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<SEC-DOCUMENT>0000724910-09-000020.txt : 20091021
<SEC-HEADER>0000724910-09-000020.hdr.sgml : 20091021
<ACCEPTANCE-DATETIME>20091021161657
ACCESSION NUMBER:		0000724910-09-000020
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20090930
FILED AS OF DATE:		20091021
DATE AS OF CHANGE:		20091021

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:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12196
		FILM NUMBER:		091130288

	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>10-Q
<SEQUENCE>1
<FILENAME>q2q10.htm
<DESCRIPTION>QUARTERLY REPORT FOR THE PERIOD ENDED SEPTEMBER 30, 2009
<TEXT>
<html>
<font style="font-size: 10pt; font-family: Times New Roman;">&nbsp;</font>
<p align="center"><font face="Times New Roman, Times, serif" size="5"><b>UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION</b></font><b><font style="font-size: 10pt; font-family: Times New Roman;"><br>
Washington, D.C.&nbsp;&nbsp;20549</font></b>
<p align="center"><b><font face="Times New Roman, Times, serif" size="5">FORM 10-Q</font></b>
<p align="left"><font style="font-size: 8pt; font-family: Times New Roman;">(Mark One)</font><br>
<font style="font-size: 10pt; font-family: Times New Roman;">[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<br>
For the quarterly period ended &nbsp;&nbsp;<b><u>September 30, 2009</u></b><br>
<div align="center">or</div>
[&nbsp;&nbsp;&nbsp;]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934<br>
For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>to&nbsp;<u>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>
<br>
Commission File Number: <b><u>000-12196</u></b><br>
<br>
<br>
</font>
<div align="center"><img src="nve-logo.gif" width="276" height="54" alt="NVE Logo"><br>
<b><font style="font-size: 22pt; font-family: Arial; Helvetica; sans-serif;">NVE CORPORATION</font></b><br>
<font style="font-size: 10pt; font-family: Times New Roman;">(Exact name of registrant
as specified in its charter)</font></div>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
&nbsp;</font>
<table style="font-size: 10pt; font-family: Times New Roman;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr align="center">
<td width="48%">
<b><u>Minnesota</u></b></td>
<td>&nbsp;</td>
<td width="48%">
<b><u>41-1424202</u></b>
</td>
</tr>
<tr align="center">
<td>(State or other jurisdiction of incorporation or organization)
</td>
<td>&nbsp;</td>
<td>(I.R.S. Employer Identification No.)
</td>
</tr>
<tr>
<td colspan="3">&nbsp;</td>
</tr>
<tr align="center">
<td>
<b><u>11409 Valley View Road, Eden Prairie, Minnesota</u></b>
</td>
<td>&nbsp;</td>
<td>
<b><u>55344</u></b>
</td>
</tr>
<tr align="center">
<td>
(Address of principal executive offices)
</td>
<td>&nbsp;</td>
<td>(Zip Code)
</td>
</tr>
<tr>
<td colspan="3">&nbsp;</td>
</tr>
<tr>
<td colspan="3" align="center">&nbsp;<b><u>(952) 829-9217</u></b>&nbsp;
</td>
</tr>
<tr>
<td colspan="3" align="center">(Registrant&#146;s telephone number, including area code)
</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Indicate by check mark whether the registrant
(1)&nbsp;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)&nbsp;has been subject to such filing requirements for the past 90 days.
<div align="right">[X]&nbsp;Yes&nbsp;&nbsp;[&nbsp;&nbsp;&nbsp;]&nbsp;No</div>
<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 229.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit and post such files).
<br>
<div align="right">[&nbsp;&nbsp;&nbsp;]&nbsp;Yes&nbsp;&nbsp;[&nbsp;&nbsp;&nbsp;]&nbsp;No<br>
<br></div>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of &#147;large accelerated filer,&#148; &#147;accelerated
filer&#148; and &#147;smaller reporting company&#148; in Rule 12b-2 of the Exchange
Act.</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="70%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Large accelerated filer [&nbsp;&nbsp;&nbsp;]</td>
<td>Accelerated filer [X]</td>
</tr>
<tr>
<td>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Non-accelerated&nbsp;filer&nbsp;[&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;(Do&nbsp;not&nbsp;check&nbsp;if&nbsp;a&nbsp;smaller&nbsp;reporting&nbsp;company)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
<td>Smaller reporting company [&nbsp;&nbsp;&nbsp;]</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[&nbsp;&nbsp;&nbsp;]&nbsp;Yes&nbsp;&nbsp;[X]&nbsp;No<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Indicate
the number of shares outstanding of each of the issuer&#146;s classes of common
stock, as of the latest practicable date.<br>
<b>Common Stock, $0.01 Par Value &#150; 4,700,583 shares outstanding as of October
16, 2009</b><br>
<br>
</font>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;">&nbsp;<a href="#TOC"></a><a name="TOC"></a><br><div align="center"><b>NVE CORPORATION<br>
QUARTERLY REPORT ON FORM 10-Q<br>
TABLE OF CONTENTS</b></div><br>
<br>
<a href="#Part1"><b>PART I. FINANCIAL INFORMATION</b></a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#Part1">Item 1. Financial Statements</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#Part1">Balance Sheets</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#QIncome">Statements
of Income for the Quarters Ended September 30, 2009 and 2008</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#YTDIncome">Statements
of Income for the Six Months Ended September 30, 2009 and 2008</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#CashFlows">Statements of Cash Flows</a><br><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#Notes">Notes to Financial Statements</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#MDA">Item 2. Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations</a><br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#Q-MD&A">Quarter ended September&nbsp;30, 2009 compared to quarter  ended September&nbsp;30, 2008</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#YTD-MD&A">Six months ended September&nbsp;30, 2009 compared to six months ended September&nbsp;30, 2008</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#MarketRisk">Item 3. Quantitative and Qualitative Disclosures About Market Risk</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#Controls">Item 4. Controls and Procedures</a><br>
<br><a href="#Part2"><b>PART II. OTHER INFORMATION</b></a><br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#Vote">Item 4. Submission of Matters to a Vote of Security Holders</a><br>
<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<a href="#Exhibits">Item 6. Exhibits</a><br>
<br><a href="#Signatures"><b>SIGNATURES</b></a><br>
<br><br>
<div align="center">2</div><br></font>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table of
Contents</a><a name="Part1"></a>
<br>
<br>
<div align="center">PART I&#150;FINANCIAL INFORMATION</div>
<br><br>Item 1. Financial Statements.
<div align="center">NVE CORPORATION<br>
BALANCE SHEETS</div></b><br><br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td></td>
<td style="border-bottom: 1px solid black;" colspan="3" valign="bottom" align="center"><b>(Unaudited)<br>
Sept. 30, 2009</b></td>
<td width="2%"></td>
<td style="border-bottom: 1px solid black;" colspan="3" valign="bottom" align="center"><b>March 31, 2009*</b></td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">ASSETS</td>
</tr>
<tr>
<td colspan="8">Current assets</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Cash and cash equivalents</div>
</td>
<td width="1%" bgcolor="#ccdaef">
$</td>
<td align="right" width="11%" bgcolor="#ccdaef">2,590,186</td>
<td width="1%" bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td width="1%" bgcolor="#ccdaef">
$</td>
<td align="right" width="11%" bgcolor="#ccdaef">1,875,063</td>
<td width="1%" bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Marketable securities, short term</div>
</td>
<td></td>
<td align="right">1,653,026</td>
<td></td>
<td></td>
<td></td>
<td align="right">
- -</td>
<td></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Accounts receivable, net of allowance for uncollectible accounts of $15,000</div>
</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">2,953,027</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">3,366,698</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Inventories</div>
</td>
<td></td>
<td align="right">1,864,989</td>
<td></td>
<td></td>
<td></td>
<td align="right">2,247,621</td>
<td></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Deferred tax assets</div>
</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">-</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">667,729</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Prepaid expenses and other assets</div>
</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">838,130</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">669,307</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">Total current assets</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">9,899,358</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">8,826,418</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td colspan="8">Fixed assets</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Machinery and equipment&nbsp;</div>
</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">5,495,846</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">5,328,237</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Leasehold improvements</div>
</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">450,546</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">450,546</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">5,946,392</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">5,778,783</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Less accumulated depreciation&nbsp;</div>
</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">4,667,319</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">4,485,509</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">Net fixed assets</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">1,279,073</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">1,293,274</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>Marketable securities, long term</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">39,383,468</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">32,446,748</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr valign="top">
<td bgcolor="#ccdaef">Total assets</td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">
$</td>
<td style="border-bottom: 3px double black;" align="right" bgcolor="#ccdaef">50,561,899</td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef"></td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">
$</td>
<td style="border-bottom: 3px double black;" align="right" bgcolor="#ccdaef">42,566,440</td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td colspan="8">&nbsp;</td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">LIABILITIES AND SHAREHOLDERS&#146; EQUITY</td>
</tr>
<tr>
<td colspan="8">Current liabilities</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Accounts payable</div>
</td>
<td bgcolor="#ccdaef">
$</td>
<td align="right" bgcolor="#ccdaef">423,552</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">
$</td>
<td align="right" bgcolor="#ccdaef">257,239</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Accrued payroll and other&nbsp;</div>
</td>
<td></td>
<td align="right">597,655</td>
<td></td>
<td></td>
<td></td>
<td align="right">637,463</td>
<td></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Deferred taxes</div>
</td>
<td colspan="2" align="right" bgcolor="#ccdaef">23,971</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td colspan="2" align="right" bgcolor="#ccdaef">-</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Deferred revenue</div>
</td>
<td style="border-bottom: 1px solid black;" colspan="2" align="right">62,500</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;" colspan="2" align="right">
104,167</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
Total current liabilities</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">1,107,678</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">
998,869</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td colspan="8">&nbsp;</td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">Shareholders&#146; equity</td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Common stock</div>
</td>
<td></td>
<td align="right">47,006</td>
<td></td>
<td></td>
<td></td>
<td align="right">46,693</td>
<td></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Additional paid-in capital</div>
</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">20,169,924</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">19,166,524</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Accumulated other comprehensive income (loss)</div>
</td>
<td></td>
<td align="right">996,882</td>
<td>&nbsp;</td>
<td></td>
<td></td>
<td align="right">(252,940</td>
<td>)
</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Retained earnings</div>
</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">28,240,409</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef"></td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">22,607,294</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td>Total shareholders&#146; equity</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">49,454,221</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">41,567,571</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr valign="top">
<td bgcolor="#ccdaef">Total liabilities and shareholders&#146; equity</td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">
$</td>
<td style="border-bottom: 3px double black;" align="right" bgcolor="#ccdaef">50,561,899</td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef"></td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">
$</td>
<td style="border-bottom: 3px double black;" align="right" bgcolor="#ccdaef">42,566,440</td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
*The March 31, 2009 Balance Sheet is derived from the audited financial statements contained
in our Annual Report on <font style="white-space: nowrap;">Form 10-K</font> for the fiscal year ended March&nbsp;31, 2009.
<br>
<br>
<div align="center">See accompanying notes.<br>
<br>
<br>
3<br>
</div>
</font>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table of Contents</a><a name="QIncome"></a>
<div align="center">
<br>
NVE CORPORATION<br>
STATEMENTS OF INCOME<br>
(Unaudited)</div>
</b><br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td colspan="7" style="border-bottom: 1px solid black;" align="center"><b>Quarter&nbsp;Ended&nbsp;Sept.&nbsp;30</b></td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" colspan="3" align="center">
<b>2009</b></td>
<td width="2%"></td>
<td style="border-bottom: 1px solid black;" colspan="3" align="center">
<b>2008</b></td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">Revenue</td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Product sales</div>
</td>
<td width="1%">$</td>
<td align="right" width="11%">5,177,445</td>
<td width="1%">&nbsp;</td>
<td>&nbsp;</td>
<td width="1%">
$</td>
<td align="right" width="11%">4,871,381</td>
<td width="1%"></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Contract research and development</div>
</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">1,331,056</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">856,409</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td>Total revenue</td>
<td></td>
<td align="right">6,508,501</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">5,727,790</td>
<td></td>
</tr>
<tr>
<td bgcolor="#ccdaef">Cost of sales</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">1,985,100</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">1,747,618</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td>Gross profit</td>
<td></td>
<td align="right">4,523,401</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">3,980,172</td>
<td></td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">Expenses</td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Selling, general, and administrative</div>
</td>
<td></td>
<td align="right">622,354</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td></td>
<td align="right">585,373</td>
<td></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Research and development</div>
</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">291,540</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">280,863</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td>Total expenses</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">913,894</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">866,236</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">Income from operations</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">3,609,507</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">
3,113,936</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>Interest income</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">393,198</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">277,074</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">Income before taxes</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">4,002,705</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">3,391,010</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>Provision for income taxes</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">1,308,522</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">1,090,629</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td valign="top" bgcolor="#ccdaef">Net income</td>
<td style="border-bottom: 3px double black;" valign="top" bgcolor="#ccdaef">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top" bgcolor="#ccdaef">2,694,183</td>
<td style="border-bottom: 3px double black;" valign="top" bgcolor="#ccdaef">&nbsp;</td>
<td valign="top" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 3px double black;" valign="top" bgcolor="#ccdaef">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top" bgcolor="#ccdaef">2,300,381</td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td valign="top">Net income per share &#150; basic</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">0.57</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">0.49</td>
<td style="border-bottom: 3px double black;">&nbsp;</td>
</tr>
<tr>
<td valign="top" bgcolor="#ccdaef">Net income per share &#150; diluted</td>
<td style="border-bottom: 3px double black;" valign="top" bgcolor="#ccdaef">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top" bgcolor="#ccdaef">0.55</td>
<td style="border-bottom: 3px double black;" valign="top" bgcolor="#ccdaef">&nbsp;</td>
<td valign="top" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 3px double black;" valign="top" bgcolor="#ccdaef">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top" bgcolor="#ccdaef">0.48</td>
<td style="border-bottom: 3px double black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td colspan="8">Weighted average shares outstanding</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;">Basic</div>
</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">4,692,607</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">4,661,396</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Diluted</div>
</td>
<td></td>
<td align="right">4,871,387</td>
<td></td>
<td></td>
<td></td>
<td align="right">4,788,614</td>
<td></td>
</tr>
</table>
<div align="center"><font style="font-size: 10pt; font-family: Times New Roman;"><br>
See accompanying notes.<br>
<br><br>4<br></font>
</div>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table of Contents</a><a name="YTDIncome"></a>
<div align="center">
<br>
NVE CORPORATION<br>
STATEMENTS OF INCOME<br>
(Unaudited)</div></b><br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td colspan="7" style="border-bottom: 1px solid black;" align="center"><b>Six Months Ended Sept. 30</b></td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" colspan="3" align="center">
<b>2009</b></td>
<td width="2%"></td>
<td style="border-bottom: 1px solid black;" colspan="3" align="center">
<b>2008</b>
</td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">Revenue</td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Product sales</div>
</td>
<td width="1%">
$</td>
<td align="right" width="11%">10,711,482</td>
<td width="1%">&nbsp;</td>
<td>&nbsp;</td>
<td width="1%">
$</td>
<td align="right" width="11%">
9,418,703
</td>
<td width="1%"></td>
</tr>
<tr bgcolor="#ccdaef">
<td>
<div style="margin-left: 9pt;">Contract research and development</div>
</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">2,631,551</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">1,172,873</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td>Total revenue</td>
<td></td>
<td align="right">13,343,033</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">10,591,576</td>
<td></td>
</tr>
<tr bgcolor="#ccdaef">
<td>Cost of sales</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" width="11%">3,876,523</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">3,155,050</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td>Gross profit</td>
<td></td>
<td align="right">9,466,510</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">7,436,526</td>
<td></td>
</tr>
<tr bgcolor="#ccdaef">
<td colspan="8">Expenses</td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Selling, general, and administrative</div>
</td>
<td></td>
<td align="right">1,258,077</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">1,114,857</td>
<td></td>
</tr>
<tr bgcolor="#ccdaef">
<td>
<div style="margin-left: 9pt;">Research and development</div>
</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">558,861</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">666,895</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td>Total expenses</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">1,816,938</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">1,781,752</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr bgcolor="#ccdaef">
<td>Income from operations</td>
<td></td>
<td align="right">7,649,572</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">5,654,774</td>
<td></td>
</tr>
<tr>
<td>Interest income</td>
<td></td>
<td align="right">763,223</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">531,509</td>
<td></td>
</tr>
<tr bgcolor="#ccdaef">
<td>Other income</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">-</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">3,400</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td>Income before taxes</td>
<td></td>
<td align="right">8,412,795</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">6,189,683</td>
<td></td>
</tr>
<tr bgcolor="#ccdaef">
<td>Provision for income taxes</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">2,779,680</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">1,986,686</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td valign="top">Net income</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">5,633,115</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">4,202,997</td>
<td style="border-bottom: 3px double black;">&nbsp;</td>
</tr>
<tr bgcolor="#ccdaef">
<td valign="top">Net income per share &#150; basic</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">1.20</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">0.90</td>
<td style="border-bottom: 3px double black;">&nbsp;</td>
</tr>
<tr>
<td valign="top">Net income per share &#150; diluted</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">1.16</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">0.88</td>
<td style="border-bottom: 3px double black;">&nbsp;</td>
</tr>
<tr bgcolor="#ccdaef">
<td colspan="8">Weighted average shares outstanding</td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;">Basic</div>
</td>
<td></td>
<td align="right">4,684,453</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">4,652,448</td>
<td></td>
</tr>
<tr bgcolor="#ccdaef">
<td>
<div style="margin-left: 9pt;">Diluted</div>
</td>
<td></td>
<td align="right">4,863,199</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">4,779,606</td>
<td></td>
</tr>
</table>
<div align="center"><font style="font-size: 10pt; font-family: Times New Roman;"><br>
See accompanying notes.<br>
<br>
<br>
5<br>
</font>
</div>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a><a name="CashFlows"></a>
<br>
<div align="center">
<br>
NVE CORPORATION<br>
STATEMENTS OF CASH FLOWS<br>
(Unaudited)</div></b><br><br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td colspan="7" style="border-bottom: 1px solid black;">
<div align="center"><b>Six Months Ended Sept. 30</b></div>
</td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" colspan="3" align="center"><b>2009</b></td>
<td width="1%"></td>
<td style="border-bottom: 1px solid black;" colspan="3" align="center"><b>2008</b></td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">OPERATING ACTIVITIES</td>
</tr>
<tr>
<td>Net income</td>
<td width="1%">
$</td>
<td align="right" width="11%">5,633,115</td>
<td width="1%"></td>
<td width="2%"></td>
<td width="1%">
$</td>
<td align="right" width="11%">4,202,997</td>
<td width="1%"></td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">
Adjustments to reconcile net income to net cash
<div style="margin-left: 9pt;">provided by operating activities:</div>
</td>
</tr>
<tr>
<td>
<div style="margin-left: 18pt;">Depreciation</div>
</td>
<td></td>
<td align="right">181,809</td>
<td></td>
<td></td>
<td>&nbsp;</td>
<td align="right">225,116</td>
<td></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 18pt;">Stock-based compensation</div>
</td>
<td bgcolor="#ccdaef"></td>
 <td align="right" bgcolor="#ccdaef">100,842</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">75,476</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
<div style="margin-left: 18pt;">Excess tax benefits</div>
</td>
<td></td>
 <td align="right">(280,448</td>
 <td>)</td>
<td></td>
<td>&nbsp;</td>
<td align="right">(236,524</td>
<td>)</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 18pt;">Gain on sale of fixed assets&nbsp;</div>
</td>
<td bgcolor="#ccdaef"></td>
 <td align="right" bgcolor="#ccdaef">-</td>
<td bgcolor="#ccdaef"> </td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">(3,400</td>
<td bgcolor="#ccdaef">)</td>
</tr>
<tr>
<td>
<div style="margin-left: 18pt;">Deferred income taxes</div>
</td>
<td></td>
 <td align="right">269,377</td>
<td></td>
<td></td>
<td>&nbsp;</td>
<td align="right">219,117</td>
<td></td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">
<div style="margin-left: 18pt;">Changes in operating assets and liabilities:</div>
</td>
</tr>
<tr>
<td>
<div style="margin-left: 36pt;">Accounts receivable</div>
</td>
<td></td>
 <td align="right">413,671</td>
<td></td>
<td></td>
<td>&nbsp;</td>
<td align="right">357,848</td>
<td></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 36pt;">Inventories</div>
</td>
<td bgcolor="#ccdaef"></td>
 <td align="right" bgcolor="#ccdaef">382,632</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">13,605</td>
<td bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td>
<div style="margin-left: 36pt;">Prepaid expenses and other assets</div>
</td>
<td></td>
 <td align="right">(168,823</td>
 <td>)</td>
<td></td>
<td>&nbsp;</td>
<td align="right">16,285</td>
<td>&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 36pt;">Accounts payable and accrued expenses</div>
</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">126,505</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">(170,636</td>
<td bgcolor="#ccdaef">)</td>
</tr>
<tr>
<td>
<div style="margin-left: 36pt;">Deferred revenue</div>
</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">(41,667</td>
 <td style="border-bottom: 1px solid black;">)</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">(41,667</td>
<td style="border-bottom: 1px solid black;">)</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
Net cash provided by operating activities</td>
<td bgcolor="#ccdaef"></td>
 <td align="right" bgcolor="#ccdaef">6,617,013</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">4,658,217</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td colspan="8">&nbsp;</td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">INVESTING ACTIVITIES</td>
</tr>
<tr>
<td colspan="2">
Purchases of fixed assets</td>
 <td align="right">(167,608</td>
 <td>)</td>
<td></td>
<td>&nbsp;</td>
<td align="right">(117,530</td>
<td>)</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
Proceeds from sale of fixed assets</td>
<td bgcolor="#ccdaef"></td>
 <td align="right" bgcolor="#ccdaef">-</td>
<td bgcolor="#ccdaef"> </td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">3,400</td>
<td bgcolor="#ccdaef"> </td>
</tr>
<tr>
<td>
Purchases of marketable securities</td>
<td></td>
 <td align="right">(6,779,505</td>
 <td>)</td>
<td></td>
<td>&nbsp;</td>
<td align="right">(6,602,443</td>
<td>)</td>
</tr>
<tr>
<td bgcolor="#ccdaef">Proceeds from maturities and sales of marketable securities</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">142,352</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef"></td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">1,411,361</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td>
Net cash used in investing activities</td>
<td></td>
 <td align="right">(6,804,761</td>
 <td>)</td>
<td></td>
<td>&nbsp;</td>
<td align="right">(5,305,212</td>
<td>)</td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td colspan="8">
FINANCING ACTIVITIES</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
Net proceeds from sale of common stock</td>
<td bgcolor="#ccdaef"></td>
 <td align="right" bgcolor="#ccdaef">622,423</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">243,917</td>
<td bgcolor="#ccdaef"></td>
</tr>
<tr>
<td>
Excess tax benefits</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">280,448</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">236,524</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
Net cash provided by financing activities</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">902,871</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef"></td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">480,441</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td colspan="8">&nbsp;</td>
</tr>
<tr>
<td bgcolor="#ccdaef">Increase (decrease) in cash and cash equivalents</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">715,123</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td align="right" bgcolor="#ccdaef">(166,554</td>
<td valign="bottom" bgcolor="#ccdaef">)</td>
</tr>
<tr>
<td>Cash and cash equivalents at beginning of period</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">1,875,063</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">1,885,867</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td valign="top">
Cash and cash equivalents at end of period</td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">2,590,186</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">
1,719,313</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
</tr>
<tr>
<td colspan="8" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td colspan="8">
Supplemental disclosures of cash flow information:</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
 <div style="margin-left: 18pt;">Cash paid during the period for income taxes</div>
</td>
<td bgcolor="#ccdaef">
$</td>
 <td align="right" bgcolor="#ccdaef">2,607,438</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef">
$</td>
<td align="right" bgcolor="#ccdaef">1,631,000</td>
<td bgcolor="#ccdaef"></td>
</tr>
</table>
<div align="center"><font style="font-size: 10pt; font-family: Times New Roman;"><br>
See accompanying notes.<br>
<br>
<br>
6<br>
</font></div>
<hr><br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a><a name="Notes"></a>
<br>
<br>
<div align="center">NVE CORPORATION<br>
NOTES TO FINANCIAL STATEMENTS<br>
(Unaudited)</div>
<br>
<br>
NOTE 1. DESCRIPTION OF BUSINESS</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.<br>
<br>
<b>NOTE 2. INTERIM FINANCIAL INFORMATION AND SUBSEQUENT EVENTS</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying unaudited financial statements
of NVE Corporation 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 unaudited financial statements be read in conjunction
with the audited financial statements and the notes included in our latest annual
financial statements included in our Annual Report on <font style="white-space: nowrap;">Form 10-K</font> for the fiscal
year ended March&nbsp;31, 2009. The results of operations for the quarter ended
September 30, 2009 are not necessarily indicative of the results that may be expected
for the full fiscal year ending March&nbsp;31, 2010.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We evaluated all events or transactions that occurred after September&nbsp;30, 2009 through October&nbsp;21, 2009, the date we issued these financial statements. During this period we did not have any material recognizable subsequent events.<br>
<br>
<b>NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No.&nbsp;168, <i>The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles&#151;a replacement of FASB Statement
No.&nbsp;162</i>. SFAS No.&nbsp;168 was codified as Accounting Standards Codification (ASC)
Topic 105-10 and replaces SFAS No.&nbsp;162, <i>The Hierarchy of Generally Accepted Accounting
Principles</i>, to establish the FASB ASC as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in preparation of financial
statements in conformity with generally accepted accounting principles in the United States.
We adopted ASC Topic 105-10 effective for the quarter ended September&nbsp;30, 2009 and the
adoption did not result in a significant impact on our financial statements.
<br>
<br>
<b>NOTE 4. NET INCOME PER SHARE</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic earnings per share are computed based on the
weighted-average number of common shares issued and outstanding during each period.
Diluted net income per share amounts assume conversion, exercise or issuance of
all potential common stock instruments (stock options and warrants). Stock options
and warrants totaling 1,000 for the quarter and six months ended September&nbsp;30, 2009 and 60,000
for the quarter and six months ended September&nbsp;30, 2008 were not included
in the computation of diluted earnings per share because the exercise prices of
the options and warrants were greater than the market price of the common stock.
The following table reflects the components of common shares outstanding:<br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td colspan="3" style="border-bottom: 1px solid black;" align="center"><b>Quarter Ended Sept. 30</b></td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" align="center" width="11%">
<b>2009</b></td>
<td></td>
<td style="border-bottom: 1px solid black;" align="center" width="11%">
<b>2008</b></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
Weighted average common shares outstanding &#150; basic</td>
<td align="right" bgcolor="#ccdaef">4,692,607</td>
<td align="left" width="2%" bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">4,661,396</td>
</tr>
<tr>
<td colspan="4">
Effect of dilutive securities:</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;" align="left">Stock options</div>
</td>
 <td align="right" bgcolor="#ccdaef">171,843</td>
<td align="left" width="2%" bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">122,329</td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;" align="left">Warrants</div>
</td>
 <td style="border-bottom: 1px solid black;" align="right">6,937</td>
<td align="left" width="2%"></td>
<td style="border-bottom: 1px solid black;" align="right">4,889</td>
</tr>
<tr bgcolor="#ccdaef">
<td valign="top">
Shares used in computing net income per share &#150; diluted</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">4,871,387</td>
<td align="left" width="2%" valign="top"></td>
<td style="border-bottom: 3px double black;" align="right" valign="top">4,788,614</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td colspan="3" style="border-bottom: 1px solid black;" align="center"><b>Six Months Ended Sept. 30</b></td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" align="center" width="11%">
<b>2009</b></td>
<td></td>
<td style="border-bottom: 1px solid black;" align="center" width="11%">
<b>2008</b></td>
</tr>
<tr>
<td bgcolor="#ccdaef">
Weighted average common shares outstanding &#150; basic</td>
<td align="right" bgcolor="#ccdaef">4,684,453</td>
<td align="left" width="2%" bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">4,652,448</td>
</tr>
<tr>
<td colspan="4">
Effect of dilutive securities:</td>
</tr>
<tr>
<td bgcolor="#ccdaef">
<div style="margin-left: 9pt;" align="left">Stock options</div>
</td>
 <td align="right" bgcolor="#ccdaef">171,809</td>
<td align="left" width="2%" bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef">122,269</td>
</tr>
<tr>
<td>
<div style="margin-left: 9pt;" align="left">Warrants</div>
</td>
 <td style="border-bottom: 1px solid black;" align="right">6,937</td>
<td align="left" width="2%"></td>
<td style="border-bottom: 1px solid black;" align="right">

4,889</td>
</tr>
<tr bgcolor="#ccdaef">
<td valign="top">
Shares used in computing net income per share &#150; diluted</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">4,863,199</td>
<td align="left" width="2%" valign="top"></td>
<td style="border-bottom: 3px double black;" align="right" valign="top">4,779,606</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;">&nbsp;<br>
<br>
<div align="center">7</div></font>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a><br>
<br>NOTE 5. MARKETABLE SECURITIES</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketable securities 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. The maturities of our marketable
securities as of September 30, 2009 were as follows:<br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" border="0" cellpadding="0" cellspacing="0" width="67%" align="center">
<tr>
<td style="border-bottom: 1px solid black;" colspan="2">
<div align="center"><b>Total</b></div>
</td>
<td width="3%"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>&lt;1 Year</b></td>
<td width="3%"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>1&#150;3 Years</b></td>
<td width="3%"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>3&#150;5 Years</b></td>
<td width="3%"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>&gt;5 Years</b></td>
</tr>
<tr bgcolor="#ccdaef">
<td width="1%">$</td>
<td width="11%" align="right">41,036,494</td>
<td></td>
<td width="1%">$</td>
<td align="right" width="11%">1,653,026</td>
<td></td>
<td width="1%">$</td>
<td align="right" width="11%">15,753,061</td>
<td width="2%"></td>
<td width="1%">$</td>
<td align="right" width="11%">23,630,407</td>
<td>&nbsp;</td>
<td width="1%">$</td>
<td align="right" width="11%">-
</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;">&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marketable securities were as follows:<br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
 <td rowspan="2" width="176"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="12"><b>As of September&nbsp;30, 2009</b></td>
 <td style="border-bottom: 1px solid black;" rowspan="2" width="6"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="12"><b>As of March&nbsp;31, 2009</b></td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" align="center" colspan="2" valign="bottom">
<div align="center"><b>Adjusted<br>
Cost</b></div>
</td>
 <td width="6">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Gross<br>
Unrealized<br>
Gains</b></td>
 <td width="7">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br>
Losses</b></td>
 <td width="6">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Estimated<br>
Fair&nbsp;Market<br>
Value</b></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2" valign="bottom">
<div align="center"><b>Adjusted<br>
Cost</b></div>
</td>
 <td width="6"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Gross<br>
Unrealized<br>
Gains</b></td>
 <td width="6"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br>
Losses</b></td>
 <td width="6"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Estimated<br>
Fair&nbsp;Market<br>
Value</b></td>
</tr>
<tr bgcolor="#ccdaef">
 <td valign="bottom" width="176">U.S. agency<br>
<div style="margin-left: 9pt;">securities</div>
</td>
 <td valign="bottom" width="10">$</td>
 <td valign="bottom" align="right" width="98">816,172</td>
 <td width="6">&nbsp;&nbsp;</td>
 <td valign="bottom" width="14">$</td>
 <td align="right" valign="bottom" width="93">22,730</td>
 <td width="7">&nbsp;&nbsp;</td>
 <td valign="bottom" width="13">$</td>
 <td align="right" valign="bottom" width="83">-</td>
 <td valign="bottom" width="9"> </td>
 <td width="6">&nbsp;&nbsp;</td>
 <td valign="bottom" width="12">$</td>
 <td align="right" valign="bottom" width="109">838,902</td>
 <td width="6">&nbsp;&nbsp;</td>
 <td valign="bottom" width="10">$</td>
 <td align="right" valign="bottom" width="98">955,827</td>
 <td width="6">&nbsp;&nbsp;</td>
 <td valign="bottom" width="14">$</td>
 <td align="right" valign="bottom" width="93">30,647</td>
 <td width="6">&nbsp;&nbsp;</td>
 <td valign="bottom" width="12">$</td>
 <td align="right" valign="bottom" width="87">-</td>
 <td valign="bottom" width="7">&nbsp;</td>
 <td width="6">&nbsp;&nbsp;</td>
 <td valign="bottom" width="12">$</td>
 <td align="right" valign="bottom" width="120">986,474</td>
</tr>
<tr>
 <td valign="bottom" width="176">Corporate&nbsp;bonds</td>
 <td width="10"></td>
 <td align="right" valign="bottom" width="98">17,654,836</td>
 <td width="6"></td>
 <td width="14"></td>
 <td align="right" valign="bottom" width="93">840,120</td>
 <td width="7"></td>
 <td width="13"></td>
 <td align="right" valign="bottom" width="83">-</td>
 <td valign="bottom" width="9">&nbsp;</td>
 <td width="6"></td>
 <td width="12"></td>
 <td align="right" valign="bottom" width="109">18,494,956</td>
 <td width="6">&nbsp;</td>
 <td width="10">&nbsp;</td>
 <td align="right" valign="bottom" width="98">13,983,202</td>
 <td width="6">&nbsp;</td>
 <td valign="bottom" width="14">&nbsp;</td>
 <td align="right" valign="bottom" width="93">54,085</td>
 <td width="6">&nbsp;</td>
 <td width="12">&nbsp;</td>
 <td align="right" valign="bottom" width="87">(942,514</td>
 <td valign="bottom" width="7"> )</td>
 <td width="6">&nbsp;</td>
 <td width="12">&nbsp;</td>
 <td align="right" valign="bottom" width="120">13,094,773</td>
</tr>
<tr bgcolor="#ccdaef">
 <td valign="bottom" width="176">Municipal&nbsp;bonds&nbsp;&nbsp;</td>
 <td style="border-bottom: 1px solid black;" width="10">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" valign="bottom" width="98">21,007,370</td>
 <td width="6"></td>
 <td style="border-bottom: 1px solid black;" width="14">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" valign="bottom" width="93">753,240</td>
 <td width="7"></td>
 <td style="border-bottom: 1px solid black;" width="13">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" valign="bottom" width="83">(57,974</td>
 <td style="border-bottom: 1px solid black; valign="bottom valign="bottom" width="9"">)</td>
 <td width="6"></td>
 <td style="border-bottom: 1px solid black;" width="12">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" valign="bottom" width="109">21,702,636</td>
 <td width="6">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" width="10">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" valign="bottom" width="98">17,902,196</td>
 <td width="6">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" valign="bottom" width="14">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" valign="bottom" width="93">489,802</td>
 <td width="6">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" width="12">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" valign="bottom" width="87">(26,497</td>
 <td style="border-bottom: 1px solid black; valign="bottom valign="bottom" width="7"">)</td>
 <td width="6">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" width="12">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" valign="bottom" width="120">18,365,501</td>
</tr>
<tr>
 <td valign="top" width="176">Total</td>
 <td style="border-bottom: 3px double black;" width="10">$</td>
 <td style="border-bottom: 3px double black;" align="right" width="98">39,478,378</td>
 <td width="6"></td>
 <td style="border-bottom: 3px double black;" width="14">$</td>
 <td style="border-bottom: 3px double black;" align="right" width="93">1,616,090</td>
 <td width="7"></td>
 <td style="border-bottom: 3px double black;" width="13">$</td>
 <td style="border-bottom: 3px double black;" align="right" width="83">(57,974</td>
 <td style="border-bottom: 3px double black;" width="9">)</td>
 <td width="6"></td>
 <td style="border-bottom: 3px double black;" width="12">$</td>
 <td style="border-bottom: 3px double black;" align="right" width="109">41,036,494</td>
 <td width="6">&nbsp;</td>
 <td style="border-bottom: 3px double black;" width="10">$</td>
 <td style="border-bottom: 3px double black;" align="right" width="98">32,841,225</td>
 <td width="6">&nbsp;</td>
 <td style="border-bottom: 3px double black;" width="14">$</td>
 <td style="border-bottom: 3px double black;" align="right" width="93">574,534</td>
 <td width="6">&nbsp;</td>
 <td style="border-bottom: 3px double black;" width="12">$</td>
 <td style="border-bottom: 3px double black;" align="right" width="87">(969,011</td>
 <td style="border-bottom: 3px double black;" width="7">)</td>
 <td width="6">&nbsp;</td>
 <td style="border-bottom: 3px double black;" width="12">$</td>
 <td style="border-bottom: 3px double black;" align="right" width="120">32,446,748</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;">&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows the gross unrealized losses
and fair value of our investments with unrealized losses, aggregated by investment
category and length of time that individual securities had been in a continuous
unrealized loss position as of September&nbsp;30 and March&nbsp;31, 2009:<br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%" align="center">
<tr>
<td rowspan="2" colspan="2"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="6">
<div align="center"><b>Less Than 12 Months</b></div>
</td>
<td width="1%"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="6">
<div align="center"><b>12 Months or Greater</b></div>
</td>
<td width="1%"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="6">
<div align="center"><b>Total</b></div>
</td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Fair<br>
Market<br>
Value</b></td>
<td></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br>
Losses</b></td>
<td></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Fair<br>
Market<br>
Value</b></td>
<td></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br>
Losses</b></td>
<td></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Fair<br>
Market<br>
Value</b></td>
<td></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br>
Losses</b></td>
</tr>
<tr>
<td colspan="22">As of September&nbsp;30, 2009</td>
</tr>
<tr bgcolor="#ccdaef">
<td width="9pt"></td>
<td>U.S.&nbsp;Agency&nbsp;securities&nbsp;</td>
<td width="1%">$</td>
 <td align="right" width="9%">-</td>
<td width="2%"></td>
<td width="1%">$</td>
 <td align="right" width="8%">-</td>
<td width="1%"> </td>
<td width="4%"></td>
<td width="1%">$</td>
 <td align="right" width="9%">-</td>
<td width="2%"></td>
<td width="1%">$</td>
 <td align="right" width="8%">-</td>
<td width="1%"></td>
<td width="4%"></td>
<td width="1%">$</td>
 <td align="right" width="9%">-</td>
<td width="2%"></td>
<td width="1%">$</td>
 <td align="right" width="8%">-</td>
<td width="1%">&nbsp; </td>
</tr>
<tr>
<td></td>
<td>Corporate bonds</td>
<td></td>
 <td align="right">-</td>
<td></td>
<td></td>
 <td align="right">-</td>
 <td>&nbsp;</td>
 <td colspan="3" align="right">-</td>
 <td colspan="3" align="right">-</td> <td width="1%">&nbsp;</td>
 <td colspan="3" align="right">-</td>
 <td colspan="3" align="right">-</td>
 <td width="1%">&nbsp;</td>
</tr>
<tr bgcolor="#ccdaef">
<td></td>
<td width="122">Municipal bonds</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">1,213,376</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">(52,835</td>
 <td style="border-bottom: 1px solid black; valign="bottom>)</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">895,330</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">(5,139</td>
 <td style="border-bottom: 1px solid black; valign="bottom>)&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">2,108,706</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">(57,974</td>
<td style="border-bottom: 1px solid black; valign="bottom>)</td>
</tr>
<tr>
<td></td>
<td width="122" valign="top">Total</td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">1,213,376</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">(52,835</td>
 <td style="border-bottom: 3px double black;" valign="top">)</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">895,330</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">(5,139</td>
 <td style="border-bottom: 3px double black;" valign="top">)</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">2,108,706</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">(57,974</td>
<td style="border-bottom: 3px double black;" width="248" valign="top">)</td>
</tr>
<tr bgcolor="#ccdaef">
<td colspan="22">As of March&nbsp;31, 2009</td>
</tr>
<tr>
<td></td>
<td>U.S.&nbsp;Agency&nbsp;securities&nbsp;</td>
<td>$</td>
 <td align="right">-</td>
<td></td>
<td>$</td>
 <td align="right">-</td>
<td> </td>
<td></td>
<td>$</td>
 <td align="right">-</td>
<td></td>
<td>$</td>
 <td align="right">-</td>
<td> </td>
<td></td>
<td>$</td>
 <td align="right">-</td>
<td></td>
<td>$</td>
 <td align="right">-</td>
<td>&nbsp;</td>
</tr>
<tr bgcolor="#ccdaef">
<td></td>
<td>Corporate bonds</td>
<td></td>
 <td align="right">7,278,810</td>
<td></td>
<td></td>
 <td align="right">(796,441</td>
 <td>)</td>
 <td colspan="3" align="right">1,902,698</td>
 <td colspan="3" align="right">(146,073</td>
 <td width="1%">)</td>
 <td colspan="3" align="right">9,181,508</td>
 <td colspan="3" align="right">(942,514</td>
<td width="1%">)</td>
</tr>
<tr>
<td></td>
<td width="122">Municipal bonds</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">901,213</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">(6,436</td>
 <td style="border-bottom: 1px solid black; valign="bottom>)</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">947,043</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">(20,061</td>
 <td style="border-bottom: 1px solid black; valign="bottom>)</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">1,848,256</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">(26,497</td>
<td style="border-bottom: 1px solid black; valign="bottom>
)</td>
</tr>
<tr bgcolor="#ccdaef">
<td></td>
<td width="122" valign="top">Total</td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">8,180,023</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">(802,877</td>
 <td style="border-bottom: 3px double black;" valign="top">)</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">2,849,741</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">(166,134</td>
 <td style="border-bottom: 3px double black;" valign="top">)</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">11,029,764</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" valign="top">$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">(969,011</td>
<td style="border-bottom: 3px double black;" valign="top">
)</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
&nbsp;&nbsp;&nbsp;&nbsp; Gross unrealized losses at September&nbsp;30, 2009 were attributable to our municipal
bonds. The gross unrealized losses were primarily due to interest rate fluctuations
and market-price changes. Although several of the bonds we hold were downgraded
by Moody&#146;s or Standard and Poor&#146;s during the six months ended September&nbsp;30,
2009, all of the bonds that were rated by Moody&#146;s or Standard and Poor&#146;s
had investment-grade credit ratings, and a substantial majority were rated A3/A-
or better. For each bond with an unrealized loss, we determined that it was not
probable that we would not collect all amounts due. In reaching this determination,
we considered factors including the credit ratings of the bonds, the underlying
ratings of insured bonds, whether the bonds were prefunded, and historical default
rates for securities of comparable credit rating. Because we determined that it
was not probable that we would not collect all amounts due, and because we have
the ability and intent to hold our bonds until a recovery of fair value, which
may be maturity, we did not consider any of our marketable securities to be other-than-temporarily
impaired at September&nbsp;30, 2009.<br>
<br>
<br>
</font>
<div style="width: 100%; text-align: center;"><font style=" font-size: 10pt; font-family: Times New Roman;">8</font></div>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><a href="#TOC"><b>Table
of Contents</b></a><br>
<br><b>NOTE 6. COMPREHENSIVE INCOME</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The components of comprehensive income are as follows:<br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td colspan="7" style="border-bottom: 1px solid black;">
<div align="center">&nbsp;<b>Quarter Ended Sept.&nbsp;30</b></div>
</td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" colspan="3" align="center">
<div style="margin-left: 0px; text-indent: 0px; margin-right: 0px;" align="center"><b>2009</b></div>
</td>
<td width="2%"></td>
<td style="border-bottom: 1px solid black;" colspan="3" align="center">
<div style="margin-left: 0px; text-indent: 0px; margin-right: 0px;" align="center"><b>2008</b></div>
</td>
</tr>
<tr>
<td bgcolor="#ccdaef">Net income</td>
<td width="1%" bgcolor="#ccdaef">
$</td>
<td align="right" width="11%" bgcolor="#ccdaef">2,694,183</td>
<td width="1%" bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td width="1%" bgcolor="#ccdaef">
$</td>
<td align="right" width="11%" bgcolor="#ccdaef">
2,300,381</td>
<td bgcolor="#ccdaef" width="1%">&nbsp;</td>
</tr>
<tr>
    <td>Unrealized gain (loss) from marketable securities, net of tax</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">437,926</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
(166,612</td>
<td style="border-bottom: 1px solid black;">)</td>
</tr>
<tr bgcolor="#ccdaef">
<td valign="top">Comprehensive income</td>
<td style="border-bottom: 3px double black;" width="1%" valign="top">
$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">3,132,109</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" width="1%" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">
2,133,769</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
</tr>
</table>
<br>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td colspan="7" style="border-bottom: 1px solid black;">
<div align="center">&nbsp;<b>Six Months Ended Sept.&nbsp;30</b></div>
</td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" colspan="3" align="center">
<div style="margin-left: 0px; text-indent: 0px; margin-right: 0px;" align="center"><b>2009</b></div>
</td>
<td width="2%"></td>
<td style="border-bottom: 1px solid black;" colspan="3" align="center">
<div style="margin-left: 0px; text-indent: 0px; margin-right: 0px;" align="center"><b>2008</b></div>
</td>
</tr>
<tr>
<td bgcolor="#ccdaef">Net income</td>
<td width="1%" bgcolor="#ccdaef">
$</td>
<td align="right" width="11%" bgcolor="#ccdaef">5,633,115</td>
<td width="1%" bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td width="1%" bgcolor="#ccdaef">
$</td>
<td align="right" width="11%" bgcolor="#ccdaef">4,202,997</td>
<td bgcolor="#ccdaef" width="1%">&nbsp;</td>
</tr>
<tr>
    <td>Unrealized gain (loss) from marketable securities, net of tax</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">1,249,822</td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td></td>
<td style="border-bottom: 1px solid black;">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">(458,912</td>
<td style="border-bottom: 1px solid black;">)</td>
</tr>
<tr bgcolor="#ccdaef">
<td valign="top">Comprehensive income</td>
<td style="border-bottom: 3px double black;" width="1%" valign="top">
$</td>
 <td style="border-bottom: 3px double black;" align="right" valign="top">6,882,937</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
<td valign="top"></td>
<td style="border-bottom: 3px double black;" width="1%" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">3,744,085</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
<br>
<b>NOTE 7. INVENTORIES</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories consisted of the following:<br><br></font>
<table style="font-size: 10pt; font-family: Times New Roman;" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td></td>
<td style="border-bottom: 1px solid black;" colspan="3" align="center"><b>September 30<br>
2009</b></td>
<td></td>
<td style="border-bottom: 1px solid black;" colspan="3" align="center"><b>March 31<br>
2009</b></td>
</tr>
<tr>
<td align="left" bgcolor="#ccdaef">
Raw materials</td>
<td align="left" width="1%" bgcolor="#ccdaef">
$</td>
 <td align="right" width="11%" bgcolor="#ccdaef">519,977</td>
<td width="1%" bgcolor="#ccdaef">&nbsp;</td>
<td width="2%" bgcolor="#ccdaef">&nbsp;</td>
<td align="left" width="1%" bgcolor="#ccdaef">
$</td>
<td align="right" width="11%" bgcolor="#ccdaef">564,630</td>
<td width="1%" bgcolor="#ccdaef"></td>
</tr>
<tr>
<td align="left">Work-in-process</td>
<td></td>
 <td align="right">792,200</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right">1,082,290</td>
<td></td>
</tr>
<tr>
<td align="left" bgcolor="#ccdaef">Finished goods</td>
<td style="border-bottom: 1px solid black;" align="left" bgcolor="#ccdaef">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">852,812</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="left" bgcolor="#ccdaef">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right" bgcolor="#ccdaef">900,701</td>
<td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td>
</tr>
<tr>
<td></td>
<td align="left"></td>
 <td align="right">2,164,989</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="left">&nbsp;</td>
<td align="right">2,547,621</td>
<td></td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
Less inventory reserve</td>
<td style="border-bottom: 1px solid black;" align="left">&nbsp;</td>
 <td style="border-bottom: 1px solid black;" align="right">(300,000</td>
<td style="border-bottom: 1px solid black;">
)</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="left">&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
(300,000</td>
<td style="border-bottom: 1px solid black;">
)</td>
</tr>
<tr>
<td align="left" valign="top">
Total inventories</td>
<td style="border-bottom: 3px double black;" align="left" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">1,864,989</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
<td valign="top">&nbsp;</td>
<td style="border-bottom: 3px double black;" align="left" valign="top">
$</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">2,247,621</td>
<td style="border-bottom: 3px double black;" valign="top">&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
<br>
<b>NOTE 8. STOCK-BASED COMPENSATION</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense was $95,244 for
the second quarter of fiscal 2010, $69,878 for the second quarter of fiscal 2009,
$100,842 for the first six months of fiscal 2010, and $75,476 for the first six
months of fiscal 2009. Stock-based compensation expenses for the quarter and six
months ended September&nbsp;30, 2009 and 2008 were non-cash and primarily due
to the issuance of automatic stock options to our non-employee directors on their
reelection to our Board. The increases in stock-based compensation for the quarter
and six months ended September&nbsp;30, 2009 compared to the prior-year periods
were primarily due to a higher stock price at the date of grant compared to the
prior-year date of grant. We calculate the share-based compensation expense on
a straight-line basis over the vesting periods of the related share-based awards.<br>
<br>
<b>NOTE 9. INCOME TAXES</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
Tax provisions of $280,448 for the the six months ended September&nbsp;30, 2009
and $236,524 for the six months ended September&nbsp;30, 2008 were credited to
&#147;Additional paid-in capital.&#148;<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At September&nbsp;30, 2009 we had no unrecognized
tax benefits and we do not expect any significant unrecognized tax benefits within
twelve months of the reporting date. We recognize interest and penalties related
to income tax matters in income tax expense. As of September&nbsp;30, 2009 we
had no accrued interest related to uncertain tax positions. The years 1999 through 2008 remain open to examination
by the major taxing jurisdictions to which we are subject.<br>
<br>
<b>NOTE 10. FAIR VALUE MEASUREMENTS</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:
<br>
<br>
<br>
<div align="center">9</div>
</font>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a></b><br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level 1&nbsp;&#150; Financial instruments with quoted prices in active markets for identical assets or liabilities. Our Level&nbsp;1 financial instruments consist of publicly-traded marketable debt securities that are classified as available-for-sale. On the balance sheets, available-for-sale securities are classified as &#147;Marketable securities, short term&#148; and &#147;Marketable securities, long term.&#148; The fair value of our available-for-sale securities was $41,036,494 at September&nbsp;30, 2009 and $32,446,748 at March&nbsp;31, 2009.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level 2 &#150; Financial instruments with quoted prices in active markets for similar assets or liabilities. Level&nbsp;2 fair value measurements are determined using either prices for similar instruments or inputs that are either directly or indirectly observable, such as interest rates. We do not have any financial assets or liabilities being measured at fair value that are classified as Level&nbsp;2 financial instruments.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level 3 &#150; Inputs to the fair value measurement are unobservable inputs or valuation techniques. We do not have any financial assets or liabilities being measured at fair value that are classified as Level&nbsp;3 financial instruments.<br>
<br>
<b>NOTE 11. STOCK REPURCHASE PLAN</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;21, 2009 we announced that our Board
of Directors authorized the repurchase of up to $2,500,000 of our Common Stock.
The repurchase program may be modified or discontinued at any time without notice.
We did not repurchase any of our Common Stock during the quarter or six months
ended September&nbsp;30, 2009.<br>
<br>
<br>
<b><a name="MDA"></a>Item 2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations.<br>
<br>
Forward-looking statements</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 (&#147;SEC&#148;) as well as information included in verbal
or written statements made by us constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. These statements
are subject to the safe harbor provisions of the reform act. Forward-looking statements
may be identified by the use of the terminology such as may, will, expect, anticipate,
intend, believe, estimate, should, or continue, or the negatives of these terms
or other variations on these words or comparable terminology. To the extent that
this Report contains forward-looking statements regarding the financial condition,
operating results, business prospects or any other aspect of NVE, you should be
aware that our actual financial condition, operating results and business performance
may differ materially from that projected or estimated by us in the forward-looking
statements. We have attempted to identify, in context, some of the factors that
we currently believe may cause actual future experience and results to differ
from their current expectations. These differences may be caused by a variety
of factors, including but not limited to an uncertain economic environment, risks
associated with our marketable securities, competition
including entry of new competitors, progress in research and development activities
by us and others, variations in costs that are beyond our control, adverse legal
proceedings, lower sales, failure of suppliers to meet our requirements, failure
to obtain new customers, inability to carry out marketing and sales plans, inability
to meet customer technical requirements, inability to consummate license agreements,
ineligibility for SBIR awards, loss of key executives, and other specific risks
that may be alluded to in this Report or in the documents incorporated by reference
in this Report.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further information regarding our risks and uncertainties are
contained in Part&nbsp;I, Item 1A &#147;Risk Factors&#148; of our Annual Report on
<font style="white-space: nowrap;">Form 10-K</font> for the year ended March&nbsp;31,&nbsp;2009.<br>
<br>
<b>General</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NVE Corporation, referred to as NVE, we, us, or
our, develops and sells devices that use spintronics, a nanotechnology that
relies on electron spin rather than electron charge to acquire, store and transmit
information. We manufacture high-performance spintronic products including sensors
and couplers that are used to acquire and transmit data. We have also licensed
our spintronic magnetoresistive random access memory technology, commonly known
as MRAM.<br>
<br>
<b>Critical Accounting Policies</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A description of our critical accounting policies
is provided in Management&#146;s Discussion and Analysis of Financial Condition
and Results of Operations in our Annual Report on <font style="white-space: nowrap;">Form 10-K</font> for the year ended
March&nbsp;31, 2009. At September&nbsp;30, 2009 our critical accounting policies
and estimates continued to include research and development contract percentage
of completion estimation, product warranty estimation, inventory valuation,
allowance for doubtful accounts estimation, and deferred tax assets estimation.<br>
<br>
<br>
<div align="center">10</div>
</font>
<hr><br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a><a name="Q-MD&A"></a><br>
<br>
Quarter ended September&nbsp;30, 2009 compared to quarter ended September&nbsp;30, 2008</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table shown below summarizes the percentage
of revenue and quarter-to-quarter changes for various items:</font><br>
<br>
<table style="font-size: 10pt; font-family: Times New Roman;" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="5"><b>Percentage of Revenue<br>
Quarter Ended Sept. 30</b></td>
<td rowspan="2"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2" rowspan="2"><b>Quarter-<br>
to-Quarter<br>
Change</b></td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>2009</b></td>
<td align="left"></td>
<td style="border-bottom: 1px solid black;"align="center" colspan="2"><b>2008</b></td>
</tr>
<tr>
<td align="left" bgcolor="#ccdaef" colspan="9">Revenue</td>
</tr>
<tr>
<td align="left">
<div style="margin-left: 9pt;" align="left">Product sales</div>
</td>
<td align="right" width="9%">79.5</td>
<td align="left" width="1%">
%</td>
<td align="left" width="4%">&nbsp;</td>
<td align="right" width="9%">
85.0</td>
<td align="left" width="1%">
%</td>
<td align="left" width="4%">&nbsp;</td>
<td align="right" width="9%">6.3</td>
<td align="left" width="1%">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
<div style="margin-left: 9pt;" align="left">Contract&nbsp;research&nbsp;and&nbsp;development</div>
</td>
<td style="border-bottom: 1px solid black;" align="right">20.5</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">15.0</td>
<td style="border-bottom: 1px solid black;" align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">55.4</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">
Total revenue</td>
<td align="right">
100.0</td>
<td align="left">
%</td>
<td></td>
<td align="right">
100.0</td>
<td align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">13.6</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
Cost of sales</td>
<td style="border-bottom: 1px solid black;" align="right">30.5</td>
<td style="border-bottom: 1px solid black;" align="left">%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">30.5</td>
<td style="border-bottom: 1px solid black;" align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">13.6</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">
Gross profit</td>
<td align="right">69.5</td>
<td align="left">
%</td>
<td>&nbsp;</td>
<td align="right">
69.5</td>
<td align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">13.6</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left" colspan="9">Expenses</td>
</tr>
<tr>
<td align="left">
<div style="margin-left: 9pt;" align="left">Selling, general, and administrative</div>
</td>
<td align="right">9.5</td>
<td>
%</td>
<td>&nbsp;</td>
<td align="right">
10.2</td>
<td>
%</td>
<td>&nbsp;</td>
<td align="right">6.3</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
<div style="margin-left: 9pt;" align="left">Research&nbsp;and&nbsp;development</div>
</td>
<td style="border-bottom: 1px solid black;" align="right">4.5</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
4.9</td>
<td style="border-bottom: 1px solid black;" align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">3.8</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">
Total expenses</td>
<td style="border-bottom: 1px solid black;" align="right">14.0</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">15.1</td>
<td style="border-bottom: 1px solid black;" align="left" width="1%">%</td>
<td>&nbsp;</td>
<td align="right">5.5</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
Income from operations</td>
<td align="right">55.5</td>
<td align="left">
%</td>
<td align="left" width="2%">&nbsp;</td>
<td align="right">
54.4</td>
<td align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">15.9</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">Interest and other income</td>
<td style="border-bottom: 1px solid black;" align="right">6.0</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
4.8</td>
<td style="border-bottom: 1px solid black;" align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">41.9</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
Income before taxes</td>
<td align="right">61.5</td>
<td align="left">
%</td>
<td align="left" width="2%">&nbsp;</td>
<td align="right">
59.2</td>
<td align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">18.0</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">
Provision for income taxes</td>
<td style="border-bottom: 1px solid black;" align="right">20.1</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
19.0</td>
<td style="border-bottom: 1px solid black;" align="left" width="1%">
%</td>
<td>&nbsp;</td>
<td align="right">20.0</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left" valign="top">
Net income</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">41.4</td>
<td style="border-bottom: 3px double black;" align="left" valign="top">
%</td>
<td align="left" width="2%" valign="top">&nbsp;</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">40.2</td>
<td style="border-bottom: 3px double black;" align="left" width="1%" valign="top">
%</td>
<td valign="top">&nbsp;</td>
<td align="right" valign="top">17.1</td>
<td align="left" valign="top">
<div align="right">%</div>
</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue for the quarter ended September&nbsp;30,
2009 (the second quarter of fiscal 2010) increased 14% to $6,508,501 compared
to $5,727,790 for the quarter ended September&nbsp;30, 2008 (the second quarter
of fiscal 2009). The increase was due to a 6% increase in product sales and a
55% increase in contract research and development revenue. The increase in product
sales was due to the addition of new customers and increased
purchase volume by existing customers. The increase in research and development
revenue was due to new contracts. The increase in research and development revenue may
not be representative of future trends and there can be no assurance of additional or
follow-on contracts for expired or completed contracts.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin was 69% of revenue for the second
quarter of fiscal 2010, unchanged from the second quarter of fiscal 2009. Higher
margins on both product sales and contract research and development revenue offset
a less favorable revenue mix with a higher portion of revenue from contract research
and development.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative expense
for the second quarter of fiscal 2010 increased 6% compared to the second quarter
of fiscal 2009, primarily due to increases in salaries, commissions, and
stock-based compensation expense. Stock-based compensation expenses for the
quarters ended September&nbsp;30, 2009 and 2008 were primarily
due to the issuance of automatic stock options to our non-employee directors on
their reelection to our Board. The increase in stock-based compensation for the
quarter ended September&nbsp;30, 2009 compared to the prior-year
quarter was primarily due to a higher stock price at the date of grant compared
to the prior-year date of grant.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development expense increased 4% for
the second quarter of fiscal 2010 compared to the second quarter of fiscal 2009
due to increased sensor and coupler product development. Our research and development expense can fluctuate significantly
depending on staffing, project requirements, and contract research and development
activities.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other income increased 42% to
$393,198 for the second quarter of fiscal 2010 compared to $277,074 for the second
quarter of fiscal 2009. The increase was due to an increase in interest-bearing
marketable securities.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provision for income taxes was $1,308,522, or
33% of income before taxes, for the second quarter of fiscal 2010 compared to
$1,090,629, or 32% of income before taxes, for the second quarter of fiscal 2009.
The effective tax rate can fluctuate due to a number of factors, some of which
are outside our control.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 17% increase in net income in the second quarter
of fiscal 2010 compared to the prior-year quarter was primarily due to increases
in product sales, contract&nbsp;research&nbsp;and&nbsp;development revenue, and
interest income, partially offset by increased expenses.<br>
<br>
<br>
<div align="center">11</div>
</font>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a><a name="YTD-MD&A"></a><br>
<br>
Six months ended September&nbsp;30, 2009 compared to six months ended September&nbsp;30, 2008</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table shown below summarizes the percentage
of revenue and period-to-period changes for various items:</font><br>
<br>
<table style="font-size: 10pt; font-family: Times New Roman;" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td rowspan="2"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="5"><b>Percentage of Revenue<br>
Six Months Ended Sept.&nbsp;30</b></td>
<td rowspan="2"></td>
<td style="border-bottom: 1px solid black;" align="center" colspan="2" rowspan="2"><b>Period-<br>
to-Period<br>
Change</b></td>
</tr>
<tr>
<td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>2009</b></td>
<td align="left"></td>
<td style="border-bottom: 1px solid black;"align="center" colspan="2"><b>2008</b></td>
</tr>
<tr>
<td align="left" bgcolor="#ccdaef" colspan="9">Revenue</td>
</tr>
<tr>
<td align="left">
<div style="margin-left: 9pt;" align="left">Product sales</div>
</td>
<td align="right" width="9%">80.3</td>
<td align="left" width="1%">
%</td>
<td align="left" width="4%">&nbsp;</td>
<td align="right" width="9%">
88.9</td>
<td align="left" width="1%">
%</td>
<td align="left" width="4%">&nbsp;</td>
<td align="right" width="9%">13.7</td>
<td align="left" width="1%">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
<div style="margin-left: 9pt;" align="left">Contract&nbsp;research&nbsp;and&nbsp;development</div>
</td>
<td style="border-bottom: 1px solid black;" align="right">19.7</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
11.1</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td align="right">124.4</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">
Total revenue</td>
<td align="right">
100.0</td>
<td align="left">
%</td>
<td></td>
<td align="right">
100.0</td>
<td align="left">
%</td>
<td>&nbsp;</td>
<td align="right">26.0</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
Cost of sales</td>
<td style="border-bottom: 1px solid black;" align="right">29.1</td>
<td style="border-bottom: 1px solid black;" align="left">%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
29.8</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td align="right">22.9</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">
Gross profit</td>
<td align="right">70.9</td>
<td align="left">
%</td>
<td>&nbsp;</td>
<td align="right">
70.2</td>
<td align="left">
%</td>
<td>&nbsp;</td>
<td align="right">27.3</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left" colspan="9">Expenses</td>
</tr>
<tr>
<td align="left">
<div style="margin-left: 9pt;" align="left">Selling, general, and administrative</div>
</td>
<td align="right">9.4</td>
<td>
%</td>
<td>&nbsp;</td>
<td align="right">
10.5</td>
<td>
%</td>
<td>&nbsp;</td>
<td align="right">12.8</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
<div style="margin-left: 9pt;" align="left">Research&nbsp;and&nbsp;development</div>
</td>
<td style="border-bottom: 1px solid black;" align="right">4.2</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
6.3</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td align="right">(16.2</td>
<td align="left">
<div align="right">)%</div>
</td>
</tr>
<tr>
<td align="left">
Total expenses</td>
<td style="border-bottom: 1px solid black;" align="right">13.6</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
16.8</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td align="right">2.0</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
Income from operations</td>
    <td align="right">57.3</td>
<td align="left">
%</td>
<td align="left" width="2%">&nbsp;</td>
<td align="right">
53.4</td>
<td align="left">
%</td>
<td>&nbsp;</td>
<td align="right">35.3</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">
Interest and other income</td>
<td style="border-bottom: 1px solid black;" align="right">5.7</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">
5.0</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td align="right">42.7</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left">
Income before taxes</td>
    <td align="right">63.0</td>
<td align="left">
%</td>
<td align="left" width="2%">&nbsp;</td>
<td align="right">58.4</td>
<td align="left">
%</td>
<td>&nbsp;</td>
<td align="right">35.9</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr>
<td align="left">
Provision for income taxes</td>
<td style="border-bottom: 1px solid black;" align="right">20.8</td>
<td style="border-bottom: 1px solid black;" align="left">
%</td>
<td>&nbsp;</td>
<td style="border-bottom: 1px solid black;" align="right">18.7</td>
<td style="border-bottom: 1px solid black;" align="left">%</td>
<td>&nbsp;</td>
<td align="right">39.9</td>
<td align="left">
<div align="right">%</div>
</td>
</tr>
<tr bgcolor="#ccdaef">
<td align="left" valign="top">Net income</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">42.2</td>
<td style="border-bottom: 3px double black;" align="left" valign="top">
%</td>
<td align="left" width="2%" valign="top">&nbsp;</td>
<td style="border-bottom: 3px double black;" align="right" valign="top">
39.7</td>
<td style="border-bottom: 3px double black;" align="left" valign="top">
%</td>
<td valign="top">&nbsp;</td>
<td align="right" valign="top">34.0</td>
<td align="left" valign="top">
<div align="right">%</div>
</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue for the six months ended September&nbsp;30,
2009 increased 26% to $13,343,033 compared
to $10,591,576 for the six months ended September&nbsp;30, 2008. The increase
was due to a 14% increase in product sales and a 124% increase in contract research
and development revenue. The increase in product sales was due to the addition of new customers and increased purchase volume by existing customers.
The increase in research and development revenue was due to new contracts. The
increase in research and development revenue may not be representative of future
trends and there can be no assurance of additional or follow-on contracts for
expired or completed contracts.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin increased to 71% of revenue
for the first six months of fiscal 2010 compared to 70% for the first six months
of fiscal 2009. The increase was due to higher margins on both product sales and
contract research and development revenue.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling, general, and administrative expense for
the first six months of fiscal 2010 increased 13% compared to the first six months
of fiscal 2009, primarily due to increased salaries, performance-based
compensation, commissions, and stock-based compensation expense.
Stock-based compensation expenses for the six months ended September&nbsp;30, 2009
and 2008 were primarily due to the issuance of automatic stock options to our
non-employee directors on their reelection to our Board. The increase in stock-based
compensation for the six months ended September&nbsp;30, 2009 compared to the prior-year
period was primarily due to a higher stock price at the date of grant compared
to the prior-year date of grant.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development expense decreased 16% for
the first six months of fiscal 2010 compared to the first six months of fiscal
2009 due to an increase in contract research and development activities,
which caused resources to be reallocated from expensed research and development
activities. The decrease in research and development expense for the six-month period may not be representative
of future expense trends. Our research and development expense can fluctuate significantly
depending on staffing, project requirements, and contract research and development
activities.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest and other income increased 43% to $763,223
for the first six months of fiscal 2010 compared to $534,909 for first six months
of fiscal 2009. The increase was due to an increase in interest-bearing marketable
securities.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The provision for income taxes was $2,779,680, or
33% of income before taxes, for the first six months of fiscal 2010 compared to $1,986,686, or
32% of income before taxes, for the first six months of fiscal 2009. The
effective tax rate can fluctuate due to a number of factors, some of which
are outside our control.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 34% increase in net income in the first six months of
fiscal 2010 compared to the prior-year period was primarily due to increases
in product sales, contract&nbsp;research&nbsp;and&nbsp;development revenue, and interest
income.<br>
<br>
<br>
<div align="center">12<font face="Times New Roman, Times, serif" size="2"></font>
</div>
</font>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a><br>
<br>
Liquidity and capital resources</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At September&nbsp;30, 2009 we had $43,626,680 in
cash plus short-term and long-term marketable securities compared to $34,321,811
at March&nbsp;31,&nbsp;2009. Our entire portfolio of short-term and long-term
marketable securities is classified as available for sale. The increase in cash
plus marketable securities in the first six months of fiscal 2010 was primarily
due to $6,617,013 in net cash provided by operating activities, a $1,952,593
net increase in the market value of our marketable securities due to market-price changes,
and $622,423 in net proceeds from the sale of common stock related to option exercises.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred taxes were a $23,971 liability at September&nbsp;30,
2009 compared to a $667,729 asset at March&nbsp;31,&nbsp;2009. The change was
primarily due to a $702,771 increase in deferred taxes related to the net increase
in the value of our marketable securities. Accounts receivable decreased by $413,671
at September&nbsp;30, 2009 compared to March&nbsp;31,&nbsp;2009 due to the timing
of payments by our customers. Inventories decreased by $382,632 due to raw material
purchase timing and our efforts to manage certain inventories.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We currently believe our working capital is adequate for our
needs at least for the next 12 months.<br>
<br>
<b><a name="MarketRisk"></a>Item 3. Quantitative and Qualitative Disclosures
About Market Risk.</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The primary objective of our investment activities
is to preserve principal while at the same time maximizing after-tax yields without
significantly increasing risk. To achieve this objective, we maintain our portfolio
of cash equivalents and marketable securities in a variety of securities including
government agency obligations, municipal obligations, corporate obligations, and
money market funds. Short-term and long-term marketable securities are generally
classified as available-for-sale and consequently are recorded on the balance
sheet at fair value with unrealized gains or losses reported as a separate component
of accumulated other comprehensive income, net of estimated tax. Marketable securities
as of September&nbsp;30, 2009 had remaining maturities between seven&nbsp;and 58&nbsp;months.
Our short-term and long-term marketable securities had a fair market value of
$41,036,494 at September&nbsp;30, 2009, representing approximately 81% of our total
assets. We have not used derivative financial instruments in our investment portfolio.<br>
<br>
<a name="Controls"></a><b>Item 4. Controls and Procedures.</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management, with the participation of the Chief
Executive Officer and Chief Financial Officer, has performed an evaluation of
our disclosure controls and procedures (as defined in
<font style="white-space: nowrap;">Rules 13a-15(e)</font> and <font style="white-space: nowrap;">15d-15(e)</font>
of the Securities Exchange Act of 1934 (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&#146;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 the end of the period covered by this
report, our disclosure controls and procedures were effective.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the quarter ended September&nbsp;30, 2009,
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.<br>
<br>
<br>
</font>
<div align="center"><font style="font-size: 10pt; font-family: Times New Roman;">13</font></div>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a></b><br>
<br>
<div align="center"><b><a name="Part2"></a>PART II&#150;OTHER INFORMATION</b></div>
<br>
<b><a name="Vote"></a>Item 4. Submission of Matters to a Vote of Security Holders.<br>
</b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Annual Meeting of Shareholders was held on August 6, 2009. Proxies for the meeting were solicited pursuant to
Regulation&nbsp;14 under the Exchange Act. All of our directors attended the meeting. The Annual Meeting was held for the
following purposes: (1)&nbsp;to elect five directors to serve until the next Annual Meeting of Shareholders; and (2)&nbsp;to ratify the
selection of Ernst&nbsp;& Young LLP as our independent registered public accounting firm for the fiscal year ending March&nbsp;31,
2010. There were 4,682,583 shares of common stock entitled to vote at the meeting with a majority represented at the
meeting. The affirmative vote of the majority of the votes cast was required to pass each of the proposals. The Board of
Directors recommended a vote for election of the director nominees and for ratification of the selection of our independent
registered public accounting firm. There was no solicitation in opposition.
Each director nominee was reelected to serve as a director until our next Annual Meeting of Shareholders and the
selection of our independent registered public accounting firm was ratified.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voting results were as follows:<br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td colspan="2" rowspan="2" valign="bottom"></td>
<td colspan="10" style="border-bottom: 1px solid black;" align="center" nowrap valign="bottom"><b>Number of Shares</b></td>
</tr>
<tr valign="bottom">
<td colspan="2" style="border-bottom: 1px solid black;" align="center" nowrap><b>Voted For</b></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2" style="border-bottom: 1px solid black;" align="center" nowrap><b>Withheld</b></td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td colspan="2" style="border-bottom: 1px solid black;" align="center" nowrap><b>Abstain</b></td>
</tr>
<tr>
<td valign="top" width="2%">1.&nbsp;</td>
<td valign="bottom" colspan="11">
To elect five directors to serve until the next Annual Meeting of Shareholders.</td>
</tr>
<tr>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef" valign="bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Terrence&nbsp;W. Glarner</td>
<td bgcolor="#ccdaef" width="1%"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom" width="5%">3,824,696</td>
<td bgcolor="#ccdaef" width="1%"></td>
<td bgcolor="#ccdaef" width="5%"></td>
<td bgcolor="#ccdaef" width="1%"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom" width="5%">138,609</td>
<td bgcolor="#ccdaef" width="1%"></td>
<td bgcolor="#ccdaef" width="5%"></td>
<td bgcolor="#ccdaef" width="1%"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom" width="5%">1,060</td>
</tr>
<tr>
<td>&nbsp;</td>
<td valign="bottom">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Daniel&nbsp;A. Baker</td>
<td>&nbsp;</td>
<td align="right" valign="bottom">3,826,733</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right" valign="bottom">136,572</td>
<td></td>
<td></td>
<td></td>
<td align="right" valign="bottom">1,060</td>
</tr>
<tr>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef" valign="bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;James&nbsp;D. Hartman</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">3,839,242</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">124,063</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">1,060</td>
</tr>
<tr>
<td>&nbsp;</td>
<td valign="bottom">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Patricia&nbsp;M. Hollister</td>
<td></td>
<td align="right" valign="bottom">3,836,415</td>
<td></td>
<td></td>
<td></td>
<td align="right" valign="bottom">126,890</td>
<td></td>
<td></td>
<td></td>
<td align="right" valign="bottom">1,060</td>
</tr>
<tr>
<td bgcolor="#ccdaef">&nbsp;</td>
<td bgcolor="#ccdaef" valign="bottom">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Robert&nbsp;H. Irish</td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">3,818,095</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">145,210</td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td bgcolor="#ccdaef"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">1,060</td>
</tr>
<tr>
<td colspan="2" rowspan="2" valign="bottom">&nbsp;</td>
<td colspan="10" style="border-bottom: 1px solid black;" align="center" nowrap valign="bottom"><b>&nbsp;<br>
Number of Shares</b></td>
</tr>
<tr valign="bottom">
<td colspan="2" style="border-bottom: 1px solid black;" align="center" nowrap><b>Voted For</b></td>
<td></td>
<td></td>
<td colspan="2" style="border-bottom: 1px solid black;" align="center" nowrap><b>Voted Against</b></td>
<td></td>
<td></td>
<td colspan="2" style="border-bottom: 1px solid black;" align="center" nowrap><b>Abstain</b></td>
</tr>
<tr>
<td align="left" valign="top" bgcolor="#ccdaef">2.&nbsp;</td>
<td bgcolor="#ccdaef" valign="bottom">
To ratify the selection of Ernst & Young LLP as our independent registered
<br>
public accounting firm for the fiscal year ending March&nbsp;31, 2010.</td>
<td bgcolor="#ccdaef" valign="bottom"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">3,931,395</td>
<td bgcolor="#ccdaef" valign="bottom"></td>
<td bgcolor="#ccdaef" valign="bottom"></td>
<td bgcolor="#ccdaef" valign="bottom"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">30,956</td>
<td bgcolor="#ccdaef" valign="bottom"></td>
<td bgcolor="#ccdaef" valign="bottom"></td>
<td bgcolor="#ccdaef" valign="bottom"></td>
<td align="right" bgcolor="#ccdaef" valign="bottom">2,015</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
&nbsp;<br>
<b><a name="Exhibits"></a>Item 6. Exhibits.</b><br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" width="100%" border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="1%">
<div align="center"><b><u>Exhibit&nbsp;#</u></b></div>
</td>
<td width="88%">
<div align="center"><b><u>Description</u></b></div>
</td>
</tr>
<tr>
<td colspan="2">&nbsp;</td>
</tr>

<tr>
<td valign="top">
&nbsp;&nbsp;31.1</td>
<td>
Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).<br>
&nbsp;
</td>
</tr>
<tr>
<td valign="top">
&nbsp;&nbsp;31.2</td>
<td valign="top">
Certification by Curt A. Reynders pursuant to Rule 13a-14(a)/15d-14(a).<br>
&nbsp;
</td>
</tr>
<tr>
<td valign="top">
&nbsp;&nbsp;32</td>
<td valign="top">
Certification by Daniel A. Baker and Curt A. Reynders pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;">&nbsp;<br>
&nbsp;
<br><br>
&nbsp;
<div align="center">14</div>
</font>
<hr>
<br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman;"><b><a href="#TOC">Table
of Contents</a></b></font><font style="font-size: 10pt; font-family: Times New Roman;"><br>
<br>
<br>
<div align="center"><b><font style="font-size: 10pt; font-family: Times New Roman;"><b><a name="Signatures"></a></b></font>SIGNATURES</b></div>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.<br>
<br>
</font>
<table style="font-size: 10pt; font-family: Times New Roman;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td rowspan="2"></td>
<td><b><u>NVE CORPORATION</u></b></td>
</tr>
<tr>
<td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant)</td>
</tr>
<tr>
<td colspan="2"><br>
&nbsp;
</td>
</tr>
<tr>
<td width="25%">
<div align="center"><b><u>October 21, 2009</u></b></div>
</td>
<td><u>/s/ DANIEL A. BAKER&nbsp;</u></td>
</tr>
<tr>
<td width="25%">
<div align="center">Date</div>
</td>
<td>Daniel A. Baker
</td>
</tr>
<tr>
<td width="25%"> </td>
<td>President and Chief Executive Officer</td>
</tr>
<tr>
<td colspan="2"><br>
&nbsp;
</td>
</tr>
<tr>
<td width="25%">
<div align="center"><b><u>October 21, 2009</u></b></div>
</td>
<td>
<div align="left"><u>/s/
CURT A. REYNDERS&nbsp;</u></div>
</td>
</tr>
<tr>
<td width="25%">
<div align="center">Date</div>
</td>
<td>Curt A. Reynders</td>
</tr>
<tr>
<td></td>
<td>Chief Financial Officer</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Times New Roman;"><br>
<br>
<br>
<br>
<div align="center">15</div>
<br>
</font>
<hr>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>ex31-dab.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
<TEXT>
<html>
<div style="font-size: 10pt; font-family: Times New Roman;">
<p align="right"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 31.1</font></b>
<p align="center"><b>CERTIFICATION</b>
<p>I, Daniel A. Baker, certify that:<br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">1.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&#160;&#160;&#160;&#160;&#160; </font> I have reviewed this Quarterly Report on Form 10-Q of NVE Corporation;
<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">&nbsp;
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">2.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&#160;&#160;&#160;&#160;&#160; </font> 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;
<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">&nbsp;
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">3.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&#160;&#160;&#160;&#160;&#160; </font> 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;
<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">&nbsp;
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">4.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>&#160;&#160;&#160;&#160;&#160; </font>
    The registrant&#146;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:
<br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(a)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>
    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;
  <br>
<br>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(b)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>
    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;&nbsp;
  <br>
<br>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(c)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>Evaluated the effectiveness of the registrant&#146;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
  <br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(d)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>
    Disclosed in this report any change in the registrant&#146;s internal
    control over financial reporting that occurred during the registrant&#146;s
    most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in
    the case of an annual report) that has materially affected, or is reasonably
    likely to materially affect, the registrant&#146;s internal control over financial
    reporting; and
<br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">5.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&#160;&#160;&#160;&#160;&#160; </font> The registrant&#146;s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant&#146;s auditors and the
audit committee of the registrant&#146;s board of directors (or persons performing
the equivalent functions):
<br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(a)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font> 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&#146;s ability to record, process, summarize and report financial
information; and
<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">&nbsp;
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(b)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Any fraud, whether or not material,
that involves management or other employees who have a significant role in the
registrant&#146;s internal control over financial reporting.
<p>Date: October 21, 2009
<p>&nbsp;
<table style="font-size: 10pt; font-family: Times New Roman;" border="0" cellspacing="0" cellpadding="0" width="100%">
 <tr>
  <td valign="top" style="padding:0in 0in 0in 0in;width:50%;">
  </td>
  <td valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:25%;">
/s/ DANIEL A. BAKER
  </td>
  <td valign="top" style="padding:0in 0in 0in 0in;">
  </td>
 </tr>
 <tr>
  <td width="54%" valign="top" style="padding:0in 0in 0in 0in;width:54.62%;">
  </td>
  <td width="45%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:45.38%;">
Daniel A. Baker
  </td>
 </tr>
 <tr>
  <td width="54%" valign="top" style="padding:0in 0in 0in 0in;width:54.62%;">
  </td>
  <td width="45%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:45.38%;">
President and Chief Executive Officer
  </td>
 </tr>
</table>
</div>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>3
<FILENAME>ex31-car.htm
<DESCRIPTION>CERTIFICATION BY CURT A. REYNDERS PURSUANT TO RULE 13A-14(A)/15D-14(A)
<TEXT>
<html>
<div style="font-size: 10pt; font-family: Times New Roman;">
<p align="right"><b>Exhibit 31.2</b>
<p align="center"><b>CERTIFICATION</b>
<p>I, Curt A. Reynders, certify that:<br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">1.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&#160;&#160;&#160;&#160;&#160; </font> I have reviewed this Quarterly Report on Form 10-Q of NVE Corporation;
<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">&nbsp;
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">2.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&#160;&#160;&#160;&#160;&#160; </font> 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;
<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">&nbsp;
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">3.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&#160;&#160;&#160;&#160;&#160; </font> 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;
<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">&nbsp;
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">4.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>&#160;&#160;&#160;&#160;&#160; </font>
    The registrant&#146;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:
<br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(a)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>
    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;
  <br>
<br>

<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(b)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>
    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;&nbsp;
  <br>
<br>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(c)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>Evaluated the effectiveness of the registrant&#146;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
  <br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(d)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>
    Disclosed in this report any change in the registrant&#146;s internal
    control over financial reporting that occurred during the registrant&#146;s
    most recent fiscal quarter (the registrant&#146;s fourth fiscal quarter in
    the case of an annual report) that has materially affected, or is reasonably
    likely to materially affect, the registrant&#146;s internal control over financial
    reporting; and
<br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;">5.<font size="1" style="font-size:3.0pt;"><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>&#160;&#160;&#160;&#160;&#160; </font> The registrant&#146;s other certifying
officer(s) and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant&#146;s auditors and the
audit committee of the registrant&#146;s board of directors (or persons performing
the equivalent functions):
<br>
<br>
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(a)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font> 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&#146;s ability to record, process, summarize and report financial
information; and
<p style="margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">&nbsp;
<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.5in;text-indent:-.5in;">(b)<font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Any fraud, whether or not material,
that involves management or other employees who have a significant role in the
registrant&#146;s internal control over financial reporting.
<p>Date: October 21, 2009
<p>&nbsp;
<table style="font-size: 10pt; font-family: Times New Roman;" border="0" cellspacing="0" cellpadding="0" width="100%">
 <tr>
  <td valign="top" style="padding:0in 0in 0in 0in;width:50%;">
  <p>&nbsp;
  </td>

<td valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:25%;">
/s/ CURT A. REYNDERS</td>
  <td valign="top" style="padding:0in 0in 0in 0in;">
  </td>
 </tr>
 <tr>
  <td width="54%" valign="top" style="padding:0in 0in 0in 0in;width:54.62%;">
  </td>
  <td width="45%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:45.38%;">
Curt A. Reynders
  </td>
 </tr>
 <tr>
  <td width="54%" valign="top" style="padding:0in 0in 0in 0in;width:54.62%;">
  </td>
<td width="45%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:45.38%;">
Chief Financial Officer</td>
 </tr>
</table>
</div>
</body>
</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>4
<FILENAME>ex32.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
<TEXT>
<html>
<div style="font-family:Times New Roman;">
<p align="right"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit 32</font></b><p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">CERTIFICATION PURSUANT TO SECTION 906</font></b></p>
<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C.
SECTION 1350)</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The undersigned certify pursuant to
18 U.S.C. Section 1350, that to the undersigned&#146;s knowledge:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    </font>The accompanying Quarterly Report of NVE Corporation (the &#147;Company&#148;)
    on Form 10-Q for the quarter ended September&nbsp;30, 2009, fully complies with
    the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
    of 1934; and</p>

<p style="margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt 1.0in;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>The information contained in the
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date:
    October 21, 2009</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
      <td valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:25%;">
        <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/
          DANIEL A. BAKER</font></p>
  </td>
      <td valign="top" style="padding:0in 0in 0in 0in;">
        <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
      <td colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
        <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Daniel A. Baker</font></p>
  </td>
 </tr>
 <tr>
      <td colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
        <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">President and
  Chief Executive Officer</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
      <td valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in 0in 0in 0in;width:25%;">
        <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/
          CURT A. REYNDERS</font></p>
  </td>
      <td wvalign="top" style="padding:0in 0in 0in 0in;">
        <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Curt A. Reynders</font></p>
  </td>
 </tr>
 <tr>
  <td width="100%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:100.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial
  Officer</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="2" width="100%" noshade color="gray" align="left"></div>
</div>
</body>
</html>
</TEXT>
</DOCUMENT>
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<SEQUENCE>5
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<DESCRIPTION>NVE CORPORATION LOGO
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