NVE CORP /NEW/ (Form: 10-K, Received: 05/06/2020 16:33:24)

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

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2020

[ ] 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)

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

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

Title of each class	Name of each exchange on which registered
Common stock, $0.01 par value	The NASDAQ Stock Market, LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [ ] No [X]

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

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted 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 [X] No [ ]

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

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

     If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]
     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes [   ]  No [X]
     The aggregate market value of the voting stock held by non-affiliates of the Registrant, based on the closing price on September 30, 2019, the last business day of the Registrant’s most recently completed second fiscal quarter, as reported on the NASDAQ Stock Market, was approximately $208 million.
     The number of shares of the registrant’s Common Stock (par value $0.01) outstanding as of May 1, 2020 was 4,835,038.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of our Proxy Statement for our 2020 Annual Meeting of Shareholders are incorporated by reference into Items 10, 11, 12, 13, and 14 of Part III hereof.
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

NVE CORPORATION
INDEX TO FORM 10-K

PART I

Item 1. Business.

Our Strategy
Our Products and Markets

Product Manufacturing
Sales and Product Distribution
New Product Status
Our Competition
Sources and Availability of Raw Materials
Intellectual Property
Working Capital Items
Dependence on Major Customers
Firm Backlog
Environmental Matters
Number of Employees
Available Information

Item 1A. Risk Factors.
Item 1B. Unresolved Staff Comments.
Item 2. Properties.
Item 3. Legal Proceedings.
Item 4. Mine Safety Disclosures.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information and Dividends
Shareholders
Securities Authorized for Issuance Under Equity Compensation Plans
Stock Repurchase Program

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 8. Financial Statements and Supplementary Data.
Item 9A. Controls and Procedures.
Item 9B. Other Information.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Item 14. Principal Accounting Fees and Services.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

SIGNATURES

FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firms
Balance Sheets
Statements of Income
Statements of Comprehensive Income
Statements of Shareholders’ Equity
Statements of Cash Flows
Notes to Financial Statements

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PART I

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 of these words or comparable terminology. To the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of NVE, you should be aware that our actual financial condition, operating results and business performance may differ materially from that projected or estimated by us in the forward-looking statements. We have attempted to identify, in context, some of the factors that we currently believe may cause actual future experience and results to differ from their current expectations. These differences may be caused by a variety of factors, including but not limited to risks related to our reliance on several large customers for a significant percentage of revenue, uncertainties related to the economic environments in the industries we serve, uncertainties related to future sales and revenues, risks related to the COVID-19 pandemic, risks and uncertainties related to future stock repurchases and dividend payments, and other specific risks that may be alluded to in this Report or in the documents incorporated by reference in this Report. For more information regarding our risks and uncertainties, see Item 1A “Risk Factors” of this Report.

ITEM 1. BUSINESS.
In 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.

NVE History and Background
     NVE is a Minnesota corporation headquartered in a suburb of Minneapolis. We were founded in 1989 by James M. Daughton, Ph.D., a spintronics pioneer. Our common stock became publicly traded in 2000 through a reverse merger and became NASDAQ listed in 2003. Since our founding, we have been awarded more than $50 million in government research contracts. These contracts have helped us develop products and build our intellectual property portfolio. We have adopted a March 31 fiscal year, so fiscal years referenced in this report end March 31.

Industry Background
     Much of the electronics industry is devoted to the acquisition, storage, and transmission of information. We have focused on three applications for our spintronic technology: magnetic sensors, couplers, and memories. Sensors acquire information, couplers transmit information, and memories store information. In that sense, our technology can provide the eyes, nerves, and brains of electronic systems.

     Magnetic sensors can be used for a number of purposes including detecting the position or speed of robotics and mechanisms, or for communicating with implantable medical devices. We believe our spintronic sensors are smaller, more precise, and more reliable than competing devices.

     Couplers are widely used in factory automation, providing reliable digital communication between electronic subsystems in factories. For example, couplers are used to send high-speed data between robots and central controllers. As manufacturing automation expands, there is a need for higher speed data and more channel density. Because of their unique properties, we believe our couplers transmit more data at higher speeds and over longer distances than conventional devices.

     Near-term potential MRAM applications include mission-critical storage such as military, industrial, and antitamper applications. Long term, MRAM could address the market for ubiquitous high-density memory.

Our Enabling Technology
     Our designs are generally based on either giant magnetoresistance or tunneling magnetoresistance. These structures produce a large change in electrical resistance depending on the electron spin orientation in a free layer.

     In giant magnetoresistance (GMR) devices, resistance changes due to conduction electrons scattering at interfaces within the devices. The GMR effect is only significant if the layer thicknesses are less than the mean free path of conduction electrons, which is approximately five nanometers. Our critical GMR conductor layers may be less than two nanometers, or five atomic layers, thick.

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     The second type of spintronic structure we use is based on tunneling magnetoresistance (TMR). Such devices are known as Spin-Dependent Tunnel (SDT) junctions or Magnetic Tunnel Junctions (MTJs). SDT junctions use tunnel barriers that are so thin that electrons can “tunnel” through a normally insulating material to cause a resistance change. SDT barrier thicknesses can be in the range of one to four nanometers (less than ten molecular layers).

     In our products, the spintronic elements are connected to integrated circuitry and encapsulated (“packaged”) in much the same way as conventional integrated circuits.

Our Strategy
     Our vision is to become the leading developer of practical spintronics technology and devices. Our spintronic technology provides eyes, nerves, and brains for electronic systems, breathing life and intelligence into inanimate objects. Our unique products support global trends of smart, small, low-power end nodes for the “Internet of Things.” We plan to monetize our technology by selling the products described below and licensing our MRAM technology. To grow product sales, we plan to broaden our sensor and coupler product lines, and longer term to target larger markets such as automotive electronics.

Our Products and Markets

Sensor Products and Markets
     Our sensor products detect the strength or gradient of magnetic fields and are often used to determine position or speed. The GMR changes its electrical resistance depending on the magnetic field. In our devices, GMR is combined with conventional foundry integrated circuitry and packaged in much the same way as conventional integrated circuits. We sell standard or catalog sensors, and custom sensors designed to meet customers’ exact requirements. Our sensors are quite small, very sensitive to magnetic fields, precise, and reliable.

Standard sensors
     Our standard, or catalog, sensors are generally used to detect the presence of a magnetic or metallic material to determine position or speed. We believe our spintronic sensors are smaller, more precise, more reliable, and lower power than competing devices. Our major market for standard sensors is the Industrial Internet of Things (IIoT) for factory automation.

Custom and medical sensors
     Our primary custom products are sensors for medical devices, which are customized to our customers’ requirements and manufactured under stringent medical device quality standards. Most are used to replace electromechanical magnetic switches. We believe our sensors have important advantages in medical devices compared to electromechanical switches, including no moving parts for inherent reliability, and being smaller, more sensitive, and more precise. Our sensors can be customized using customer-specific integrated signal processing and design variations that can include the range and sensitivity to magnetic fields, electrical resistance, and multisensor elements configuration. Future custom sensor target markets include consumer electronics, automotive electronics, and biosensors.

Coupler Products and Markets
     Our spintronic couplers combine a GMR sensor element and an integrated microscopic coil. The coil creates a small magnetic field that is picked up by the spintronic sensor, transmitting data almost instantly. Couplers are also known as “isolators” because they electrically isolate the coupled systems. Our IsoLoop couplers are faster than the fastest optical couplers. Our major coupler market is currently the Industrial Internet of Things (IIoT) for factory automation. We are targeting the automotive market longer term.

MRAM Products and Markets
     MRAM uses spintronics to store data. It has been called the ideal or universal memory because of its potential to combine the speed of SRAM, the density of DRAM, and the nonvolatility of flash memory. Data is stored in the spin of the electrons in thin metal alloy films, and read with spin-dependent tunnel junctions. Unlike electrical charge, the spin of an electron is inherently permanent. We have invented several types of MRAM memory cells including inventions related to advanced MRAM designs and MRAM for tamper prevention or detection.

     Our strategy is to develop, manufacture, and sell low bit-density MRAM for applications such as tamper prevention and detection. For high bit-density MRAM, our strategy is to license our technology to companies with large-scale memory manufacturing capabilities.

Product Manufacturing
     The heart of our fabrication facility is a cleanroom area with specialized equipment to deposit, pattern, etch, and process spintronic materials. Most of our products are fabricated in our facility using either raw silicon wafers or foundry wafers. Foundry wafers contain conventional electronics that perform housekeeping functions such as voltage regulation and signal conditioning in our products.

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     Each wafer may include thousands of devices. We build spintronics structures on wafers in our fabrication facility. We either saw wafers to be sold in die form, or send wafers to Asia for dicing and packaging. Other production operations include wafer-level inspection and testing. Packaged parts are returned to us to be tested, inventoried, and shipped.

Sales and Product Distribution
     We rely on distributors who stock our products and sell them in more than 75 countries. Distributors of our products include America II Electronics, Inc., Avnet companies, and Digi-Key Corporation. Our distributor agreements generally renew annually. In addition, we distribute versions of some of our products under private-brand partnerships with large integrated device manufacturers. These private-brand partnerships broaden our distribution and enhance our sales support, technical support, and brand awareness.

New Product Status
     In the past year we began marketing a number of new products, including:

	•	new smart sensors for the Internet of Things;
	•	new TMR sensors and magnetic switches;
	•	high transient immunity data couplers;
	•	isolated power convertors; and
	•	new antitamper sensors.

Long-term product development programs in fiscal 2020 included:

	•	new TMR sensors;
	•	custom integrated circuits for smart sensors; and
	•	power conversion integrated circuits.

Our Competition
Industrial Sensor Competition
     Several other companies either make or may have the capability to make GMR or TMR sensors. Also, several competitors make solid-state industrial magnetic sensors including silicon Hall-effect sensors and anisotropic magnetoresistive (AMR) sensors. We believe those types of sensors are not as sensitive or power-efficient as our GMR or TMR sensors.

Medical Sensor Competition
     Our sensors for medical devices face competition from electromechanical magnetic sensors and from other solid-state magnetic sensors. Electromechanical magnetic sensors such as reed and micro-electromechanical system (MEMS) switches have been in use for several decades. Because our sensors have no moving parts, we believe they are inherently more reliable than electromechanical magnetic sensors. We also believe our sensors are smaller than the smallest electromechanical magnetic sensors, more precise in their magnetic switch points, and more sensitive. Compared to other solid-state sensors, our medical sensors may have advantages in size, sensitivity to small magnetic fields, or electrical interface simplicity.

Coupler Competition
     Competing coupler technologies include optical couplers, inductive couplers (transformers), capacitive couplers, and radio-frequency modulation couplers. Prominent optical coupler suppliers include Broadcom Limited, Fairchild Semiconductor International, Lite-On Technology Corporation, Renesas Electronics Corporation, Toshiba Corporation, and Vishay Intertechnology.

     Our strategy is to compete based on product features rather than to compete solely on price. IsoLoop couplers are smaller and therefore require less circuit board space per channel than most competing couplers. Our other advantages over competing technologies may include less signal distortion, longer product life, and lower power consumption.

MRAM Competition
     A number of companies compete or may compete with us for MRAM research and development or service business, or may be attempting to develop MRAM intellectual property for licensing to others. Emerging technologies that could compete with MRAM include graphene and carbon nanotubes, phase-change memory (PCM; also known as chalcogenide, 3D XPoint, or Ovonic memory), resistive RAM (ReRAM or RRAM), conductive bridge RAM (CBRAM), memory resistors (“memristors”), and conductive metal oxide (CMOx) memory. MRAM may have advantages over these technologies in either manufacturability, speed, bit density, data retention, or endurance.

Sources and Availability of Raw Materials
     Our principal sources of raw materials include suppliers of raw silicon and semiconductor foundry wafers that are incorporated into our products, and suppliers of device packaging services. Our wafers sources are based around the world; most of our packaging services take place in Asia.

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Intellectual Property
Patents
     As of March 31, 2020 we had more than 50 issued U.S. patents assigned to us. We also have a number of foreign patents, a number of U.S. and foreign patents pending, and we have licensed patents from others. There are no patents we regard as critical to our current business owned by us or licensed to us that expire in the next 12 months.

     Much of our intellectual property has been developed with U.S. Government support. Under federal legislation, companies normally may retain the principal worldwide patent rights to any invention developed with U.S. Government support.

     Certain of our patents cover inventions we believe may be necessary for successful high-density, high-performance MRAMs. We believe U.S. Patents 6,538,921 titled “Circuit selection of magnetic memory cells and related cell structures,” and 6,744,086 titled “Current switched magnetoresistive memory cell” are particularly important. The 6,744,086 patent has been reissued as RE 44,878 and expires May 15, 2022. The 6,538,921 patent has been reissued as RE 47,583 and expires August 14, 2021.

     We also have patents on advanced MRAM designs that we believe are important, including patents that relate to magnetothermal MRAM, spin-momentum MRAM, and synthetic antiferromagnetic storage.

Trademarks
     “NVE” and “IsoLoop” are our registered trademarks. Other trademarks we claim include “GMR Switch” and “GT Sensor.”

Working Capital Items
     Like other companies in the electronics industry, we have historically invested in capital equipment for manufacturing and testing our products, as well as research and development equipment. We have also deployed significant capital in inventories to have finished products available from stock, to receive more favorable pricing for raw materials, and to guard against raw material shortages.

Dependence on Major Customers
     We rely on several large customers for a significant percentage of our revenue, including Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors. The loss of one or more of these customers could have a material adverse effect on us.

Firm Backlog
     As of March 31, 2020 we had $223,300 of contract research and development backlog we believed to be firm, and which we expect to be filled in fiscal 2021. Certain contracts have performance requirements and milestones, and there can be no assurance that backlog will result in future revenue. Our product sales are made primarily under standard purchase orders, which are generally cancellable. Therefore product order backlog is not included in “firm backlog,” and product sales backlog as of any particular date may not be indicative of future results. We also have certain agreements that require customers to forecast purchases; however, these agreements do not generally obligate the customer to purchase any particular quantity of products. Based on semiconductor industry practice and our experience, we do not believe that such agreements are meaningful for determining backlog amounts.

Environmental Matters
     We are subject to environmental laws and regulations, particularly with respect to industrial waste and emissions. Compliance with these laws and regulations has not had a material impact on our capital expenditures, earnings, or competitive position to date. Existing and future environmental laws and regulations could result in expenses related to emission abatement or remediation, but we are currently unable to estimate such expenses.

Number of Employees
     We had 46 employees as of March 31, 2020. Our employment can fluctuate due to a variety of factors. None of our employees are represented by a labor union or are subject to a collective bargaining agreement, and we believe we maintain good relations with our employees.

Available Information
     All reports we file with the SEC, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy statements and additional proxy materials on Schedule 14A, as well as any amendments to those reports and schedules, are accessible at no cost through the “Investors” section of our Website (www.nve.com). These filings are also accessible through the SEC’s Website (www.sec.gov).

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ITEM 1A. RISK FACTORS.
     We caution readers that the following important factors, among others, could affect our financial condition, operating results, business prospects or any other aspect of NVE, and could cause our actual results to differ materially from that projected or estimated by us in the forward-looking statements made by us or on our behalf. Although we have attempted to list below the important factors that do or may affect our financial condition, operating results, business prospects, or any other aspect of NVE, other factors may in the future prove to be more important. New factors emerge from time to time and it is not possible for us to predict all of such factors. Similarly, we cannot necessarily assess or quantify the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in forward-looking statements.

Risks Related to our Business
We may lose revenue if any of our large customers cancel, postpone, or reduce their purchases.
     We rely on several large customers for a significant percentage of our revenue. These large customers include Abbott Laboratories, Sonova AG, certain other medical device manufacturers, and certain distributors. Although we have agreements with certain large customers, these agreements do not obligate customers to purchase from us and may not prevent price reductions. Furthermore, orders from our large customers can generally be reduced, postponed, or canceled, and a number of orders have already been delayed or canceled due to the effects of the COVID-19 pandemic. Any decreases in purchases, or the loss of any of our large customers, could have a significant impact on our revenue and our profitability.

We risk losing business to our competitors.
     We have a number of competitors and potential competitors, many of whom have significantly greater financial, technical, and marketing resources than us. We believe that our competition is increasing as the technology and markets mature. This has meant more competitors and more severe pricing pressure. In addition, our competitors may be narrowing or eliminating our performance advantages. We expect these trends to continue, and we may lose business to competitors or it may be necessary to significantly reduce our prices in order to acquire or retain business. These factors could cause a material adverse impact on our financial condition, revenue, gross profit margins, or income.

Failure to meet stringent customer requirements could result in the loss of key customers and reduce our sales.
     Some of our customers, including certain medical device manufacturers, have stringent technical and quality requirements that require our products to meet certain test and qualification criteria or to adopt and comply with specific quality standards. Certain customers also periodically audit our performance. Failure to meet technical or quality requirements or a negative customer audit could result in the loss of current sales revenue, customers, and future sales.

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 January 1, 2021, and Supply Agreement, as amended, with Sonova AG, which expires March 31, 2025. 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 or the loss of these customers could have a significant adverse impact on our revenue and our profitability.

We will lose revenue if government contract funding is reduced, delayed, or eliminated.
     A decrease in U.S. Government funded research or disqualification as a vendor to the U.S. Government for any reason could hamper future research and development activity and decrease related revenue. In addition to direct Government funding, certain of our non-Government customers and prospective customers depend on Government support to fund their contracts with us. Our direct and indirect Government funding depends on adequate continued funding of the agencies and their programs. Such funding is subject to the availability of Congressional appropriations and that, as a result, long-term government contracts are partially funded initially with additional funds committed only as Congress makes further appropriations. We may be required to maintain security clearances for facilities and personnel in order to protect classified information. Furthermore, some of our Government funding has been through Small Business Innovation Research (SBIR) or Small Business Technology Transfer Research (STTR) contracts. SBIR and STTR budgets, eligibility, or funding limits may be changed by legislation or by agencies such as the Department of Defense.

If we were barred for any reason from U.S. government contracts there could be a significant adverse impact on our revenue and our ability to make research and development progress.
     If we were to be charged with violation of certain laws or if the U.S. Government were to determine that we are not a “presently responsible contractor,” we could be temporarily suspended or, in the event of a violation, barred for up to three years from receiving new U.S. Government contracts or government-approved subcontracts. Additionally, we are subject to routine government audits and may be subject to investigations, and any deficiencies or illegal activities identified during the audits or investigations may result in the forfeiture or suspension of payments and civil or criminal penalties. Being barred for any reason from U.S. Government contracts could have a material adverse effect on our revenue, profits, and research and development efforts.

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Some of our products are incorporated into medical devices, which could expose us to a risk of product liability claims and such claims could seriously harm our business and financial condition.
     Certain of our products are used in medical devices, including devices that help sustain human life. We are also marketing our technology to other manufacturers of cardiac pacemakers and ICDs. Although we have indemnification agreements with certain customers including provisions designed to limit our exposure to product liability claims, there can be no assurance that we will not be subject to losses, claims, damages, liabilities, or expenses resulting from bodily injury or property damage arising from the incorporation of our products in devices sold by our customers. Our indemnifying customers may not have the financial resources to cover all liability. Existing or future laws or unfavorable judicial decisions could limit or invalidate the provisions of our indemnification agreements, or the agreements may not be enforceable in all instances. A successful product liability claim could require us to pay, or contribute to payment of, substantial damage awards, which would have a significant negative effect on our business and financial condition.

We may lose revenue if we are unable to maintain important certifications.
     Our quality management system is certified to the ISO 9001 standard, and we have received a letter of conformance for the International Automotive Task Force (IATF) 16949 automotive sector-specific standard. Our products are also subject to independent certification and listings including by the VDE Institute and UL LLC. These certifications are subject to a number of rigorous conditions. Failure to achieve or maintain any of these certifications or listings could cause us to be disqualified by one or more of our customers, and could have a material adverse impact on our business and revenue.

Federal legislation may not protect us against liability for the use of our products in medical devices and a successful liability claim could seriously harm our business and financial condition.
     Although the Biomaterials Access Assurance Act of 1998 may provide us some protection against potential liability claims, that Act includes significant exceptions to supplier immunity provisions, including limitations relating to negligence or willful misconduct. A successful product liability claim could require us to pay, or contribute to payment of, substantial damage awards, which would have a significant negative effect on our business and financial condition. Any product liability claim against us, with or without merit, could result in costly litigation, divert the time, attention, and resources of our management and have a material adverse impact on our business.

The malfunction of our products in medical devices could lead to the need to recall devices incorporating our products from the market, which may be harmful to our reputation and cause a significant loss of revenue.
     The malfunction of our products that are incorporated in medical devices could lead to the recall of existing medical devices incorporating our products. Such a recall could be harmful to our reputation for product safety and efficacy. Even if assertions that our products caused or contributed to device failure do not lead to product liability or contract claims, such assertions could harm our reputation and customer relationships. Any damage to our reputation and/or the reputation of our products, or the reputation of our customers or their products could limit the market for our and our customers’ products and harm our results of operations.

We may lose business and revenue if our critical production equipment fails.
     Our production process relies on certain critical pieces of equipment for defining, depositing, and modifying the magnetic properties of thin films. Some of this equipment was designed or customized by us, and some may no longer be in production. While we have an in-house maintenance staff, maintenance agreements for certain equipment, some critical spare parts, and back-ups for some of the equipment, we cannot be sure we could repair or replace critical manufacturing equipment were it to fail.

The loss of supply from any of our key single-source wafer suppliers could impact our ability to produce and deliver products and cause loss of revenue.
     Our critical suppliers include suppliers of certain raw silicon and semiconductor foundry wafers that are incorporated in our products. We maintain inventory of some critical wafers, but we have not identified or qualified alternate suppliers for many of the wafers now being obtained from single sources. The COVID-19 pandemic has caused shortages of the ingots and wafer substrates that are used to make the wafers we buy, and leadtimes have increased for certain of our foundry wafers. Wafer supply interruptions for any reason, including acts of God such as floods, typhoons, cyclones, earthquakes, or pandemics could seriously jeopardize our ability to provide products that are critical to our business and operations, and may cause us to lose revenue.

The loss of supply of any critical chemicals or supplies could impact our ability to produce and deliver products and cause loss of revenue.
     There are a number of critical chemicals and supplies that we require to make products. These include certain gases, photoresists, polymers, metals, and specialized alloys. We maintain inventory of critical chemicals and materials, but in many cases we are dependent on single sources, and some of the materials could be subject to shortages or be discontinued by their suppliers at any time. Supply interruptions or shortages for any reason, including interruptions due to effects of the COVID-19 pandemic, could seriously jeopardize our ability to provide products that are critical to our business and operations and may cause us to lose revenue.

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The loss of supply from any of our packaging vendors could impact our ability to produce and deliver products and cause loss of revenue.
     We are dependent on our packaging vendors. Because of the unique materials our products use, the complexity of some of our products, unique magnetic requirements, and high isolation voltage specifications, many of our products are more challenging to package than conventional integrated circuits. Some of our products use processes or tooling unique to a particular packaging vendor, and it might be expensive, time-consuming, or impractical to convert to another vendor in the event of a supply interruption due to vendors’ business decisions, business condition, or acts of God, including floods, typhoons, earthquakes, or pandemics. One of our packaging vendors was forced to suspend its factory operations in late March 2020 pursuant to a COVID-19 lockdown order and it is uncertain when they will resume operations. The COVID-19 pandemic has also caused shortages of materials and subassemblies our packaging vendors need for the packaging process. Additionally, certain of our packaging vendors are in flood-susceptible areas. Flooding risks to such vendors may increase in the future due to possible higher ocean levels, extreme weather, and other potential effects of climate change. We have alternate vendors or potential alternate vendors for the majority of our products, but it can be expensive, time-consuming, and technically challenging to convert to alternate vendors. Furthermore, we may not be able to recover work in process or finished goods at a packaging vendor in the event of a disruption. Any supply interruptions or loss of inventory could seriously jeopardize our ability to provide products that are critical to our business and operations and may cause us to lose revenue.

We are subject to risks inherent in doing business in foreign countries that could impair our results of operations.
     Foreign sales are a significant portion of our revenue and we rely on suppliers in China, India, Taiwan, Thailand, and other foreign countries. Risks relating to operating in foreign markets that could impair our results of operations include economic and political instability; acts of God, including floods, typhoons, cyclones and earthquakes; public health crises including, but not limited to, the COVID-19 pandemic; difficulties in enforcement of contractual obligations and intellectual property rights; changes in regulatory requirements, tariffs, customs, duties, and other trade barriers; transportation delays; and other uncertainties relating to the administration of, or changes in, or new interpretation of, the laws, regulations, and policies of jurisdictions where we do business.

Public health crises could have an adverse effect on our operations and financial results.
     Public health crises could adversely affect our ongoing business operations. In particular, the COVID-19 pandemic has severely impacted global economic activity and caused many of our important customers to delay or cancel orders. We are operating under Minnesota “Emergency Executive Order 20-20 Directing Minnesotans to Stay at Home,” which has been in effect since March 27, 2020. We are allowed to operate under the Order because the Company is in several “Critical Sectors” as defined in the Order, however future orders could be imposed by State or Federal authorities that could limit or prohibit our normal operation. Furthermore, if one or more of our employees become infected with COVID-19, we could be forced to curtail or cease operations to protect the health of our employees or to prevent the spread of the disease. Additionally, any customer or supplier disruptions could affect our ability to operate. These and other impacts of COVID-19 pandemic or other public health crises could have a material adverse effect on our results of operations or our financial condition.

We may not be able to enforce our intellectual property rights.
     We protect our proprietary technology and intellectual property by seeking patents, trademarks, and copyrights, and by maintaining trade secrets through entering into confidentiality agreements with employees, suppliers, customers, and prospective customers depending on the circumstances. We hold patents or are the licensee of others owning patented technology covering certain aspects of our products and technology. These patent rights may be challenged, rendered unenforceable, invalidated, or circumvented. Additionally, rights granted under the patents or under licensing agreements may not provide a competitive advantage to us. Efforts to enforce patent rights can involve substantial expense and may not be successful. Furthermore, others may independently develop similar, superior, or parallel technologies to any technology developed by us, or our technology may prove to infringe on patents or rights owned by others. Thus the patents held by or licensed to us may not afford us any meaningful competitive advantage. Also, our confidentiality agreements may not provide meaningful protection of our proprietary information. Our inability to maintain our proprietary rights could have a material adverse effect on our business, financial condition, and results of operations.

Our business success may be adversely affected if we are unable to attract and retain highly qualified employees.
     We have employment agreements with certain employees, including our Chief Executive Officer and Chief Financial Officer, but those agreements do not prevent employees from leaving the company. Competition for highly qualified management and technical personnel can be intense and we may not be able to attract and retain the personnel necessary for the development and operation of our business. The loss of the services of key personnel could have a material adverse effect on our business, financial condition, and results of operations.

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Our business could be negatively impacted by cyber security events or information technology disruptions.
     We face various cyber security threats, including threats to our information technology infrastructure and attempts to gain access to our proprietary or classified information, and denial-of-service attacks. Additionally, there is a risk of disruptions due to failures of our information technology infrastructure or service provider outages. We maintain policies and procedures for the mitigation of information technology risks, and we maintain data backups, backup hardware, and some redundant systems. We have experienced cyber security events and disruptions such as viruses, ransomware, hacker attacks, and limited server, Website, and e-mail outages. Although these events did not materially impact our business, future events could disrupt our operations, harm our reputation, expose us to liability, compromise our eligibility for research and development contracts involving sensitive or classified information, or have other effects including unpredictable effects.

We could incur losses on our marketable securities.
     As of March 31, 2020, we held $62,691,309 in short-term and long-term marketable securities, representing approximately 79% of our total assets. Conditions and circumstances beyond our control or ability to anticipate, including the effects of the COVID-19 pandemic, can cause downgrades and increased default risk, and such downgrades or increases in default risk are possible at any time. Additionally, the assignment of a high credit rating does not preclude the risk of default on any marketable security. Defaults, default risks, or changes in market conditions could cause us to incur losses on our marketable securities, which could have a material adverse impact on our financial condition, income, or cash flows, and our ability to pay dividends.

Risks Related to our Industry
We face an uncertain economic environment in the industries we serve, which could adversely affect our business.
     We sell our products into the semiconductor market, which is highly cyclical and is currently being significantly affected by the COVID-19 pandemic. We cannot predict the timing, strength, or duration of any economic slowdown or subsequent recovery, worldwide or in the industries we serve. The economic environment could have a material adverse impact on our business and revenue.

Our business and our reliance on intellectual property exposes us to litigation risks.
     If patent infringement claims or actions are asserted against us, we may be required to obtain a license or cross-license, modify our existing technology or design a new noninfringing technology. Such licenses or design modifications can be costly or could increase the cost of our products. In addition, we may decide to settle a claim or action against us, which settlement could be costly. We may also be liable for any past infringement, and we may be required to indemnify our customers against expenses relating to possible infringement. If there is an adverse ruling against us in an infringement lawsuit, an injunction could be issued barring production or sale of any infringing product. It could also result in a damage award equal to a reasonable royalty or lost profits or, if there is a finding of willful infringement, treble damages. Any of these results would increase our costs or harm our operating results.

Risks Related to our Stock
Any decisions to reduce or discontinue paying cash dividends to our shareholders could cause the market price of our common stock to decline.
     Future dividends will be subject to Board approval and will take into account factors including our results of operations, cash and marketable security balances, the timing of securities maturations, estimates of future cash requirements, fixed asset requirements, the impacts of the COVID-19 pandemic, and other factors our Board may deem relevant. Because they are generally more than our current cash flow from operations, recent and declared dividend amounts may be unsustainable. Any reduction or discontinuance by us of cash dividends could cause the market price of our common stock to decline.

The price of our common stock may be adversely affected by significant price fluctuations due to a number of factors, many of which are beyond our control.
     From time to time our stock price has decreased sharply, and could decline in the future. The market price of our common stock may be significantly affected by many factors, some of which are beyond our control, including:

	•	the announcement of new products, product enhancements, or contracts by us or our competitors;
	•	delays in our introduction of new products or technologies or market acceptance of these products or technologies;
	•	loss of customers, decreases in customers’ purchases, or decreases in customers’ purchase prices;
	•	changes in demand for our customers’ products;
	•	quarterly variations in our financial results, revenue, or revenue growth rates;
	•	speculation in the press or analyst community about our business, potential revenue, or potential earnings;
	•	general economic conditions or market conditions specific to industries we or our customers serve or may serve;
	•	legal proceedings involving us, including intellectual property litigation or class action litigation;
	•	changes in Federal corporate income tax rates or changes in other tax provisions;
	•	changes in tariffs, customs, duties, or other trade barriers in foreign jurisdictions where we purchase raw materials or sell our products;
	•	the impact or perceived impact of the COVID-19 pandemic on general economic conditions, our industry, or our revenues or net income;
	•	our stock repurchase and dividend policies and decisions.

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ITEM 1B. UNRESOLVED STAFF COMMENTS.
     None.

ITEM 2. PROPERTIES.
     Our principal executive offices and manufacturing facility are located at 11409 Valley View Road, Eden Prairie, Minnesota, 55344, and leased under an agreement expiring March 31, 2026. The space consists of 21,362 square feet of offices, laboratories, and production areas. The facility is currently being utilized at less than maximum capacity to allow for growth, and we believe the facility is adequate to meet our current requirements. We hold no investments in real estate.

ITEM 3. 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 4. MINE SAFETY DISCLOSURES.
     Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information and Dividends
     Our Common Stock trades on the Capital Market tier of the NASDAQ Stock Market under the symbol NVEC.

     Dividends have been funded from net cash provided by operating activities and proceeds from maturities of marketable securities. Our dividend policy is subject to change at any time, and future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, our forecasts of future cash requirements, and other factors our Board may deem relevant.

Shareholders
     We have approximately 62 shareholders of record as of April 21, 2020. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.

Securities Authorized for Issuance Under Equity Compensation Plans
     Information regarding our securities authorized for issuance under equity compensation plans will be included in the section “Equity Compensation Plan Information” of our Proxy Statement for our 2020 Annual Meeting of Shareholders, and is incorporated by reference into Item 12 of this Report.

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. We repurchased 12,972 shares of our Common Stock in fiscal 2020. We did not repurchase shares in fiscal 2019. The remaining authorization was $3,853,459 as of March 31, 2020. Common Stock repurchases during each quarter of fiscal 2020, all of which were made as part of our publicly announced program, were as follows:

				Total number of	Max. approximate
Period	Total	Average		shares purchased	dollar value of
	number	price		as part of publicly	shares that may
	of shares	paid		announced	yet be purchased
	purchased	per share		program	under the program
April 1, 2019 – June 30, 2019	-	$	-	-	$	4,540,806
July 1, 2019 – September 30, 2019	-	$	-	-	$	4,540,806
October 1, 2019 – December 31, 2019	-	$	-	-	$	4,540,806
January 1, 2020 – March 31, 2020	12,972	$	52.99	12,972	$	3,853,374
	12,972			12,972

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Common Stock repurchases during the fourth quarter of fiscal 2020 were as follows:

				Total number of	Max. approximate
Period	Total	Average		shares purchased	dollar value of
	number	price		as part of publicly	shares that may
	of shares	paid		announced	yet be purchased
	purchased	per share		program	under the program
January 1, 2020 – January 31, 2020	-	$	-	-	$	4,540,806
February 1, 2020 – February 29, 2020	-	$	-	-	$	4,540,806
March 1, 2020 – March 31, 2020	12,972	$	52.99	12,972	$	3,853,374
	12,972			12,972

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
     You should read this discussion together with our financial statements and notes included elsewhere in this Report. In addition to historical information, the following discussion contains forward-looking information that involves risks and uncertainties. Our actual future results could differ materially from those presently anticipated due to a variety of factors, including those discussed in Item 1A of this Report.

General
     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. We manufacture high-performance spintronic products including sensors and couplers to revolutionize data sensing and transmission. We also receive contracts for research and development and are a licensor of spintronic magnetoresistive random access memory technology, commonly known as MRAM.

Application of Critical Accounting Policies and Estimates
     In accordance with SEC guidance, those material accounting policies that we believe are the most critical to an investor’s understanding of our financial results and condition and require complex management judgment are discussed below.

Investment Valuation
     Our investments consist primarily of corporate obligations. We have generally invested excess cash in high-quality investment grade long-term marketable securities with less than five years to maturity. We classify all of our marketable securities as available-for-sale, thus securities are recorded at fair value and any associated unrealized gain or loss, net of tax, is included as a separate component of shareholders’ equity, “Accumulated other comprehensive income.” If we judged a decline in fair value for any security to be other than temporary, the cost basis of the individual security would be written down and a charge recognized to net income. The fair values for our securities are determined based on quoted market prices as of the valuation date and observable prices for similar assets. We consider a number of factors in determining whether other-than-temporary impairment exists, including: credit market conditions; the credit ratings of the securities; historical default rates for securities of comparable credit rating; the presence of insurance of the securities and, if insured, the credit rating and financial condition of the insurer; the effect of market interest rates on the value of the securities; and the duration and extent of any unrealized losses. We also consider the likelihood that we will be required to sell the securities prior to maturity based on our financial condition and anticipated cash flows. If any of these conditions and estimates change in the future, or, if different estimates are used, the fair value of the investments may change significantly and could result in other-than-temporary decline in value, which could have an adverse impact on our results of operations.

Inventory Valuation
     Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first in, first out method. Where there is evidence that inventory could be disposed of at less than carrying value, the inventory is written down to the net realizable value in the current period. Additionally, we periodically examine our inventory in the context of inventory turnover, sales trends, competition and other market factors, and we record provisions to inventory reserve when we determine certain inventory is unlikely to be sold. If reserved inventory is subsequently sold, corresponding reductions in inventory and inventory reserves are made. Our inventory reserve was $210,000 as of March 31, 2020 and $190,000 as of March 31, 2019.

Deferred Tax Assets Estimation
     In determining the carrying value of our net deferred tax assets, we must assess the likelihood of sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions to realize the benefit of these assets. We evaluate the realizability of the deferred assets quarterly and assess the need for valuation allowances or reduction of existing allowances quarterly. No valuation allowance was recorded as we believe it is more likely than not that all of the deferred tax assets will be realized.

     We had $108,119 of net deferred tax assets as of March 31, 2020 and $353,735 as of March 31, 2019. Net deferred tax assets included $65,218 in deferred tax assets for stock-based compensation deductions as of March 31, 2020 and $62,671 as of March 31, 2019.

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Results of Operations
The following table summarizes the percentage of revenue and year-to-year changes for various items for the last two fiscal years:

	Percentage of Revenue Year Ended March 31				Year- to-Year Change
	2020		2019		Year- to-Year Change
Revenue
Product sales	96.0	%	95.5	%	(3.5	)%
Contract research and development	4.0	%	4.5	%	(14.3	)%
Total revenue	100.0	%	100.0	%	(4.0	)%
Cost of sales	19.2	%	19.7	%	(6.3	)%
Gross profit	80.8	%	80.3	%	(3.5	)%
Expenses
Research and development	14.5	%	15.5	%	(10.2	)%
Selling, general, and administrative	5.2	%	4.6	%	7.6	%
Total expenses	19.7	%	20.1	%	(6.1	)%
Income from operations	61.1	%	60.2	%	(2.6	)%
Interest income	7.0	%	6.7	%	0.1	%
Income before taxes	68.1	%	66.9	%	(2.3	)%
Income tax provision	10.9	%	12.1	%	(13.3	)%
Net income	57.2	%	54.8	%	0.1	%

     Total revenue for fiscal 2020 decreased 4% compared to fiscal 2019 due to a 4% decrease in product sales and a 14% decrease in contract research and development revenue. The decrease in product sales was primarily due to decreased purchases by existing customers. The decrease in contract research and development revenue was due to the completion of certain contracts.

     Gross profit margin for fiscal 2020 increased to 81% from 80% for fiscal 2019 due to a more profitable revenue mix.

     Total expenses decreased 6% for fiscal 2020 compared to fiscal 2019 due to a 10% decrease in research and development expense, partially offset by an 8% increase in selling, general, and administrative expense. The decrease in research and development expense was primarily due to the completion of certain new product development projects. The increase in selling, general, and administrative expense was due to increased sales activities and staffing changes.

     The provision for income taxes decreased 13% due to tax benefits from the Federal Tax Reform Act enacted in 2017. Our effective tax rate for fiscal 2020 was 16% of income before taxes compared to 18% for fiscal 2019. We currently expect our tax rate for fiscal 2021 to be approximately 18%.

     The increase in net income in fiscal 2020 compared to the prior year was primarily due to a decrease in research and development expense and a decrease in the provision for income taxes, partially offset by an increase in selling, general, and administrative expense and a decrease in total revenue.

The Impact of the COVID-19 Pandemic
     We believe the COVID-19 pandemic had a slight negative impact on our results of operations in late fiscal 2020 due to deteriorating business conditions, especially in China. We currently expect significant decreases in total revenue and net income for the quarter ending June 30, 2020 compared to the prior-year quarter due to the effects of the COVID-19 pandemic on general economic conditions, market conditions in industries we and our customers serve, and supply-chain disruptions affecting our ability to produce certain products. Total revenue and net income will likely continue to decrease for quarters beyond June 30, 2020 compared to prior-year quarters due to the effects of the COVID-19 pandemic.

Liquidity and Capital Resources
Overview
     Cash and cash equivalents were $8,065,594 as of March 31, 2020 compared to $6,877,304 as of March 31, 2019. The $1,188,290 increase in cash and cash equivalents was due to $15,895,773 in net cash provided by operating activities and $5,251,629 net cash provided by investing activities, less $19,959,112 net cash used in financing 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 fiscal 2020 and 2019. Net cash provided by operating activities was $15,895,773 for fiscal 2020 and $14,218,994 for fiscal 2019.

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     Inventory decreased $380,426 in fiscal 2020 primarily due to the timing of raw material purchases. Accounts receivable decreased $301,620 primarily due to the timing of sales to and payments from customers.

Investing Activities
     Net cash provided by investing activities in fiscal 2020 was due to marketable security maturities of $12,500,000, partially offset by marketable security purchases of $7,196,330 and fixed assets purchases of $52,041.

     Purchases of fixed assets were $52,041 in fiscal 2020 and $68,265 in fiscal 2019. Purchases were primarily for capital equipment and leasehold improvements to speed new product development and were financed with cash provided by operating activities. Our capital expenditures have been significantly higher in prior years and can vary from year to year depending on our needs and equipment purchasing opportunities.

Financing Activities
     Net cash used in financing activities in fiscal 2020 was due to $19,384,040 in cash dividends to shareholders and $687,432 in repurchases of our common stock, partially offset by net proceeds from the sale of common stock of $112,360 from stock option exercises.

     In addition to cash dividends to shareholders paid in fiscal 2020, on May 6, 2020 we announced that our Board had declared a cash dividend of $1.00 per share of Common Stock, or $4,835,038 based on shares outstanding as of May 1, 2020, to be paid May 29, 2020. We plan to fund dividends through cash provided by operating activities and proceeds from maturities of marketable securities. All future dividends will be subject to Board approval and subject to the company’s results of operations, cash and marketable security balances, estimates of future cash requirements, the impacts of the COVID-19 pandemic, and other factors the Board may deem relevant. Furthermore, dividends may be modified or discontinued at any time without notice.

     We believe our working capital and cash generated from operations will be adequate for our needs at least through fiscal 2021.

Off-Balance-Sheet Arrangements
     Our off-balance sheet arrangements consist of purchase commitments. We believe such arrangements have no material current or anticipated future effect on our profitability, cash flows, or financial position.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
     Financial statements and accompanying notes are included in this Report beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
     None.

ITEM 9A. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
     Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has performed an evaluation of our disclosure controls and procedures that are defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this Report. This evaluation included consideration of the controls, processes, and procedures that are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2020, our disclosure controls and procedures were effective.

Management’s Report on Internal Control Over Financial Reporting
     Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Our management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of March 31, 2020. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the 2013 Internal Control—Integrated Framework. Based on our assessment using the criteria set forth by COSO in the 2013 Internal Control—Integrated Framework, management concluded that our internal control over financial reporting was effective as of March 31, 2020.

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     Under an amendment recently adopted by the SEC to the definition of “accelerated filer” pursuant to Rule 12b-2 under the Securities Exchange Act of 1934, we now qualify as a “smaller reporting company” and are therefore no longer required to have an audit of our internal control over financial reporting by an independent registered public accounting firm.

     Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within NVE have been detected. Our internal controls over financial reporting, however, are designed to provide reasonable assurance that the objectives of internal control over financial reporting are met.

Changes in Internal Controls
     During the quarter ended March 31, 2020, there was no change in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.
     We amended our Bylaws to allow our meetings of shareholders to be held by means of remote communication (often referred to as “virtual meetings”). This provides us with additional options for our annual meetings of shareholders, especially with limitations on public movement and the size of gatherings during the COVID-19 pandemic. We also modernized and clarified certain sections of the Bylaws. Our Bylaws as amended are filed as Exhibit 3.2 to this Report.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
     The section titled “Proposal 1. Election of Board of Directors” to be included in our Proxy Statement for our 2020 Annual Meeting of Shareholders sets forth certain information regarding our directors and executive officers required by Item 10, the section titled “Information About Our Executive Officers” sets forth information regarding our executive officers required by Item 10, and the section titled “Corporate Governance” sets forth information regarding our corporate governance and code of ethics required by Item 10. The information in these sections to be included in our Proxy Statement for our 2020 Annual Meeting of Shareholders are incorporated by reference into this section.

ITEM 11. EXECUTIVE COMPENSATION.
     The information in the sections “Executive Compensation,” “Compensation Discussion and Analysis,” “Corporate Governance – Board Committees – Compensation Committee Interlocks and Insider Participation,” and “Director Compensation” to be included in our Proxy Statement for our 2020 Annual Meeting of Shareholders is incorporated by reference into this section.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
     The information in the sections “Equity Compensation Plan Information” and “Security Ownership” to be included in our Proxy Statement for our 2020 Annual Meeting of Shareholders is incorporated by reference into this section. Information regarding the material features of our 2000 Stock Option Plan, as amended, is contained in Note 5 to the Financial Statements included elsewhere in this Report.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
     The information in the sections “Security Ownership – Transactions With Related Persons, Promoters, and Certain Control Persons” and “Corporate Governance – Board Composition and Independence” to be included in our Proxy Statement for our 2020 Annual Meeting of Shareholders is incorporated by reference into this section.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
     The information in the sections “Audit Committee Disclosure – Fees Billed to Us by Our Independent Registered Public Accounting Firm During Fiscal 2020 and 2019” and “Audit Committee Disclosure – Audit Committee Pre-Approval Policy” to be included in our Proxy Statement for our 2020 Annual Meeting of Shareholders is incorporated by reference into this section.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) Financial Statements and Schedules
Financial statements are provided pursuant to Item 8 of this Report. Certain financial statement schedules have been omitted because they are not required, not applicable, or the required information is provided in other financial statements or the notes to the financial statements.

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(b) Exhibits
The following is a list of exhibits:

Exhibit #	Description
3.1	Amended and Restated Articles of Incorporation of the company as amended by the Board of Directors effective November 21, 2002 (incorporated by reference to the Form 10-QSB for the period ended December 31, 2002).
3.2	Bylaws of the company as amended by the Board of Directors effective May 6, 2020.
4	Description of the registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
10.1	Lease dated October 1, 1998 between the company and Glenborough Properties, LP (incorporated by reference to the Form 10-QSB for the period ended September 30, 2002).
10.2	First amendment to lease between the company and Glenborough dated September 18, 2002 (incorporated by reference to the Form 10-QSB for the period ended September 30, 2002).
10.3	Second amendment to lease between the company and Glenborough dated December 1, 2003 (incorporated by reference to the Form 10-QSB for the period ended December 31, 2003).
10.4	Third amendment to lease between the company and Carlson Real Estate (incorporated by reference to the Form 8-K/A filed December 20, 2007).
10.5	Fourth amendment to lease between the company and the Barbara C. Gage Revocable Trust (incorporated by reference to our Current Report on Form 8-K/A filed August 3, 2011).
10.6	Fifth amendment to lease between the company and GRE – Bryant Lake, LLC (incorporated by reference to our Current Report on Form 8-K/A filed March 3, 2020).
10.7†	Employment Agreement between the company and Daniel A. Baker dated January 29, 2001 (incorporated by reference to the Form 10-KSB for the year ended March 31, 2001).
10.8†	NVE Corporation 2000 Stock Option Plan as Amended July 19, 2001 by the shareholders (incorporated by reference to our Registration Statement on Form S-8 filed July 20, 2001).
10.9	Indemnification Agreement by and between Pacesetter, Inc., a St. Jude Medical Company, d.b.a. St. Jude Medical Cardiac Rhythm Management Division, and the company (incorporated by reference to the Form 8-K filed September 27, 2005).
10.10+	Supplier Partnering Agreement by and between St. Jude and the company (incorporated by reference to the Form 8-K filed January 4, 2006).
10.11+	Amendment No. 1 to Supplier Partnering Agreement between St. Jude and the company (incorporated by reference to the Form 8-K/A filed September 10, 2007).
10.12+	Amendment No. 2 to Supplier Partnering Agreement between St. Jude and the company (incorporated by reference to the Form 8-K/A filed December 18, 2009).
10.13+	Amendment No. 3 to Supplier Partnering Agreement between St. Jude and the company (incorporated by reference to the Form 8-K/A filed September 16, 2010).
10.14	Amendment No. 4 to Supplier Partnering Agreement between St. Jude and the company (incorporated by reference to the Form 8-K/A filed February 7, 2011).
10.15	Supplier Quality Agreement between St. Jude and the company (incorporated by reference to the Form 8-K filed February 10, 2016).
10.16	Amendment No. 5 to Supplier Partnering Agreement between St. Jude and the company (incorporated by reference to the Form 8-K/A filed April 21, 2016).
10.17+	Supply Agreement by and between the company and Sonova AG (incorporated by reference to the Form 8-K/A filed November 16, 2015).
10.18*	First Amendment to Supply Agreement by and between the company and Sonova AG (incorporated by reference to the Form 8-K/A filed February 18, 2020).
23.1	Consent of Boulay PLLP.
23.2	Consent of Grant Thornton LLP.
31.1	Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).
31.2	Certification by Curt A. Reynders pursuant to Rule 13a-14(a)/15d-14(a).
32	Certification by Daniel A. Baker and Curt A. Reynders pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

†Indicates a management contract or compensatory plan or arrangement.

+Confidential portions deleted and filed separately with the SEC.

*Certain confidential portions redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause us competitive harm if publicly disclosed. We agree to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission on its request.

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ITEM 16. FORM 10-K SUMMARY.
We have elected not to include an optional Form 10-K Summary.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NVE CORPORATION
(Registrant)

/s/Daniel A. Baker
by Daniel A. Baker
President and Chief Executive Officer

Date May 6, 2020

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/Terrence W. Glarner Terrence W. Glarner	Director and Chairman of the Board	May 6, 2020
/s/Daniel A. Baker Daniel A. Baker	Director, President & Chief Executive Officer (Principal Executive Officer)	May 6, 2020
/s/Curt A. Reynders Curt A. Reynders	Treasurer and Chief Financial Officer (Principal Financial and Accounting Officer)	May 6, 2020
/s/Patricia M. Hollister Patricia M. Hollister	Director	May 6, 2020
/s/Richard W. Kramp Richard W. Kramp	Director	May 6, 2020
/s/Gary R. Maharaj Gary R. Maharaj	Director	May 6, 2020

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
NVE Corporation

Opinion on the Financial Statements
We have audited the accompanying balance sheet of NVE Corporation (the Company) as of March 31, 2020, and the related statements of income, comprehensive income, shareholders' equity, and cash flows for the year ended March 31, 2020, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2020, and the results of its operations and its cash flows for the year ended March 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Boulay PLLP
We have served as the Company’s auditor since May 8, 2019.

Minneapolis, Minnesota
May 6, 2020

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders
NVE Corporation

Opinion on the financial statements
We have audited the accompanying balance sheet of NVE Corporation (a Minnesota corporation) (the “Company”) as of March 31, 2019, the related statements of income, comprehensive income, shareholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2019, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Grant Thornton LLP
We served as the Company’s auditor from 2014 through 2019 and are now the predecessor auditor.

Minneapolis, Minnesota
May 1, 2019

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NVE CORPORATION
BALANCE SHEETS

	March 31, 2020		March 31, 2019
ASSETS
Current assets
Cash and cash equivalents	$	8,065,594	$	6,877,304
Marketable securities, short-term		19,084,814		12,487,821
Accounts receivable, net of allowance for uncollectible accounts of $15,000		2,694,018		2,995,638
Inventories		3,884,450		4,264,876
Prepaid expenses and other assets	655,835		816,045
Total current assets		34,384,711		27,441,684
Fixed assets
Machinery and equipment		9,280,062		9,365,806
Leasehold improvements	1,797,245		1,787,269
		11,077,307		11,153,075
Less accumulated depreciation and amortization	10,494,840		10,258,240
Net fixed assets		582,467		894,835
Deferred tax assets	108,119		353,735
Marketable securities, long-term	43,606,495		54,925,633
Right-of-use asset – operating lease	816,358		-
Total assets	$	79,498,150	$	83,615,887

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	186,993	$	375,188
Accrued payroll and other	482,074		460,488
Operating lease	127,134		-
Total current liabilities		796,201		835,676

Operating lease	706,600		-
Total liabilities	1,502,801		835,676

Shareholders’ equity
Common stock, $0.01 par value, 6,000,000 shares authorized; 4,835,038 issued and outstanding as of March 31, 2020 and 4,846,010 as of March 31, 2019		48,350		48,460
Additional paid-in capital		19,383,956		19,910,558
Accumulated other comprehensive income (loss)		516,523		(82,725	)
Retained earnings	58,046,520		62,903,918
Total shareholders’ equity	77,995,349		82,780,211
Total liabilities and shareholders’ equity	$	79,498,150	$	83,615,887

See accompanying notes.

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NVE CORPORATION
STATEMENTS OF INCOME

	Year Ended March 31
	2020			2019
Revenue
Product sales	$	24,400,192		$	25,291,306
Contract research and development	1,011,971			1,181,031
Total revenue		25,412,163			26,472,337
Cost of sales	4,889,295			5,216,112
Gross profit	20,522,868			21,256,225
Expenses
Research and development		3,690,539			4,107,692
Selling, general, and administrative	1,317,543			1,223,971
Total expenses	5,008,082			5,331,663
Income from operations		15,514,786			15,924,562
Interest income		1,787,117			1,785,277
Income before taxes		17,301,903			17,709,839
Provision for income taxes	2,775,261			3,201,903
Net income	$	14,526,642		$	14,507,936
Net income per share – basic	$	3.00		$	3.00
Net income per share – diluted	$	3.00		$	2.99
Cash dividends declared per common share	$	4.00		$	4.00
Weighted average shares outstanding
Basic	4,845,627		4,844,010
Diluted	4,847,294		4,850,567

STATEMENTS OF COMPREHENSIVE INCOME

	Year Ended March 31
	2020		2019
Net income	$	14,526,642	$	14,507,936
Unrealized gain from marketable securities, net of tax	599,248		893,275
Comprehensive income	$	15,125,890	$	15,401,211

See accompanying notes.

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NVE CORPORATION
STATEMENTS OF SHAREHOLDERS’ EQUITY

						Additional Paid-In Capital			Accumulated Other Comprehen- sive Income (Loss)				Retained Earnings
	Common Stock
	Shares		Amount													Total
Balance as of March 31, 2018	4,842,010		$	48,420		$	19,599,298		$	(915,635	)		$	67,709,657		$	86,441,740
Exercise of stock options	4,000			40			217,900										217,940
Comprehensive income:
Unrealized gain on marketable securities, net of tax										893,275		893,275
Net income														14,507,936			14,507,936
Total comprehensive income																	15,401,211
Stock-based compensation						93,360										93,360
Cash dividends declared ($4.00 per share of common stock)													(19,374,040		)	(19,374,040		)
Cumulative effect of accounting change										(60,365	)		60,365
Balance as of March 31, 2019	4,846,010			48,460			19,910,558			(82,725	)			62,903,918			82,780,211
Exercise of stock options	2,000			20			112,340										112,360
Repurchase of common stock	(12,972	)		(130	)		(687,302	)									(687,432	)
Comprehensive income:
Unrealized gain on marketable securities, net of tax										599,248		599,248
Net income														14,526,642			14,526,642
Total comprehensive income																	15,125,890
Stock-based compensation						48,360										48,360
Cash dividends declared ($4.00 per share of common stock)													(19,384,040		)	(19,384,040		)
Balance as of March 31, 2020	4,835,038		$	48,350		$	19,383,956		$	516,523			$	58,046,520		$	77,995,349

See accompanying notes.

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NVE CORPORATION
STATEMENTS OF CASH FLOWS

	Year Ended March 31
	2020			2019
OPERATING ACTIVITIES
Net income	$	14,526,642		$	14,507,936
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		549,969			705,197
Stock-based compensation		48,360			93,360
Deferred income taxes		77,779			(31,269	)
Changes in operating assets and liabilities:
Accounts receivable		301,620			(106,859	)
Inventories		380,426			(614,437	)
Prepaid expenses and other assets		(394,504	)		(180,885	)
Accounts payable and accrued expenses		405,481			(154,049	)
Net cash provided by operating activities		15,895,773			14,218,994

INVESTING ACTIVITIES
Purchases of fixed assets		(52,041	)		(68,265	)
Purchases of marketable securities		(7,196,330	)		(13,672,407	)
Proceeds from maturities and sales of marketable securities		12,500,000			20,800,000
Net cash provided by investing activities		5,251,629			7,059,328

FINANCING ACTIVITIES
Proceeds from exercise of stock options		112,360			217,940
Repurchase of common stock		(687,432	)		-
Payment of dividends to shareholders		(19,384,040	)		(19,374,040	)
Net cash used in financing activities		(19,959,112	)		(19,156,100	)

Increase in cash and cash equivalents		1,188,290			2,122,222
Cash and cash equivalents at beginning of year	6,877,304			4,755,082

Cash and cash equivalents at end of year	$	8,065,594		$	6,877,304

Supplemental disclosures of cash flow information:
Cash paid during the year for income taxes	$	2,586,661		$	3,426,045

See accompanying notes.

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NVE CORPORATION
NOTES TO FINANCIAL STATEMENTS

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. We operate in one reportable segment.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
     We consider all highly liquid investments with maturities of three months or less when purchased to be cash equivalents.

Fair Value of Financial Instruments
     The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable approximates fair value because of the short maturity of these instruments. Fair values of marketable securities are based on quoted market prices.

Concentration of Risk and Financial Instruments
     Financial instruments potentially subject to significant concentrations of credit risk consist principally of cash equivalents, marketable securities, and accounts receivable.

     Cash and cash equivalents have been maintained in financial institutions we believe have high credit quality, however these accounts are generally in excess of federally insured amounts.

     We have invested our excess cash in corporate-backed and municipal-backed bonds and money market instruments. Our investment policy prescribes purchases of only high-grade securities, and limits the amount of credit exposure to any one issuer. The effects of the COVID-19 pandemic have degraded outlooks for some of our securities’ issuers, which may increase the risk of default on one or more securities.

     Our customers are throughout the world. We generally do not require collateral from our customers, but we perform ongoing credit evaluations of their financial condition. More information on accounts receivable is contained in the paragraph titled “Accounts Receivable and Allowance for Doubtful Accounts” of this note. The effects of the COVID-19 pandemic could increase our bad-debt risk in the future.

     Additionally, we are dependent on critical suppliers including our packaging vendors and suppliers of certain raw silicon and semiconductor wafers that are incorporated in our products. The effects of the COVID-19 pandemic have increased the risk of supply interruptions.

Accounts Receivable and Allowance for Doubtful Accounts
     We grant credit to customers in the normal course of business and at times may require customers to prepay for an order prior to shipment. Accounts receivable are recorded net of an allowance for doubtful accounts. We make estimates of the uncollectibility of accounts receivable. We specifically analyze accounts receivable, historical bad debts, and customer creditworthiness when evaluating the adequacy of the allowance. We had no charges or provisions to our allowance for doubtful accounts in fiscal 2020 or 2019.

Inventories
     Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first in, first out method. We record inventory reserves when we determine certain inventory is unlikely to be sold based on sales trends, turnover, competition, and other market factors.

Product Warranty
     In general we warranty our products to be free from defects in material and workmanship for one year.

Fixed Assets
     Fixed assets are stated at cost. Depreciation of machinery and equipment is recorded over the estimated useful lives of the assets, generally five years, using the straight-line method. Amortization of leasehold improvements is recorded using the straight-line method over the lesser of the lease term or five-year useful life. We record losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. We have not identified any indicators of impairment during fiscal 2020 or 2019. Depreciation and amortization expense related to fixed assets was $364,409 for fiscal 2020 and 498,813 for fiscal 2019.

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

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

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

     Accounts receivable is recognized when we have transferred a good or service to a customer and our right to receive consideration is unconditional through the completion of our performance obligation. A contract asset is recognized when we have a right to consideration from the transfer of goods or services to a customer but have not completed our performance obligation. A contract liability is recognized when we have been paid by a customer but have not yet satisfied the performance obligation by transferring goods or services. We had no material contract assets or contract liabilities as of March 31, 2020 or March 31, 2019.

     Our performance obligations related to product sales and contract research and development contracts are satisfied in one year or less. Unsatisfied performance obligations represent contracts with an original expected duration of one year or less. As permitted under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, we are using the practical expedient not to disclose the value of these unsatisfied performance obligations. We also use the practical expedient in which we do not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.

Income Taxes
     We account for income taxes using the asset and liability method. Deferred income taxes are provided for temporary differences between the financial reporting and tax bases of assets and liabilities. We provide valuation allowances against deferred tax assets if we determine that it is less likely than not that we will be able to utilize the deferred tax assets.

Research and Development Expense Recognition
     Research and development costs are expensed as they are incurred. Customer-sponsored research and development costs are included in cost of sales.

Stock-Based Compensation
     We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize the compensation expense over the requisite service period, which is generally the vesting period. We recognize any forfeitures as they occur.

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 year. Net income per diluted share amounts assume exercise of all stock options. The following table shows the components of diluted shares:

	Year Ended March 31
	2020		2019
Weighted average common shares outstanding – basic	4,845,627	4,844,010
Dilutive effect of stock options	1,667		6,557
Shares used in computing net income per share – diluted	4,847,294		4,850,567

Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

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Recently Issued Accounting Standards
Recently Adopted Accounting Standards
     In July 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-07, Codification Updates to SEC Sections—Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization, and Miscellaneous Updates. ASU 2019-07 aligns the guidance in various SEC sections of the codification with the requirements of certain SEC final rules and is effective immediately. These rules include requiring filers to include in their interim financial statements a reconciliation of changes in shareholders’ equity. We adopted all of the applicable rules for our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 and subsequent interim reports. The adoption of ASU 2019-07 only affected presentation and disclosure.

     In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Lease Accounting. ASU 2016-02 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases), which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, which is fiscal 2020 for us. In July 2018, the FASB issued ASU No. 2018-11, Leases Topic (842): Targeted Improvements. ASU No. 2018-11 provided companies an option to apply the transition provisions of the new lease standard at its adoption date instead of at the earliest comparative period presented in its financial statements, and we adopted the new lease guidance using that method in the quarter ended June 30, 2019. Currently our only lease is the lease for our facility. We recognized $298,983 of leased liabilities a right-of-use asset of $261,644 as of April 1, 2019. The leased liabilities and right-of-use asset exclude non-lease components. There was no effect on our results of operations or cash flows.

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

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

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NOTE 3. 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 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.

The fair value of our available-for-sale securities as of March 31, 2020 by maturity were as follows:

Total			<1 Year			1–3 Years			3–5 Years
$	70,594,742		$	26,988,247		$	28,683,823		$	14,922,672

     Total available-for-sale securities represented approximately 89% of our total assets. Marketable securities as of March 31, 2020 had remaining maturities between seven and 47 months.

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

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

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

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

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

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

	As of March 31, 2020						As of March 31, 2019
	Level 1		Level 2		Total		Level 1		Level 2		Total
Money market funds	$	7,903,433	$	-	$	7,903,433	$	6,703,809	$	-	$	6,703,809
Corporate bonds		-		62,691,309		62,691,309		-		67,413,454		67,413,454
Total	$	7,903,433	$	62,691,309	$	70,594,742	$	6,703,809	$	67,413,454	$	74,117,263

Our available-for-sale securities as of March 31, 2020 and 2019, aggregated into classes of securities, were as follows:

	As of March 31, 2020									As of March 31, 2019
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Money market funds	$	7,903,433	$	-	$	-		$	7,903,433	$	6,703,809	$	-	$	-		$	6,703,809
Corporate bonds		62,030,120		752,621		(91,432	)		62,691,309		67,519,350		315,902		(421,798	)		67,413,454
Total	$	69,933,553	$	752,621	$	(91,432	)	$	70,594,742	$	74,223,159	$	315,902	$	(421,798	)	$	74,117,263

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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 March 31, 2020 and 2019.

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

As of March 31, 2020
	Corporate bonds	$	19,525,169	$	(91,432	)	$	-	$	-		$	19,525,169	$	(91,432	)
	Total	$	19,525,169	$	(91,432	)	$	-	$	-		$	19,525,169	$	(91,432	)

As of March 31, 2019
	Corporate bonds	$	-	$	-		$	51,413,428	$	(421,798	)	$	51,413,428	$	(421,798	)
	Total	$	-	$	-		$	51,413,428	$	(421,798	)	$	51,413,428	$	(421,798	)

We did not consider any of our available-for-sale securities to be impaired as of March 31, 2020. 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 March 31, 2020.

NOTE 4. INVENTORIES
Inventories are shown in the following table:

	March 31
	2020		2019
Raw materials	$	1,017,451	$	1,130,917
Work in process		1,863,000		2,325,238
Finished goods	1,003,999		808,721
Total inventories	$	3,884,450	$	4,264,876

NOTE 5. STOCK-BASED COMPENSATION
Stock Option Plan
Our 2000 Stock Option Plan, as amended, provides for issuance to employees, directors, and certain service providers of incentive stock options and nonstatutory stock options. Generally, the options may be exercised at any time prior to expiration, subject to vesting based on terms of employment. The period ranges from immediate vesting to vesting over a five-year period. The options have exercisable lives ranging from one year to ten years from the date of grant, and are generally not eligible to vest early in the event of retirement, death, disability, or change in control. Exercise prices are not less than fair market value of the underlying Common Stock at the date the options are granted. Stock-based compensation expense was $48,360 in fiscal 2020 and $93,360 in fiscal 2019.

Valuation assumptions
We use the Black-Scholes standard option-pricing model to determine the fair value of stock options. The following assumptions were used to estimate the fair value of options granted:

	Year Ended March 31
	2020		2019
Risk-free interest rate	1.7	%	2.9	%
Expected volatility	37	%	33	%
Expected life (years)	4.6		4.5
Dividend yield	5.9	%	3.7	%

The determination of the fair value of the awards on the date of grant using the Black-Scholes model is affected by our stock price as well as assumptions of other variables, including projected stock option exercise behaviors, risk-free interest rate, and expected volatility of our stock price in future periods. Our estimates and assumptions affect the amounts reported in the financial statements and accompanying notes.

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Expected life
     We analyze historical exercise and termination data to estimate the expected life assumption. We believe historical data currently represents the best estimate of the expected life of a new option.

Risk-free interest rate
     The risk-free rate is based on the yield of U.S. Treasury securities on the grant date for maturities similar to the expected lives of the options.

Volatility
     We use historical volatility to estimate the expected volatility of our common stock.

Dividend yield
     We assumed a dividend yield of 5.9% for fiscal 2020 and 3.7% for fiscal 2019 based on the dividend yield on the date the options were granted.

Tax effects of stock-based compensation
     Stock-based compensation increased deferred tax assets by $10,581 for fiscal 2020 and $19,771 for fiscal 2019.

General stock option information
     The following table summarizes information about options outstanding as of March 31, 2020, all of which were exercisable:

Ranges of Exercise Prices	Number Outstanding	Weighted Average Exercise Price		Weighted Remaining Contractual Life (years)
$49.86 - $67.69	16,000	$	61.37	6.0
$76.13 - $107.86	8,000	92.00		7.9
	24,000	$	71.58	6.6

A summary of our stock options is shown in the following table:

	Option Shares Reserved		Options Outstanding		Weighted Average Option Exercise Price
At March 31, 2018	139,230		22,000		$	61.19
Granted	(4,000	)	4,000		$	107.86
Exercised	-		(4,000	)	$	54.49
At March 31, 2019	135,230		22,000		$	70.89
Granted	(4,000	)	4,000		$	67.65
Exercised	-		(2,000	)	$	56.18
At March 31, 2020	131,230		24,000		$	71.58

The remaining weighted-average exercisable life was 6.6 years as of March 31, 2020 and 6.7 years as of March 31, 2019. All outstanding options were exercisable as of March 31, 2020 and 2019. The total intrinsic value of options exercised during fiscal 2020 was $32,108 based on the difference between the exercise price and stock price at the time of exercise for in-the-money options. The total intrinsic value of options outstanding March 31, 2020, based on our closing stock price for that day, was $2,170, all of which was exercisable. The total fair value of option grants was $48,360 in fiscal 2020. There was no unrecognized stock-based compensation as of March 31, 2020.

NOTE 6. INCOME TAXES
Income tax provisions for fiscal 2020 and 2019 consisted of the following:

	Year Ended March 31
	2020			2019
Current taxes
Federal	$	2,710,658		$	3,107,376
State	(13,176		)	125,796
Deferred taxes
Federal	74,651			(30,012		)
State	3,128			(1,257		)
Income tax provision	$	2,775,261		$	3,201,903

A reconciliation of income tax provisions at the U.S. statutory rate for fiscal 2020 and 2019 is as follows:

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	Year Ended March 31
	2020			2019
Tax expense at U.S. statutory rate	$	3,633,400		$	3,719,066
State income taxes, net of Federal benefit		77,989			95,430
Research and development credits		(126,320	)		-
Foreign-derived intangible income deduction		(540,265	)		(555,256	)
Other		(269,543	)		(57,337	)
Income tax provision	$	2,775,261		$	3,201,903

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. Significant components of our deferred tax assets and liabilities as of March 31, 2020 and 2019 were as follows:

	March 31
	2020			2019
Paid time off accrual	$	55,240		$	55,900
Inventory reserve	45,948			41,572
Depreciation and amortization	22,651			112,125
Stock-based compensation deductions	65,218			62,671
Unrealized (gain) loss on marketable securities	(144,668		)	23,170
Other	63,730			58,297
Deferred tax assets	$	108,119		$	353,735

We had no unrecognized tax benefits as of March 31, 2020, and we do not expect any significant unrecognized tax benefits within 12 months of the reporting date. We recognize interest and penalties related to income tax matters in income tax expense. As of March 31, 2020 we had no accrued interest related to uncertain tax positions. The tax years 2016 through 2018 remain open to examination by the major taxing jurisdictions to which we are subject.

NOTE 7. LEASES
We conduct our operations in a leased facility under a non-cancellable lease expiring March 31, 2026. On March 2, 2020 we executed a fifth amendment to the lease agreement between us and GRE – Bryant Lake, LLC covering our facility. Our lease would have expired December 31, 2020 without the fifth amendment, which extended the lease for an additional term of 63 months. The fifth amendment is incorporated in this Report by reference to our Current Report on Form 8-K/A filed March 3, 2020. The fifth amendment will decrease our monthly base rent to $14,241 in 2021 from $14,811 in 2020 under the current lease, with subsequent 2% annual increases for 2022, 2023, 2024, and 2025. The fifth amendment also provides the first three months of 2021 as net free. 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:

	Year Ended March 31, 2020
Operating lease cost	$	154,565
Variable lease cost	96,798
Total	$	251,363

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for leases	$	174,528
Remaining lease term		6 years
Discount rate		3.5	%

The following table presents the maturities of lease liabilities as of March 31, 2020:

Year Ending March 31	Operating Leases
2021	128,537
2022	152,703
2023	156,121
2024	159,592
2025	163,224
2026	165,947
Total lease payments	926,124
Imputed lease interest	(92,390		)
Total lease liabilities	$	833,734

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NOTE 8. CONCENTRATIONS
The following table summarizes customers comprising 10% or more of revenue for the two most recent fiscal years:

	% of Revenue for Year Ended March 31
	2020	2019
Customer A	24%	21%
Customer B	14%	18%
Customer C	10%	Less than 10%

     These customers accounted for 43% of our accounts receivable as of March 31, 2020 and 41% as of March 31, 2019. We believe the receivable balances from these customers do not represent a significant credit risk based on past collection experience.

NOTE 9. 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. We repurchased 12,972 shares of our Common Stock in fiscal 2020. We did not repurchase shares in fiscal 2019. The remaining authorization was $3,853,459 as of March 31, 2020. The Stock Repurchase Program may be modified or discontinued at any time without notice.

NOTE 10. 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 $92,880 for fiscal 2020 and $91,341 for fiscal 2019.

NOTE 11. SUBSEQUENT EVENTS
     On May 6, 2020 we announced that our Board had declared a quarterly cash dividend of $1.00 per share of Common Stock to be paid May 29, 2020 to shareholders of record as of the close of business May 18, 2020.

EXHIBIT INDEX

Exhibit #	Description
3.2	Bylaws of the company as amended by the Board of Directors effective May 6, 2020.
4	Description of the registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934.
10.6	Fifth amendment to lease between the company and GRE – Bryant Lake, LLC (incorporated by reference to the Form 8-K/A filed March 3, 2020).
10.18	First Amendment to Supply Agreement by and between the company and Sonova AG (incorporated by reference to the Form 8-K/A filed February 18, 2020). Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The omitted information is (i) not material and (ii) would likely cause competitive harm to us if publicly disclosed. We agree to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission on its request.
23.1	Consent of Boulay PLLP.
23.2	Consent of Grant Thornton LLP.
31.1	Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).
31.2	Certification by Curt A. Reynders pursuant to Rule 13a-14(a)/15d-14(a).
32	Certification by Daniel A. Baker and Curt A. Reynders pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

F-14

BYLAWS
OF
NVE CORPORATION
(as amended by the Board of Directors effective May 6, 2020)

TABLE OF CONTENTS

ARTICLE I. NAME AND ADDRESS	1

ARTICLE II. FISCAL YEAR	1

ARTICLE III. SHAREHOLDERS' MEETINGS	1

ARTICLE IV. THE BOARD OF DIRECTORS	2

ARTICLE V. MEETINGS OF THE BOARD	3

ARTICLE VI. THE OFFICERS	4

ARTICLE VII. STOCK	5

ARTICLE VIII. SPECIAL CORPORATE ACTS	6

ARTICLE IX. AMENDMENTS	6

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BYLAWS
OF
NVE CORPORATION

ARTICLE I
NAME AND ADDRESS

SECTION 1. NAME. The name of the Corporation is NVE Corporation.

SECTION 2. REGISTERED OFFICE AND AGENT. The address of the registered office is 11409 Valley View Road, Eden Prairie, Minnesota 55344; and the name of the registered agent at this address is Curt A. Reynders.

ARTICLE II
FISCAL YEAR

SECTION 1. FISCAL YEAR. The fiscal year of this Corporation shall begin on April 1 and end on March 31.

ARTICLE III
SHAREHOLDERS' MEETINGS

SECTION 1. PLACE OF MEETINGS. Meetings of the shareholders shall be held at the registered office of the Corporation or at any other place the Board of Directors may from time to time select. The Board of Directors may determine that a regular meeting of the shareholders shall be held solely by means of remote communication in accordance with Minnesota section 302A.436, subdivision 2 and other applicable rules and regulations.

SECTION 2. SHAREHOLDERS MEETINGS. Regular meetings of the shareholders may be held at the discretion of the Board of Directors on an annual or less frequent periodic basis. The date, time, and place of such meetings may be designated by the Board of Directors in the notices of meeting. At regular meetings the shareholders shall elect a Board of Directors and transact such other business as may be appropriate for action by shareholders. If a regular meeting of shareholders has not been held for a period of fifteen (15) months, one or more shareholders holding not less than three percent (3%) of the voting power of all shares of the corporation entitled to vote may call a regular meeting of shareholders by delivering to the chief executive officer or chief financial officer a written demand for a regular meeting. Within thirty (30) days after the receipt of such written demand by the chief executive officer or chief financial officer, the Board of Directors shall cause a regular meeting of shareholders to be called. Such a meeting shall be held on notice no later than ninety (90) days after the receipt of such written demand, all at the expense of the corporation.

SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders may be called by the president, the Board of Directors, or the holders of not less than three percent of the shares outstanding and entitled to vote.

SECTION 4. NOTICE OF MEETINGS & WAIVER. Written notice stating the place, day, hour of the meeting, and the purpose or purposes for which the meeting is called, shall be delivered not less than 10 nor more than 60 days before the date of an annual meeting and not less than 3 nor more than 60 days before the date of a special meeting, either personally or by mail, by or at the direction of the President, or other officer or persons calling the meeting, to each registered holder entitled to vote at such meeting.

SECTION 5. PROXIES.A shareholder entitled to vote may cast or authorize the casting of a vote by filing a written appointment of a proxy with an officer of the Corporation on or before the meeting at which the appointment is to be effective. A proxy shall not be valid after 11 months from the date of its execution.

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SECTION 6. QUORUM; PARTICIPATION BY MEANS OF REMOTE COMMUNICATION. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum is present the affirmative votes of a majority of the shareholders in attendance shall approve the action. The shareholders present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. The Board of Directors may determine that a shareholder not physically present in person or by proxy at a regular or special meeting of shareholders may, by means of remote communication, participate in a meeting of shareholders held at a designated place. Participation by a shareholder by that means constitutes presence at the meeting in person or by proxy if all the other requirements for such participation are met. A majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If a quorum is present the affirmative votes of a majority of the shareholders in attendance shall approve the action. The shareholders present at a duly organized meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.

SECTION 7. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors of the Corporation may provide that the stock transfer book shall be closed for a stated period but not to exceed, in any case, 50 days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, the books shall be closed for at least 10 days immediately preceding the meeting. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice or to vote at a meeting of shareholders or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring the dividend is adopted, as the case may be, shall be the record date for the determination of shareholders.

SECTION 8. ACTION WITHOUT A MEETING. An action required, or permitted to be taken at a meeting of the shareholders may be taken without a meeting by written action signed by all of the shareholders entitled to vote on that action. The written action is effective when it has been signed by all of those shareholders, unless a different effective time is provided in the written action.

ARTICLE IV
THE BOARD OF DIRECTORS

SECTION 1. NUMBER AND QUALIFICATIONS. The businesses and affairs of the Corporation shall be managed by a Board of Directors initially comprised of five members, who need not be residents of the State of Minnesota or shareholders of the Corporation.

SECTION 2. ELECTION. Members of the initial Board of Directors shall hold office until the first annual meeting of shareholders and until their successors shall have been elected and qualified. At the first annual meeting of shareholders, and at each annual meeting thereafter, the shareholders shall elect Directors to hold office until the next succeeding annual meeting. Each Director shall hold office for the term for which he is elected and until his successor shall be elected and qualified.

SECTION 3. VACANCIES. Any vacancy occurring in the Board of Directors may be filled by the affirmative vote of a majority of the remaining Directors though less than a quorum of the Board of Directors. A Director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office.

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SECTION 4. COMPENSATION. The Board of Directors may fix the compensation of directors. A director may serve the Corporation in a capacity other than that of director and receive compensation for the services rendered in that other capacity.

SECTION 5. REMOVAL. Any one or all of the directors may be removed at any time, with or without cause, by the vote of a majority of the shares entitled to vote at an election of directors.

SECTION 6. RESIGNATION. A director may resign at any time by giving written notice to the Corporation. The resignation is effective without acceptance when the notice is given to the Corporation, unless a later effective time is specified in the notice.

ARTICLE V
MEETINGS OF THE BOARD

SECTION 1. PLACE OF MEETINGS. Meetings of the Board of Directors may be held at the registered office of the Corporation or at any other place the board may select.

SECTION 2. FREQUENCY OF MEETINGS. The Board of Directors shall meet at least annually to conduct business.

SECTION 3. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called at any time by the president or by any two (2) members of the board.

SECTION 4. NOTICE OF MEETINGS. Notice of the annual meeting of the Board of Directors need not be given. Written notice of each special meeting, setting forth the time and place of the meeting shall be given to each director at least 10 days before the meeting. This notice may be given either personally; by electronic mail, when directed to an electronic mail address at which the director has consented to receive notice; or by sending a copy of the notice through the United States mail to the address of each director appearing on the books of the Corporation.

SECTION 5. WAIVER OF NOTICE. A director may waive in writing notice of a special meeting of the board either before or after the meeting; and his waiver shall be deemed the equivalent of giving notice. Attendance of a director at a meeting shall constitute waiver of notice of that meeting unless he attends for the express purpose of objecting to the transaction of business because the meeting has not been lawfully called or convened.

SECTION 6. QUORUM. At meetings of the Board of Directors a majority of the directors in office shall be necessary to constitute a quorum for the transaction of business. If a quorum is present, the acts of a majority of the directors in attendance shall be the acts of the board.

SECTION 7. ACTION WITHOUT A MEETING. Any action that may be taken at a meeting of the directors may be taken without a meeting if a consent in writing, setting forth the action so to be taken, shall be signed by all directors.

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ARTICLE VI
THE OFFICERS

SECTION 1. OFFICERS. The executive officers of the Corporation shall be chosen by the Board of Directors and shall consist of a President, who is the Chief Executive Officer and a Chief Financial Officer. Two or more offices may be held by the same person. Other officers, assistant officers, agents and employees that the Board of Directors from time to time may deem necessary may be elected or appointed by the board.

Officers shall hold office until their successors are chosen and have qualified, unless they are sooner removed from office as provided in these bylaws.

SECTION 2. VACANCIES. Whenever vacancies shall occur in any office by death, resignation, increase in the number of offices of the Corporation, or otherwise, the same shall be filled by the Board of Directors and the officer so elected shall hold office until his successor is chosen and qualified.

SECTION 3. SALARIES. The Board of Directors shall fix the salaries of the officers of the Corporation. The salaries of other agents and employees of the Corporation may be fixed by the Board of Directors or by an officer to whom that function has been delegated by the board.

SECTION 4. REMOVAL OF OFFICERS AND AGENTS. An officer or agent of the Corporation may be removed by a majority vote of the Board of Directors whenever in their judgment the best interests of the Corporation will be served by the removal. The removal shall be without prejudice to the contract rights, if any, of the person so removed.

SECTION 5. THE PRESIDENT (CHIEF EXECUTIVE OFFICER). The president shall:

(a) Have general active management of the business of the Corporation;

(b) When present, preside at all meetings of the board and of the shareholders;

(d) Sign and deliver in the name of the Corporation any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the Corporation, except in cases in which the authority to sign and deliver is required by law to be exercised by another person or is expressly delegated by the articles or bylaws or by the board to some other officer or agent of the Corporation;

(e) Maintain records of and, whenever necessary, certify all proceedings of the board and the shareholders; and

(f) Perform other duties prescribed by the board.

SECTION 6. CHIEF FINANCIAL OFFICER. The chief financial officer shall:

(a) Keep accurate financial records for the Corporation;

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(b) Deposit all money, drafts, and checks in the name of and to the credit of the Corporation in the banks and depositories designated by the board;

(c) Endorse for deposit all notes, checks, and drafts received by the Corporation as ordered by the board, making proper vouchers therefor;

(d) Disburse corporate funds and issue checks and drafts in the name of the Corporation, as ordered by the board;

(e) Render to the chief executive officer and the board, whenever requested, an account of all transactions by the chief financial officer and of the financial condition of the Corporation; and

(f) Perform other duties prescribed by the board or by the chief executive officer.

SECTION 7. DELEGATION OF DUTIES. Whenever an officer is absent or whenever for any reason the Board of Directors may deem it desirable, the board may delegate the powers and duties of an officer to any other officer or officers or to any director or directors.

ARTICLE VII
STOCK

SECTION 1. SHARE CERTIFICATES. Shares of stock of the Corporation shall be represented by certificates, or shall be uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock, or a combination of both. To the extent that shares are represented by certificates, such certificates shall be in a form approved by the Board of Directors. Each certificate shall be signed by the president.

SECTION 2. REGISTERED SHAREHOLDERS. The Corporation shall be entitled to treat the holder of record of shares as the holder in fact and, except as otherwise provided by the laws of Minnesota, shall not be bound to recognize any equitable or other claim to or interest in the shares.

SECTION 3. TRANSFER OF SHARES. Certificated shares of the Corporation shall only be transferred on its books upon the surrender to the Corporation of the share certificates duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer. In that event, the surrendered certificates shall be canceled, new certificates issued to the person entitled to them, and the transaction recorded on the books of the Corporation. Uncertificated shares will only be transferred on the books of the Corporation upon the written instruction from the registered owner of such uncertificated shares, or from a duly authorized attorney or from an individual presenting proper evidence of succession, assignment or authority to transfer the stock.

SECTION 4. LOST CERTIFICATES. The Board of Directors may direct a new certificate to be issued in place of a certificate alleged to have been destroyed or lost if the owner makes an affidavit that it is destroyed or lost. The board, in its discretion, may as a condition precedent to issuing the new certificate, require the owner to give the Corporation a bond as indemnity against any claim that may be made against the Corporation on the certificate allegedly destroyed or lost.

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ARTICLE VIII
SPECIAL CORPORATE ACTS

SECTION 1. EXECUTION OF WRITTEN INSTRUMENTS. Contracts, deeds, documents and instruments shall be executed by the president unless the Board of Directors shall in a particular situation designate another procedure for their execution.

SECTION 2. SIGNING OF CHECKS AND NOTES. Checks, notes, drafts, and demands for money shall be signed by the officer or officers from time to time designated by the Board of Directors.

SECTION 3. VOTING SHARES HELD IN OTHER CORPORATIONS. In the absence of other arrangement by the Board of Directors, shares of stock issued by any other corporation and owned or controlled by this Corporation may be voted at any shareholders' meeting of the Corporation by the president of this Corporation or, if he is not present at the meeting, by such person as the president of the Corporation shall by duly executed proxy designate to represent the Corporation at the meeting.

ARTICLE IX
AMENDMENTS

SECTION 1. AMENDMENTS. The power to alter, amend, or repeal the Bylaws, or to adopt new Bylaws is vested in the Board of Directors. The Bylaws may contain any provision for the regulations and management of the affairs of the Corporation not prohibited by law or the Articles of Incorporation.

Exhibit 4

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

Description of Our Common Stock
     The following description of our Common Stock is a summary and does not purport to be complete. For a complete description of the terms and provisions of the our equity securities, including our common stock, refer to our Amended and Restated Articles of Incorporation and our Bylaws as amended, both of which are furnished as exhibits to this Annual Report on Form 10-K.

Authorized Capital
     The Corporation is authorized to issue an aggregate number of shares of capital stock of 10,000,000 shares, 6,000,000 of which is Common Stock, $0.01 par value per share, and 4,000,000 shares of which are undesignated, $0.01 par value per share. Our Board of Directors is authorized to establish from the undesignated shares one or more classes or series of shares, to set forth the designation of each such class or series and to fix the relative rights and preferences of each such class or series to the full extent permitted by law.

Voting Rights
     Our Common Stock does not have cumulative voting rights.

Other Rights
     Special meetings of the shareholders may be called by the holders of not less than three percent of the shares outstanding and entitled to vote.

Listing
     Our Common Stock is traded on the Nasdaq Stock Market, LLC under the trading symbol “NVEC.”

FIFTH AMENDMENT TO LEASE

DATE:	March 2, 2020
PARTIES:	GRE – BRYANT LAKE, LLC, A MINNESOTA LIMITED LIABILITY COMPANY “Landlord” NVE CORPORATION, A MINNESOTA CORPORATION “Tenant”
RECITALS:
	A. Landlord, as successor in interest, and Tenant, as successor in interest, are parties to that certain lease dated October 1, 1998, First Amendment to Lease dated September 18, 2002, Second Amendment to Lease dated December 1, 2003, Third Amendment to Lease dated December 17, 2007 and Fourth Amendment to Lease dated August 2, 2011 (collectively, the “Lease”) relating to approximately 21,362 square feet of space (the “Premises”) located in Bryant Lake Business Center, 11409 Valley View Road, Eden Prairie, Minnesota.
	B. The parties have reached an agreement with extending the Term of the Lease which they wish to reduce to writing.

AGREEMENT:

          In consideration of the following terms and conditions, the parties agree as follows:

          1.        Recitals.      The foregoing recitals are true and are incorporated herein.

          2.        Effective Date. The “Effective Date” of this Fifth Amendment to Lease shall be January 1, 2021.

          3.        Extension of Lease Term. The Term of the Lease is hereby extended, pursuant to all of the terms and conditions of the Lease as amended, for an additional period of five (5) years and three (3) months, commencing on January 1, 2021 and ending March 31, 2026 (the “Third Extended Term”).

          4.        Annual Base Rent. As of January 1, 2021, Tenant’s Annual Base Rent for the Premises shall be as follows:

Months	Annual Base Rent	Monthly Installment
01/01/21-12/31/21	$170,896.00	$14,241.33
01/01/22-12/31/22	$174,313.92	$14,526.16
01/01/23-12/31/23	$177,731.84	$14,810.99

5^TH Amend – NVE

01/01/24-12/31/24	$181,363.38	$15,113.62
01/01/25-03/31/26	$184,994.92	$15,416.24

          5.       Free Rent. Notwithstanding any provision of this Lease to the contrary, but subject to the condition that Tenant is not in monetary default in the performance of any of its obligations under this Lease beyond the applicable cure period, Landlord hereby releases Tenant from the obligation to pay its Monthly Installment of Annual Base Rent for the period from January 1, 2021 through March 31, 2021 (“Free Rent Period”). During the said Free Rent Period, Tenant shall remain obligated to pay Landlord for all Additional Rent and other charges payable pursuant to the Lease, including, but not limited to, Real Estate Taxes and Operating Expenses.

          6.        Option to Extend. At the expiration of the Third Extended Term of this Lease, if this Lease shall then be in full force and effect and no default beyond the applicable cure period then exists, Tenant shall have the option to extend this Lease for an extended term of five (5) Lease Years (the “Fourth Extended Term”), upon the same terms and conditions stated in this Lease, except that the Annual Base Rent during the Fourth Extended Term shall be at the Market Rent as determined below, provided further, however, that (a) the Annual Base Rent payable during the Fourth Extended Term shall not be less than that payable during the final year of the Third Extended Term of this Lease; (b) Landlord shall have no obligation to do any work in the Premises or give any work allowance; (c) there shall be no rent abatement period; and (d) there shall be no further option to extend beyond the expiration of the Fourth Extended Term. In order to exercise the said option to extend, Tenant shall give Landlord written notice thereof not later than June 30, 2025. Tenant shall have no right to exercise its option to extend the Term, and any attempted exercise shall be void and of no effect, if: (i) the named Tenant has assigned this Lease or has at any time subleased, in the aggregate, more than 50% of the Premises; or (ii) Tenant shall be in default hereunder and such default shall not have been cured at the time of the attempted exercise or, if such default occurs after Tenant’s attempted exercise of the option, at the time of the proposed commencement of the Fourth Extended Term.

              Market Rent Determination.

(a)          Definition. “Market Rent” means the market net rental rate for the premises in question with respect to the time period in question, taking into account all pertinent factors including, but not limited to, the then existing condition of the premises in question, the size of the premises in question, the term in question, the improvements existing in the premises in question, the location and quality of the Building and Building amenities, and assuming the Landlord to be a prudent person willing to lease, but being under no compulsion to do so, and assuming the Tenant to be a prudent person willing to lease, but being under no compulsion to do so.

(b)          Landlord’s Notice of Market Rent. Whenever Annual Base Rent under this Lease is based on Market Rent, Landlord shall provide Tenant written notice (“Landlord’s Notice”) of the Market Rent within thirty (30) days after Tenant notifies Landlord of Tenant’s exercise of either Tenant’s right to renew this Lease or Tenant’s exercise of any of its rights of first refusal to which Market Rent is applicable.

5^TH Amend – NVE

(c)          Tenant’s Notice of Disagreement on Market Rent. If Tenant does not agree with Landlord’s determination of Market Rent, Tenant shall give notice to Landlord of Tenant’s disagreement with the Market Rent (“Tenant’s Notice of Disagreement”) set by Landlord, together with Tenant’s determination of Market Rent, within twenty (20) days after receipt of Landlord’s Notice. In the event Tenant fails to provide Tenant’s Notice of Disagreement, the Market Rent as specified in Landlord’s Notice shall be deemed to be the Market Rent. Landlord and Tenant shall negotiate such Market Rent in good faith. If within thirty (30) days after Landlord’s Notice as described in this Section Landlord and Tenant are not able to mutually agree on Market Rent, Tenant may either revoke its exercise of its applicable renewal rights or rights of first refusal, or elect to determine Market Rent pursuant to the mechanism described in subparagraph (d) below. If Tenant does not revoke the exercise of its applicable option, pending determination of Market Rent, Tenant shall nevertheless pay, subject to subsequent adjustment, Annual Rent at the rate set out in the notice given by Landlord pursuant to this Section.

(d)          Market Rent Determination Mechanism. If Tenant does not revoke the exercise of its option, then each party shall choose either (i) a real estate professional with not less than ten (10) years’ recognized experience in determination of commercial rental rates in the Minneapolis metropolitan area, or (ii) a member in good standing of the American Institute of Real Estate Appraisers (or successor organization or, if no such organization exists, a person of similar professional qualifications), with the designation M.A.I., and shall give notice of the name and address of such person to the other within thirty (30) days of Tenant’s Notice of Disagreement. Those two (2) persons shall within fifteen (15) days after designation select a third person meeting the qualifications set forth in the preceding sentence. The three (3) persons (hereinafter the “Experts”) shall make a determination of Market Rent as expeditiously as possible thereafter but in no event shall the determination be made more than ninety (90) days after Tenant’s Notice of Disagreement. The determination for the Experts shall be made as follows:

(i)          Each Expert will independently determine the Market Rent and simultaneously disclose to each other his or her separate determination.

(ii)          If the high Market Rent is less than ten percent (10%) higher than the middle Market Rent and the low Market Rent is less than ten percent (10%) lower than the middle Market Rent, the average Market Rent of the three Experts shall be the Market Rent.

(iii)          If either the high Market Rent or the low Market Rent deviates from the middle Market Rent by more than ten percent (10%) then the average of the two Market Rents closest by dollar amount shall be the Market Rent.

(iv)          The Experts shall promptly notify Landlord and Tenant of the determination of the Market Rent.

Upon the Experts’ determination of Market Rent, such determination shall be final and binding on the parties. Any rent previously paid by Tenant at other than Market Rent on the applicable space shall be retroactively adjusted. Each party will pay any and all fees and expenses incurred in connection with such party’s Expert and the fees and expenses for the third Expert will split equally between Landlord and Tenant.

5^TH Amend – NVE

          7.          Landlord Improvement Allowance. Landlord shall pay Tenant a maximum of One Hundred Thousand and 00/100 ($100,000.00) Dollars for Tenant’s improvements to the Premises. Said amount shall be payable from Landlord to Tenant, at any time after full execution of this amendment, provided the following conditions have been fully satisfied:

A.          Landlord has approved all improvements. Landlord’s consent shall not be unreasonably withheld.

B.          All necessary permits and approvals have been obtained from appropriate government authorities.

C.          Tenant is not in default under the terms of the Lease.

D.          Tenant shall have fully completed all of Tenant’s improvements and fully paid all bills for labor, materials and services prior to December 31, 2021 and shall provide Landlord with copies of all paid bills together with appropriate lien waivers and any other documentation requested by Landlord.

          8.          Controllable Operating Expenses. As of the Effective Date of this Fifth Amendment to Lease, Paragraph 4 of the Fourth Amendment to Lease is hereby deleted and replaced with the following:

Notwithstanding anything to the contrary contained herein, “Controllable Operating Expenses” (as hereinafter defined) shall not increase by more than three (3%) percent per year, compounded annually, over the amount of the Controllable Operating Expenses for the previous calendar year. Such cap is cumulative, and the unused portion of a year’s cap may be carried forward to absorb any further Operating Expenses that would otherwise be in excess of the cap.

“Controllable Operating Expenses” shall be deemed to mean all Operating Expenses except for utilities, insurance, snow and ice removal, management fees, repair and maintenance costs and any other expense reasonably determined to be beyond Landlord’s control.

          9.          Annual HVAC Cap. In no event shall Tenant be liable for more than $1,000 for repairs or maintenance of each HVAC roof top unit serving the Premises in any one Lease Year; provided however, such amount shall not include sums expended for required preventative maintenance and the HVAC maintenance contract. Additionally, once an HVAC unit is replaced, the $1,000 for said unit shall no longer apply for the remainder of the year and Tenant shall be responsible for maintaining the unit even it exceeds the $1,000 cap within that year (the “Annual HVAC Cap”). If an HVAC unit requires replacement, the HVAC unit is at least 15 years old and Tenant has expended at least $1,000 in repairs on said HVAC unit in the immediately preceding 12 months, then Landlord will replace said HVAC unit and Tenant shall only be responsible for paying the amortized costs of the HVAC unit (amortized over a maximum of fifteen (15) years at an interest rate of 5% per annum) which occurs during the Term or any extended term.

5^TH Amend – NVE

          10.          Brokerage. Tenant represents that it has not had or dealt with any realtor, broker or agent in connection with the negotiation of this Lease, except for Colliers International (“Broker”), and Tenant shall pay and hold Landlord harmless from any cost, expense or liability (including costs of suit and attorneys’ fees) for any compensation, commission or charges claimed by any realtor, broker or agent with respect to this Lease and the negotiation thereof, other than a claim of the Broker and a claim based upon any written agreement between such person and Landlord. Landlord represents that it has not entered into a written agreement with any broker other than the Broker, with respect to the leasing of the Premises and which is in effect this date. Landlord shall compensate the Broker pursuant to a separate agreement.

          11.          Counterparts/Electronic Signatures. This Fifth Amendment to Lease may be executed in multiple counterparts, each of which shall be effective upon delivery and, thereafter, shall be deemed to be an original, and all of which shall be taken as one and the same instrument with the same effect as if each party had signed on the same signature page. This Fifth Amendment to Lease may be transmitted by fax or by electronic mail in portable document format (“pdf”) and signatures appearing on faxed instruments and/or electronic mail instruments shall be treated as original signatures.

          12.          Interpretation of Fifth Amendment to Lease. In the event of any conflict between the Lease and this Fifth Amendment to Lease, the terms of this Fifth Amendment to Lease shall control. Except as expressly amended, supplemented or modified by this Fifth Amendment to Lease, the Lease shall continue in full force and effect. All capitalized terms contained in this Fifth Amendment to Lease, unless specifically defined herein, shall have the meaning ascribed to them in the Lease.

          13.          Binding Effect. This Fifth Amendment to Lease shall bind and inure to the benefit of the parties hereto and their respective heirs, successors and assigns.

[Signature page follows]

5

5^TH Amend – NVE

IN WITNESS WHEREOF, Landlord and Tenant have caused this Fifth Amendment to Lease to be executed as of the day and year first above written.

LANDLORD:
	GRE – BRYANT LAKE, LLC, A MINNESOTA LIMITED LIABILITY COMPANY
	By:	Carlson Real Estate Services, LLC, its Asset Manager
	By:	/s/ MARK G. HERREID Name: Mark G. Herreid Title: Chief Manager and CFO
TENANT:
	NVE CORPORATION, A MINNESOTA CORPORATION
	By:	/s/ DANIEL A. BAKER Name: Daniel A. Baker Title: President and CEO

5^TH Amend – NVE

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated May 6, 2020, with respect to the financial statements included in the Annual Report of NVE Corporation on Form 10-K for the year ended March 31, 2020. We hereby consent to the incorporation by reference of said report in the Registration Statement of NVE Corporation on Form S-8 (File No. 333-65560).

/s/ Boulay PLLP

Minneapolis, Minnesota

May 6, 2020

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated May 1, 2019, with respect to the financial statements and internal control over financial reporting included in the Annual Report of NVE Corporation on Form 10-K for the year ended March 31, 2019. We consent to the incorporation by reference of said reports in the Registration Statement of NVE Corporation on Form S-8 (File No. 333- 65560).

/s/ Grant Thornton LLP

Southfield, Michigan

May 6, 2020

Exhibit 31.1

CERTIFICATION

I, Daniel A. Baker, certify that:

1. I have reviewed this Annual Report on Form 10-K of NVE Corporation;

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

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

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

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

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

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

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

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

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

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

Date: May 6, 2020

/s/ DANIEL A. BAKER

Daniel A. Baker

President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, Curt A. Reynders, certify that:

1. I have reviewed this Annual Report on Form 10-K of NVE Corporation;

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

Date: May 6, 2020

/s/ CURT A. REYNDERS

Curt A. Reynders

Chief Financial Officer

Exhibit 32

CERTIFICATION PURSUANT TO SECTION 906

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

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

1. The accompanying Annual Report of NVE Corporation (the “Company”) on Form 10-K for the year ended March 31, 2020, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: May 6, 2020

/s/ DANIEL A. BAKER
Daniel A. Baker
President and Chief Executive Officer

/s/ CURT A. REYNDERS
Curt A. Reynders
Chief Financial Officer

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