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| **Minnesota**                                                | **41-1424202**                      |
|--------------------------------------------------------------|-------------------------------------|
| State or other jurisdiction of incorporation or organization | (I.R.S.Employer Identification No.) |
|                                                         |
| **11409 Valley View Road, Eden Prairie, Minnesota**          | **55344**                           |
| (Address of principal executive offices)                     | (Zip Code)                          |

|                          Titleof each class                                  | Name of each exchange on which registered |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|
| **Common stock, $0.01 par value (“Common Stock”)**                                                                                                                                                                                                                                                                                                                   | **The NASDAQ Stock Market, LLC**          |

|      Large accelerated filer [   ]                                                                                     | Accelerated filer [X]                                |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|
|      Non-accelerated filer [   ] (Do not check if a smaller reporting company)      | Smaller reporting company [   ]  |

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PART I

Item 1. Business.

Our StrategyOur Products and Markets

Sensor Products and MarketsCoupler Products and MarketsMRAM Products and Markets

Product ManufacturingSales and Product DistributionNew Product StatusOur CompetitionSources and Availability of Raw MaterialsIntellectual PropertySeasonalityWorking Capital ItemsDependence on Major CustomersFirm BacklogResearch and Development ActivitiesEnvironmental MattersNumber of EmployeesFinancial Information About Geographic AreasAvailable Information

Item 1A. Risk Factors.Item 2. Properties.Item 3. Legal Proceedings.

PART II

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

Market InformationShareholders, Dividends, and Securities Authorized for Issuance Under Equity Compensation PlansStock Performance GraphStock Repurchase Program

Item 6. Selected Financial Data.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Item 8. Financial Statements and Supplementary Data.Item 9A. Controls and Procedures.

PART III

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

PART IV

Item 15. Exhibits, Financial Statement Schedules.

SIGNATURES

FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting FirmBalance SheetsStatements of IncomeStatements of Shareholders’ EquityStatements of Cash FlowsNotes to Financial Statements

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PART I

ITEM 1. BUSINESS.

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|            | •                                                                                                                            | technological innovations by us or our competitors; |
|--------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|
| •                                                       | the announcement of new products, product enhancements, contracts, or license agreements by us or our competitors;                     |
| •                                                       | delays in our introduction of new products or technologies or market acceptance of these new products or technologies;                 |
| •                                                       | changes in demand for our customers’ products;                                                                                    |
| •                                                       | the announcement of changes in strategy or discontinuation of products by us or our potential licensees;                               |
| •                                                       | quarterly variations in our operating results, revenue, or revenue growth rates;                                                       |
| •                                                       | changes in revenue estimates, earnings estimates, or market projections by market analysts;                                            |
| •                                                       | speculation in the press or analyst community about our business, potential revenue, or potential earnings;                            |
| •                                                       | short selling and covering of short positions in our stock; and                                                                        |
| •                                                       | general economic conditions or market conditions specific to particular industries servedor potentially served by us or our customers. |

ITEM 2. PROPERTIES.

ITEM 3. LEGAL PROCEEDINGS.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

|                  | **Quarter Ended** |
|------------------|-------------------|
| **3/31/10**      |                   | **12/31/09** |  | **9/30/09** |  | **6/30/09** |  | **3/31/09** |  | **12/31/08** |  | **9/30/08** |  | **6/30/08** |
| High   | $                 | 48.61 |   | $ | 53.49 |   | $ | 63.64 |   | $ | 49.49 |  | $ | 34.93 |   | $ | 29.35 |   | $ | 35.00 |   | $ | 39.60 |
| Low              | $                 | 39.83 |  | $ | 35.51 |  | $ | 40.00 |  | $ | 28.02 |  | $ | 20.11 |  | $ | 16.56 |  | $ | 26.01 |  | $ | 24.99 |

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|                                         | **3/31/2005** |        | **3/31/2006** |   | **3/31/2007** |  | **3/31/2008** |        | **3/31/2009** |   | **3/31/2010** |
|-----------------------------------------|---------------|--------|---------------|---|---------------|--|---------------|--------|---------------|---|---------------|
| NVE Corporation                         | $             | 100.00 |               | $ | 84.23         |  | $             | 143.43 |               | $ | 129.86        |  | $ | 151.47 |  | $ | 238.17 |
| Cedrus Nanotechnology Index – Pure | $             | 100.00 |               | $ | 154.95        |  | $             | 172.41 |               | $ | 187.74        |  | $ | 114.38 |  | $ | 212.63 |
| GCC Nanotechnology Index                | $             | 100.00 |               | $ | 127.39        |  | $             | 133.27 |               | $ | 125.41        |  | $ | 67.93 | - |
| NASDAQ Industrial Index                 | $             | 100.00 |               | $ | 117.67        |  | $             | 125.33 |               | $ | 111.88        |  | $ | 66.30 |  | $ | 110.09 |

|                                                  | **Balance Sheet Data as of March 31**                    |
|--------------------------------------------------|----------------------------------------------------------|
| **2010**                                         |                                                          | **2009** |  | **2008** |  | **2007** |  | **2006** |
| Cash, cash equivalents,and marketable securities | $                                                        | 49,543,766 |  | $ | 34,321,811 |  | $ | 24,736,874 |  | $ | 18,289,191 |  | $ | 10,891,326 |
| Total assets                                     | $                                                        | 57,462,914 |  | $ | 42,566,440 |  | $ | 32,768,128 |  | $ | 25,010,494 |  | $ | 17,758,919 |
| Capital lease obligations, less current portion  | $                                                        | - |  | $ | - |  | $ | - |  | $ | - |  | $ | 33,281 |
| Total shareholders’ equity                  | $                                                        | 55,953,294 |  | $ | 41,567,571 |  | $ | 31,513,482 |  | $ | 23,888,255 |  | $ | 16,778,111 |
|                                                  | ** Income Statement Data for Years Ended March 31** |
| **2010**                                         |                                                          | **2009** |  | **2008** |  | **2007** |  | **2006** |
| Revenue                                          |
| Product sales                                    | $                                                        | 22,665,860 |  | $ | 19,715,311 |  | $ | 18,505,650 |  | $ | 14,425,632 |  | $ | 8,345,967 |
| Contract research and development                | 5,481,325                                                |  | 3,656,958 |  | 2,023,162 |  | 2,035,198 |  | 3,824,559 |
| Total revenue                                    | $                                                        | 28,147,185 |  | $ | 23,372,269 |  | $ | 20,528,812 |  | $ | 16,460,830 |  | $ | 12,170,526 |
|                                             |
| Gross profit                                     | $                                                        | 19,834,170 |  | $ | 16,648,027 |  | $ | 13,695,504 |  | $ | 10,673,172 |  | $ | 5,951,993 |
| Income from operations                           | $                                                        | 16,298,536 |  | $ | 13,251,590 |  | $ | 10,048,779 |  | $ | 6,545,569 |  | $ | 2,471,026 |
| Net income                                       | $                                                        | 11,999,344 |  | $ | 9,782,895 |  | $ | 7,187,384 |  | $ | 4,780,783 |  | $ | 1,797,746 |
| Net income per share – diluted              | $                                                        | 2.47 |  | $ | 2.04 |  | $ | 1.51 |  | $ | 1.00 |  | $ | 0.39 |

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**Table of Contents**
Results of Operations

|                                                                                      | **Percentage of RevenueYear Ended March 31** |     | **Year-to-Year ChangeYears Ended March 31** |
|--------------------------------------------------------------------------------------|----------------------------------------------|----------|-----------------------------------------------------------------|
| **2010**                                                                             |                                              | **2009** |                                                                 | **2008** | **2009 to2010** |  | **2008 to2009** |
| Revenue                                                                              |
| Product sales                                                                        | 80.5                                         | %        |                                                                 | 84.4 | % |  | 90.1 | % |  | 15.0 | % |  | 6.5 | % |
| Contract research and development       | 19.5                                         | %        |                                                                 | 15.6 | % |  | 9.9 | % |  | 49.9 | % |  | 80.8 | % |
| Total revenue                                                                        | 100.0                                        | %        |                                                                 | 100.0 | % |  | 100.0 | % |  | 20.4 | % |  | 13.9 | % |
| Cost of sales                                                                        | 29.5                                         | %        |                                                                 | 28.8 | % |  | 33.3 | % |  | 23.6 | % |  | (1.6 | )% |
| Gross profit                                                                         | 70.5                                         | %        |                                                                 | 71.2 | % |  | 66.7 | % |  | 19.1 | % |  | 21.6 | % |
| Expenses                                                                             |
| Selling, general, and administrative                                                 | 8.6                                          | %        |                                                                 | 9.3 | % |  | 10.5 | % |  | 10.9 | % |  | 0.9 | % |
| Research and development                                                   | 4.0                                          | %        |                                                                 | 5.2 | % |  | 7.2 | % |  | (8.0 | )% |  | (18.1 | )% |
| Total expenses                                                                       | 12.6                                         | %        |                                                                 | 14.5 | % |  | 17.7 | % |  | 4.1 | % |  | (6.9 | )% |
| Income from operations                                                               | 57.9                                         | %        |                                                                 | 56.7 | % |  | 49.0 | % |  | 23.0 | % |  | 31.9 | % |
| Interest and other income                                                            | 5.7                                          | %        |                                                                 | 5.0 | % |  | 5.0 | % |  | 37.6 | % |  | 14.0 | % |
| Income before taxes                                                                  | 63.6                                         | %        |                                                                 | 61.7 | % |  | 54.0 | % |  | 24.2 | % |  | 30.2 | % |
| Income tax provision                                                                 | 21.0                                         | %        |                                                                 | 19.9 | % |  | 19.0 | % |  | 27.4 | % |  | 19.3 | % |
| Net income                                                                           | 42.6                                         | %        |                                                                 | 41.8 | % |  | 35.0 | % |  | 22.7 | % |  | 36.1 | % |

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|                                       | **Payments Due by Period** |
|---------------------------------------|----------------------------|
| **Contractual obligations**      |                            | **Total** |  | **<1 Year** |  | **1–3 Years** |  | **3–5 Years** |  | **>5 Years** |
| Operating lease obligations |                            | $ | 1,475,497 |  | $ | 248,285 |  | $ | 507,466 |  | $ | 521,240 |  | $ | 198,506 |
| Purchase obligations             |                            | 540,443 |  | 540,443 |  | - |  | - |  | - |
| Total                                 |                            | $ | 2,015,940 |  | $ | 788,728 |  | $ | 507,466 |  | $ | 521,240 |  | $ | 198,506 |

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**Table of Contents**
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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|                                                              | **Unaudited; Quarter Ended**       |
|--------------------------------------------------------------|------------------------------------|
| **March 31, 2010**                                      |                                    | **Dec. 31, 2009** |  | **Sept. 30, 2009** |  | **June 30, 2009** |
| Revenue                                                      |
| Product sales                                                | $                                  | 6,662,150 |  | $ | 5,292,228 |  | $ | 5,177,445 |  | $ | 5,534,037 |
| Contract research and development             | 1,517,145                          |  | 1,332,629 |  | 1,331,056 |  | 1,300,495 |
| Total revenue                                                |                               | 8,179,295 |  |   | 6,624,857 |  |   | 6,508,501 |  |   | 6,834,532 |
| Cost of sales                                                | 2,333,637                          |  | 2,102,855 |  | 1,985,100 |  | 1,891,423 |
| Gross profit                                                 |                               | 5,845,658 |  |   | 4,522,002 |  |   | 4,523,401 |  |   | 4,943,109 |
| Expenses                                                     |
| Selling, general, and administrative          |                               | 607,534 |  |   | 548,973 |  |   | 622,354 |  |   | 635,723 |
| Research and development                           | 310,564                            |  | 251,625 |  | 291,540 |  | 267,321 |
| Total expenses                                               |                               | 918,098 |  |   | 800,598 |  |   | 913,894 |  |   | 903,044 |
| Income from operations                                       |                               | 4,927,560 |  |   | 3,721,404 |  |   | 3,609,507 |  |   | 4,040,065 |
| Income before taxes                                          | 5,367,548                          |  | 4,136,073 |  | 4,002,705 |  | 4,410,090 |
| Net income                                                   | $                                  | 3,598,746 |  | $ | 2,767,483 |  | $ | 2,694,183 |  | $ | 2,938,932 |
| Net income per share – diluted | $                                  | 0.74 |  | $ | 0.57 |  | $ | 0.55 |  | $ | 0.61 |
|                                                              | ** Unaudited; Quarter Ended** |
| **March 31, 2009**                                 |                                    | **Dec. 31, 2008** |  | **Sept. 30, 2008** |  | **June 30, 2008** |
| Revenue                                                      |
| Product sales                                                | $                                  | 5,699,660 |  | $ | 4,596,948 |  | $ | 4,871,381 |  | $ | 4,547,322 |
| Contract research and development             | 1,196,920                          |  | 1,287,165 |  | 856,409 |  | 316,464 |
| Total revenue                                                |                                    | 6,896,580 |  |  | 5,884,113 |  |  | 5,727,790 |  |  | 4,863,786 |
| Cost of sales                                                | 1,806,102                          |  | 1,763,090 |  | 1,747,618 |  | 1,407,432 |
| Gross profit                                                 |                                    | 5,090,478 |  |  | 4,121,023 |  |  | 3,980,172 |  |  | 3,456,354 |
| Expenses                                                     |
| Selling, general, and administrative          |                                    | 554,055 |  |  | 508,953 |  |  | 585,373 |  |  | 529,484 |
| Research and development                           | 292,679                            |  | 258,998 |  | 280,863 |  | 386,032 |
| Total expenses                                               |                                    | 846,734 |  |  | 767,951 |  |  | 866,236 |  |  | 915,516 |
| Income from operations                                       |                                    | 4,243,744 |  |  | 3,353,072 |  |  | 3,113,936 |  |  | 2,540,838 |
| Income before taxes                                          | 4,577,231                          |  | 3,660,686 |  | 3,391,010 |  | 2,798,673 |
| Net income                                                   | $                                  | 3,111,494 |  | $ | 2,468,404 |  | $ | 2,300,381 |  | $ | 1,902,616 |
| Net income per share – diluted | $                                  | 0.65 |  | $ | 0.52 |  | $ | 0.48 |  | $ | 0.40 |

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PART III

ITEM 10.

ITEM 11.

ITEM 12.

ITEM 13.

ITEM 14.

PART IV

ITEM 15. 

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| **Exhibit #** | **Description**                                                                                                                                                                                                                                                                                                   |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   3.1    | Amended and Restated Articles of Incorporation of the company as amended by theBoard of Directors effective November 21, 2002 (incorporated by referenceto our Quarterly Report on Form 10-QSB for the period ended December 31, 2002).                                                                      |
|   3.2    | Bylaws of the company as amended by the Board of Directors effective December18, 2007 (incorporated by reference to our Current Report on Form 8-Kfiled December 19, 2007).                                                                                                                                       |
|   4      | Form of Common Stock Certificate (incorporated by reference to our Registration Statement on Form S-8 filed July 20, 2001).                                                                                                                                                                                  |
|   10.1   | Lease dated October 1, 1998 between the company and Glenborough Properties, L.P. (incorporated by reference to our Quarterly Reporton Form 10-QSB for the period ended September 30, 2002).                                                                                                                       |
|   10.2   | First amendment to lease between the company and Glenborough Properties,LP dated September 18, 2002 (incorporated by reference to our QuarterlyReport on Form 10-QSB for the period ended September 30, 2002).                                                                                          |
|   10.3   | Second amendment to lease between the company and Glenborough Properties, LP dated December 1, 2003 (incorporated by reference to our QuarterlyReport on Form 10-QSB for the period ended December 31, 2003).                                                                                                     |
|   10.4   | Notification from Glenborough Properties, LP relating to change in building ownership(incorporated by reference to our Current Report on Form 8-K filed October 11, 2005).                                                                                                                                   |
|   10.5   | Notification from Carlson Real Estate Company, Inc. relating to change in building ownership (incorporated by reference to our CurrentReport on Form 8-K filed October 11, 2005).                                                                                                                            |
|   10.6   | Third amendment to lease between the company and Carlson Real Estate Company, Inc. dated December 17, 2007(incorporated by reference to our Current Report on Form 8-K/A filed December 20, 2007).                                                                                                                |
|   10.7*  | Employment Agreement between the company and Daniel A. Baker dated January 29,2001 (incorporated by reference to our Annual Report on Form 10-KSB for the year ended March 31, 2001).                                                                                                                   |
|   10.8*  | NVE Corporation 2000 Stock Option Plan as Amended July 19, 2001 by theshareholders (incorporated by reference to our Registration Statement on Form S-8 filed July 20, 2001).                                                                                                                           |
|   10.9+  | Agreement between the company and Agilent Technologies, Inc. dated September 27, 2001 (incorporated by reference to our QuarterlyReport on Form 10-QSB for the period ended September 30, 2001).                                                                                                   |
|   10.10  | Amendment dated October 18, 2002 to Agreement between the company and AgilentTechnologies, Inc. (incorporated by reference to our Quarterly Report onForm 10-QSB for the period ended December 31, 2002).                                                                                                    |
|   10.11  | Notification from Agilent Technologies of planned sale of Agilent’s SemiconductorProduct Group (incorporated by reference to our Current Report on Form 8-K filed October 19, 2005).                                                                                                                    |
|   10.12  | Report of completion of the divestiture of Agilent’s Semiconductor Productsbusiness (incorporated by reference to our Current Report on Form 8-K/A filed December 6, 2005).                                                                                                                             |
|   10.13  | Amendment Number 2 to OEM Purchase Agreement dated September 10, 2007 to Agreement between AgilentTechnologies, Inc. (and subsequently assigned to Avago Technologies, Inc.) and the company (incorporated byreference to our Exhibit 10.5 filed with our Current Report on Form 8-K/A filed September 11, 2007). |
|   10.14* | Amendment No. 1 dated March 28, 2005 to Stock Option Agreement dated May 7, 2004between the Company and Daniel A. Baker (incorporated by reference to our Current Report on Form 8-K filed March 30, 2005).                                                                              |
|   10.15  | Amendment No. 1 dated March 28, 2005 to Stock Option Agreement dated August 17, 2004between the Company and Patricia M. Hollister (incorporated by referenceto our Current Report on Form 8-K filed March 30, 2005).                                                                     |
|   10.16  | Indemnification Agreement by and between Pacesetter, Inc., a St. Jude Medical Company,d.b.a. St. Jude Medical Cardiac Rhythm Management Division (“St. Jude”), and the company (incorporated by reference to our CurrentReport on Form 8-K filed September 27, 2005).                              |
|   10.17+ | Supplier Partnering Agreement by and between St. Jude andthe company (incorporated by reference to our Current Report on Form 8-Kfiled January 4, 2006).                                                                                                                                                |
|   10.18+ | Amendment Number 1 dated September 6, 2007 to Supplier Partnering Agreement between St. Jude and the company(incorporated by reference to our Current Report on Form 8-K/A filed September 10, 2007).                                                                                                        |
|   10.19+ | Amendment Number 2 dated December 15, 2009 to Supplier Partnering Agreement between St. Jude and the company(incorporated by reference to our Current Report on Form 8-K/A filed December 18, 2009).                                                                                               |
|   10.20* | Verbal agreement with Curt A. Reynders (incorporated by reference to Item 1.01 of our Current Report on Form 8-K filed January 18, 2006).                                                                                                                                                                    |
|   10.21  | Supply Agreement by and between the company and Phonak AG (incorporated by reference to our Current Report on Form 8-K filed May 6, 2009).                                                                                                                                                                   |
|   23     | Consent of Ernst & Young LLP.                                                                                                                                                                                                                                                                                 |
|   31.1   | Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                                                                                            |
|   31.2   | Certification by Curt A. Reynders pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                                                                                           |
|   32     | Certification by Daniel A. Baker and Curt A. Reynders pursuant to 18 U.S.C. Section1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                               |

|   |
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|   |

| * | Indicates a management contract or compensatory plan or arrangement.                                                                                               |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| + | Confidential portions of this exhibit were deleted and filed separately with the SEC under a request for confidentialtreatment pursuant to Rule 24b-2 or Rule 406. |

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SIGNATURES

| **Name**                                                  |  **Title**                                                                     | **Date**  |
|-----------------------------------------------------------|-------------------------------------------------------------------------------------|----------------|
| /s/Terrence W. GlarnerTerrence W. Glarner                 | Director andChairman of the Board                                         | May 5, 2010    |
| /s/Daniel A. BakerDaniel A. Baker                         | Director,President & Chief Executive Officer(Principal Executive Officer)  | May 5, 2010    |
| /s/Curt A. ReyndersCurt A. Reynders                       | Treasurer andChief Financial Officer(Principal Financial andAccounting Officer)     | May 5, 2010    |
| /s/James D. HartmanJames D. Hartman             | Director                                                                            | May 5, 2010    |
| /s/Patricia M. HollisterPatricia M. Hollister   | Director                                                                            | May 5, 2010    |
| /s/Robert H. IrishRobert H. Irish                         | Director                                                                            | May 5, 2010    |

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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NVE CORPORATION

|                                                                             | **March 31** |
|-----------------------------------------------------------------------------|--------------|
| **2010**                                                                    |              | **2009** |
| ASSETS                                                                      |
| Current assets                                                              |
| Cash and cash equivalents                                                   | $            | 1,389,288 |  |  | $ | 1,875,063 |  |
| Marketable securities, short term                                           |              | 1,566,666 |  |  |  | - |  |
| Accounts receivable, net of allowance for uncollectible accounts of $15,000 |              | 4,221,564 |  |  |  | 3,366,698 |  |
| Inventories                                                                 |              | 1,706,427 |  |  |  | 2,247,621 |  |
| Deferred tax assets                                                         |              | - |  |  |  | 667,729 |  |
| Prepaid expenses and other assets                                           | 781,294      |   |  | 669,307 |   |
| Total current assets                                                        |              | 9,665,239 |  |  |  | 8,826,418 |  |
| Fixed assets                                                                |
| Machinery and equipment                                                |              | 5,617,136 |  |  |  | 5,328,237 |  |
| Leasehold improvements                                                      | 450,546      |   |  | 450,546 |   |
|                                                                        |              | 6,067,682 |  |  |  | 5,778,783 |  |
| Less accumulated depreciation                                          | 4,857,819    |   |  | 4,485,509 |   |
| Net fixed assets                                                            |              | 1,209,863 |  |  |  | 1,293,274 |  |
| Marketable securities, long term                                            | 46,587,812   |   |  | 32,446,748 |   |
| Total assets                                                                | $            | 57,462,914 |   |  | $ | 42,566,440 |   |
|                                                                        |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                   |
| Current liabilities                                                         |
| Accounts payable                                                            | $            | 665,782 |  |  | $ | 257,239 |  |
| Accrued payroll and other                                              |              | 720,867 |  |  |  | 637,463 |  |
| Deferred taxes                                                              | 102,138      |  |  | - |  |
| Deferred revenue                                                            | 20,833       |   |  | 104,167 |   |
| Total current liabilities                                                   |              | 1,509,620 |  |  |  | 998,869 |  |
|                                                                        |
| Shareholders’ equity                                                   |
| Common stock                                                                |              | 47,006 |  |  |  | 46,693 |  |
| Additional paid-in capital                                                  |              | 20,169,924 |  |  |  | 19,166,524 |  |
| Accumulated other comprehensive income (loss)                               |              | 1,129,726 |  |  |  | (252,940 | ) |
| Retained earnings                                                           | 34,606,638   |   |  | 22,607,294 |   |
| Total shareholders’ equity                                             | 55,953,294   |   |  | 41,567,571 |   |
| Total liabilities and shareholders’ equity                             | $            | 57,462,914 |   |  | $ | 42,566,440 |   |

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**Table of Contents**

NVE CORPORATION

|                                      | **Year Ended March 31** |
|--------------------------------------|-------------------------|
| **2010**                             |                         | **2009** |  | **2008** |
| Revenue                              |
| Product sales                        | $                       | 22,665,860 |  |  | $ | 19,715,311 |  |  | $ | 18,505,650 |  |
| Contract research and development    | 5,481,325               |   |  | 3,656,958 |   |  | 2,023,162 |   |
| Total revenue                        |                         | 28,147,185 |  |  |  | 23,372,269 |  |  |  | 20,528,812 |  |
| Cost of sales                        | 8,313,015               |   |  | 6,724,242 |   |  | 6,833,308 |   |
| Gross profit                         | 19,834,170              |  |  | 16,648,027 |  |  | 13,695,504 |  |
| Expenses                             |
| Selling, general, and administrative |                         | 2,414,584 |  |  |  | 2,177,865 |  |  |  | 2,158,818 |  |
| Research and development             | 1,121,050               |   |  | 1,218,572 |   |  | 1,487,907 |   |
| Total expenses                       | 3,535,634               |   |  | 3,396,437 |   |  | 3,646,725 |   |
| Income from operations               |                         | 16,298,536 |  |  |  | 13,251,590 |  |  |  | 10,048,779 |  |
| Interest income                      |                         | 1,617,880 |  |  |  | 1,171,810 |  |  |  | 974,990 |  |
| Other income                         | -                       |   |  | 4,200 |   |  | 56,235 |   |
| Income before taxes                  |                         | 17,916,416 |  |  |  | 14,427,600 |  |  |  | 11,080,004 |  |
| Provision for income taxes           | 5,917,072               |   |  | 4,644,705 |   |  | 3,892,620 |   |
| Net income                           | $                       | 11,999,344 |   |  | $ | 9,782,895 |   |  | $ | 7,187,384 |   |
| Net income per share – basic    | $                       | 2.56 |   |  | $ | 2.10 |   |  | $ | 1.55 |   |
| Net income per share – diluted  | $                       | 2.47 |   |  | $ | 2.04 |   |  | $ | 1.51 |   |
| Weighted average shares outstanding  |
| Basic                                | 4,692,496               | 4,659,486 | 4,635,470 |  |
| Diluted                              | 4,857,044               | 4,785,565 | 4,763,101 |  |

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NVE CORPORATION

|                                                      |     |       | **AdditionalPaid-InCapital** |   | **AccumulatedOtherComprehen-sive Income(Loss)** |   | **RetainedEarnings** |   |        |
|------------------------------------------------------|--------------------|------------|------------------------------|--------|-------------------------------------------------|--------|----------------------|--------|--------|
| **Common Stock**                                     |
| **Shares**                                           |               | **Amount** | **Total**                    |
| Balance at March 31, 2007                            | 4,627,383          |            | $                            | 46,274 |                                                 | $      | 18,289,248           |        | $      | (84,282 | ) |  | $ | 5,637,015 |   |  | $ | 23,888,255 |  |
| Exercise of stockoptions and warrants                | 11,300             |            |                              | 113    |                                                 |        | 46,911               |        |        | - |  |  |  | - |  |  |  | 47,024 |  |
| Comprehensive income:                                |
| Unrealized gain onmarketable securities, net of tax  | -                  |            |                              | -      |                                                 |        | -                    |        |        | 187,440 | 187,440 |  |
| Net income                                           | -                  |            |                              | -      |                                                 |        | -                    |        |        | - |  |  |  | 7,187,384 |   |   |   | 7,187,384 |  |
| Total comprehensive income                           |                    | 7,374,824  |                              |
| Stock-based compensation                             | 169,606            | 169,606    |                              |
| Tax benefit of stock-based compensation              | 33,773             | 33,773     |                         |
| Balance at March 31, 2008                            | 4,638,683          |       |                         | 46,387 |                                            |   | 18,539,538           |   |   | 103,158 |  |  |   | 12,824,399 |   |   |   | 31,513,482 |  |
| Exercise of stockoptions and warrants                | 30,650             |       |                         | 306    |                                            |   | 269,901              |   |   | - |  |   |   | - |   |   |   | 270,207 |  |
| Comprehensive income:                                |
| Unrealized (loss) onmarketable securities,net of tax | -                  |       |                         | -      |                                            |   | -                    |   |   | (356,098 | ) | (356,098 | ) |
| Net income                                           | -                  |       |                         | -      |                                            |   | -                    |   |   | - |  |   |   | 9,782,895 |   |   |   | 9,782,895 |  |
| Total comprehensive income                           |               | 9,426,797  |                              |
| Stock-based compensation                             | 86,672             | 86,672     |                              |
| Tax benefit of stock-based compensation              | 270,413            | 270,413    |                         |
| Balance at March 31, 2009                            | 4,669,333          |       |                         | 46,693 |                                            |   | 19,166,524           |   |   | (252,940 | ) |   |   | 22,607,294 |   |   |   | 41,567,571 |   |
| Exercise of stockoptions and warrants                | 31,250             |            |                              | 313    |                                                 |        | 622,110              |        |        | - |  |  |  | - |  |  |  | 622,423 |  |
| Comprehensive income:                                |
| Unrealized gain onmarketable securities,net of tax   | -                  |       |                         | -      |                                            |   | -                    |        |        | 1,382,666 |  | 1,382,666 |  |
| Net income                                           | -                  |       |                         | -      |                                            |   | -                    |        |        | - |  |  |  | 11,999,344 |  |  |  | 11,999,344 |  |
| Total comprehensive income                           | 13,382,010         |            |
| Stock-based compensation                             | 100,842            |            | 100,842                      |        |
| Tax benefit of stock-based compensation              | 280,448            | 280,448    |                         |
| Balance at March 31, 2010                            | 4,700,583          |       | $                            | 47,006 |                                            | $      | 20,169,924           |   | $      | 1,129,726 |   |   | $ | 34,606,638 |   |   | $ | 55,953,294 |   |

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NVE CORPORATION

|                                                                                  | **Year Ended March 31** |
|----------------------------------------------------------------------------------|-------------------------|
| **2010**                                                                         |                         | **2009** |  | **2008** |
| OPERATING ACTIVITIES                                                             |
| Net income                                                                       | $                       | 11,999,344 |  |  | $ | 9,782,895 |  |  | $ | 7,187,384 |  |
| Adjustments to reconcile net income to net cashprovided by operating activities: |
| Depreciation                                                                     | 389,273                 |  |  | 473,740 |  |  | 560,528 |  |
| Stock-based compensation                                                         | 100,842                 |  |  | 86,672 |  |  | 169,606 |  |
| Excess tax benefits                                                              | (280,448                | ) |  | (270,413 | ) |  | (33,773 | ) |
| (Gain) loss on sale of fixed assets                                              | -                       |  |  | (4,200 | ) |  | 601 |  |
| Gain on marketable securities, net                                               | -                       |  |  | - |   |  | (56,837 | ) |
| Deferred income taxes                                                            | 271,651                 |  |  | 256,376 |  |  | 806,307 |  |
| Changes in operating assets and liabilities                                      |
| Accounts receivable                                                              | (854,866                | ) |  | (140,671 | ) |  | (1,221,022 | ) |
| Inventories                                                                      | 541,194                 |  |  | 209,183 |   |  | (439,946 | ) |
| Prepaid expenses and other assets                                                | (111,987                | ) |  | (139,691 | ) |  | (196,029 | ) |
| Accounts payable and accrued expenses                                            | 491,947                 |  |  | (172,444 | ) |  | (25,736 | ) |
| Deferred revenue                                                                 | (83,334                 | ) |  | (83,333 | ) |  | 158,143 |   |
| Net cash provided by operating activities                                        | 12,463,616              |  |  | 9,998,114 |  |  | 6,909,226 |  |
|                                                                             |
| INVESTING ACTIVITIES                                                             |
| Purchases of fixed assets                                                        | (305,862                | ) |  | (401,612 | ) |  | (817,596 | ) |
| Proceeds from sale of fixed assets                                               | -                       |  |  | 4,200 |  |  | 1,500 |  |
| Purchases of marketable securities                                               | (13,804,629             | ) |  | (12,137,160 | ) |  | (16,518,287 | ) |
| Proceeds from maturities and sales of marketable securities                      | 258,229                 |   |  | 1,985,034 |   |  | 11,832,804 |   |
| Net cash used in investing activities                                            | (13,852,262             | ) |  | (10,549,538 | ) |  | (5,501,579 | ) |
|                                                                             |
| FINANCING ACTIVITIES                                                             |
| Net proceeds from sale of common stock                                           | 622,423                 |  |  | 270,207 |  |  | 47,024 |  |
| Excess tax benefits                                                              | 280,448                 |   |  | 270,413 |   |  | 33,773 |   |
| Net cash provided by financing activities                                        | 902,871                 |   |  | 540,620 |   |  | 80,797 |   |
|                                                                             |
| (Decrease) increase in cash and cash equivalents                                 | (485,775                | ) |  | (10,804 | ) |  | 1,488,444 |   |
| Cash and cash equivalents at beginning of year                                   | 1,875,063               |   |  | 1,885,867 |   |  | 397,423 |   |
|                                                                             |
| Cash and cash equivalents at end of year                                         | $                       | 1,389,288 |   |  | $ | 1,875,063 |   |  | $ | 1,885,867 |   |
|                                                                             |
| Supplemental disclosures of cash flow information:                               |
| Cash paid during the year for income taxes                                       | $                       | 5,587,438 |  |  | $ | 4,356,000 |  |  | $ | 3,254,313 |  |

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|                                                              | **Year Ended March 31** |
|--------------------------------------------------------------|-------------------------|
| **2010**                                                     |                         | **2009** |  | **2008** |
| Weighted average common shares outstanding – basic      | 4,692,496               |  | 4,659,486 |  | 4,635,470 |
| Effect of dilutive securities:                               |
| Stock options                                                | 158,142                 |  | 121,135 |  | 123,195 |
| Warrants                                                     | 6,406                   |  | 4,944 |  | 4,436 |
| Shares used in computing net income per share – diluted | 4,857,044               |  | 4,785,565 |  | 4,763,101 |

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| **Total** |            | **<1 Year** |   | **1–3 Years** |  | **3–5 Years** |
|-----------|------------|----------------|---|--------------------|--|--------------------|
| $         | 48,154,478 |                | $ | 1,566,666          |  | $                  | 26,643,339 |  | $ | 19,944,473 |

|                                  | **As of March 31, 2010** |                          | **As of March 31, 2009** |
|----------------------------------|-------------------------------|--------------------------|-------------------------------|
| **AdjustedCost**                 |                               | **GrossUnrealizedGains** |                               | **GrossUnrealizedLosses** |  | **FairMarketValue** | ** AdjustedCost** |  | **GrossUnrealizedGains** |  | **GrossUnrealizedLosses** |  | **FairMarketValue** |
| U.S. agencysecurities            | $                             | 702,992                  |                     | $ | 19,240 |    | $ | - |   |    | $ | 722,232 |    | $ | 955,827 |    | $ | 30,647 |    | $ | - |   |    | $ | 986,474 |
| Corporate bonds             |                               | 23,807,375               |                          |   | 1,029,273 |   |   | (23,601 | ) |   |   | 24,813,047 |  |  | 13,983,202 |   |   | 54,085 |  |   | (942,514 | ) |   |   | 13,094,773 |
| Municipal bonds   | 21,877,258                    |                     | 747,483                       |   | (5,542 | ) |  | 22,619,199 |  | 17,902,196 |  | 489,802 |  | (26,497 | ) |  | 18,365,501 |
| Total                            | $                             | 46,387,625               |                          | $ | 1,795,996 |   | $ | (29,143 | ) |   | $ | 48,154,478 |  | $ | 32,841,225 |   | $ | 574,534 |  | $ | (969,011 | ) |   | $ | 32,446,748 |

|                      | **Less Than 12 Months**                |                           | **12 Months or Greater** |        | **Total**                 |
|----------------------|----------------------------------------|---------------------------|--------------------------|--------|---------------------------|
| **FairMarketValue**  |                                        | **GrossUnrealizedLosses** | **FairMarketValue**      |        | **GrossUnrealizedLosses** | **FairMarketValue** |  | **GrossUnrealizedLosses** |
| As of March 31, 2010 |
|                      | U.S. agency securities  | $                         | -                        |   | $                         | - |  |   | $ | - |   | $ | - |  |   | $ | - |   | $ | - |   |
|                      | Corporate bonds                        | 2,032,306                 | (23,601                  | )      | -                         | - |   | 2,032,306 | (23,601 | ) |
|                      | Municipal bonds                        | 1,564,416                 |                     | (5,542 | )                         |   | - |  | - |   |   | 1,564,416 |   | (5,542 | ) |
|                      | Total                                  | $                         | 3,596,722                |   | $                         | (29,143 | ) |   | $ | - |   | $ | - |   |   | $ | 3,596,722 |   | $ | (29,143 | ) |
| As of March 31, 2009 |
|                      | U.S. agency securities  | $                         | -                        |   | $                         | - |   |   | $ | - |   | $ | - |   |   | $ | - |   | $ | - |   |
|                      | Corporate bonds                   |                      | 7,278,810                |   |                      | (796,441 | ) | 1,902,698 | (146,073 | ) | 9,181,508 | (942,514 | ) |
|                      | Municipal bonds                        | 901,213                   |                     | (6,436 | )                         |   | 947,043 |   | (20,061 | ) |   | 1,848,256 |   | (26,497 | ) |
|                      | Total                                  | $                         | 8,180,023                |   | $                         | (802,877 | ) |   | $ | 2,849,741 |   | $ | (166,134 | ) |   | $ | 11,029,764 |   | $ | (969,011 | ) |

|                        | **March 31** |
|------------------------|--------------|
| **2010**               |              | **2009** |
| Raw materials          | $            | 595,032 |  |  | $ | 564,630 |  |
| Work in process        |              | 794,091 |  |  |  | 1,082,290 |  |
| Finished goods         | 617,304      |   |  | 900,701 |   |
|                        |              | 2,006,427 |  |  |  | 2,547,621 |  |
| Less inventory reserve | (300,000     | ) |  | (300,000 | ) |
| Total inventories      | $            | 1,706,427 |   |  | $ | 2,247,621 |   |

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|                         | **Year Ended March 31** |
|-------------------------|-------------------------|
| **2010**                |                         | **2009** |  | **2008** |
| Risk-free interest rate | 2.7                     | % |  | 3.2 | % |  | 4.2 | % |
| Expected volatility     | 55                      | % |  | 68 | % |  | 70 | % |
| Expected life (years)   | 4.1                     |   |  | 3.7 |   |  | 3.5 |  |
| Dividend yield          | 0                       | % |  | 0 | % |  | 0 | % |

|                                                             | **Year Ended March 31** |
|-------------------------------------------------------------|-------------------------|
| **2010**                                                    |                         | **2009** |  | **2008** |
| Effect of stock-based compensation on net income            | $                       | (100,842 | ) |  | $ | (86,672 | ) |  | $ | (169,606 | ) |
| Effect of stock-based compensation on net income per share: |
| Basic                                                       | $                       | (0.02 | ) |  | $ | (0.02 | ) |  | $ | (0.04 | ) |
| Diluted                                                     | $                       | (0.02 | ) |  | $ | (0.02 | ) |  | $ | (0.04 | ) |

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**Table of Contents**

| **Nonvested Shares**        |  | **Shares** |   | **Weighted AverageGrant-DateFair Value** |
|-----------------------------|--|------------|--------|-----------------------------------------------|
| Nonvested at March 31, 2009 |  | 1,500      |   |                                          | $       20.12 |  |
| Granted                     |  | 4,000      |        |                                               | $       51.04 |  |
| Vested                      |  | (5,500     | )      |                                               | $       42.61 |   |
| Nonvested at March 31, 2010 |  | -          |   |                                               | - |   |

| **Ranges ofExercise Prices**               |      | **NumberOutstanding** |      | **Weighted AverageExercise Price** |      | **Weighted RemainingContractual Life (years)** |
|-------------------------------------------------|--------------------------|-----------------------|--------------------------|----------------------------------------------|--------------------------|---------------------------------------------------------------|
| $    6.58 - 16.93 |                          | 192,500               |                          | $                                            | 12.78                    |                                                               | 3.6 |
| 20.12 - 29.65                         |                          | 43,000                |                          |                                              | 27.88                    |                                                               | 4.5 |
| 31.27 - 58.27                         |                          | 19,000                |                          | 38.94                                        |                          | 7.5                                                           |
|                                                 |                          | 254,500               |                          | $                                            | 17.28                    |                                                               | 4.0 |

|                                                          | **Option SharesReserved** |       | **OptionsOutstanding** |       | **Weighted AverageOption Exercise Price** |       | **WarrantsOutstanding** |       | **Weighted AverageWarrant Exercise Price** |
|----------------------------------------------------------|--------------------------------|--------------------------------|------------------------|--------------------------------|-----------------------------------------------------|--------------------------------|-------------------------|--------------------------------|------------------------------------------------------|
| At March 31, 2007                                        | 186,230                        |                                |                        | 311,700                        |                                                     |                                | $                       | 15.18                          |                                                      | 10,000 |  | $ | 16.28 |
| Granted                                                  | (8,000                         | )                              |                        | 8,000                          |                                                     |                                | $                       | 34.71                          |                                                      | - |  |  | - |
| Exercised                                                | -                              |                           |                        | (11,300                        | )                                                   |                                | $                       | 4.16                           |                                                      | - |  | - |
| At March 31, 2008                                        | 178,230                        |                                |                        | 308,400                        |                                                     |                                | $                       | 16.09                          |                                                      | 10,000 |  | $ | 16.28 |
| Granted                                                  | (4,000                         | )                              |                   | 4,000                          |                                                |                           | $                       | 31.27                          |                                                 | - |   |   | - |
| Exercised                                                | -                              |                           |                   | (30,650                        | )                                                   |                           | $                       | 8.82                           |                                                 | - |  | - |
| At March 31, 2009                                        | 174,230                        |                           |                   | 281,750                        |                                                |                           | $                       | 17.10                          |                                                 | 10,000 |   | $ | 16.28 |
| Granted                                                  | (4,000                         | )                              |                        | 4,000                          |                                                |                                | $                       | 51.04                          |                                                 | - |   |   | - |
| Exercised                                                | -                              |                           |                   | (31,250                        | )                                                   |                           | $                       | 19.92                          |                                                 | - |  | - |
| At March 31, 2010     | 170,230                        |                           |                   | 254,500                        |                                                |                           | $                       | 17.28                          |                                                 | 10,000 |   | $ | 16.28 |

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**Table of Contents**

|                      | **Year Ended March 31** |
|----------------------|-------------------------|
| **2010**             |                         | **2009** |  | **2008** |
| Current taxes        |
| Federal              | $                       | 5,375,724 |  |  | $ | 4,304,330 |  |  | $ | 2,808,433 |  |
| State                | 550,146                 |  |  | 351,625 |  | 314,904 |  |
| Deferred taxes       |
| Federal              | (6,109                  | ) |  | (17,880 | ) | 719,197 |   |
| State                | (2,689                  | ) |  | 6,630 |   |  | 50,086 |   |
| Income tax provision | $                       | 5,917,072 |   |  | $ | 4,644,705 |   |  | $ | 3,892,620 |   |

|                                            | **Year Ended March 31** |
|--------------------------------------------|-------------------------|
| **2010**                                   |                         | **2009** |  | **2008** |
| Tax expense at U.S. statutory rate         | $                       | 6,091,581 |   |  | $ | 4,905,384 |   |  | $ | 3,767,201 |  |
| State income taxes, net of Federal benefit |                         | 369,754 |   |  |  | 271,307 |   |  |  | 238,861 |  |
| Domestic manufacturing deduction           |                         | (309,222 | ) |  |  | (238,679 | ) |  |  | - |  |
| Municipal interest                         |                         | (225,695 | ) |  |  | (197,065 | ) |  |  | - |  |
| Other                                      |                         | (9,346 | ) |  |  | (96,242 | ) |  |  | 87,512 |  |
| Change in valuation allowance              | -                       |   |  | - |   |  | (200,954 | ) |
| Income tax provision                       | $                       | 5,917,072 |   |  | $ | 4,644,705 |   |  | $ | 3,892,620 |   |

|                                                 | **March 31** |
|-------------------------------------------------|--------------|
| **2010**                                        |              | **2009** |
| Deferred revenue                                | $            | 7,513 |  |  | $ | 37,375 |   |
| Vacation accrual                                | 121,788      | 107,517 |   |
| Inventory reserve                               | 108,180      | 107,640 |   |
| Depreciation                                    | 65,443       | 67,901 |   |
| Stock-based compensation deductions             | 162,869      | 136,587 |   |
| Unrealized (gain) loss on marketable securities | (637,127     | ) | 141,538 |   |
| Other                                           | 69,196       |   |  | 69,171 |   |
| Net deferred tax (liabilities) assets           | $            | (102,138 | ) |  | $ | 667,729 |   |

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**Table of Contents**

|            | **% of Revenue for Year Ended March 31** |
|------------|------------------------------------------|
| **2010**   |                                          | **2009** |  | **2008** |
| Customer A | 16%                                      |  | 19% |  | 17% |
| Customer B | *                                        |  | * |  | 10% |
| Customer C | 11%                                      |  | 11% |  | * |
| Customer D | 15%                                      |  | 10% |  | * |

|   |   |
|--------|--------|
|   |

| *Less than 10% |
|----------------|

|               | **Year Ended March 31** |
|---------------|-------------------------|
| **2010**      |                         | **2009** |  | **2008** |
| United States | $                       | 14,283,819 |  | $ | 12,445,164 |  | $ | 10,792,550 |
| Europe        |                         | 9,334,742 |  |  | 8,154,261 |  |  | 5,981,940 |
| Asia          |                         | 4,133,251 |  |  | 2,314,626 |  |  | 3,274,700 |
| Other         | 395,373                 |  | 458,218 |  | 479,622 |
| Total Revenue | $                       | 28,147,185 |  | $ | 23,372,269 |  | $ | 20,528,812 |

| **Year Ending March 31** |         |
|--------------------------|---------|
| **2011**                 |         | **2012** |  | **2013** |  | **2014** |  | **2015** |  | **2016** |  | **Total** |
| $                        | 248,285 |   | $ | 251,917 |   | $ | 255,549 |   | $ | 259,234 |   | $ | 262,006 |   | $ | 198,506 |   | $ | 1,475,497 |

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| **Exhibit #** | **Description**                                                                                                                                                 |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|               |
|   23     | Consent of Ernst & Young LLP.                                                                                                                          |
|   31.1   | Certification by Daniel A. Baker pursuant to Rule 13a-14(a)/15d-14(a).                                                                                     |
|   31.2   | Certification by Curt A. Reynders pursuant to Rule 13a-14(a)/15d-14(a).                                                                                    |
|   32     | Certification by Daniel A. Baker and Curt A. Reynders pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

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