UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended: June 30, 2001
[ ] Transition report under Section 13 or 15(d) of the
Securities Exchange Act.
NVE Corporation
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(Exact name of registrant as specified in its charter)
Minnesota
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(State or other jurisdiction of incorporation)
000-12196 41-1424202
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Commission File Number I.R.S. Employer
Identification number
11409 Valley View Road, Eden Prairie, Minnesota 55344
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(Address of principal executive offices) (Zip code)
Issuer's telephone number, including area code: (952) 829-9217
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Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date:
Common Stock, $.01 Par Value - 16,998,861 shares outstanding as
of June 30, 2001.
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
NVE CORPORATION
BALANCE SHEET
JUNE 30, 2001
ASSETS
Current assets:
Cash $ 735,818
Grants and contracts receivable 1,178,706
Inventories 1,086,393
Prepaid expenses and other assets 92,888
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Total current assets 3,093,805
Fixed assets:
Machinery and equipment 1,562,199
Furniture and fixtures 35,499
Leasehold improvements 354,426
Construction in progress 569,471
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2,521,595
Less accumulated depreciation 1,421,688
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Assets 1,099,907
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Total $4,193,712
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable $ 254,397
Accounts payable 326,537
Accrued expenses 184,532
Deferred revenue 978,837
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Total current liabilities 1,744,303
Shareholders' equity:
Common Stock 169,999
Additional paid-in capital 5,727,842
Accumulated Deficit (3,448,432)
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Total shareholders' equity 2,449,409
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Total liabilities and shareholders' equity $4,193,712
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SEE ACCOMPANYING NOTES.
NVE CORPORATION
STATEMENT OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2001 AND 2000
THREE MONTHS ENDED JUNE 30,
2001 2000
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Revenues
Research and development $1,112,596 $1,191,187
Product sales 369,045 148,985
License fees 181,249 181,250
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1,662,890 1,521,422
Expenses
Research and development 1,240,147 1,288,333
Cost of sales 239,007 66,983
Selling, general & administrative 359,956 237,181
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Total expenses 1,839,110 1,592,497
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Income (loss) from operations (176,220) (71,075)
Royalty expense (4,245) -
Interest income 10,376 6,895
Interest expense (6,410) (8,141)
Other income 81,963 500
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Net income (loss) (94,536) (71,821)
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Net income (loss) per
basic and diluted share (.01) -
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Weighted average shares outstanding:
Basic 16,945,607 16,775,035
Diluted 16,945,607 16,775,035
SEE ACCOMPANYING NOTES.
NVE CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED JUNE 30,
2001 2000
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OPERATING ACTIVITIES
Net income (loss) $ (94,536) $ (71,821)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation 65,219 60,449
Changes in operating assets and liabilities:
Grants and contracts receivable 138,022 (480,100)
Inventories 1,423 (86,649)
Prepaid expenses and other (19,009) (7,793)
Accounts payable and accrued expenses (110,475) 43,146
Deferred revenues (336,585) 853,534
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Net cash provided by operating activities (355,941) 310,766
INVESTING ACTIVITIES
Purchases of fixed assets (466,831) (6,976)
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Net cash used in investing activities (466,831) (6,976)
FINANCING ACTIVITIES
Net proceeds from sale of common stock 80,001 1,849
Net proceeds from (repayment of) note payable (13,491) (9,196)
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Net cash provided by financing activities 66,510 (38,514)
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Increase (Decrease) in cash (756,262) 296,443
Cash at beginning of period 1,492,080 382,273
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Cash at end of period $ 735,818 $ 678,716
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SEE ACCOMPANYING NOTES.
NVE CORPORATION
NOTES TO FINANCIAL STATEMENTS
June 30, 2001
1. INTERIM FINANCIAL INFORMATION
The accompanying unaudited condensed financial statements of NVE Corporation
(the "Company") are consistent with generally accepted principles for financial
reporting with SEC 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 the Company believes that the disclosures are adequate to make the
information presented not misleading, it is suggested that that these condensed
financial statements be read in conjunction with the audited financial
statements and the notes there to included in the company's latest annual
financial statements included in its report on Form 10-KSB. The results
of operations for the three-month period ended June 30, 2001 are not
necessarily indicative of the results that may be expected for the full year
ending March 31, 2002.
Merger
On November 21, 2000, then privately-owned Nonvolatile Electronics,
Incorporated ("NVE") and publicly-held Premis Corporation completed a merger
with Premis surviving under the new name NVE Corporation. The Company issued
new shares of Common Stock in exchange for outstanding shares of NVE capital
stock. The shares of Common Stock issued to NVE shareholders represented 94% of
the common shares outstanding immediately following the consummation of the
merger. In applying generally-accepted accounting principles ("GAAP"), the
Merger has been deemed to be equivalent, for accounting purposes, to NVE's
issuance of capital stock in exchange for the fair-market value of the assets
and liabilities of the Company. As a result, no goodwill has been recorded, and
the assets of NVE are recorded at their historic values.
Revenue Recognition
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition," which provides
guidance on the recognition, presentation and disclosure of revenue in
financial statements. SAB 101 requires that license and other up-front fees
received from research collaborators be recognized over the term of the
agreement unless the fee is in exchange for products delivered or services
performed that represent the culmination of a separate earnings process.
Effective January 1, 2000, the Company adopted SAB 101. The Company recognized
$83,333 of revenue that was included in the cumulative effect adjustment for
the three months ended June 30, 2000 and 2001. The effect of that revenue was
to increase income by the amount reported.
Earnings Per Share
The Company calculates its income (loss) per share pursuant to Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), Earnings Per Share.
Basic earnings per share is computed based upon the weighted average number
of common shares issued and outstanding during each year. Diluted net
income per share amounts assume conversion, exercise or issuance of all
potential common stock instruments (stock options, warrants and convertible
preferred stock). Potentially dilutive securities including warrants and
stock options are excluded from diluted earnings per share during net loss
periods because these securities would be anti-dilutive. All per share amounts
have been restated, based on the same conversion resulting from the Merger.
ITEM 2. MANAGEMENT'S DISCUSSION
AND ANALYSIS OR PLAN OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTHS
ENDED JUNE 30, 2001.
RESULTS FROM OPERATIONS
Results reported herein are for prior periods and not necessarily
indicative of results which may be expected in the future. Management has made
no predictions or estimates as to future operations, and no inferences as to
future operations should be drawn.
Revenues for the three months ended June 30, 2001 were $1,663,000,
an increase of 9% from revenues of $1,521,000 for the three months ended
June 30, 2000. The increase in revenue was due primarily to a 148% increase in
product sales, partially offset by a decline in research and development
revenues.
Research and development expenses decreased by 4% to $1,240,000 for
the quarter ended June 30, 2001 as compared to $1,288,000 in the prior year's
quarter. The decrease was due to a lower volume of research contracts as the
Company emphasized product sales rather than contract research and development.
Selling, general and administrative expenses for the quarter ended
June 30, 2001 increased by 52% to $360,000 compared to $237,000 in the
prior year. The increase is due in part to higher expenses associated with
commercial selling activities and additional expenses associated with being
publicly-held.
The Company had a net loss in the quarter ended June 30, 2001 of
$95,000 compared to a net loss of $72,000 for the quarter ended June 30, 2000.
The increased loss was due primarily to higher selling, general and
administrative expenses, which were partially offset by other income from a
dispute settlement.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow for the quarter ended June 30, 2001 shows a decrease of
$756,000. The Company had cash on June 30, 2001 of $736,000. The decrease in
cash is primarily due to the purchase of equipment and investment in commercial
selling activities. Management believes working capital is adequate for its
current needs, but is exploring various methods of meeting the Company's
long-term capital needs.
PART II--OTHER INFORMATION
Item #6 Exhibits and Reports of Form 8-K
a. Exhibits
None.
b. Reports on Form 8-K
The Company submitted a Form 8-K dated April 16, 2001, relating to
Regulation FD disclosure of information regarding a review of a new NVE device.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on behalf of the undersigneds thereunto duly authorized.
NVE CORPORATION
Dated: July 27, 2001 By /s/ Daniel A. Baker
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Daniel A. Baker
President and Chief Executive Officer
By /s/ Richard George
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Richard George
Chief Financial Officer