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<SEC-DOCUMENT>0000724910-05-000003.txt : 20050119
<SEC-HEADER>0000724910-05-000003.hdr.sgml : 20050119
<ACCEPTANCE-DATETIME>20050119161236
ACCESSION NUMBER:		0000724910-05-000003
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20041231
FILED AS OF DATE:		20050119
DATE AS OF CHANGE:		20050119

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NVE CORP /NEW/
		CENTRAL INDEX KEY:			0000724910
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				411424202
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12196
		FILM NUMBER:		05536507

	BUSINESS ADDRESS:	
		STREET 1:		11409 VALLEY VIEW ROAD
		CITY:			EDEN PRAIRIE
		STATE:			MN
		ZIP:			55344
		BUSINESS PHONE:		9528299217

	MAIL ADDRESS:	
		STREET 1:		11409 VALLEY VIEW ROAD
		CITY:			EDEN PRAIRIE
		STATE:			MN
		ZIP:			55344

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PREMIS CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>tenq3q05.txt
<TEXT>
                              UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                FORM 10-QSB

(Mark One)
   [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
   ACT OF 1934
                            For the quarterly period ended  December 31, 2004


   [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

               For the transition period from _______________to______________

                                            Commission file number  000-12196

                                NVE Corporation
       (Exact name of small business issuer as specified in its charter)

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


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

                                (952) 829-9217
               (Issuer's telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, $.01 Par Value - 4,543,354 shares outstanding
as of January 17, 2005


Transitional Small Business Disclosure Format (Check one): Yes [ ]    No [X]


<PAGE>
                       PART I--FINANCIAL INFORMATION

Item 1. Financial Statements.

                                 NVE CORPORATION
                                  BALANCE SHEET
                                DECEMBER 31, 2004
                                   (Unaudited)

<TABLE>
<S>                                                                <C>
Current assets:
   Cash and cash equivalents                                       $   670,725
   Investment securities                                             6,576,674
   Accounts receivable, net of allowance for
     uncollectible accounts of $15,000                               2,266,330
   Inventories                                                       1,750,989
   Deferred tax asset                                                  250,000
   Prepaid expenses and other assets                                   131,623
                                                                   ------------
Total current assets                                                11,646,341
Fixed assets:
   Machinery and equipment                                           4,115,724
   Leasehold improvements                                              406,287
                                                                   ------------
                                                                     4,522,011
   Less accumulated depreciation                                     2,675,683
                                                                   ------------
Net fixed assets                                                     1,846,328
                                                                   ------------
Total assets                                                       $13,492,669
                                                                   ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                                $   410,035
   Accrued payroll and other                                           682,001
   Deferred revenue                                                    316,414
   Capital lease obligations                                            65,999
                                                                   ------------
Total current liabilities                                            1,474,449
Capital lease obligations, less current portion                         50,685
                                                                   ------------
Total liabilities                                                    1,525,134

Shareholders' equity:
   Common stock                                                         45,013
   Additional paid-in capital                                       13,376,776
   Accumulated other comprehensive loss                                (36,627)
   Accumulated deficit                                              (1,417,627)
                                                                   ------------
Total shareholders' equity                                          11,967,535
                                                                   ------------
Total liabilities and shareholders' equity                         $13,492,669
                                                                   ============
</TABLE>



                            SEE ACCOMPANYING NOTES.


<PAGE>
                                NVE CORPORATION
                             STATEMENTS OF INCOME
                  THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                  (Unaudited)

<TABLE>
<CAPTION>
                                            Three Months Ended Dec. 31
                                                2004           2003
                                            ------------   ------------
<S>                                         <C>            <C>
Revenue:
  Contract research and development         $ 1,440,262    $ 1,633,361
  Product sales                               1,118,210      1,484,766
                                            ------------   ------------
Total revenue                                 2,558,472      3,118,127

Cost of sales                                 1,570,826      1,907,029
                                            ------------   ------------
Gross profit                                    987,646      1,211,098

Expenses:
  Research and development                      257,284        230,671
  Selling, general & administrative             437,839        446,264
                                            ------------   ------------
Total expenses                                  695,123        694,935
                                            ------------   ------------

Income from operations                          292,523        516,163

Interest income                                  60,177         46,716
Interest expense                                 (2,796)        (6,107)
Other income                                     25,268         20,384
                                            ------------   ------------
Net income                                  $   375,172    $   577,156
                                            ============   ============

Net income per share-basic                  $      0.08    $      0.13
                                            ============   ============
Net income per share-diluted                $      0.08    $      0.12
                                            ============   ============

Weighted average shares outstanding:
  Basic                                       4,501,345      4,334,092
  Diluted                                     4,883,402      4,831,540
</TABLE>



                            SEE ACCOMPANYING NOTES.


<PAGE>
                                NVE CORPORATION
                             STATEMENTS OF INCOME
                NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                  (Unaudited)

<TABLE>
<CAPTION>
                                            Nine Months Ended Dec. 31
                                                2004           2003
                                            ------------   ------------
<S>                                         <C>            <C>
Revenue:
  Contract research and development         $ 4,612,011    $ 4,949,879
  Product sales                               3,931,402      3,852,282
                                            ------------   ------------
Total revenue                                 8,543,413      8,802,161

Cost of sales                                 5,157,504      5,554,726
                                            ------------   ------------
Gross profit                                  3,385,909      3,247,435

Expenses:
  Research and development                      925,136        711,913
  Selling, general & administrative           1,404,083      1,390,818
                                            ------------   ------------
Total expenses                                2,329,219      2,102,731
                                            ------------   ------------

Income from operations                        1,056,690      1,144,704

Interest income                                 173,543        140,184
Interest expense                                (10,858)       (20,705)
Other income                                     62,766         53,867
                                            ------------   ------------
Net income                                  $ 1,282,141    $ 1,318,050
                                            ============   ============

Net income per share-basic                  $      0.29    $      0.31
                                            ============   ============
Net income per share-diluted                $      0.26    $      0.28
                                            ============   ============

Weighted average shares outstanding:
  Basic                                       4,497,919      4,241,791
  Diluted                                     4,879,976      4,739,239
</TABLE>



                            SEE ACCOMPANYING NOTES.


<PAGE>
                               NVE CORPORATION
                          STATEMENTS OF CASH FLOWS
                NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                    Nine Months Ended Dec. 31
                                                       2004            2003
                                                    ------------   ------------
<S>                                                 <C>            <C>
OPERATING ACTIVITIES
Net income                                          $ 1,282,141    $ 1,318,050
Adjustments to reconcile net income to net
  cash provided by operating activities:
    Depreciation and amortization                       409,530        381,919
    Changes in operating assets and liabilities:
      Accounts receivable                              (526,851)      (124,701)
      Inventories                                      (601,135)      (348,234)
      Prepaid expenses and other                        164,914         62,234
      Accounts payable and accrued expenses              52,920         89,008
      Deferred revenue                                 (107,762)      (469,289)
                                                    ------------   ------------
Net cash provided by operating activities               673,757        908,987

INVESTING ACTIVITIES
Purchases of fixed assets                              (805,148)      (774,110)
(Purchases) sales of investment securities             (226,320)       477,074
                                                    ------------   ------------
Net cash used in investing activities                (1,031,468)      (297,036)

FINANCING ACTIVITIES
Net proceeds from sale of common stock                   79,147        246,071
Repayment of capital lease obligations                 (106,507)      (114,447)
                                                    ------------   ------------
Net cash (used in) provided by
  financing activities                                  (27,360)       131,624
                                                    ------------   ------------

(Decrease) increase in cash and cash equivalents       (385,071)       743,575
Cash and cash equivalents at beginning of period      1,055,796        595,768
                                                    ------------   ------------

Cash and cash equivalents at end of period          $   670,725    $ 1,339,343
                                                    ============   ============
</TABLE>



                            SEE ACCOMPANYING NOTES.


<PAGE>
                                NVE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                               DECEMBER 31, 2004


1.  INTERIM FINANCIAL INFORMATION
The accompanying unaudited financial statements of NVE Corporation (the
"Company") are consistent with accounting principles generally accepted in the
United States and reporting with Securities and Exchange Commission rules and
regulations. In the opinion of management, these financial statements reflect
all adjustments, consisting only of normal and recurring adjustments, necessary
for a fair presentation of the financial statements. Although we believe that
the disclosures are adequate to make the information presented not misleading,
it is suggested that these condensed financial statements be read in
conjunction with the audited financial statements and the notes included in our
latest annual financial statements included in our Annual Report on Form 10-KSB
for the fiscal year ended March 31, 2004. The results of operations for the
three and nine month periods ended December 31, 2004 are not necessarily
indicative of the results that may be expected for the full fiscal year ending
March 31, 2005.

2.  NATURE OF BUSINESS
We develop, manufacture, and sell "spintronics" devices, a nanotechnology which
relies on electron spin rather than electron charge to acquire, store, and
transmit information.

3.  REVENUE RECOGNITION
Revenue from product sales is recognized when title transfers, generally upon
shipment. Revenue from licensing and technology development programs, which is
nonrefundable and for which no significant future obligations exist, is
recognized when the license is signed. Revenue from licensing and technology
development programs, which is refundable, recoupable against future royalties,
or for which future obligations exist, is recognized when we complete our
obligations under the terms of the agreements. Revenue from royalties is
recognized upon the shipment of product from our technology license partners to
direct customers. Certain research and development activities are conducted for
third parties and such revenue is recognized as the services are performed.
Payments received from licensing and technology development programs relating
to future obligations as well as prepayments for future discounts on product
sales are recorded as deferred revenue.

4.  EARNINGS PER SHARE
We calculate our net income per share pursuant to Statement of Financial
Accounting Standards (SFAS) No. 128, Earnings per Share. Basic earnings per
share is computed based upon the weighted average number of common shares
issued and outstanding during each fiscal year. Diluted net income per share
amounts assume conversion, exercise or issuance of all potential common stock
instruments (stock options and warrants). Stock options were not included in
the computation of diluted earnings per share if the exercise prices of the
options were greater than the market price of the common stock.

5.  INVESTMENTS
We classify and account for debt and equity securities in accordance with SFAS
No. 115, Accounting for Certain Investments in Debt and Equity Securities. Our
entire portfolio consists of government-backed and corporate bonds and is
classified as available for sale; thus, securities are recorded at fair market
value and any associated unrealized gain or loss, net of tax, is included as a
separate component of shareholders' equity, "Accumulated other comprehensive
income."


<PAGE>
6.  COMPREHENSIVE INCOME
The components of comprehensive income are as follows:

<TABLE>
<CAPTION>
                                    Three months            Nine months
                                 ended December 31       ended December 31
                                 2004        2003        2004         2003
                               --------    --------   ----------    ----------
<S>                            <C>         <C>        <C>           <C>
Net income                     $375,172    $577,156   $1,282,141    $1,318,050
Change in unrealized gains
 (loss)                         (41,902)    (24,146)    (126,997)      (22,911)
                               --------    --------   ----------    ----------
Comprehensive income           $333,270    $553,010   $1,155,144    $1,295,139
                               ========    ========   ==========    ==========
</TABLE>

7.  INVENTORIES
Inventories consist of the following:

<TABLE>
<S>                        <C>
Raw materials              $  761,306
Work-in-process               772,606
Finished goods                397,077
                           -----------
                            1,930,989
Less obsolescence reserve    (180,000)
                           -----------
                           $1,750,989
                           ===========
</TABLE>

8.  STOCK-BASED COMPENSATION
     We have adopted the disclosure-only provisions of SFAS Nos. 123 and 148,
Accounting for Stock-Based Compensation, but apply Accounting Principles Board
(APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations in accounting for our Stock Option Plan and Employee Stock
Purchase Plan. Under APB Opinion No. 25, when the exercise price of employee
stock options equals or exceeds the market price of the underlying stock on the
date of grant, no compensation expense is recognized.

     Pro forma information regarding net income and income per share is
required by SFAS Nos. 123 and 148, and has been determined as if we had
accounted for our employee stock options under the fair value method. The fair
value for these options was estimated at the date of grant using the Black-
Scholes option pricing model with the following weighted average assumptions:
risk-free interest rate of 3.1% and 2.7% for the three and nine months ended
December 31, 2004 and 2003, expected volatility of 55% to 99% and 55% for the
three and nine months ended December 31, 2004 and 2003, a weighted average
expected life of the options of one to five years, and no dividend yield.

     Option valuation models were developed for use in estimating the fair
value of traded options, which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions. Because our employee stock options have characteristics
significantly different from those of traded options, and because changes in
the subjective input assumptions can materially affect the fair value estimate,
in management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of our employee stock options.


<PAGE>
     The pro forma information is as follows:

<TABLE>
<CAPTION>
                                                    Three Months Ended Dec. 31
                                                        2004           2003
                                                    ------------   ------------
<S>                                                 <C>            <C>
   Net income applicable to common shares:
        As reported                                 $   375,172    $   577,156
        Pro forma adjustment
          for stock options                            (186,761)       (83,590)
                                                    ------------   ------------
        Pro forma net income                        $   188,411    $   493,566
                                                    ============   ============
   Earnings per share:
     Basic - as reported                            $      0.08    $      0.13
     Basic - pro forma                              $      0.04    $      0.11

     Diluted - as reported                          $      0.08    $      0.12
     Diluted - pro forma                            $      0.04    $      0.10
</TABLE>


<TABLE>
<CAPTION>
                                                     Nine Months Ended Dec. 31
                                                        2004           2003
                                                    ------------   ------------
<S>                                                 <C>            <C>
   Net income applicable to common shares:
        As reported                                 $ 1,282,141    $ 1,318,050
        Pro forma adjustment
          for stock options                            (570,779)      (246,240)
                                                    ------------   ------------
        Pro forma net income                        $   711,362    $ 1,071,810
                                                    ============   ============
   Earnings per share:
     Basic - as reported                            $      0.29    $      0.31
     Basic - pro forma                              $      0.16    $      0.25

     Diluted - as reported                          $      0.26    $      0.28
     Diluted - pro forma                            $      0.15    $      0.23
</TABLE>


<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.

Forward-looking statements
     Some of the statements made in this Quarterly Report on Form 10-QSB
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are subject to the
safe harbor provisions of the reform act. Forward-looking statements may be
identified by the use of the terminology such as may, will, expect, anticipate,
intend, believe, estimate, should, or continue or the negatives of these terms
or other variations on these words or comparable terminology. To the extent
that this report contains forward-looking statements regarding the financial
condition, operating results, business prospects or any other aspect of NVE,
you should be aware that our actual financial condition, operating results and
business performance may differ materially from that projected or estimated by
us in the forward-looking statements. We have attempted to identify, in
context, some of the factors that we currently believe may cause actual future
experience and results to differ from their current expectations. These
differences may be caused by a variety of factors, including but not limited to
adverse economic conditions, intense competition, including entry of new
competitors, our ability to obtain sufficient financing to support our
operations, progress in research and development activities by us and others,
variations in costs that are beyond our control, adverse federal, state and
local government regulations, unexpected costs, lower sales and net income, or
higher net losses than forecasted, price increases for equipment, our
dependence on significant suppliers, including Taiwan Semiconductor
Manufacturing Corporation for foundry semiconductor wafers, our ability to meet
stringent customer technical requirements, our ability to consummate additional
license agreements, our ability to continue eligibility for SBIR awards, our
inability to raise prices, failure to obtain new customers, the possible
fluctuation and volatility of our operating results and financial condition,
inability to carry out marketing and sales plans, loss of key executives, and
other specific risks included in our Annual Report on Form 10-KSB for the
fiscal year ended March 31, 2004.

General
     We develop, manufacture, and sell devices using "spintronics," a
nanotechnology we helped pioneer, which utilizes electron spin rather than
electron charge to acquire, store and transmit information. We are a licensor
of spintronic magnetic random access memory technology, commonly referred to as
MRAM, which we believe has the potential to revolutionize electronic memory. We
also manufacture high-performance spintronic products including sensors and
couplers to revolutionize data sensing and transmission.

Outlook
     We have been shifting resources from government-funded research contracts
to company-funded research in order to develop new commercial products. Our
contract research and development revenue may therefore decline in coming
quarters. Furthermore, increased MRAM development could increase research and
development expenses and reduce research and development revenue by diverting
resources from revenue generating activities.

     An electronic industry inventory glut may continue for one or more
quarters, which could continue to depress our product sales. The inventory glut
may be due to depressed demand for electronic components in certain segments of
the electronic industry. In addition, increased competition may depress product
sales, especially coupler sales.

     We expect selling, general and administrative expenses to increase as we
prepare to rollout MRAM manufactured under our technology agreement with
Cypress Semiconductor Corporation. We may also increase expenditures relating

<PAGE>
to MRAM license procurement. Legal expenses relating to enforcing our MRAM
intellectual property may also increase. We expect general and administrative
expenses to increase in the remainder of fiscal 2005 due to auditing and
consulting related to compliance with the internal control provisions of
Sarbanes-Oxley section 404.

     While we currently have no material commitments for capital expenditures,
we may purchase additional capital equipment needed to package and test MRAM
from wafers manufactured under our technology agreement with Cypress.

     While we expect to remain profitable in the fourth quarter of Fiscal 2005,
there is a risk that these additional expenses could lead to lower net income
compared to the prior year or operating losses.

Critical accounting policies
     It is important to understand our significant accounting policies in order
to understand our financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States. These
accounting principles require us to make estimates and assumptions that affect
amounts reported in our financial statements and the accompanying notes. Actual
results are likely to differ from those estimates, but we do not believe such
differences will materially affect our financial position or results of
operations for the periods presented in this report.

Revenue Recognition
     Revenue from product sales is recognized when title transfers, generally
upon shipment. Revenue from licensing and technology development programs,
which is nonrefundable and for which no significant future obligations exist,
is recognized when the license is signed. Revenue from licensing and technology
development programs, which is refundable, recoupable against future royalties,
or for which future obligations exist, is recognized when we complete our
obligations under the terms of the agreements. Revenue from royalties is
recognized upon the shipment of product from our technology license partners to
direct customers. Certain research and development activities are conducted for
third parties and such revenue is recognized as the services are performed.
Payments received from licensing and technology development programs relating
to future obligations as well as prepayments for future discounts on product
sales are recorded as deferred revenue.

Bad Debt
     We maintain an allowance for doubtful accounts for estimated losses
resulting from the inability of our customers to make required payments. If the
financial condition of our customers were to deteriorate resulting in an
impairment of their ability to make payments, additional allowances may be
required.

Inventory
     We reduce the stated value of our inventory for excess quantities or
obsolescence in an amount equal to the difference between the cost of inventory
and the estimated market value based upon assumptions about future demand and
market conditions. Additional reductions in stated value may be required if
actual future demand or market conditions are less favorable than we projected.

Income Taxes
     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.


<PAGE>
Three months ended December 31, 2004 compared to three months ended
December 31, 2003

     The table below summarizes the percentage of revenue for the various
items for the periods indicated:

<TABLE>
<CAPTION>
                                        Three Months Ended Dec. 31
                                          2004             2003
                                         -------          -------
<S>                                      <C>              <C>
Revenue:
  Research and development                56.3 %           52.4 %
  Product sales                           43.7             47.6
                                         -------          -------
Total revenue                            100.0            100.0
Cost of sales                             61.4             61.2
                                         -------          -------
Gross profit                              38.6             38.8

Total expenses                            23.9             20.3
                                         -------          -------
Net income                                14.7 %           18.5 %
                                         =======          =======
</TABLE>

     Revenue for the three months ended December 31, 2004 (the third quarter of
fiscal 2005) was $2,558,472, a decrease of 18% from revenue of $3,118,127, for
the three months ended December 31, 2003 (the third quarter of fiscal 2004).
The revenue decrease was primarily due to a 25% decrease in product sales to
$1,118,210 from $1,484,766. The decrease in product sales was primarily due to
a decline in sales to St. Jude Medical and an industry-wide inventory glut. The
decline in sales to St. Jude Medical was due to St. Jude Medical purchasing
parts for inventory in the prior-year period as they expanded their use of our
components.

     Research and development expenses increased by 12% to $257,284 for the
three months ended December 31, 2004 as compared to $230,671 for the three
months ended December 31, 2003. The increase was due to increased efforts to
develop new and improved commercial products.

     Selling, general and administrative expenses for the three months ended
December 31, 2004 decreased by 2% to $437,839 compared to $446,264 for the
three months ended December 31, 2003.

     We recorded pre-tax income of $375,172 and $577,156 for the three months
ended December 31, 2004 and December 31, 2003, respectively. The income tax
provision for the three months ended December 31, 2004 is comprised of U.S.
Federal income tax expense of $127,558, offset by a tax valuation allowance
adjustment of $127,558. The income tax provision for the three months ended
December 31, 2003 is comprised of U.S. Federal income tax expense of $196,233,
offset by a tax valuation allowance adjustment of $196,233.

     Net income totaled $375,172 for the three months ended December 31, 2004
compared to $577,156 for the three months ended December 31, 2003. The decrease
in net income was due to decreased revenues.

<PAGE>
Nine months ended December 31, 2004 compared to nine months ended
December 31, 2003

     The table below summarizes the percentage of revenue for the various
items for the periods indicated:

<TABLE>
<CAPTION>
                                         Nine Months Ended Dec. 31
                                          2004             2003
                                         -------          -------
<S>                                      <C>              <C>
Revenue:
  Research and development                54.0 %           52.4 %
  Product sales                           46.0             47.6
                                         -------          -------
Total revenue                            100.0            100.0
Cost of sales                             60.4             61.2
                                         -------          -------
Gross profit                              39.6             38.8

Total expenses                            24.6             20.3
                                         -------          -------
Net income                                15.0 %           18.5 %
                                         =======          =======
</TABLE>

     Revenue for the nine months ended December 31, 2004 was $8,543,413, a
decrease of 3% from revenue of $8,802,161, for the nine months ended December
31, 2003. The revenue decrease was primarily due to a decline in research and
development revenue partially offset by increases in commercial product sales.

     Research and development revenue decreased 7% for the nine months ended
December 31, 2004 to $4,612,011 from $4,949,879 for the nine months ended
December 31, 2003 due to a shift in resources from government-funded research
contracts to company-funded research. Product sales increased 2% to $3,931,402
from $3,852,282.

     Research and development expenses increased by 30% to $925,136 for the
nine months ended December 31, 2004 as compared to $711,913 for the nine months
ended December 31, 2003. The increase was due to shifting resources from
government-funded research contracts to company-funded research.

     Selling, general and administrative expenses for the nine months ended
December 31, 2004 increased by 1% to $1,404,083 compared to $1,390,818 for the
nine months ended December 31, 2003.

     We recorded pre-tax income of $1,282,141 and $1,318,050 for the nine
months ended December 31, 2004 and December 31, 2003, respectively. The income
tax provision for the nine months ended December 31, 2004 is comprised of U.S.
Federal income tax expense of $435,928, offset by a tax valuation allowance
adjustment of $435,928. The income tax provision for the nine months ended
December 31, 2003 is comprised of U.S. Federal income tax expense of $448,137,
offset by a tax valuation allowance adjustment of $448,137.

     Net income totaled $1,282,141 for the nine months ended December 31, 2004
compared to $1,318,050 for the nine months ended December 31, 2003. The
decrease in net income was due to decreased revenues.

Liquidity and capital resources
     At December 31, 2004 we had $7,247,399 in cash and available-for-sale
securities, consisting of marketable fixed-income investments. We believe our
working capital is adequate to meet our requirements for at least the next
twelve months.


<PAGE>
Item 3. Controls and Procedures.

Disclosure Controls and Procedures
     The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of the Company's disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) as of the end of the period covered by this report. Based on
such evaluation, the Company's Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of such period, the Company's
disclosure controls and procedures are effective in recording, processing,
summarizing and reporting, on a timely basis, information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act.

Internal Control Over Financial Reporting
     There have not been any changes in the Company's internal control over
financial reporting (as such term is defined in Rule 13a-15(f) under the
Exchange Act) during the quarter ended December 31, 2004 that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.


<PAGE>
                          PART II--OTHER INFORMATION


Item 6. Exhibits.

  31.1    Certification by Daniel A. Baker pursuant to
          Rule 13a-14(a)/15d-14(a).

  31.2    Certification by Richard L. George pursuant to
          Rule 13a-14(a)/15d-14(a).

  32      Certification by Daniel A. Baker and Richard L. George pursuant to
          18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
          Sarbanes-Oxley Act of 2002.

  99      Cautionary statements for purposes of the "safe harbor" provisions of
          The Private Securities Litigation Reform Act.


<PAGE>
                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


                                                                NVE CORPORATION
                                                                  (Registrant)


Date  January 19, 2005                                      /s/ Daniel A. Baker
      ----------------                    -------------------------------------
                                                                Daniel A. Baker
                                          President and Chief Executive Officer


Date  January 19, 2005                                    /s/ Richard L. George
      ----------------                    -------------------------------------
                                                              Richard L. George
                                                        Chief Financial Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>dabex31.txt
<DESCRIPTION>EXHIBIT 31.1 - CERTIFICATION BY DANIEL A. BAKER
<TEXT>
                                                                   Exhibit 31.1
                               CERTIFICATION

I, Daniel A. Baker, certify that:

   1. I have reviewed this quarterly report on Form 10-QSB 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 small business issuer as of, and for, the periods presented in this
      report;

   4. The small business issuer'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))
      for the small business issuer 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
            small business issuer, 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) Evaluated the effectiveness of the small business issuer'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

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

   5. The small business issuer's other certifying officer(s) and I have
      disclosed, based on our most recent evaluation of internal control over
      financial reporting, to the small business issuer's auditors and the
      audit committee of the small business issuer'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 small business issuer'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 small business
            issuer's internal control over financial reporting.


Date: January 19, 2005

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

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>rlgex31.txt
<DESCRIPTION>EXHIBIT 31.2 - CERTIFICATION BY RICHARD L. GEORGE
<TEXT>
                                                                   Exhibit 31.2
                               CERTIFICATION

I, Richard L. George, certify that:

   1. I have reviewed this quarterly report on Form 10-QSB 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 small business issuer as of, and for, the periods presented in this
      report;

   4. The small business issuer'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))
      for the small business issuer 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
            small business issuer, 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) Evaluated the effectiveness of the small business issuer'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

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

   5. The small business issuer's other certifying officer(s) and I have
      disclosed, based on our most recent evaluation of internal control over
      financial reporting, to the small business issuer's auditors and the
      audit committee of the small business issuer'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 small business issuer'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 small business
            issuer's internal control over financial reporting.


Date: January 19, 2005

                                  /s/ Richard L. George
                                  -----------------------
                                  Richard L. George
                                  Chief Financial Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>ex32.txt
<DESCRIPTION>EXHIBIT 32 - SECTION 906 CERTIFICATION
<TEXT>
                                                                     Exhibit 32

                           CERTIFICATION PURSUANT TO
                            18 U.S.C. SECTION 1350,
                            AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of NVE Corporation (the "Company")
on Form 10-QSB for the period ended December 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), we,
Daniel A. Baker, Chief Executive Officer; and Richard L. George, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that
based on our knowledge:

           1. The Report 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: January 19, 2005

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



/s/ Richard L. George
- ---------------------
Richard L. George
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.

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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