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<SEC-DOCUMENT>0000724910-10-000024.txt : 20101020
<SEC-HEADER>0000724910-10-000024.hdr.sgml : 20101020
<ACCEPTANCE-DATETIME>20101020161612
ACCESSION NUMBER:		0000724910-10-000024
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20100930
FILED AS OF DATE:		20101020
DATE AS OF CHANGE:		20101020

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:		101132978

	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>q2q11.htm
<DESCRIPTION>QUARTERLY REPORT FOR THE PERIOD ENDED SEPT. 30, 2010
<TEXT>
<html> <font style="font-size: 10pt; font-family: Times New Roman">&nbsp;</font><p align="center"><b><font face="Times New Roman" size="5">UNITED
STATES<br> SECURITIES AND EXCHANGE COMMISSION</font><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" 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, 2010</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 232.405 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 15, 2010<br> </b><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> <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, 2010 and 2009</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, 2010 and 2009</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&#146;s Discussion and Analysis of Financial Condition and Results
of Operations</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="#Risks">Item 1A. Risk Factors</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<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="Part1"></a> <br> <br> <div align="center">PART I&#150;FINANCIAL
INFORMATION</div><br><br>Item 1. Financial Statements. </b><div align="center"><b>NVE
CORPORATION<br> BALANCE SHEETS<br> <br> </b></div></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, 2010</b></td><td width="2%"></td><td style="border-bottom: 1px solid black;" colspan="3" valign="bottom" align="center"><b>March
31, 2010*</b></td></tr> <tr bgcolor="#ccdaef"> <td colspan="8">ASSETS</td></tr>
<tr> <td colspan="8">Current assets</td></tr> <tr bgcolor="#ccdaef"><td> <div style="margin-left: 9pt;">Cash
and cash equivalents</div></td><td width="1%">$</td><td align="right" width="11%">690,841</td><td width="1%"></td><td></td><td width="1%">$</td><td align="right" width="11%">1,389,288</td><td width="1%"></td></tr>
<tr> <td> <div style="margin-left: 9pt;">Marketable securities, short term</div></td><td>&nbsp;</td><td align="right">2,489,580</td><td></td><td></td><td></td><td align="right">1,566,666</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;">Accounts receivable,
net of allowance for uncollectible accounts of $15,000</div></td><td>&nbsp;</td><td align="right">4,138,418</td><td></td><td></td><td></td><td align="right">4,221,564</td><td></td></tr>
<tr> <td> <div style="margin-left: 9pt;">Inventories</div></td><td>&nbsp;</td><td align="right">2,371,727</td><td></td><td></td><td></td><td align="right">1,706,427</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;">Prepaid expenses and
other assets</div></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">1,073,176</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">781,294</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td>Total current assets</td><td>&nbsp;</td><td align="right">10,763,742</td><td></td><td></td><td></td><td align="right">9,665,239</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td colspan="8">Fixed assets</td></tr> <tr> <td> <div style="margin-left: 9pt;">Machinery
and equipment&nbsp;</div></td><td>&nbsp;</td><td align="right">5,821,555</td><td></td><td></td><td></td><td align="right">5,617,136</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;">Leasehold improvements</div></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">450,546</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">450,546</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td>&nbsp;</td><td></td><td align="right">6,272,101</td><td></td><td></td><td></td><td align="right">6,067,682</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;">Less accumulated depreciation&nbsp;</div></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">5,038,657</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">4,857,819</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td>Net fixed assets</td><td></td><td align="right">1,233,444</td><td></td><td></td><td></td><td align="right">1,209,863</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td>Marketable securities, long term</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">52,720,248</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">46,587,812</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr valign="top"> <td>Total assets</td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">64,717,434</td><td style="border-bottom: 3px double black;">&nbsp;</td><td></td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">57,462,914</td><td style="border-bottom: 3px double black;">&nbsp;</td></tr>
<tr> <td colspan="8">&nbsp;</td></tr> <tr bgcolor="#ccdaef"> <td colspan="8">LIABILITIES
AND SHAREHOLDERS&#146; EQUITY</td></tr> <tr> <td colspan="8">Current liabilities</td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;">Accounts payable</div></td><td>$</td><td align="right">712,396</td><td></td><td></td><td>$</td><td align="right">665,782</td><td></td></tr>
<tr> <td> <div style="margin-left: 9pt;">Accrued payroll and other&nbsp;</div></td><td>&nbsp;</td><td align="right">716,079</td><td></td><td></td><td></td><td align="right">720,867</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;">Deferred taxes</div></td><td colspan="2" align="right">434,739</td><td></td><td></td><td colspan="2" align="right">102,138</td><td></td></tr>
<tr> <td> <div style="margin-left: 9pt;">Deferred revenue</div></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">20,833</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <td>Total current liabilities</td><td></td><td align="right">1,863,214</td><td></td><td></td><td></td><td align="right">1,509,620</td><td></td></tr>
<tr> <td colspan="8">&nbsp;</td></tr> <tr bgcolor="#ccdaef"> <td colspan="8">Shareholders&#146;
equity</td></tr> <tr> <td> <div style="margin-left: 9pt;">Common stock</div></td><td>&nbsp;</td><td align="right">47,006</td><td></td><td></td><td></td><td align="right">47,006</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;">Additional paid-in
capital</div></td><td>&nbsp;</td><td align="right">20,246,644</td><td></td><td></td><td></td><td align="right">20,169,924</td><td></td></tr>
<tr> <td> <div style="margin-left: 9pt;">Accumulated other comprehensive income</div></td><td></td><td align="right">1,646,825</td><td></td><td></td><td></td><td align="right">1,129,726</td><td>&nbsp;
</td></tr> <tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;">Retained
earnings</div></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">40,913,745</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">34,606,638</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td>Total shareholders&#146; equity</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">62,854,220</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">55,953,294</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr valign="top" bgcolor="#ccdaef"> <td>Total liabilities and shareholders&#146;
equity</td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">64,717,434</td><td style="border-bottom: 3px double black;">&nbsp;</td><td></td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">57,462,914</td><td style="border-bottom: 3px double black;">&nbsp;</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman"><br> *The
March 31, 2010 Balance Sheet is derived from the audited financial statements
contained in our Annual Report on <font style="white-space: nowrap;">Form 10-K</font>
for the fiscal year ended March&nbsp;31, 2010.<br> <br> <div align="center">See
accompanying notes.<br> <br> <br> 3<br> </div></font> <hr> <br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman"><b><a href="#TOC">Table
of Contents</a><a name="QIncome"></a> <div align="center"> <br> NVE CORPORATION<br>
STATEMENTS OF INCOME<br> (Unaudited)</div></b><br></font> <table style="font-size: 10pt; font-family: Times New Roman" cellpadding="0" cellspacing="0" width="100%">
<tr> <td rowspan="2"></td><td colspan="7" style="border-bottom: 1px solid black;" align="center"><b>Quarter&nbsp;Ended&nbsp;Sept.&nbsp;30</b></td></tr>
<tr> <td style="border-bottom: 1px solid black;" colspan="3" align="center"> <b>2010</b></td><td width="2%"></td><td style="border-bottom: 1px solid black;" colspan="3" align="center">
<b>2009</b></td></tr> <tr bgcolor="#ccdaef"> <td colspan="8">Revenue</td></tr>
<tr> <td> <div style="margin-left: 9pt;">Product sales</div></td><td width="1%">$</td><td align="right" width="11%">6,410,512</td><td width="1%">&nbsp;</td><td>&nbsp;</td><td width="1%">$</td><td align="right" width="11%">5,177,445</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;" colspan="2" align="right">1,398,648</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="RIGHT">1,331,056</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td>Total revenue</td><td></td><td align="right">7,809,160</td><td>&nbsp;</td><td>&nbsp;</td><td align="RIGHT"></td><td align="RIGHT">6,508,501</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td>Cost of sales</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">2,604,926</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="RIGHT">1,985,100</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td>Gross profit</td><td></td><td align="right">5,204,234</td><td>&nbsp;</td><td>&nbsp;</td><td></td><td align="right">4,523,401</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">634,547</td><td>&nbsp;</td><td>&nbsp;</td><td></td><td align="right">622,354</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;" colspan="2" align="right">309,873</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="RIGHT">291,540</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td>Total expenses</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">944,420</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" align="RIGHT">&nbsp;</td><td style="border-bottom: 1px solid black;" align="RIGHT">913,894</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <td>Income from operations</td><td></td><td align="right">4,259,814</td><td>&nbsp;</td><td>&nbsp;</td><td colspan="2" align="RIGHT">3,609,507</td><td></td></tr>
<tr> <td>Interest income</td><td style="border-bottom: 1px solid black;" colspan="2" align="RIGHT">497,731</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" align="RIGHT" colspan="2">393,198</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <td>Income before taxes</td><td></td><td align="right">4,757,545</td><td>&nbsp;</td><td>&nbsp;</td><td colspan="2" align="RIGHT">4,002,705</td><td></td></tr>
<tr> <td>Provision for income taxes</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">1,551,535</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">1,308,522</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <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">3,206,010</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">2,694,183</td><td style="border-bottom: 3px double black;">&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">0.68</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">0.57</td><td style="border-bottom: 3px double black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <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">0.66</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">
$</td><td style="border-bottom: 3px double black;" align="right" valign="top">0.55</td><td style="border-bottom: 3px double black;">&nbsp;</td></tr>
<tr> <td colspan="8">Weighted average shares outstanding</td></tr> <tr bgcolor="#ccdaef">
<td><div style="margin-left: 9pt;">Basic</div></td><td></td><td align="right">4,700,583</td><td>&nbsp;</td><td>&nbsp;</td><td>&nbsp;</td><td align="right">4,692,607</td><td></td></tr>
<tr> <td><div style="margin-left: 9pt;">Diluted</div></td><td></td><td align="right">4,860,237</td><td></td><td></td><td></td><td align="right">4,871,387</td><td></td></tr>
</table><div align="center"><font style="font-size: 10pt; font-family: Times New Roman"><br>
<br>See accompanying notes.<br> <br> <br>4<br> </font> </div><hr> <br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman"><b><a href="#TOC">Table
of Contents</a><a name="YTDIncome"></a> <div align="center"> <br> NVE CORPORATION<br>
STATEMENTS OF INCOME<br> (Unaudited)</div></b><br></font> <table style="font-size: 10pt; font-family: Times New Roman" cellpadding="0" cellspacing="0" width="100%">
<tr> <td rowspan="2"></td><td colspan="7" style="border-bottom: 1px solid black;" align="center"><b>Six&nbsp;Months&nbsp;Ended&nbsp;Sept.&nbsp;30</b></td></tr>
<tr> <td style="border-bottom: 1px solid black;" colspan="3" align="center"> <b>2010</b></td><td width="2%"></td><td style="border-bottom: 1px solid black;" colspan="3" align="center">
<b>2009</b></td></tr> <tr> <td colspan="8" bgcolor="#ccdaef">Revenue</td></tr>
<tr> <td> <div style="margin-left: 9pt;">Product sales</div></td><td width="1%">$</td><td align="right" width="11%">12,604,388</td><td width="1%">&nbsp;</td><td>&nbsp;</td><td width="1%">
$</td><td align="right" width="11%">10,711,482</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;" colspan="2" align="right" bgcolor="#ccdaef">2,446,066</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">2,631,551</td><td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td></tr>
<tr> <td>Total revenue</td><td></td><td align="right">15,050,454</td><td>&nbsp;</td><td>&nbsp;</td><td></td><td align="right">13,343,033</td><td></td></tr>
<tr> <td bgcolor="#ccdaef">Cost of sales</td><td style="border-bottom: 1px solid black;" colspan="2" align="right" bgcolor="#ccdaef">4,680,730</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">3,876,523</td><td style="border-bottom: 1px solid black;" bgcolor="#ccdaef">&nbsp;</td></tr>
<tr> <td>Gross profit</td><td></td><td align="right">10,369,724</td><td>&nbsp;</td><td>&nbsp;</td><td></td><td align="right">9,466,510</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">1,262,933</td><td>&nbsp;</td><td>&nbsp;</td><td></td><td align="right">1,258,077</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;" colspan="2" align="right" bgcolor="#ccdaef">651,536</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">558,861</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;" colspan="2" align="right">1,914,469</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">1,816,938</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">8,455,255</td><td bgcolor="#ccdaef">&nbsp;</td><td bgcolor="#ccdaef">&nbsp;</td><td bgcolor="#ccdaef"></td><td align="right" bgcolor="#ccdaef">7,649,572</td><td bgcolor="#ccdaef"></td></tr>
<tr> <td>Interest income</td><td style="border-bottom: 1px solid black;" colspan="2" align="RIGHT">973,461</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td>&nbsp;</td><td colspan="2" style="border-bottom: 1px solid black;" align="RIGHT">763,223</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">9,428,716</td><td bgcolor="#ccdaef">&nbsp;</td><td bgcolor="#ccdaef">&nbsp;</td><td bgcolor="#ccdaef"></td><td align="right" bgcolor="#ccdaef">8,412,795</td><td bgcolor="#ccdaef"></td></tr>
<tr> <td>Provision for income taxes</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">3,121,609</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">2,779,680</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">6,307,107</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">5,633,115</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">1.34</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">1.20</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">1.30</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">
$</td><td style="border-bottom: 3px double black;" align="right" valign="top" bgcolor="#ccdaef">1.16</td><td style="border-bottom: 3px double black;" bgcolor="#ccdaef">&nbsp;</td></tr>
<tr> <td colspan="8">Weighted average shares outstanding</td></tr> <tr> <td bgcolor="#ccdaef"><div style="margin-left: 9pt;">Basic</div></td><td bgcolor="#ccdaef"></td><td align="right" bgcolor="#ccdaef">4,700,583</td><td bgcolor="#ccdaef">&nbsp;</td><td bgcolor="#ccdaef">&nbsp;</td><td bgcolor="#ccdaef">&nbsp;</td><td align="right" bgcolor="#ccdaef">4,684,453</td><td bgcolor="#ccdaef"></td></tr>
<tr> <td><div style="margin-left: 9pt;">Diluted</div></td><td></td><td align="right">4,860,237</td><td></td><td></td><td></td><td align="right">4,863,199</td><td></td></tr>
</table><div align="center"><font style="font-size: 10pt; font-family: Times New Roman"><br>
<br>See accompanying notes.<br> <br> &nbsp;<br>5<br> </font> </div><hr> <br clear="all" style="page-break-before:always;">
<font style="font-size: 10pt; font-family: Times New Roman"><b><a href="#TOC">Table
of Contents</a><a name="CashFlows"></a> <br> <div align="center"> <br> NVE CORPORATION<br>
STATEMENTS OF CASH FLOWS<br> (Unaudited)</div></b><br></font> <table style="font-size: 10pt; font-family: Times New Roman" cellpadding="0" cellspacing="0" width="100%">
<tr> <td rowspan="2"></td><td colspan="7" style="border-bottom: 1px solid black;">
<div align="center"><b>Six Months Ended Sept. 30</b></div></td></tr> <tr> <td style="border-bottom: 1px solid black;" colspan="3" align="center"><b>2010</b></td><td></td><td style="border-bottom: 1px solid black;" colspan="3" align="center"><b>2009</b></td></tr>
<tr bgcolor="#ccdaef"> <td colspan="8">OPERATING ACTIVITIES</td></tr> <tr> <td>Net
income</td><td width="1%">$</td><td align="right" width="11%">6,307,107</td><td width="1%"></td><td width="2%"></td><td width="1%">$</td><td align="right" width="11%">5,633,115</td><td width="1%"></td></tr>
<tr bgcolor="#ccdaef"> <td colspan="8"> 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">180,838</td><td></td><td></td><td>&nbsp;</td><td align="right">181,809</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 18pt;">Stock-based compensation</div></td><td></td><td align="right">76,720</td><td></td><td></td><td>&nbsp;</td><td align="right">100,842</td><td></td></tr>
<tr> <td> <div style="margin-left: 18pt;">Excess tax benefits</div></td><td></td><td align="right">-</td><td>&nbsp;</td><td></td><td>&nbsp;</td><td align="right">(280,448</td><td>)</td></tr>
<tr bgcolor="#ccdaef"> <td><div style="margin-left: 18pt;">Deferred income taxes</div></td><td></td><td align="right">(1,611</td><td>)</td><td></td><td>&nbsp;</td><td align="right">269,377</td><td></td></tr>
<tr> <td colspan="8"> <div style="margin-left: 18pt;">Changes in operating assets
and liabilities:</div></td></tr> <tr bgcolor="#ccdaef"><td><div style="margin-left: 36pt;">Accounts
receivable</div></td><td></td><td align="right">83,146</td><td></td><td></td><td>&nbsp;</td><td align="right">413,671</td><td></td></tr>
<tr> <td> <div style="margin-left: 36pt;">Inventories</div></td><td></td><td align="right">(665,300</td><td>)</td><td></td><td>&nbsp;</td><td align="right">382,632</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td><div style="margin-left: 36pt;">Prepaid expenses and
other assets</div></td><td></td><td align="right">(291,882</td><td>)</td><td></td><td>&nbsp;</td><td align="right">(168,823</td><td>)</td></tr>
<tr> <td> <div style="margin-left: 36pt;">Accounts payable and accrued expenses</div></td><td></td><td align="right">41,826</td><td></td><td></td><td>&nbsp;</td><td align="right">126,505</td><td></td></tr>
<tr bgcolor="#ccdaef"><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">(20,833</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>Net cash provided by operating activities</td><td></td><td align="right">5,710,011</td><td></td><td></td><td>&nbsp;</td><td align="right">6,617,013</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td colspan="8">&nbsp;</td></tr> <tr> <td colspan="8">INVESTING
ACTIVITIES</td></tr> <tr bgcolor="#ccdaef"> <td colspan="2">Purchases of fixed
assets</td><td align="right">(204,419</td><td>)</td><td></td><td>&nbsp;</td><td align="right">(167,608</td><td valign="bottom">)</td></tr>
<tr><td>Purchases of marketable securities</td><td></td><td align="right">(7,765,811</td><td>)</td><td></td><td>&nbsp;</td><td align="right">(6,779,505</td><td>)</td></tr>
<tr bgcolor="#ccdaef"> <td>Proceeds from maturities and sales of marketable securities</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td style="border-bottom: 1px solid black;" align="right">1,561,772</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">142,352</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr><td>Net cash used in investing activities</td><td></td><td align="right">(6,408,458</td><td>)</td><td></td><td>&nbsp;</td><td align="right">(6,804,761</td><td>)</td></tr>
<tr bgcolor="#ccdaef"> <td colspan="8">&nbsp;</td></tr> <tr> <td colspan="8">FINANCING
ACTIVITIES</td></tr> <tr bgcolor="#ccdaef"> <td>Net proceeds from sale of common
stock</td><td></td><td align="right">-</td><td></td><td></td><td>&nbsp;</td><td align="right">622,423</td><td></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">-</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">280,448</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <td>Net cash provided by financing activities</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></td><td style="border-bottom: 1px solid black;"">&nbsp;</td><td style="border-bottom: 1px solid black;" align="right">902,871</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td colspan="8">&nbsp;</td></tr> <tr bgcolor="#ccdaef"> <td>Increase (decrease)
in cash and cash equivalents</td><td></td><td align="right">(698,447</td><td>)</td><td></td><td></td><td align="right">715,123</td><td valign="bottom">&nbsp;</td></tr>
<tr> <td>Cash and cash equivalents at beginning of period</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">1,389,288</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">1,875,063</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <td colspan="8">&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">690,841</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">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">2,590,186</td><td style="border-bottom: 3px double black;" valign="top">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <td colspan="8">&nbsp;</td></tr> <tr> <td colspan="8">Supplemental
disclosures of cash flow information:</td></tr> <tr> <td><div style="margin-left: 18pt;">Cash
paid during the period for income taxes</div></td><td>$</td><td align="right">3,274,742</td><td></td><td></td><td>$</td><td align="right">2,607,438</td><td></td></tr>
</table><div align="center"><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br>&nbsp;<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</b><br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying
unaudited financial statements of NVE Corporation are prepared consistent with
accounting principles generally accepted in the United States and in accordance
with Securities and Exchange Commission rules and regulations. In the opinion
of management, these financial statements reflect all adjustments, consisting
only of normal and recurring adjustments, necessary for a fair presentation of
the financial statements. Although we believe that the disclosures are adequate
to make the information presented not misleading, 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, 2010. The results of operations for the quarter or six
months ended September&nbsp;30, 2010 are not necessarily indicative of the results
that may be expected for the full fiscal year ending March&nbsp;31, 2011.<br>
<br> <b>NOTE 3. RECENT ACCOUNTING PRONOUNCEMENTS</b><br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have adopted all recently issued accounting pronouncements. The adoption of the
accounting pronouncements, including those not yet effective, is not anticipated
to have a material effect on our financial position or results of operations.<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
5,000 for the quarter and six months ended September&nbsp;30, 2010 and 1,000 for
the quarter and six months ended September 30, 2009 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>2010</b></td><td></td><td style="border-bottom: 1px solid black;" align="center" width="11%">
<b>2009</b></td></tr> <tr bgcolor="#ccdaef"> <td>Weighted average common shares
outstanding &#150; basic</td><td align="right">4,700,583</td><td width="2%"></td><td align="right" width="11%">4,692,607</td></tr>
<tr> <td colspan="4">Effect of dilutive securities:</td></tr> <tr bgcolor="#ccdaef">
<td><div style="margin-left: 9pt;" align="left">Stock options</div></td><td align="right">153,438</td><td></td><td align="right">171,843</td></tr>
<tr> <td> <div style="margin-left: 9pt;" align="left">Warrants</div></td><td style="border-bottom: 1px solid black;" align="right">6,216</td><td></td><td style="border-bottom: 1px solid black;" align="right">6,937</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">4,860,237</td><td></td><td style="border-bottom: 3px double black;" align="right" valign="top">4,871,387</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<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>2010</b></td><td></td><td style="border-bottom: 1px solid black;" align="center" width="11%">
<b>2009</b></td></tr> <tr bgcolor="#ccdaef"> <td>Weighted average common shares
outstanding &#150; basic</td><td align="right">4,700,583</td><td width="2%"></td><td align="right" width="11%">4,684,453</td></tr>
<tr> <td colspan="4">Effect of dilutive securities:</td></tr> <tr bgcolor="#ccdaef">
<td><div style="margin-left: 9pt;" align="left">Stock options</div></td><td align="right">153,438</td><td></td><td align="right">171,809</td></tr>
<tr> <td> <div style="margin-left: 9pt;" align="left">Warrants</div></td><td style="border-bottom: 1px solid black;" align="right">6,216</td><td></td><td style="border-bottom: 1px solid black;" align="right">6,937</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">4,860,237</td><td></td><td style="border-bottom: 3px double black;" align="right" valign="top">4,863,199</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br>
&nbsp;<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 fair value of our marketable securities as of September&nbsp;30, 2010 were
as follows:<br> <br> </font> <table style="font-size: 10pt; font-family: Times New Roman" border="0" cellpadding="0" cellspacing="0" width="50%" align="center">
<tr> <td style="border-bottom: 1px solid black;" colspan="2" align="center"> <b>Total</b></td><td width="4%"></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>&lt;1
Year</b></td><td width="4%"></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>1&#150;3
Years</b></td><td width="4%"></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>3&#150;5
Years</b></td></tr> <tr> <td width="1%">$</td><td width="12%" align="right">55,209,828</td><td></td><td width="1%">$</td><td align="right" width="12%">2,489,580</td><td></td><td width="1%">$</td><td align="right" width="12%">29,801,387</td><td width="2%"></td><td width="1%">$</td><td align="right" width="12%">22,918,861</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of September&nbsp;30 and March&nbsp;31, 2010,
our marketable securities were as follows:<br> &nbsp;<br></font> <table style="font-size: 10pt; font-family: Times New Roman" cellpadding="0" cellspacing="0" width="100%">
<tr> <td rowspan="2"></td><td style="border-bottom: 1px solid black;" align="center" colspan="12"><b>As
of September&nbsp;30, 2010</b></td><td style="border-bottom: 1px solid black;" rowspan="2" width="1"></td><td style="border-bottom: 1px solid black;" align="center" colspan="12"><b>As
of March&nbsp;31, 2010</b></td></tr> <tr> <td style="border-bottom: 1px solid black;" align="center" colspan="2">
<b><br> Adjusted<br> Cost</b></td><td width="1"></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Gross<br>
Unrealized<br> Gains</b></td><td width="1"></td><td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br> Losses</b></td><td width="1"></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Fair<br>
Market<br> Value</b></td><td style="border-bottom: 1px solid black;" align="center" colspan="2">
<b><br> Adjusted<br> Cost</b></td><td width="1"></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Gross<br>
Unrealized<br> Gains</b></td><td width="1"></td><td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br> Losses</b></td><td width="1"></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Fair<br>
Market<br> Value</b></td></tr> <tr bgcolor="#ccdaef"> <td valign="bottom"> U.S.
agency<br> <div style="margin-left: 9pt;">securities</div></td><td valign="bottom">$</td><td valign="bottom" align="right">101,545</td><td>&nbsp;&nbsp;</td><td valign="bottom">$</td><td align="right" valign="bottom">2,173</td><td>&nbsp;&nbsp;</td><td valign="bottom">$</td><td align="right" valign="bottom">-</td><td valign="bottom">&nbsp;</td><td>&nbsp;&nbsp;</td><td valign="bottom">$</td><td align="right" valign="bottom">103,718</td><td>&nbsp;&nbsp;</td><td valign="bottom">$</td><td valign="bottom" align="right">702,992</td><td>&nbsp;&nbsp;</td><td valign="bottom">$</td><td align="right" valign="bottom">19,240</td><td>&nbsp;&nbsp;</td><td valign="bottom">$</td><td align="right" valign="bottom">-</td><td valign="bottom">&nbsp;
</td><td>&nbsp;&nbsp;</td><td valign="bottom">$</td><td align="right" valign="bottom">722,232</td></tr>
<tr> <td valign="bottom"> Corporate&nbsp;bonds</td><td></td><td align="right" valign="bottom">30,765,448</td><td></td><td></td><td align="right" valign="bottom">1,754,469</td><td></td><td align="RIGHT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td align="right" valign="bottom">-</td><td valign="bottom">&nbsp;</td><td></td><td></td><td align="right" valign="bottom">32,519,917</td><td></td><td></td><td align="right" valign="bottom">23,807,375</td><td>&nbsp;</td><td>&nbsp;</td><td align="right" valign="bottom">1,029,273</td><td>&nbsp;</td><td>&nbsp;</td><td align="right" valign="bottom">(23,601</td><td valign="bottom">)</td><td>&nbsp;</td><td>&nbsp;</td><td align="right" valign="bottom">24,813,047</td></tr>
<tr bgcolor="#ccdaef"> <td valign="bottom"> Municipal&nbsp;bonds&nbsp;&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">21,724,671</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">861,522</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td style="border-bottom: 1px solid black; valign="bottom">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">22,586,193</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">21,877,258</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">747,483</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">(5,542</td><td style="border-bottom: 1px solid black; valign="bottom valign="bottom"">)</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">22,619,199</td></tr>
<tr> <td valign="top">Total</td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">52,591,664</td><td></td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">2,618,164</td><td></td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">-</td><td style="border-bottom: 3px double black;">&nbsp;</td><td></td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">55,209,828</td><td></td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">46,387,625</td><td>&nbsp;</td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">1,795,996</td><td>&nbsp;</td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">(29,143</td><td styl
e="border-bottom: 3px double black;">)</td><td>&nbsp;</td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">48,154,478</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None of our investments had an unrealized loss as
of September 30, 2010. Guaranteed global notes issued by BP Capital Markets&nbsp;plc,
which had an unrealized loss of $313,428 at June 30, 2010, had an unrealized gain
as of September&nbsp;30, 2010. <br><br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
table shows the gross unrealized losses and fair value of our investments with
unrealized losses, aggregated by investment category and length of time that individual
securities had been in a continuous unrealized loss position as of September&nbsp;30
and March&nbsp;31, 2010:<br> &nbsp;<br></font> <table style="font-size: 10pt; font-family: Times New Roman" cellpadding="0" cellspacing="0" width="100%" align="center">
<tr> <td rowspan="2" colspan="2"></td><td style="border-bottom: 1px solid black;" align="center" colspan="6">
<b>Less Than 12 Months</b></td><td rowspan="2"></td><td style="border-bottom: 1px solid black;" align="center" colspan="6">
<b>12 Months or Greater</b></td><td rowspan="2"></td><td style="border-bottom: 1px solid black;" align="center" colspan="6">
<b>Total</b></td></tr> <tr> <td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Fair<br>
Market<br> Value</b></td><td></td><td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br> Losses</b></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Fair<br>
Market<br> Value</b></td><td></td><td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br> Losses</b></td><td style="border-bottom: 1px solid black;" align="center" colspan="2"><b>Fair<br>
Market<br> Value</b></td><td></td><td style="border-bottom: 1px solid black;" align="center" colspan="3"><b>Gross<br>
Unrealized<br> Losses</b></td></tr> <tr> <td colspan="22">As of September 30,
2010</td></tr> <tr bgcolor="#ccdaef"> <td width="9pt">&nbsp;</td><td>U.S.&nbsp;agency&nbsp;securities&nbsp;</td><td width="1%">$</td><td align="right" width="9%">-</td><td width="2%"></td><td width="1%">$</td><td align="right" width="8%">-</td><td valign="bottom" width="1%">&nbsp;</td><td width="4%"></td><td width="1%">$</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%">$</td><td align="right" width="8%">-</td><td valign="bottom" width="1%">&nbsp;</td></tr>
<tr> <td>&nbsp;</td><td>Corporate bonds</td><td colspan="2" align="right">-</td><td colspan="3" align="right">-</td><td>&nbsp;</td><td colspan="3" align="right">-</td><td colspan="3" align="right">-</td><td></td><td colspan="3" align="right">-</td><td colspan="3" align="right">-</td><td>&nbsp;
</td></tr> <tr bgcolor="#ccdaef"> <td>&nbsp;</td><td>Municipal bonds</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td>&nbsp;</td><td valign="top">Total</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">-</td><td valign="top"></td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">-</td><td style="border-bottom: 3px double black;" valign="top">&nbsp;</td><td valign="top"></td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">-</td><td valign="top"></td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">-</td><td style="border-bottom: 3px double black;" valign="top">&nbsp;</td><td valign="top"></td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">-</td><td valign="top"></td><td style="border-
bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">-</td><td style="border-bottom: 3px double black;" valign="top">&nbsp;</td></tr>
<tr> <td colspan="22">As of March 31, 2010</td></tr> <tr bgcolor="#ccdaef"> <td></td><td>U.S.&nbsp;agency&nbsp;securities&nbsp;</td><td>$</td><td align="right">-</td><td>&nbsp;</td><td>$</td><td align="right">-</td><td></td><td>&nbsp;</td><td>$</td><td align="right">-</td><td>&nbsp;</td><td>$</td><td align="right">-</td><td></td><td>&nbsp;</td><td>$</td><td align="right">-</td><td>&nbsp;</td><td>$</td><td align="right">-</td><td>&nbsp;
</td></tr> <tr> <td></td><td>Corporate bonds</td><td colspan="2" align="right">2,032,306</td><td colspan="3" align="right">(23,601</td><td>)</td><td colspan="3" align="right">-</td><td colspan="3" align="right">-</td><td>&nbsp;</td><td colspan="3" align="right">2,032,306</td><td colspan="3" align="right">(23,601</td><td>
)</td></tr> <tr bgcolor="#ccdaef"> <td></td><td>Municipal bonds</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">1,564,416</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">(5,542</td><td style="border-bottom: 1px solid black;">)</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">-</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">1,564,416</td><td>&nbsp;</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">(5,542</td><td style="border-bottom: 1px solid black;">)</td></tr>
<tr> <td></td><td valign="top">Total</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">3,596,722</td><td valign="top">&nbsp;</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">(29,143</td><td style="border-bottom: 3px double black;" valign="top">)</td><td valign="top">&nbsp;</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">-</td><td valign="top">&nbsp;</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">-</td><td style="border-bottom: 3px double black;" valign="top">&nbsp;</td><td valign="top">&nbsp;</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">3,596,722</td><td v
align="top">&nbsp;</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">(29,143</td><td style="border-bottom: 3px double black;" valign="top">)</td></tr></table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br><br></font>
<div style="width: 100%; text-align: center;"><font style=" font-size: 10pt; font-family: Times New Roman">8</font></div><hr>
<br clear="all" style="page-break-before:always;"> <font style="font-size: 10pt; font-family: Times New Roman"><a href="#TOC"><b>Table
of Contents</b></a><br> <br><b>NOTE 6. COMPREHENSIVE INCOME</b><br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
components of comprehensive income are as follows:<br> <br></font> <table style="font-size: 10pt; font-family: Times New Roman" cellpadding="0" cellspacing="0" width="100%">
<tr> <td rowspan="2"></td><td colspan="7" style="border-bottom: 1px solid black;">
<div align="center">&nbsp;<b>Quarter Ended Sept. 30</b></div></td></tr> <tr> <td style="border-bottom: 1px solid black;" colspan="3" align="center">
<div style="margin-left: 0px; text-indent: 0px; margin-right: 0px;" align="center"><b>2010</b></div></td><td width="2%"></td><td style="border-bottom: 1px solid black;" colspan="3" align="center">
<div style="margin-left: 0px; text-indent: 0px; margin-right: 0px;" align="center"><b>2009</b></div></td></tr>
<tr bgcolor="#ccdaef"> <td>Net income</td><td width="1%">$</td><td align="right" width="11%">3,206,010</td><td width="1%"></td><td></td><td width="1%">$</td><td align="right" width="11%">2,694,183</td><td width="1%"></td></tr>
<tr> <td>Unrealized (loss) gain from marketable securities, net of tax</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">678,599</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="RIGHT">437,926</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <td valign="top">Comprehensive income</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">3,884,609</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">
$</td><td style="border-bottom: 3px double black;" align="right" valign="top">3,132,109</td><td style="border-bottom: 3px double black;">&nbsp;</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br></font>
<table style="font-size: 10pt; font-family: Times New Roman" cellpadding="0" cellspacing="0" width="100%">
<tr> <td rowspan="2"></td><td colspan="7" style="border-bottom: 1px solid black;">
<div align="center">&nbsp;<b>Six Months Ended Sept. 30</b></div></td></tr> <tr>
<td style="border-bottom: 1px solid black;" colspan="3" align="center"> <div style="margin-left: 0px; text-indent: 0px; margin-right: 0px;" align="center"><b>2010</b></div></td><td width="2%"></td><td style="border-bottom: 1px solid black;" colspan="3" align="center">
<div style="margin-left: 0px; text-indent: 0px; margin-right: 0px;" align="center"><b>2009</b></div></td></tr>
<tr bgcolor="#ccdaef"> <td>Net income</td><td width="1%">$</td><td align="right" width="11%">6,307,107</td><td width="1%"></td><td></td><td width="1%">
$</td><td align="right" width="11%">5,633,115</td><td width="1%"></td></tr> <tr>
<td>Unrealized (loss) gain from marketable securities, net of tax</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">517,099</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="RIGHT">1,249,822</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr bgcolor="#ccdaef"> <td valign="top">Comprehensive income</td><td style="border-bottom: 3px double black;" valign="top">$</td><td style="border-bottom: 3px double black;" align="right" valign="top">6,824,206</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">
$</td><td style="border-bottom: 3px double black;" align="right" valign="top">6,882,937</td><td style="border-bottom: 3px double black;">&nbsp;</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman"><br> <b>NOTE
7. INVENTORIES</b><br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories consisted of
the following:<br> &nbsp;<br> </font> <table style="font-size: 10pt; font-family: Times New Roman" cellpadding="0" cellspacing="0" width="50%" align="center">
<tr> <td></td><td style="border-bottom: 1px solid black;" colspan="3" align="center"><b>Sept.
30<br> 2010</b></td><td></td><td style="border-bottom: 1px solid black;" colspan="3" align="center"><b>March
31<br> 2010</b></td></tr> <tr bgcolor="#ccdaef"> <td>Raw materials</td><td width="1%">$</td><td align="right" width="22%">1,024,155</td><td width="1%"></td><td width="4%"></td><td width="1%">$</td><td align="right" width="22%">595,032</td><td width="1%"></td></tr>
<tr> <td>Work in process</td><td></td><td align="right">1,160,804</td><td></td><td></td><td></td><td align="right">794,091</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td>Finished goods</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">486,768</td><td style="border-bottom: 1px solid black;">&nbsp;</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">617,304</td><td style="border-bottom: 1px solid black;">&nbsp;</td></tr>
<tr> <td></td><td></td><td align="right">2,671,727</td><td></td><td></td><td></td><td align="right">2,006,427</td><td></td></tr>
<tr bgcolor="#ccdaef"> <td>Less inventory reserve</td><td style="border-bottom: 1px solid black;" colspan="2" align="right">(300,000</td><td style="border-bottom: 1px solid black;">
)</td><td></td><td style="border-bottom: 1px solid black;" colspan="2" align="right">(300,000</td><td style="border-bottom: 1px solid black;">
)</td></tr> <tr valign="top"> <td> Total inventories</td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">2,371,727</td><td style="border-bottom: 3px double black;">&nbsp;</td><td></td><td style="border-bottom: 3px double black;">$</td><td style="border-bottom: 3px double black;" align="right">1,706,427</td><td style="border-bottom: 3px double black;">&nbsp;</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br>
&nbsp;<br> <b>NOTE 8. STOCK-BASED COMPENSATION</b><br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based
compensation expense was $76,720 for the second quarter of fiscal 2011, $95,244
for the second quarter of fiscal 2010, $76,720 for the first six months of fiscal
2011, and $100,842 for the first six months of fiscal 2010. Stock-based compensation
expenses for the quarter and six months ended September&nbsp;30, 2010 and 2009
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 decreases in
stock-based compensation for the quarter and six months ended September&nbsp;30,
2010 compared to the prior-year periods were primarily due to a lower 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> &nbsp;<br> &nbsp;<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. No tax provisions were credited to &#147;Additional paid-in capital&#148;
for the six months ended September&nbsp;30, 2010; $280,448 was credited to &#147;Additional
paid-in capital&#148; for the the six months ended September&nbsp;30, 2009.<br>
<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We had no unrecognized tax benefits as of September&nbsp;30,
2010, and we do not expect any significant unrecognized tax benefits within 12&nbsp;months
of the reporting date. We recognize interest and penalties related to income tax
matters in income tax expense. As of September&nbsp;30, 2010 we had no accrued
interest related to uncertain tax positions. The tax years 1999 through 2009 remain
open to examination by the major taxing jurisdictions to which we are subject.<br>
<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> </font> <div align="center"><font style="font-size: 10pt; font-family: Times New Roman">9</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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level 1 &#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 $55,209,828 at September&nbsp;30, 2010 and $48,154,478 at March&nbsp;31,
2010.<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><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 ended September&nbsp;30, 2010. <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<br> </b>&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 risks associated with competition, progress
in research and development activities by us and others, decreased sales, failure
of suppliers to meet our requirements, inability to meet customer technical requirements,
inability to consummate license agreements, ineligibility for SBIR awards, inability
to renew agreements with large customers, risks of losses on our marketable securities,
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;2010, as updated in Part&nbsp;II,
Item 1A of our Quarterly Report on <font style="white-space: nowrap;">Form 10-Q</font>
for the quarter ended June&nbsp;30,&nbsp;2010 and Part&nbsp;II, Item 1A of this
Quarterly Report on <font style="white-space: nowrap;">Form 10-Q</font>.<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, 2010. At September&nbsp;30, 2010 our critical accounting
policies and estimates continued to include research and development contract
percentage of completion 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><br> <br> Quarter ended September&nbsp;30, 2010 compared to quarter
ended September&nbsp;30, 2009</b><br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table
shown below summarizes the percentage of revenue and quarter-to-quarter changes
for various items:<br> <br> </font> <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>2010</b></td><td></td><td style="border-bottom: 1px solid black;"align="center" colspan="2"><b>2009</b></td></tr>
<tr bgcolor="#ccdaef"> <td colspan="9">Revenue</td></tr> <tr> <td> <div style="margin-left: 9pt;" align="left">Product
sales</div></td><td align="right" width="9%">82.1</td><td width="1%"> %</td><td width="4%"></td><td align="right" width="9%">79.5</td><td width="1%">
%</td><td width="4%"></td><td align="right" width="9%">23.8</td><td width="1%">
%</td></tr> <tr bgcolor="#ccdaef"> <td> <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">17.9</td><td style="border-bottom: 1px solid black;" align="left">%</td><td></td><td style="border-bottom: 1px solid black;" align="right">20.5</td><td style="border-bottom: 1px solid black;">
%</td><td></td><td align="right">5.1</td><td> %</td></tr> <tr> <td> Total revenue</td><td align="right">100.0</td><td>%</td><td></td><td align="right">
100.0</td><td>%</td><td></td><td align="right">20.0</td><td>%</td></tr> <tr bgcolor="#ccdaef">
<td>Cost of sales</td><td style="border-bottom: 1px solid black;" align="right">33.4</td><td style="border-bottom: 1px solid black;" align="left">%</td><td></td><td style="border-bottom: 1px solid black;" align="right">30.5</td><td style="border-bottom: 1px solid black;">%</td><td></td><td align="right">31.2</td><td>%</td></tr>
<tr> <td> Gross profit</td><td align="right">66.6</td><td>%</td><td></td><td align="right">69.5</td><td>
%</td><td></td><td align="right">15.1</td><td> %</td></tr> <tr bgcolor="#ccdaef">
<td colspan="9">Expenses</td></tr> <tr> <td> <div style="margin-left: 9pt;" align="left">Selling,
general, and administrative</div></td><td align="right">8.1</td><td>%</td><td></td><td align="right">9.5</td><td>%</td><td></td><td align="right">2.0</td><td>%</td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;" align="left">Research&nbsp;and&nbsp;development</div></td><td style="border-bottom: 1px solid black;" align="right">4.0</td><td style="border-bottom: 1px solid black;" align="left">
%</td><td></td><td style="border-bottom: 1px solid black;" align="right">4.5</td><td style="border-bottom: 1px solid black;">%</td><td></td><td align="right">6.3</td><td>%</td></tr>
<tr> <td>Total expenses</td><td style="border-bottom: 1px solid black;" align="right">12.1</td><td style="border-bottom: 1px solid black;" align="left">
%</td><td></td><td style="border-bottom: 1px solid black;" align="right">14.0</td><td style="border-bottom: 1px solid black;">%</td><td></td><td align="right">3.3</td><td>
%</td></tr> <tr bgcolor="#ccdaef"> <td>Income from operations</td><td align="right">54.5</td><td>%</td><td></td><td align="right">55.5</td><td>
%</td><td></td><td align="right">18.0</td><td> %</td></tr> <tr> <td>Interest and
other income</td><td style="border-bottom: 1px solid black;" align="right">6.4</td><td style="border-bottom: 1px solid black;" align="left">%</td><td></td><td style="border-bottom: 1px solid black;" align="right">6.0</td><td style="border-bottom: 1px solid black;">%</td><td></td><td align="right">26.6</td><td>%</td></tr>
<tr bgcolor="#ccdaef"> <td>Income before taxes</td><td align="right">60.9</td><td>%</td><td></td><td align="right">61.5</td><td>%</td><td></td><td align="right">18.9</td><td>
%</td></tr> <tr> <td>Provision for income taxes</td><td style="border-bottom: 1px solid black;" align="right">19.8</td><td style="border-bottom: 1px solid black;" align="left">%</td><td></td><td style="border-bottom: 1px solid black;" align="right">20.1</td><td style="border-bottom: 1px solid black;">%</td><td></td><td align="right">18.6</td><td>%</td></tr>
<tr bgcolor="#ccdaef"> <td valign="top">Net income</td><td style="border-bottom: 3px double black;" align="right" valign="top">41.1</td><td style="border-bottom: 3px double black;" valign="top">%</td><td valign="top"></td><td style="border-bottom: 3px double black;" align="right" valign="top">41.4</td><td style="border-bottom: 3px double black;" valign="top">%</td><td valign="top"></td><td align="right" valign="top">19.0</td><td valign="top">%</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue for the quarter ended ended September&nbsp;30,
2010 (the second quarter of fiscal 2011) increased 20% to $7,809,160 compared
to $6,508,501 for the quarter ended ended September&nbsp;30, 2009 (the second
quarter of fiscal 2010). The increase was due to a 24% increase in product sales
and a 5% increase in contract research and development revenue.<br> <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
increase in product sales from the prior-year quarter was due to the addition
of new customers and increased purchase volume by existing customers.<br> <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase in research and development revenue
was due to new contracts and increased activity on certain contracts. Contract&nbsp;research&nbsp;and&nbsp;development
revenue may not be representative of future quarters. Contract research and development
activities can fluctuate for a number of reasons, some of which are beyond our
control, 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 decreased to 67% of revenue for the second quarter of fiscal 2011 compared
to 69% for the second quarter of fiscal 2010, due to a less favorable product
sales mix.<br> <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses increased 3%
for the second quarter of fiscal 2011 compared to the second quarter of fiscal
2010 due to a 2% increase in selling, general, and administrative expense and
a 6% increase in research and development expense. The increase in research and
development expense was due to increased product development activities. 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
income increased 27% to $497,731 for the second quarter of fiscal 2011 compared
to $393,198 for the second quarter of fiscal 2010. 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 $1,551,535 for the second quarter of fiscal 2011
compared to $1,308,522 for the second quarter of fiscal 2010. The effective tax
rate was 33% of income before taxes for the second quarter of fiscal 2011, which
was the same rate as the prior-year quarter. Our effective tax rate can fluctuate,
however, due to a number of factors, some of which are outside our control.<br>
<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 19% increase in net income in the second
quarter of fiscal 2011 compared to the prior-year quarter was primarily due to
increased product sales.<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> <br><br>Six months ended September&nbsp;30, 2010 compared to six
months September&nbsp;30, 2009</b><br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table
shown below summarizes the percentage of revenue and period-to-period changes
for various items:<br> <br></font> <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>2010</b></td><td></td><td style="border-bottom: 1px solid black;"align="center" colspan="2"><b>2009</b></td></tr>
<tr bgcolor="#ccdaef"> <td colspan="9">Revenue</td></tr> <tr> <td> <div style="margin-left: 9pt;" align="left">Product
sales</div></td><td align="right" width="9%">83.7</td><td width="1%"> %</td><td width="4%"></td><td align="right" width="9%">80.3</td><td width="1%">%</td><td width="4%"></td><td align="right" width="9%">17.7</td><td width="1%">%</td></tr>
<tr bgcolor="#ccdaef"> <td><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">16.3</td><td style="border-bottom: 1px solid black;" align="left">%</td><td></td><td style="border-bottom: 1px solid black;" align="right">19.7</td><td style="border-bottom: 1px solid black;" width="1%">%</td><td></td><td align="right">(7.0</td><td>)%</td></tr>
<tr> <td>Total revenue</td><td align="right">100.0</td><td>%</td><td></td><td align="right">100.0</td><td width="1%">%</td><td></td><td align="right">12.8</td><td>%</td></tr>
<tr bgcolor="#ccdaef"> <td>Cost of sales</td><td style="border-bottom: 1px solid black;" align="right">31.1</td><td style="border-bottom: 1px solid black;" align="left">%</td><td></td><td style="border-bottom: 1px solid black;" align="right">29.1</td><td style="border-bottom: 1px solid black;" width="1%">%</td><td></td><td align="right">20.7</td><td>%</td></tr>
<tr> <td> Gross profit</td><td align="right">68.9</td><td>%</td><td></td><td align="right">70.9</td><td>
%</td><td></td><td align="right">9.5</td><td> %</td></tr> <tr bgcolor="#ccdaef">
<td colspan="9">Expenses</td></tr> <tr> <td> <div style="margin-left: 9pt;" align="left">Selling,
general, and administrative</div></td><td align="right">8.4</td><td>%</td><td></td><td align="right">9.4</td><td>%</td><td></td><td align="right">0.4</td><td>%</td></tr>
<tr bgcolor="#ccdaef"> <td> <div style="margin-left: 9pt;" align="left">Research&nbsp;and&nbsp;development</div></td><td style="border-bottom: 1px solid black;" align="right">4.3</td><td style="border-bottom: 1px solid black;" align="left">
%</td><td></td><td style="border-bottom: 1px solid black;" align="right">4.2</td><td style="border-bottom: 1px solid black;" width="1%">%</td><td></td><td align="right">16.6</td><td>%</td></tr>
<tr> <td>Total expenses</td><td style="border-bottom: 1px solid black;" align="right">12.7</td><td style="border-bottom: 1px solid black;" align="left">
%</td><td></td><td style="border-bottom: 1px solid black;" align="right">13.6</td><td style="border-bottom: 1px solid black;" width="1%">%</td><td></td><td align="right">5.4</td><td>
%</td></tr> <tr bgcolor="#ccdaef"> <td>Income from operations</td><td align="right">56.2</td><td>%</td><td width="2%"></td><td align="right">57.3</td><td width="1%">
%</td><td></td><td align="right">10.5</td><td> %</td></tr> <tr> <td>Interest and
other income</td><td style="border-bottom: 1px solid black;" align="right">6.4</td><td style="border-bottom: 1px solid black;" align="left">%</td><td></td><td style="border-bottom: 1px solid black;" align="right">5.7</td><td style="border-bottom: 1px solid black;" width="1%">%</td><td></td><td align="right">27.5</td><td>%</td></tr>
<tr bgcolor="#ccdaef"> <td>Income before taxes</td><td align="right">62.6</td><td>%</td><td width="2%"></td><td align="right">63.0</td><td width="1%">%</td><td></td><td align="right">12.1</td><td>
%</td></tr> <tr> <td>Provision for income taxes</td><td style="border-bottom: 1px solid black;" align="right">20.7</td><td style="border-bottom: 1px solid black;" align="left">%</td><td></td><td style="border-bottom: 1px solid black;" align="right">20.8</td><td style="border-bottom: 1px solid black;" width="1%">%</td><td></td><td align="right">12.3</td><td>%</td></tr>
<tr bgcolor="#ccdaef"> <td valign="top">Net income</td><td style="border-bottom: 3px double black;" align="right" valign="top">41.9</td><td style="border-bottom: 3px double black;" valign="top">%</td><td width="2%" valign="top"></td><td style="border-bottom: 3px double black;" align="right" valign="top">42.2</td><td style="border-bottom: 3px double black;" valign="top">%</td><td valign="top"></td><td align="right" valign="top">12.0</td><td valign="top">%</td></tr>
</table><font style="font-size: 10pt; font-family: Times New Roman">&nbsp;<br><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenue for the six months ended September&nbsp;30,
2010 increased 13% to $15,050,454 compared to $13,343,033 for the six months ended
September&nbsp;30, 2009. The increase was due to an 18% increase in product sales,
partially offset by a 7% decrease in contract research and development revenue.<br>
<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The increase in product sales from the prior-year
period was due to the addition of new customers and increased purchase volume
by existing customers.<br> <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The decrease in
research and development revenue was due to the completion of certain contracts
and contract activities. Contract research and development activities can fluctuate
for a number of reasons, some of which are beyond our control, 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 decreased to 69% of revenue
for the first six months of fiscal 2011 compared to 71% for the first six months
of fiscal 2010, due to a less favorable product sales mix.<br> <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
expenses increased 5% for the first six months of fiscal 2011 compared to the
first six months of fiscal 2010 due to a 17% increase in research and development
expense. The increase in research and development expense was due to a decrease
in contract research and development activities, which caused resources to be
reallocated to expensed research and development activities, and increased product
development activities. 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 income increased 28%
to $973,461 for the first six months of fiscal 2011 compared to $763,223 for the
first six months of fiscal 2010. 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 $3,121,609 for the first six months of fiscal 2011 compared to
$2,779,680 for the first six months of fiscal 2010. The effective tax rate was
33% of income before taxes for the first six months of fiscal 2011, which was
the same rate as the prior-year period. Our effective tax rate can fluctuate,
however, due to a number of factors, some of which are outside our control.<br>
<br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 12% increase in net income in the first
six months of fiscal 2011 compared to the prior-year period was primarily due
to increased product sales and increased interest income.<br> <br> <br><div align="center">12</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, 2010 we had $55,900,669 in cash plus short-term and long-term
marketable securities compared to $49,543,766 at March&nbsp;31,&nbsp;2010. 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 2011 was primarily due to $5,710,011 in net cash provided
by operating activities and a $851,311 net increase in the market value of our
marketable securities due to market-price changes.<br> <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
$922,914 increase in short-term marketable securities in the first six months
of fiscal 2011 was due to marketable securities previously classified as long-term
approaching maturity. We expect short-term marketable securities to increase in
the remaining quarters of the fiscal year as more of our securities approach maturity.
<br> <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories increased by $665,300 due to
raw material purchase timing and to support an increased rate of product sales.
<br><br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We had no deferred revenue as of September&nbsp;30,
2010 compared to $20,833 at March&nbsp;31,&nbsp;2010. Deferred revenue at March&nbsp;31,&nbsp;2010
was due to a nonrefundable payment of $250,000 by Avago to us under the terms
of Amendment No.&nbsp;2 to an agreement between us and Agilent. We recognized
revenue from the payment over the term of Amendment No.&nbsp;2, which was effective
as of June&nbsp;27, 2007 and ended June&nbsp;27, 2010. <br> <br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases
of fixed assets were $204,419 during the six months ended September&nbsp;30, 2010,
primarily for production equipment. We currently expect such purchases to be at
a higher quarterly rate during the balance of the fiscal year ending March&nbsp;31,&nbsp;2011
because we plan to expand our production capacity.<br> <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
currently believe our working capital is adequate for our needs at least for the
next 12&nbsp;months.<br> <br><a name="MarketRisk"></a><b>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, 2010
had remaining maturities between eight and 59&nbsp;months. Our short-term and
long-term marketable securities had a fair market value of $55,209,828 at September&nbsp;30,
2010, representing approximately 85% 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, 2010, 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> &nbsp;<br>
&nbsp;<br> <div align="center">13</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></b><div align="center"><b><a name="Part2"></a>PART II&#150;OTHER
INFORMATION</b></div><b><br><a name="Risks"></a>Item 1A. Risk Factors.<br> </b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
have been no material changes from the risk factors disclosed in our Annual Report
on <font style="white-space: nowrap;">Form 10-K</font> for the fiscal year ended
March&nbsp;31, 2010 as updated in our Quarterly Report on <font style="white-space: nowrap;">Form
10-Q</font> for the quarter ended June&nbsp;30, 2010, except the risk factors
titled &#147;We may lose revenue if we are unable to renew agreements with large
customers&#148; and &#147;We could incur losses on our marketable securities&#148;
are<b></b> replaced in their entirety by the following: <br><br><b><i>We may lose
revenue if we are unable to renew agreements with large customers.</i></b> <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Supplier Partnering Agreement with St.&nbsp;Jude Medical, as amended, expires
December&nbsp;31, 2011; our Phonak AG Supply Agreement expires May&nbsp;1, 2012;
and our agreement with Avago Technologies, Inc., as amended, expires June&nbsp;27,
2013. We have executed a letter of intent including a provision to extended the
term of our Agreement with Phonak through March&nbsp;31, 2015. We cannot predict
if any of these agreements will be renewed, or if renewed, under what terms. Although
it is possible we could continue to sell products to these customers without formal
agreements, an inability to agree on mutually acceptable terms or the loss of
any of these large customers could have a significant adverse impact on our revenue
and our profitability. <br><br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This risk factor
is being updated because we executed an amendment extending the term of our Supplier
Partnering Agreement with St.&nbsp;Jude Medical.<br><br> <b><i>We could incur
losses on our marketable securities.</i></b><br> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
September&nbsp;30, 2010, we held $55,209,828 in short-term and long-term marketable
securities, representing approximately 85% of our total assets. For the first
six months of the fiscal year ending March&nbsp;31, 2011 we earned $973,461 in
interest, virtually all of which was from those securities. During the past two
fiscal years a number of the securities we hold were downgraded by Moody&#146;s
or Standard and Poor&#146;s indicating a possible increase in default risk. The
credit crisis may have caused or contributed to many of these downgrades. Conditions
and circumstances beyond our control or ability to anticipate can cause downgrades
and increases in default risk. For example, in fiscal 2011 guaranteed global notes
issued by BP Capital Markets plc that we hold were downgraded due to the impact
of BP&#146;s Macondo subsea well oil spill on BP&#146;s financial profile. Although
we recovered an unrealized loss in BP securities, downgrades of any of our marketable
securities are possible at any time for reasons beyond our control, which could
cause us to incur losses on those securities. Additionally, the assignment of
a high credit rating does not preclude the risk of default on any marketable security.
Losses for any reason on our marketable securities could have a material adverse
impact on our financial condition, income, or cash flows.<br> <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
value of our marketable securities, the portion of our total assets in marketable
securities, interest earned, and the recovery of our unrealized loss in BP securities
are being updated in this risk factor. <br><br><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;10.1+</td><td><font face="Times New Roman, Times, serif" size="2">Amendment
Number 3 dated September 13, 2010 to Supplier Partnering Agreement between Pacesetter,
Inc., a St. Jude Medical Company, d.b.a. St. Jude Medical Cardiac Rhythm Management
Division, and the company (incorporated by reference to our Current Report on
Form 8-K/A filed September&nbsp;16, 2010).<br></font>&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"><br>
+Confidential portions of this exhibit were deleted and filed separately with
the SEC under a request for confidential treatment pursuant to Rule 24b-2 or Rule
406.<br> <br> <br> </font> <div align="center"><font style="font-size: 10pt; font-family: Times New Roman">14</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"><a name="Signatures"></a><b>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
20, 2010</u></b></div></td><td><u>/s/ DANIEL A. BAKER&nbsp;</u></td></tr> <tr>
<td><div align="center">Date</div></td><td>Daniel A. Baker </td></tr> <tr> <td></td><td>President
and Chief Executive Officer</td></tr> <tr> <td colspan="2"><br> &nbsp; </td></tr>
<tr> <td> <div align="center"><b><u>October 20, 2010</u></b></div></td><td> <div align="left"><u>/s/
CURT A. REYNDERS&nbsp;</u></div></td></tr> <tr> <td> <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> <div align="center">15<br></div></font> <hr>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>ex31-dab.htm
<DESCRIPTION>CERTIFICATION BY DANIEL A. BAKER 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><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 20, 2010
<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 20, 2010
<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, 2010, 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 20, 2010</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></div>
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