Table of Contents

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, 2021September 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                    to                                     

 

Commission File Number: 000-12196

NVE CORPORATION

(Exact name of registrant as specified in its charter)

 

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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes  ☐ No

 

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

☒ Yes  ☐ No

 

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

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	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

 

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

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

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $0.01 Par Value – 4,833,7144,830,826 shares outstanding as of JanuaryOctober 14, 2022

 

 

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PART I–FINANCIAL INFORMATION

Item 1. Financial Statements.

NVE CORPORATION

BALANCE SHEETS

*The March 31, 20212022 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, 2021.2022.

See accompanying notes. 

NVE CORPORATION

STATEMENTS OF INCOME

(Unaudited)

STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

See accompanying notes.

NVE CORPORATION

STATEMENTS OF INCOME

(Unaudited)

STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

See accompanying notes.

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

See accompanying notes. 

NVE CORPORATION

STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

See accompanying notes. 

NVE CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)

See accompanying notes. 

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, 2021.2022. The results of operations for the quarter and ninesix months ended December 31, 2021September 30, 2022 are not necessarily indicative of the results that may be expected for the full fiscal year ending March 31, 2022.2023.

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, 2021.2022. As of December 31, 2021,September 30, 2022, there were no changes to our significant accounting policies.

NOTE 3. RECENTLY ISSUED ACCOUNTING STANDARDS

Recently Adopted Accounting Standard

In December 2019,May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies accounting for income taxes, removes certain exceptions to the general principles in Topic 740, and amends existing guidance to improve consistent application. We adopted ASU 2019-12 beginning with the quarter ended June 30, 2021. The adoption had no material impact on our financial statements.
 

New Accounting Standard Not Yet Adopted

In May 2021, the FASB issued ASU No.2021-04, Earnings Per Share (Topic 260), Debt—Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Hedging—Contracts in Entity’sEntity’s Own Equity (Subtopic 815-40) Issuer’sIssuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options. ASU 2021-04 addresses issuer’sissuers’ accounting for certain modifications or exchanges of freestanding equity-classified written call options. We adopted ASU 2021-04 beginning with the quarter ended June 30,2022. The adoption had no material impact on our financial statements.
 

New Accounting Standard Not Yet Adopted

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 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. In accordance with ASU 2019-10 and ASU 2020-02, ASU 2016-13is effective for certain Smaller Reporting Companies for financial statements issued for fiscal years beginning after December 15, 2021 2022and interim periods within those fiscal years, which iswill be fiscal 20232024 for us if we continue to be classified as a Smaller Reporting Company, with early adoption permitted. We doare evaluating the potential impact of ASU not2016 expect adoption of the new guidance to have a significant impact-13 on our financial statements.

NOTE 4. NET INCOME PER SHARE

Net income per basic share is computed based on the weighted-average number of common shares issued and outstanding during each period. Net income per diluted share amounts assume exercise of all stock options. The following tables show the components of diluted shares:

NOTE 5. FAIR VALUE OF FINANCIAL INSTRUMENTS

Our corporate bonds and money market funds are classified as available-for-sale securities and carried at estimated fair value. Unrealized holding gains and losses are included in accumulated other comprehensive income (loss) in the statement of shareholders’ equity. Corporate bonds with remaining maturities less than one year are classified as short-term, and those with remaining maturities greater than one year are classified as long-term. We consider all highly-liquid investments with maturities of three months or less when purchased, including money market funds, to be cash equivalents. Gains and losses on marketable security transactions are reported on the specific-identification method.

Contractual maturities of available-for-sale securities as of December 31, 2021September 30, 2022 are as follows: 

Total available-for-sale securities represented approximately 84%76% of our total assets. Marketable securities as of December 31, 2021September 30, 2022 had remaining maturities between three14 weeks and 3879 months.

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

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

Level 2 – Financial instruments with quoted prices in active markets for similar assets or liabilities. Level 2 fair value measurements are determined using either prices for similar instruments or inputs that are either directly or indirectly observable, such as interest rates.

Level 3 – Inputs to the fair value measurement are unobservable inputs or valuation techniques.

Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included on the balance sheets in “Marketable securities, short term” and “Marketable securities, long term.”

The following table shows the estimated fair value of assets that were accounted for at fair value on a recurring basis:

Our available-for-sale securities as of December 31September 30 and March 31, 2021,2022, aggregated into classes of securities, were as follows:

The following table shows the gross unrealized holding losses and fair value of our available-for-sale securities with unrealized holding losses, aggregated by class of securities and length of time that individual securities had been in a continuous unrealized loss position as of December 31, 2021September 30 and March 31, 2021.2022.

We did not consider any of our available-for-sale securities to be impaired as of December 31, 2021. None of the securities were impaired at acquisition, and subsequent declines in fair value are not attributed to declines in credit quality. The effects of the COVID-19 pandemic, however, have degraded outlooks for some of our marketable securities’ issuers, which could lead to credit-quality downgrades in the future. 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 ability to hold until maturity. Because we believe it is more likely than not we will recover the cost basis of our investments, we did not consider any of our marketable securities to be impaired as of December 31, 2021.September 30, 2022.

NOTE 6. INVENTORIES

Inventories are shown in the following table:

NOTE 7. STOCK-BASED COMPENSATION

Stock-based compensation expense was $8,799$39,951 for the thirdsecond quarter of fiscal 2023, $56,999 for the second quarter of fiscal 2022, $4,275 for the third quarter of fiscal 2021, $73,036$47,085 for the first ninesix months of fiscal 2022,2023, and $41,297$64,237 for the first ninesix months of fiscal 2021.2022. We calculate the share-based compensation expense using the Black-Scholes standard option-pricing model.

NOTE 8. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Federal and state income taxes payable as of September 30,2022 of approximately $1,457,000 are included in accrued expenses.

We had 0no unrecognized tax benefits as of December 31, 2021,September 30, 2022, 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, 2021September 30, 2022 we had 0no accrued interest related to uncertain tax positions. The tax years 20162018 through 20202022 remain open to examination by the major taxing jurisdictions to which we are subject. 

NOTE 9. LEASES

We conduct our operations in a leased facility under a non-cancellable lease expiring March 31, 2026. Our lease does not provide an implicit rate, so we used our incremental borrowing rate to determine the present value of lease payments. Lease expense is recognized on a straight-line basis over the lease term. Variable lease costs consist primarily of common area maintenance and real estate taxes which are paid based on actual costs incurred by the lessor. Details of our operating lease are as follows: 

 The following table presents the maturities of lease liabilities as of December 31, 2021:September 30, 2022:

NOTE 10. STOCK REPURCHASE PROGRAM

On January 21, 2009 we announced that our Board of Directors authorized the repurchase of up to $2,500,000 of our Common Stock from time to time in open market, block, or privately negotiated transactions. The timing and extent of any repurchases depends on market conditions, the trading price of the company’s stock, and other factors, and subject to the restrictions relating to volume, price, and timing under applicable law. On August 27, 2015, we announced that our Board of Directors authorized up to $5,000,000 of additional repurchases. Our repurchase program does not have an expiration date and does not obligate us to purchase any shares. The Program may be modified or discontinued at any time without notice. We intend to finance any stock repurchases with cash provided by operating activities or maturating marketable securities. The remaining authorization was $3,762,040$3,598,519 as of December 31, 2021.September 30, 2022. We havedid not repurchasedrepurchase any of our Common Stock during the firstsix months of fiscal 2022.2023.

NOTE 11. INFORMATION AS TO EMPLOYEE STOCK PURCHASE, SAVINGS, AND SIMILAR PLANS

All of our employees are eligible to participate in our 401(k) savings plan the first quarter after reaching age 21. Employees may contribute up to the Internal Revenue Code maximum. We make matching contributions of 100% of the first 3% of participants’ salary deferral contributions. Our matching contributions were $21,57923,751 for the thirdsecond quarter of fiscal 2023, $26,831 for the second quarter of fiscal 2022, $22,571 for the third quarter of fiscal 2021, $76,995$52,177 for the first ninesix months of fiscal 2022,2023, and $69,227$55,415 for the first ninesix months of fiscal 2021.2022.

NOTE 12. SUBSEQUENT EVENTS

On JanuaryOctober 19, 2022 we announced that our Board had declared a quarterly cash dividend of $1.00 per share of Common Stock to be paid February 28,November 30, 2022 to shareholders of record as of the close of business JanuaryOctober 31, 2022.

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 and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report.

Further information regarding our risks and uncertainties are contained in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, 2021 as updated in Item 1A of this report.2022.

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, 2021.2022. As of December 31, 2021September 30, 2022 our critical accounting policies and estimates continued to include investment valuation, inventory valuation, and deferred tax assets estimation.

Quarter ended December 31, 2021September 30, 2022 compared to quarter ended December 31, 2020

September 30, 2021

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

Total revenue for the quarter ended December 31, 2021September 30, 2022 (the thirdsecond quarter of fiscal 2022) decreased 4%2023) increased 57% compared to the quarter ended December 31, 2020September 30, 2021 (the thirdsecond quarter of fiscal 2021)2022). The decreaseincrease was due to a 7% decrease59% increase in product sales partially offset by an 86%and a 5% increase in contract research and development revenue.

The decreaseincrease in product sales in the third quarter of fiscal 2022 from the prior-year quarter was primarily due to raw materials shortagesincreased purchases by existing customers and longer lead-times for critical materialsnew customers. Sales increased in most of our markets and services.product lines. The increase in contract research and development revenue was due to new contracts.

Gross profit as a percentageTotal expenses decreased 7% for the second quarter of revenue decreasedfiscal 2023 compared to 78% the thirdsecond quarter of fiscal 2022 from 84% the third quarter of fiscal 2021 primarily due to revenue mix and increased costs.

Total expenses decreased 14% in the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021 due to a 15%5% decrease in research and development expense and a 13%10% decrease in selling, general, and administrative expense. The decreasedecreases in research and development expense wasexpenses were primarily due to staffing changes and the completionreallocation of certain product developmentresources to revenue-generating activities. The decrease in selling, general, and administrative expense was primarily due to staffing changes.

Interest income for the thirdsecond quarter of fiscal 2022 decreased 22%2023 increased 19% due to a decreasean increase in our available-for-sale securities and a decreasean increase in thetheir average interest rates on those securities.rate.

The 12% decrease67% increase in net income in the thirdsecond quarter of fiscal 20222023 compared to the prior-year quarter was primarily due to decreasedincreased revenue decreased gross margin, and decreased interest income partially offset by decreased expenses.

NineSix months ended December 31, 2021September 30, 2022 compared to ninesix months ended December 31, 2020

September 30, 2021

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

Total revenue for the ninesix months ended December 31, 2021September 30, 2022 (the first six months of fiscal 2023) increased 31%29% compared to the ninesix months ended December 31, 2020.September 30, 2021 (the first six months of fiscal 2022). The increase was due to a 31%29% increase in product sales and a 17%19% increase in contract research and development revenue.

The increase in product sales from the prior-year period was primarily due to increased purchases by existing customers and salesnew customers. Sales increased in most of our markets and product lines. The increase in contract research and development revenue was due to new contracts.

Gross profit as a percentage of revenue decreasedincreased to 77%78% for the first ninesix months of fiscal 2023 from 76% for the first six months of fiscal 2022 from 82% for the first nine months of fiscal 2021 primarily due to revenue mix andincreased prices partially offset by increased costs.

Total expenses decreased 3%16% for the first ninesix months of fiscal 2023 compared to the first six months of fiscal 2022 compared to the first nine months of fiscal 2021 due to a 12%16% decrease in research and development expense partially offset byand a 19% increase15% decrease in selling, general, and administrative expense. The decreasedecreases in research and development expense wasexpenses were primarily due to staffing changes and the completionreallocation of certain product developmentresources to revenue-generating activities. The increase in selling, general, and administrative expense was primarily due to increased employee compensation expense.

Interest income for the first ninesix months of fiscal 2022 decreased 26%2023 increased 9% due to a decreasean increase in our available-for-sale securities and a decreasean increase in thetheir average interest rates on those securities.rate.

The 25% 42% increase in net income in the first ninesix months of fiscal 20222023 compared to the prior-year period was primarily due to an increase in product sales.increased revenue and decreased expenses.

The Impact of the COVID-19 PandemicSupply Chain Disruptions

We believe the impact ofSupply chain disruptions related to the COVID-19 pandemic on customer demand was significantly lessmay have favorably affected product sales in the quarter and ninesix months ended December 31, 2021 compared toSeptember 30, 2022 since we believe the prior-year periods.disruptions may have been less severe for us than for our competitors. We believe thesupply chain disruptions also had an unfavorable impact of the pandemic on our supply chain, however, was significantly more in the quarter and nine months ended December 31, 2021 than in the prior-year periods. The effectscosts of the pandemic also increased labor and materials costs and expenses for the quarter and nine months ended December 31, 2021.sales.

Liquidity and Capital Resources

Overview

Cash and cash equivalents were $8,967,657$3,583,539 as of December 31, 2021September 30, 2022 compared to $10,427,340$10,449,510 as of March 31, 2021.2022. The $1,459,683$6,865,971 decrease in cash and cash equivalents during the first ninesix months of fiscal 20222023 was due to $14,499,696$9,661,652 of cash used in financing activities for dividend payments and $6,555,557 of cash used by investing activities, partially offset by $9,098,330$9,351,238 in net cash provided by operating activities and $3,941,683 of cash provided by investing activities.

Operating Activities

Net cash provided by operating activities related to product sales and research and development contract revenue as our primary source of working capital for the current and prior yearprior-year quarters. Net cash provided by operating activities was $9,098,330$9,351,238 for the first ninesix months of fiscal 2022 and $8,531,0682023 compared to $6,458,196 for the first ninesix months of fiscal 2021.2022.

Accounts receivable increased by $1,073,922$1,155,585 during the first ninesix months of fiscal 20222023 primarily due to the timing of sales to and payments from customers.increased product sales.

Prepaid expenses and other assets increased by $435,067 due to the timing of estimated tax payments.
 

Inventories increased $466,898$706,214 due primarily to our decisions to increase work in process in order to mitigate longer vendor lead-times.

Accounts payable and accrued expenses increased $890,822 due primarily due to a $1,504,462 increase in accrued expenses partially offset by a $544,272 decrease in accounts payable and a $69,368 net decrease in current and long-term operating lease liabilities. The increase in accrued expenses was due to increases in income taxes payable and deferred revenue. The decrease in accounts payable was due to the timing of vendor payments.

Investing Activities

Cash providedused by investing activities during the ninesix months ended December 31, 2021September 30, 2022 consisted of $4,000,000$25,381,057 of  marketable securities purchases and $24,500 of fixed asset purchases, partially offset by $18,750,000 in proceeds from maturities of marketable securities partially offset by $58,317 in capital expenditures. Capital expendituresand the receipt of a $100,000 tenant improvement allowance. Fixed asset purchases can vary from quarter to quarter depending on our needs and equipment purchasing opportunities. We have ordered several pieces ofadditional new production equipment to increase our production capacity. Therefore we currently expect significantly more capital expendituresfixed asset purchases during fiscal 20222023 than the $62,727$484,579 we invested in fiscal 2021.2022.

Financing Activities

Cash used in financing activities during the ninesix months ended December 31, 2021September 30, 2022 consisted of $14,499,696$9,661,652 of cash dividends paid to shareholders. In addition to cash dividends to shareholders paid in first nine monthssecond quarter of fiscal 2022,2023, on JanuaryOctober 19, 2022 we announced that our Board had declared a cash dividend of $1.00 per share of Common Stock, or $4,833,714$4,830,826 based on shares outstanding as of JanuaryOctober 14, 2022, to be paid February 28,November 30, 2022. 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.

We currently believe our working capital and cash generated from operations will be adequate for our needs at least for the next 12 months.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Management, with the participation of the Chief Executive Officer and PrincipalChief 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, our management concluded that, as of December 31, 2021,September 30, 2022, our disclosure controls and procedures were effective.

Changes in Internal Controls

During the quarter ended December 31, 2021,September 30, 2022, 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, 2021 as updated in our Quarterly Report on Form 10-Q for the quarters ended June 30, 2021 and September 30, 2021.2022.

Item 4. Mine Safety Disclosures.

None.
 

Item 6. Exhibits.