 31, 2022of fiscal 2024 consisted of $26,618,617 of marketable securities purchases and $907,612 of fixed asset purchases, partially offset by $18,750,000$8,400,000 in proceeds from maturities of marketable securities, partially offset by $16,731 of fixed assets purchases and the receipt$3,937,835 of a $100,000 tenant improvement allowance.marketable securities purchases. Purchases of fixed assets were primarily capital expenditures for additional productioncan vary from period to period depending on our needs and equipment topurchasing opportunities. Such purchases could increase our manufacturing capacity.significantly in future periods.
Financing Activities
Cash used in financing activities during the ninesix months ended December 31, 2022September 30, 2023, consisted of $14,492,478$9,664,227 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 thirdthe second quarter of fiscal 2023,2024, on January 25,October 18, 2023, we announced that our Board of Directors had declared a cash dividend of $1.00 per share of Common Stock, or $4,830,826 based on shares outstanding as of January 20, 2023,$4,833,401, to be paid February 28,November 30, 2023, to shareholders of record as of the close of business October 30, 2023.
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, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.
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Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Management, with the participation of the Chief Executive Officer and ChiefPrincipal 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 Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Although there have been changes in personnel involved in our controls, processes, and procedures, ourOur management concluded that, as of December 31, 2022,September 30, 2023, our disclosure controls and procedures were effective.
Changes in Internal Controls
During the quarter ended December 31, 2022,September 30, 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–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, 2022, except2023, as updated in our Quarterly Report on Form 10-Q for the following risk factor is replaced in its entirety by the following to reflect an amendment to an agreement with Abbott Laboratories, which extends the Agreement term through December 31, 2023:quarter ended June 30, 2023.
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, 2023. We cannot predict if these agreements will be renewed, or if renewed, under what terms. Although it is possible we could continue to sell products to these customers without formal agreements, an inability to agree on mutually acceptable terms could have a significant adverse impact on our revenue or profitability.
Item 4. Mine Safety Disclosures.
None.
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Item 6. Exhibits.
Exhibit # | Description |
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| Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a). |
Certification by | |
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 | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
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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 18, 2023 | |||
| /s/ DANIEL A. BAKER | ||
Date | Daniel A. Baker | ||
President and Chief Executive Officer | |||
October 18, 2023 | /s/ DANIEL NELSON | ||
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