UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C. 20549

                           FORM 10-KSB

[X]  Annual Report Pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934

For the year ended March 31, 2002
                                       OR
[ ]  Transition Report Pursuant to Section 13 or 15(d) of the
     Securities Exchange Act of 1934

For the transition period from _____________________to____________________

Commission file Number      000-12196
                            ---------

                                NVE Corporation
                                ---------------
             (Exact name of registrant as specified in its charter)

                 Minnesota                                      41-1424202
                 ---------                                      ----------
(State or other jurisdiction of incorporation)               I.R.S. Employer
                                                          Identification number


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

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

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:  Common
stock, $0.01 par value ("Common Stock")

Check whether the issuer: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
                      YES [X]        NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or
any amendment to this Form 10-KSB. [ ]

Issuer's revenues for the most recent fiscal year ended March 31, 2002
totaled $6,995,325.

Based upon the $2.10 per share closing sales price of the
registrant's common stock as of May 9, 2002, the aggregate
value of the shares of Common Stock held by nonaffiliates as of
such date was approximately 13,906,000.

Common Stock - 20,785,549 shares outstanding as of May 9, 2002.

Transitional Small Business Disclosure Format (check one)   YES [ ]   NO [X]

                   Documents Incorporated By Reference
Portions of the Proxy Statement for NVE Corporation's 2002 Annual Meeting of
Shareholders are incorporated by reference into Part III of this Form 10-KSB to
the extent described in Part III.
<PAGE>
                                   PART I

FORWARD LOOKING STATEMENTS
         Certain statements included in this Annual Report on Form 10-KSB,
except for the historical information contained herein, may be forward-looking
statements within the meaning of Section 21E of the Exchange Act, which are
subject to the safe harbor created by that statute, and further, may contain
forward-looking statements that are made in reliance upon the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The words
or phrases "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," "believe" or similar expressions identify
forward-looking statements. Actual results may be different from those
described in the forward-looking statements. Future events involve risks and
uncertainties. Some of these risks and uncertainties are outside the control of
management. Readers are cautioned against placing undue reliance on the
forward-looking statements due to these risks and uncertainties and are
cautioned to review the historical information and statements of risk contained
in the Company's Securities and Exchange Commission reports.

ITEM 1.  BUSINESS.

HISTORY AND BACKGROUND
         NVE Corporation ("NVE" or "the Company") is a leader in the practical
commercialization of "spintronics," magnetic devices which many experts believe
represent the next generation of microelectronics.

         NVE was incorporated under the laws of the state of Minnesota in 1989
as the result of research completed by the Company's founder, Dr. James
Daughton, while employed with Honeywell. Historically, NVE has been a research
and development (R&D) company funded largely by government contracts. In
November, 2000, the shareholders of Nonvolatile Electronics, Incorporated (NVE)
approved the merger of the company with and into Premis Corporation ("Premis"),
a publicly-traded corporation, with Premis surviving under the new name NVE
Corporation.

         NVE's enabling technology is a quantum-mechanics effect known as
"spintronics" or "SPINS." Some experts think spintronics represents the next
generation of microelectronics--the successor to the transistor. Unlike
conventional electronics, which rely on electron charge, spintronics use
electron spin to store and transmit information. NVE's products use proprietary
spintronic materials called Giant Magnetoresistors (GMR), which were discovered
in 1988 and perfected by NVE under government research grants. GMR is made from
exotic alloys a few atoms thick, and provides a large signal (the "Giant" in
"Giant Magnetoresistor") when subjected to a magnetic field. Such sensitivity
was previously possible only with super-cooling. In NVE's products, GMR
elements are connected to integrated circuitry and packaged in much the same
way as conventional integrated circuits.

         NVE first sold and shipped products using GMR spintronics materials in
1995, and produced the first known products combining GMR materials with
integrated circuits in 1998.
<PAGE>
PRODUCTS AND MARKETS
         NVE is a recognized leader in the practical commercialization of
spintronics and GMR. Our sensor products detect the presence of a magnet or
metal to determine position or speed. MRAM uses GMR spintronics to store data,
combining the speed of semiconductor memory with the nonvolatility of magnetic
memory. Our magnetic Couplers (also known as "isolators" because they
electrically isolate the coupled systems) add an IsoLoop-registered trademark-,
an integrated microscopic coil. The IsoLoop coil is electrically insulated from
the output-side sensors. The coil creates a small magnetic field that is picked
up by the sensor, transmitting data almost instantly. Thus IsoLoop Magnetic
Couplers are many times faster than conventional optical coupling. Optical
coupler speed is limited by the latency of the emitting element, much as an
electric oven element has a "warm-up" time, while a microwave oven magnetron
starts up almost instantly.

         Our product portfolio consists of three lines: 1) magnetic sensors for
precise data acquisition, 2) IsoLoop Couplers for high-speed data transfer, and
3) Magnetic Random Access Memory (MRAM) for non-volatile data storage. Our
present sensor market is industrial and robotic controls, with automotive
sensors in the near future. Couplers are sold primarily for factory and
industrial networks, with broadband and telecommunications in the future. MRAM
applications include hard-disk replacement and instant-on computers, and we
have licensed our MRAM intellectual property to major memory manufacturers.

DISTRIBUTION
         The company relies primarily on indirect channels to sell its
products. In the past year, Digi-Key, one of the country's largest electronic
component distributors, agreed to distribute NVE products. Also in the past
year, we added a number of manufacturers' representatives, particularly for our
Coupler products. This expansion dramatically expanded our geographical reach
and the number of sales engineers representing the company. In September 2001,
we signed a five-year agreement with Agilent Technologies, Inc. ("Agilent"). We
believe Agilent is the world's largest seller of solid-state couplers.

COMPETITION
         General barriers to competitive entry include specialized equipment,
know-how, and patents. NVE's technical staff includes leading world experts
with unique design, processing, packaging and testing know-how. We have also
amassed a range of specialized and customized production equipment.

         NVE's enabling spintronic technology addresses four "Bs" in global
trends:

Bandwidth--NVE Couplers are five to ten times faster than opto-couplers,
providing higher-bandwidth and maximizing the productivity of existing copper
networks.

Bounds--Because of their high signal-to-noise ratio, NVE Couplers drive ten
times longer data paths than opto-couplers or transformers. This allows 10-mile
range DSL replacement, which could significantly increase the copper-broadband
market.

Bits--NVE sensors are more precise (more useful "bits") than other sensors.
That means more productive industrial controls and robotics in the high-end
sensor market.

Boxes--NVE products combine multiple channels of magnetics and silicon in one
sub-millimeter die for smaller, less expensive systems. Customers have reported
payback times as short as three months by using our parts to save board space.

         Our markets are highly competitive, and there is no assurance that we
can maintain our competitive advantages.
<PAGE>
Sensor Competition
         Our three main sensor competitors are: 1) Honeywell International Inc.
("Honeywell"), 2) Royal Philips Electronics ("Philips"), and 3) Allegro
Microsystems, Inc. ("Allegro"). Honeywell and Philips make traditional nickel-
iron anisotropic magnetoresistive (AMR) sensors. AMR sensors are used in
automotive and high-performance industrial control systems. Unlike NVE's GMR
sensors, AMR sensors have "flipping" artifacts that limit their reliability.
Allegro makes inexpensive silicon Hall sensors, but Hall sensors are not nearly
as sensitive or precise as NVE's.

Coupler Competition
         The two main competing digital couplers are opto-couplers and
inductive couplers (transformers). In addition to being a customer, Agilent,
the Hewlett Packard spin-off, is the leading producer of high-speed opto-
couplers. Other top opto-coupler suppliers are Vishay Intertechnology (formerly
Infineon, a Siemens AG spin-off), NEC, Toshiba, and Fairchild Semiconductor.
Inductive couplers are made by a number of companies. As noted previously, NVE
run up to ten times faster the fastest opto-couplers. Unlike IsoLoops,
inductive couplers require special encoding to transmit logic signals.
Furthermore, IsoLoop Couplers require much less board space than opto- or
inductive couplers.

SUPPLIERS
         The Company has several single-source semiconductor foundry suppliers
for certain integrated circuit wafers critical to production of its commercial
products. Significant interruption of supply from any of these vendors could
have a material adverse effect on the Company.

MAJOR CUSTOMERS
         NVE's largest customer is the United States government and, although
no current problems exist with respect to any government contract or with the
Company's vibrant relationship with the government funding vehicles,
disqualification as a vendor to the United States government would cause
serious setbacks for the Company on a going forward basis and would likely
hamper future R&D activity.

         Our largest commercial customers include Agilent, St. Jude Medical,
Inc., and certain distributors. The loss of any of these customers could have a
significant impact on our commercial revenues and profitability.

PATENTS, LICENSES, AND ROYALTY AGREEMENTS
Patents
         NVE technology is protected by over 70 patents either issued, pending,
or licensed. We are continuing to strengthen our intellectual property.

Licenses
         We have licensed certain MRAM intellectual property to several
companies. In the past year we recognized revenues for advance payments made by
license agreements with two of these companies. We will also receive royalties
after the licensees begin selling devices using our intellectual property,
subject to certain conditions. There can be no assurance that existing
licensees will produce devices using our intellectual property.

         There are other potential licensees for our MRAM intellectual
property, although existing agreements place some restrictions on future
license agreements. There is no assurance that the company will gain additional
licensees.
<PAGE>
Royalty Agreements
         We have licensed rights to another organization's GMR-related patent,
which calls for us to pay royalties on our sales of certain products. Payments
under this agreement have not been material.

RESEARCH AND DEVELOPMENT
         In Fiscal 2002 our research and development consisted of contract
research and development and commercial product research and development.
Contract research and development is primarily for U.S. government agencies,
which fund such developments. Major commercial product research and development
programs in the past fiscal year included the development of anti-skid brake
sensors and new types of position sensors. The cost of these programs were at
least partially borne by customers.

         Total research and development expenses were $5.73 million and $5.05
million for the years ended March 31, 2002 and 2001, respectively, of which
$4.15 million and $4.02 million, respectively, was contract research and
development. The balance was primarily commercial product research and
development in both periods.

EMPLOYEES
         As of March 31, 2002, we had 59 employees, 53 of whom were full time.
Of the full-time employees, there were five general and administrative
employees, seven sales and marketing employees, 19 technicians and 22
scientists. Ten employees have earned doctorate degrees. None of our employees
is represented by a labor union or is subject to a collective bargaining
agreement, and we believe we maintain good relations with our employees.

ITEM 2.  PROPERTIES.
         Our principal offices are at 11409 Valley View Road, Eden Prairie,
Minnesota 55344. We lease the space which consists of approximately 18,500
square feet of offices, production, and laboratories. The lease agreement has a
term of five years, expiring December 31, 2003. On April 1, 2002 we began
leasing an additional 2,500 square feet of office and warehouse space in the
same building under a sublease agreement expiring May 31, 2003.

ITEM 3.  LEGAL PROCEEDINGS.
         We are not currently a party to any pending legal proceeding nor is
any property of the Company subject to such proceeding. Furthermore, we are not
aware of any potential claims, by any governmental authority or otherwise, that
may be brought against the Company.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
         No matters were submitted to security holders during the quarter ended
March 31, 2002.
<PAGE>
                                  PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
         NVE's Common Stock is traded on the OTC Bulletin Board under the
symbol "NVEC." The following data sets forth, for the fiscal quarters
indicated, a summary of the range of high and low bid information of
our common stock. Prices through the second quarter of fiscal year ended March
31, 2002 ("Fiscal 2002"), represent high and low bids as reported on the OTC
Bulletin Board. Prices for the third quarter of Fiscal 2001 represent high and
low bids as reported on the OTC Bulletin Board for the post-dividend and post-
merger period of December 6, 2000, to December 31, 2001. Subsequent prices
represent high and low bids as reported on the OTC Bulletin Board. Such bid
information reflects inter-dealer prices, without retail mark-up, mark-down or
commissions and does not necessarily reflect actual transactions.
<TABLE>
<CAPTION>
                                                     COMMON STOCK
                                                     ------------
                                                  LOW            HIGH
                                                 ------         ------
        <S>                                      <C>            <C>
        FISCAL 2001 (YEAR ENDED MARCH 31, 2001)
        First Quarter                            $0.438         $1.031
        Second Quarter                            0.438          0.818
        Third Quarter                             0.750          1.250
        Fourth Quarter                            0.875          1.438

        FISCAL 2002 (YEAR ENDED MARCH 31, 2002)
        First Quarter                            $0.750         $1.188
        Second Quarter                            0.950          1.540
        Third Quarter                             1.200          2.050
        Fourth Quarter                            1.300          2.000
</TABLE>

         The Company has never paid or declared any cash dividends on its
common stock. We do not anticipate paying any dividends in the foreseeable
future, and intend to retain any earnings we may generate to provide for the
operation and projected expansion of our business.

         Approximately 15.9 million shares were issued to approximately 75
shareholders of Nonvolatile Electronics, Incorporated, in November, 2000 in
connection with the merger by and between Nonvolatile Electronics, Incorporated
and Premis Corporation. Also in November 2000, we issued approximately 69,000
shares to three individuals in connection with the exercise of warrants
provided in exchange for services rendered.

         We sold approximately 77,000 shares of unregistered Common Stock to
Japan's K.K.Rocky Group in June, 2001 in connection with an agreement with
K.K.Rocky to distribute our products in Japan and Korea. The sale was under
Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act
of 1933, as amended.

         As of March 31, 2002, NVE had approximately 209 shareholders of record
and approximately 986 total shareholders.
<PAGE>
ITEM 6.
                           MANAGEMENT'S DISCUSSION
                 AND ANALYSIS OF FINANCIAL CONDITION AND
                           RESULTS OF OPERATIONS.

GENERAL
         NVE is a leader in the practical commercialization of "spintronics,"
which many experts believe represents the next generation of microelectronics.
We derive revenue from three sources: 1) contract R&D (principally government
contracts); 2) commercial sales of GMR sensor and coupler products; and
3) licenses for our magnetic random-access memory (MRAM) intellectual property.

         Our strategy is to continue to rapidly expand our product revenues
while relying on government contracts for basic technology development. The
expansion of product revenue will require additional product development and
marketing expenditures as well as working capital to fund receivables and
inventories.

CRITICAL ACCOUNTING POLICIES
         Management's Discussion and Analysis of Financial Condition and
Results of Operations discusses our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. On an on-going basis,
management evaluates its estimates and adjustments, including those related to
bad debts, inventories, income taxes, and contingencies and litigation.
Management bases its estimates and judgments on historical experience and on
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions.

         We believe the following critical accounting policies, among others,
affect our more significant judgments and estimates used in the preparation of
our financial statements.

Bad Debt
         The Company maintains an allowance for doubtful accounts for estimated
losses resulting from the inability of its customers to make required payments.
If the financial condition of the Company's customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required.

Inventory
         The Company reduces the stated value of its inventory for obsolescence
or impairment in an amount equal to the difference between the cost of
inventory and the estimated market value based upon assumptions about future
demand and market conditions.  If actual future demand or market conditions are
less favorable than those projected by management, additional reductions in
stated value may be required.
<PAGE>
Income Taxes
         In determining the carrying value of the Company's net deferred tax
assets, the Company must assess the likelihood of sufficient future taxable
income in certain tax jurisdictions, based on estimates and assumptions to
realize the benefit of these assets.  Management evaluates the realizability of
the deferred tax assets quarterly and assesses the need for valuation
allowances or reduction of existing allowances quarterly. As of March 31, 2002,
the Company has recorded $2.17 million of valuation allowances related to its
net deferred tax assets.

RESULTS FROM OPERATIONS
         Results reported herein are for prior periods and not necessarily
indicative of results which may be expected in the future. We have made
no predictions or estimates as to future operations, and no inferences as to
future operations should be drawn.

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

<TABLE>
<CAPTION>
                                           Years Ended March 31,
                                          2002             2001
                                         -------          -------
<S>                                      <C>              <C>
Revenue:
  Research and development                68.8 %           62.0 %
  Product sales                           22.8             10.4
  License fees                             8.4             27.6
                                         -------          -------
Total revenues                           100.0            100.0

Cost of sales                             83.2             65.0
                                         -------          -------
Gross profit                              16.8             35.0

Total expenses                            46.8             33.2
                                         -------          -------
Net (loss) income                        (30.0)%            1.8 %
                                         =======          =======
</TABLE>

         Revenues for the fiscal year ended March 31, 2002 ("Fiscal 2002") were
$6,995,325, a decrease of 2% from revenues of $7,165,665 for the year ended
March 31, 2001 ("Fiscal 2001"). Product sales in Fiscal 2002 increased by 113%
to $1,593,182 from $749,407 in Fiscal 2001. This was offset by the non-
recurrence of $1.25 million of license revenues resulting from a December, 2000
agreement with Honeywell International for MRAM technology. Additionally,
recurring license revenues decreased $138,887 as revenue recognition for one of
the Company's license agreements was completed during the current year (see
Note 2 to Financial Statements--Revenue Recognition).

         Gross profit margins decreased from 35% to 17%, primarily due to
lower license revenues, more lower-margin indirect sales, and start-up costs
associated with new commercial products.

         Research and development expenses increased by 14% to $5,731,764 for
Fiscal 2002, compared to $5,047,924 for Fiscal 2001. The increase was due to an
increase in commercial product development.
<PAGE>
         Selling, general and administrative expenses for Fiscal 2002 increased
by 32% to $1,807,273 compared to $1,368,767 in the prior year. Selling expenses
increased with the addition of a National Sales Manager and expenses associated
with development of a manufacturer's representative network. General and
administrative expenses increased due to additional legal and accounting
expenses associated with being publicly-held and the costs of implementing a
new accounting software system in the current period.

         NVE had a net loss for Fiscal 2002 of $2,100,442 compared to a net
income of $127,258 for Fiscal 2001. The loss was due primarily to lower license
revenues and higher R&D expenses.

FOREIGN CURRENCY TRANSACTIONS
         Due to product sales abroad, the Company has some limited revenue
risks from fluctuations in values of foreign currency. Foreign sales are
generally made in U.S. currency, and currency transaction gains or losses in
the past two fiscal years were not significant.

LIQUIDITY AND CAPITAL RESOURCES
         Cash flow for Fiscal 2002 showed a decrease of $954,822. The Company
had cash on March 31, 2002 of $537,258. The decrease in cash was primarily due
to investments in developing and selling our commercial products, partially
offset by cash generated by the sale and lease-back of equipment and payments
from Agilent. With the addition of a $6.228 million strategic investment after
the end Fiscal 2002 (see Note 15 to Financial Statements--Subsequent Event), we
believe our working capital is adequate for our Fiscal 2003 needs.

INFLATION
         Inflation has not had a significant impact on the operations of
NVE since its inception. Prices for our products and for the materials and
labor going into those products are governed by market conditions. It is
possible that inflation in future years could impact both materials and labor
in the production of our products. Rates paid by the U.S. Government on
research and development contracts are adjustable with inflation.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
         Financial Statements and Notes are set forth on this Form 10-KSB
following the signature page.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
         Our shareholders approved the engagement of Ernst & Young LLP ("E&Y")
as our independent auditors for Fiscal 2001 at our 2001 Annual Meeting of
Shareholders on July 19, 2001. We filed a report on Form 8-K on that date
disclosing the approval. Prior to the November 21, 2000 Merger, E&Y was
Nonvolatile Electronics, Incorporated's independent auditors, and
PricewaterhouseCoopers, LLP ("PwC") was PREMIS' independent auditors.
<PAGE>
         The reports of PwC on PREMIS' financial statements for the fiscal
years ended March 31, 2000 and 1999 did not contain any adverse opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principle. In connection with its audits of the
financial statements of PREMIS for fiscal years ended March 31, 2000 and 1999
and through June 28, 2001, there were no disagreements with PwC within the
meaning of Instruction 4 of Item 304 of Regulation S-B of the Securities and
Exchange Commission ("SEC") on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure which,
if not resolved to PwC's satisfaction, would have caused PwC to make reference
to the subject matter of the disagreement in connection with its reports on
PREMIS' financial statements. Furthermore, with respect to PREMIS, during the
fiscal years ended March 31, 2000 and 1999, there were no "reportable events"
(as defined in Item 304(a) (1) (iv) (B) of Regulation S-B of the SEC).


                                  PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

EXECUTIVE OFFICERS OF THE COMPANY
         The executive officers of the Company at the time of the filing of
this Form 10-KSB are as follows:

         Daniel A. Baker, President, Chief Executive Officer and Director,
age 44, was elected an officer and director of the Company in January, 2001.
From 1993 until joining the Company, he was President and CEO of Printware,
Inc., a public company that makes high-speed laser imaging systems. Dr. Baker
has 25 years of experience in high-tech industries, including executive
positions with Minntech Corporation and Percom Data Corporation. Dr. Baker
holds Ph.D. and M.S. degrees in engineering from the University of Minnesota,
an M.B.A. in finance from the University of Minnesota, and a B.S. in
engineering from Case Western Reserve University. He holds 15 patents.

         Richard George, Treasurer and Chief Financial Officer, age 58, has
served as the Chief Financial Officer of NVE since March, 1995. From 1991 to
1995, Mr. George served as Controller for NVE. From 1966 to 1991, Mr. George
held various financial and financial management positions in the areas of
operations and contracts at Honeywell Inc. Mr. George received a B.A. in
economics in 1966 from the University of Minnesota, where he later took
graduate courses in law and management.

         James Daughton, Chief Technical Officer and Director, age 65, has
been a director of the Company since its inception and Chief Technical Officer
since January, 2001. He served as NVE's Chairman and CEO from the company's
inception to January, 2001. From 1974 to 1989, Dr. Daughton held various
research and product development positions at Honeywell, Inc. including Vice
President of The Solid State Development Center. From 1964 to 1974, he
developed magnetic and semiconductor memory devices at IBM Corporation. Dr.
Daughton holds a doctorate in electrical engineering from Iowa State University
and is an adjunct professor of physics at the University of Minnesota. He has
more than 20 issued or pending patents.

         Other information required by this Item will be contained in the
Company's Proxy Statement for its 2002 Annual Meeting of Shareholders and is
incorporated herein by reference.
<PAGE>
ITEM 10.  EXECUTIVE COMPENSATION.
         The information required by Item 10 is incorporated herein by
reference to the section titled "Executive Compensation" contained in the
Company's Proxy Statement for its 2002 Annual Meeting of Shareholders.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
         The information required by Item 11 is incorporated herein by
reference to the section entitled "Security Ownership Of Certain Beneficial
Owners and Management" contained in the Company's Proxy Statement for its 2002
Annual Meeting of Shareholders.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
         The information required by Item 12 is incorporated herein by
reference to the section titled "Executive Compensation" contained in the
Company's Proxy Statement for its 2002 Annual Meeting of Shareholders.

<PAGE>
ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) Exhibits.

Exhibit #                          Description
---------                          -----------

3.1      Amended and Restated Articles of Incorporation of the Company
         (incorporated by reference to the Company's Definitive Proxy
         Statement on Schedule 14A filed November 16, 2000).

3.2      By-laws of the Company
         (incorporated by reference to the Company's Current Report on Form
         8-K filed December 6, 2000).

3.3      By-laws of the Company as amended by the Board of Directors,
         May 31, 2002 (filed herewith).

*10.1    Employment Agreement between the Company and Daniel A. Baker dated
         January 29, 2001
         (incorporated by reference to the Company's Annual Report on Form
         10-KSB for the year ended March 31, 2001).

*10.2    NVE Corporation 2000 Stock Option Plan
         (incorporated by reference to the Company's filing on Current Report
         on Form 8-K/A filed February 2, 2001).

*10.3    NVE Corporation 2000 Stock Option Plan as Amended July 19, 2001
         by the shareholders
         (incorporated by reference to the Company's Registration Statement on
         Form S-8 filed July 20, 2001).

*10.4    NVE Corporation 2001 Employee Stock Purchase Plan
         (incorporated by reference to the Company's Definitive Proxy
         Statement on Schedule 14A filed June 1, 2001).

10.5     Agreement between the Company and Agilent Technologies, Inc. dated
         September 27, 2001
         (incorporated by reference to the Company's Quarterly Report on Form
         10-QSB for the period ended September 30, 2001).

21.1     Subsidiaries of the Registrant.  None.

23.1     Consent of Ernst & Young LLP (filed herewith).

*Indicates a management contract or compensatory plan or arrangement.


(b) Reports on Form 8-K.
         The Company submitted a Form 8-K dated March 18, 2002 relating to
Regulation FD disclosure of a broadcast interview with the Company's president.
<PAGE>
                                   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:   May 31, 2002                  By /s/ Daniel A. Baker
                                          -------------------------------------
                                          Daniel A. Baker
                                          President and Chief Executive Officer


                                       By /s/ Richard George
                                          -------------------------------------
                                          Richard George
                                          Chief Financial Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant on the dates in the capacities indicated.

          Name                         Title                          Date
    ------------------     -------------------------------        ------------

/s/ Terrence Glarner               Director and                   May 31, 2002
    ------------------         Chairman of the Board              ------------
    Terrence Glarner

/s/ Daniel A. Baker                   Director,                   May 31, 2002
    ------------------     President & Chief Executive Officer    ------------
    Daniel A. Baker           (Principal Executive Officer)

/s/ Richard George                   Treasurer and                May 31, 2002
    ------------------          Chief Financial Officer            ------------
    Richard George             (Principal Financial and
                                  Accounting Officer)

/s/ James Daughton                  Director and                  May 31, 2002
    ------------------         Chief Technical Officer            ------------
    James Daughton

/s/ Herbert Goronkin                   Director                   May 31, 2002
    ------------------                                            ------------
    Herbert Goronkin

/s/ Robert Irish                       Director                   May 31, 2002
    ------------------                                            ------------
    Robert Irish
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS

Board of Directors
NVE Corporation


         We have audited the accompanying balance sheet of NVE Corporation
as of March 31, 2002 and the related statements of operations, shareholders'
equity and cash flows for the years ended March 31, 2002 and 2001. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

         We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of NVE Corporation at
March 31, 2002 and the results of its operations and its cash flows for the
years ended March 31, 2002 and 2001 in conformity with accounting principles
generally accepted in the United States.

/s/ Ernst & Young LLP
Minneapolis, Minnesota
April 26, 2002
<PAGE>
                                 NVE CORPORATION
                                  BALANCE SHEET
                                  MARCH 31, 2002

<TABLE>
<S>                                                                 <C>
ASSETS
Current assets:
   Cash                                                             $  537,258
   Accounts receivable                                               1,261,173
   Inventories                                                         512,215
   Prepaid expenses and other assets                                    59,205
                                                                    -----------
Total current assets                                                 2,369,851
Fixed assets:
   Machinery and equipment                                           2,244,393
   Furniture and fixtures                                               35,499
   Leasehold improvements                                              352,640
   Construction in progress                                             78,987
                                                                    -----------
                                                                     2,711,519
   Less accumulated depreciation                                     1,485,914
                                                                    -----------
Total fixed assets                                                   1,225,605
                                                                    -----------
Total assets                                                        $3,595,456
                                                                    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Note payable                                                     $  218,539
   Accounts payable                                                    388,532
   Accrued payroll and other                                           426,950
   Deferred revenue                                                  1,565,307
   Current portion of capital lease obligations                        141,921
                                                                    -----------
Total current liabilities                                            2,741,249

   Capital lease obligations, less current portion                     377,399
                                                                    -----------
Total liabilities                                                    3,118,648

Shareholders' equity:
   Common stock                                                        172,702
   Additional paid-in capital                                        5,758,444
   Accumulated deficit                                              (5,454,338)
                                                                    -----------
Total shareholders' equity                                             476,808
                                                                    -----------
Total liabilities and shareholders' equity                          $3,595,456
                                                                    ===========
</TABLE>

                              SEE ACCOMPANYING NOTES.
<PAGE>
                                 NVE CORPORATION
                             STATEMENT OF OPERATIONS
                        YEARS ENDED MARCH 31, 2002 AND 2001
<TABLE>
<CAPTION>
                                            YEAR ENDED MARCH 31,
                                            2002           2001
                                        --------------------------
<S>                                     <C>            <C>
Revenues
  Contract research and development     $ 4,816,029    $ 4,441,259
  Product sales                           1,593,182        749,407
  License revenues                          586,114      1,974,999
                                        ---------------------------
Total revenues                            6,995,325      7,165,665

Cost of sales                             5,822,536      4,654,880
                                        ---------------------------
Gross profit                              1,172,789      2,510,785

Expenses
  Research and development                1,583,008      1,031,263
  Selling, general & administrative       1,807,273      1,368,767
                                        ---------------------------
Total expenses                            3,390,281      2,400,030
                                        ---------------------------

(Loss) income from operations            (2,217,492)       110,755

Interest expense                            (45,710)       (33,919)
Other income                                162,760         50,422
                                        ---------------------------
Net (loss) income                       $(2,100,442)    $  127,258
                                        ===========================

Net (loss) income per
  basic and diluted share                     $(.12)          $.01
                                        ===========================

Weighted average shares outstanding:
  Basic                                  17,028,870     16,852,042
  Diluted                                17,028,870     17,708,709
</TABLE>

                              SEE ACCOMPANYING NOTES.
<PAGE>
                                 NVE CORPORATION
                        STATEMENT OF SHAREHOLDERS' EQUITY
                       YEARS ENDED MARCH 31, 2002 AND 2001
<TABLE>
<CAPTION>
                                                                          Additional
                               Preferred Stock         Common Stock         Paid-in   Accumulated
                              Shares     Amount      Shares     Amount      Capital     Deficit        Total
                             ----------------------------------------------------------------------------------
<S>                          <C>         <C>        <C>         <C>       <C>         <C>           <C>
Balance, March 31, 2000       1,675,000  $ 16,750    2,813,828  $ 28,139  $4,733,046  $(3,481,154)  $1,296,781

  Exercise of stock
    options and warrants                                47,120       471       6,444                     6,915
  Repurchase of common stock                            (3,823)      (38)    (19,022)                  (19,060)
  Recapitalization in
    connection with merger
    of Premis Corp.          (1,675,000)  (16,750)  14,064,103   140,641     928,159                 1,052,050
  Net income for year ended
    March 31, 2001                                                                        127,258      127,258
                             ----------------------------------------------------------------------------------
Balance, March 31, 2001               -         -   16,921,228   169,213   5,648,627   (3,353,896)   2,463,944

  Exercise of stock
    options and warrants                               257,100     2,571      15,653                    18,224
  Shares issued pursuant
    to employee stock
    purchase plan                                       14,195       142      14,940                    15,082
  Sale of common stock                                  77,633       776      79,224                    80,000
  Net loss for year ended
    March 31, 2002                                                                    $(2,100,442)  (2,100,442)
                             ----------------------------------------------------------------------------------
Balance, March 31, 2002               -  $      -   17,270,156  $172,702  $5,758,444  $(5,454,338)  $  476,808
                             ==================================================================================
</TABLE>

                                                 SEE ACCOMPANYING NOTES.
<PAGE>
                                 NVE CORPORATION
                             STATEMENT OF CASH FLOWS
                       YEARS ENDED MARCH 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                                       YEAR ENDED MARCH 31,
                                                       2002            2001
                                                    ---------------------------
<S>                                                 <C>             <C>
OPERATING ACTIVITIES
Net (loss) income                                   $(2,100,442)    $  127,258
Adjustments to reconcile net (loss) income to net
  cash (used in) provided by operating activities:
    Depreciation and amortization                       332,290        256,275
    Changes in operating assets and liabilities:
      Accounts receivable                                55,555       (358,570)
      Inventories                                       575,601       (503,841)
      Prepaid expenses and other                         14,674        (32,252)
      Accounts payable and accrued expenses             193,938        271,837
      Deferred revenue                                  249,885        787,645
                                                    ---------------------------
Net cash (used in) provided by operating activities    (678,499)       465,473

INVESTING ACTIVITIES
Purchases of fixed assets                              (224,735)      (359,556)
                                                    ---------------------------
Net cash used in investing activities                  (224,735)      (359,556)

FINANCING ACTIVITIES
Net proceeds from sale (repurchase) of common stock     113,306      1,039,905
Repayment of note payable and capital leases           (164,894)       (36,015)
                                                     --------------------------
Net cash (used in) provided by financing activities     (51,588)     1,003,890
                                                     --------------------------

(Decrease) increase in cash                            (954,822)     1,109,807
Cash at beginning of year                             1,492,080        382,273
                                                     --------------------------

Cash at end of year                                  $  537,258     $1,492,080
                                                     ==========================

Supplemental disclosure of non-cash activity
Assets acquired through capital lease obligations      (634,865)             -
                                                     ==========================
</TABLE>

                              SEE ACCOMPANYING NOTES.
<PAGE>
                                 NVE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS

1.  DESCRIPTION OF BUSINESS
NVE Corporation ("NVE" or "the Company") is a leader in the practical
commercialization of "spintronics," which many experts believe represents the
next generation of microelectronics. The Company derives revenue from three
sources: 1) contract R&D (principally government contracts); 2) commercial
sales of its GMR sensor and coupler products; and 3) licenses for its magnetic
random-access memory (MRAM) technology.

The Company has representatives throughout the world, and derives approximately
15% of its revenues from sources outside the United States.

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.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a remaining maturity
of three months or less when purchased to be cash equivalents.

REVENUE RECOGNITION
Revenue from product sales to direct customers is recognized upon shipment.
Revenue from licensing and technology development programs, which is
nonrefundable and for which no significant future obligations exist, is
recognized when the license is signed. Revenue from licensing and technology
development programs, which is refundable, recoupable against future royalties,
or for which future obligations exist, is recognized when the Company has
completed its obligations under the terms of the agreements. Revenue from
royalties is recognized upon the shipment of product from the Company's
technology license partners to direct customers. Certain research and
development activities are conducted for third parties and such revenue is
recognized as the services are performed.

NEW PRONOUNCEMENTS
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. As a result of the
adoption, the Company reported a cumulative effect of a change in accounting
principle in the amount of $611,110, or $.04 per share, which represented the
deferral of recoupable up-front license fees for which the earnings process was
not complete. The Company recognized $194,445 and $333,332 of revenue that was
included in the cumulative effect adjustment for the years ended March 31, 2002
and 2001, respectively. The effect of that revenue was to increase income by
the amounts reported.
<PAGE>
In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards(SFAS) No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets (Statement 142). Under the new rules,
goodwill and indefinite lived intangible assets are no longer amortized but are
reviewed annually for impairment. Separate intangible assets that are not
deemed to have an indefinite life will continue to be amortized over their
estimated useful lives. The amortization provisions of SFAS No. 142 apply to
goodwill and intangible assets acquired after June 30, 2001. The Company does
not anticipate that the adoption of the new statements will have any effect on
earnings or the financial position of the Company.

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144,
Accounting for the Impairment of Long-Lived Assets, effective for fiscal years
beginning after December 15, 2001. Under the new rule, a single accounting
model is established for long-lived assets to be disposed of by sale. In
addition, implementation issues are resolved in regards to previously issued
statements. The Company does not anticipate that the adoption of the new
statement will have any effect on earnings or the financial position of the
Company.

INVENTORIES
Inventories are stated at lower of cost, first-in, first-out (FIFO) method, or
market.

FIXED ASSETS
Fixed assets are stated at cost. Depreciation of machinery and equipment, and
furniture and fixtures is recorded over the estimated useful lives of the
assets, generally five years, using the straight-line method. Amortization of
leasehold improvements is recorded using the straight-line method over the
lesser of the lease term or useful life of five years.

STOCK-BASED COMPENSATION
The Company has adopted the disclosure-only provisions of SFAS No.123,
Accounting for Stock-Based Compensation, but applies Accounting Principles
Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations in accounting for its plans. Under APB No. 25, when the
exercise price of employee stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

NET INCOME PER COMMON SHARE
The Company calculates its income (loss) per share pursuant to SFAS No. 128,
Earnings Per Share. Basic earnings per share is computed based upon the
weighted average number of common shares issued and outstanding during each
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 for
Fiscal 2002 because these securities would be anti-dilutive. Stock options were
not included in the computation of diluted earnings per share per share if the
exercise prices of the options were greater than the market price of the common
stock. The following table reflects the components of common shares outstanding
in accordance with SFAS No. 128:
<PAGE>
<TABLE>
<CAPTION>
                                                YEAR ENDED MARCH 31,
                                                  2002         2001
                                               -----------------------
<S>                                            <C>          <C>
Weighted avg. common shares outstanding-basic  17,028,870   16,852,042
Effect of dilutive securities:
  Stock options                                         -      848,374
  Stock warrants                                        -        8,293
                                               -----------------------
Shares used in computing net income (loss)
  per common share - diluted                   17,028,870   17,708,709
                                               =======================
</TABLE>

SEGMENT INFORMATION
The Company follows the provisions of SFAS No. 131, Disclosures About Segments
of an Enterprise and Related Information. The Company derives most of its
revenue from one industry segment, government contracts. Until such time as the
Company diversifies its operations, this pronouncement has no significant
impact on the reporting practices of the Company.

INCOME TAXES
The Company accounts for income taxes using the liability method. Deferred
income taxes are provided for temporary differences between the financial
reporting and tax bases of assets and liabilities.

USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from the estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist of cash and cash equivalents,
short-term trade receivables and accounts and note payable. The carrying values
of the Company's financial instruments approximate fair value due to their
short-term nature.

ACCOUNTING FOR LONG-LIVED ASSETS
The Company records losses on long-lived assets used in operations when
indicators of impairment are present and the undiscounted cash flows estimated
to be generated by those assets are less than the assets' carrying amount.

CONDENSED FORMAT
Statements contained herein are condensed as permitted under Regulation S-B.
Specifically, in the Statement of Operations, "Other Income" includes royalty
expense, interest income, interest expense, and miscellaneous income and
expenses.

CLASSIFICATION OF RESEARCH AND DEVELOPMENT COSTS
The Company has reclassified certain research and development costs related to
contract research and development programs to cost of sales.  Previously, these
costs were included with research and development costs reported as operating
expenses.
<PAGE>
3.  INVENTORIES
Inventories consist of the following:

<TABLE>
<CAPTION>
                                         MARCH 31,
                                           2002
                                         ----------
   <S>                                   <C>
   Raw materials                         $ 167,607
   Work-in-progress                        395,144
   Finished goods                           99,464
                                         ---------
                                           662,215
   Less obsolescence reserve              (150,000)
                                         ----------
                                         $ 512,215
                                         ==========
</TABLE>

4.  INCOME TAXES
As of March 31, 2002, the Company had net operating loss carry forwards of
approximately $5,082,000 which expire in fiscal years 2006 through 2021 and
$210,000 in research and development credits which can be used to offset
federal income taxes. Credits will expire in fiscal years 2004 through 2007.
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. Significant components
of the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                                           MARCH 31,
                                                             2002
                                                         ------------
   <S>                                                   <C>
   Deferred tax assets:
     Net operating loss carryforwards                    $ 1,830,000
     Other                                                   129,000
     Tax credit carryforward                                 210,000
                                                         ------------
                                                           2,169,000
   Valuation allowance                                    (2,169,000)
                                                         ------------
                                                         $         -
                                                         ============
</TABLE>

5.  NOTES PAYABLE
The Company has a note payable to a bank totaling $218,539 at March 31, 2002.
The note accrues interest at a rate equal to 1.5% above the bank's index rate
(6.25% at March 31, 2002). The note requires monthly payments with a balloon
payment of the outstanding principal due October 15, 2002. Substantially all of
the Company's assets are pledged as collateral on the note. Total interest paid
was $19,247 and $31,769 for the years ended March 31, 2002 and March 31, 2001,
respectively.
<PAGE>
6.  CAPITAL LEASES
The Company has a lease payable to a leasing company totaling $247,793 at March
31, 2002. The lease has an effective annual rate of 8.48% with monthly
payments of $8,894 through October 2004. The lease is for production equipment.

The Company has another lease payable to a leasing company totaling $271,527 at
March 31, 2002. The lease has an effective annual rate of 8.96% with monthly
payments of $6,123 through June 2006 and a payoff amount of $15,000 due June
2006. The lease is for production equipment.

The cost and accumulated amortization at March 31, 2002 for assets reported
under capital lease obligations amounted to $634,865 and $70,953 respectively.

The Company's capital lease future payments are summarized as follows:

<TABLE>
<CAPTION>
  YEAR
 ENDING                                    FUTURE
 MARCH 31,                                PAYMENTS
 ---------                                --------
   <S>                                    <C>
   2003                                   $180,203
   2004                                    180,203
   2005                                    135,736
   2006                                     73,481
   2007                                     33,870
                                          --------
   Total payments                          603,493
   Less interest portion                    84,173
                                          --------
   Principal amount                        519,320
   Less current portion                    141,921
                                          --------
   Long-term obligation                   $377,399
                                          ========
</TABLE>

7.  STOCK OPTIONS AND WARRANTS
Shareholders approved an amendment to the 2000 Stock Option Plan at the
Company's Annual Meeting July 19, 2001 to increase the shares reserved for
issuance under the plan from 2,000,000 shares to 5,000,000 shares. The plan
provides for issuance to employees, Directors, and certain service providers of
incentive stock options and non-statutory stock options. Generally, the options
may be exercised at any time prior to expiration, subject to vesting based on
terms of employment. Options granted are exercisable over a one- to six-year
period or a one- to seven-year period from date of grant at prices not less
than fair market value at the date the options are granted as determined by the
Board of Directors. A summary of the Incentive Stock Options is shown in the
following table:
<PAGE>
<TABLE>
<CAPTION>
                                                                             WEIGHTED AVERAGE
                                                  SHARES       OPTIONS        EXERCISE PRICE
                                                 RESERVED    OUTSTANDING         PER SHARE
                                              -----------------------------------------------
   <S>                                        <C>             <C>                   <C>
   Balance at March 31, 2000                   2,072,787       1,466,500            $.14
     Adjustment for change in stock plans     (1,443,037)           -                  -
     Granted                                    (631,500)        631,500             .75
     Exercised                                         -         (96,250)            .07
     Terminated                                    1,750          (1,750)            .16
                                              -----------------------------------------------
   Balance at March 31, 2001                           -       2,000,000             .33
     Additional options authorized             3,000,000            -                  -
     Granted*                                   (770,250)        770,250            1.27
     Exercised                                         -        (257,100)            .07
     Terminated                                   15,400         (15,400)            .17
                                              -----------------------------------------------
   Balance at March 31, 2002                   2,245,150       2,497,750            $.65
                                              ===============================================
</TABLE>
*Includes 378,250 shares committed to in the year ended March 31, 2001 in
excess of those authorized. Those options were issued following shareholder
approval of an amendment to the Company's 2000 Stock Option Plan.

As of March 31, 2002 and 2001 there were exercisable options outstanding
covering 1,429,750 and 1,124,958 shares, respectively, at a weighted average
exercise price of $.50 and $.32 per share. The remaining weighted-average
exercisable life was 4.7 and 4.0 years at March 31, 2002 and 2001.

The Company has elected to follow APB No. 25 and related Interpretations in
accounting for its employee stock options because, as discussed below, the
alternative fair value accounting provided for under SFAS No. 123 requires use
of option valuation models that were not developed for use in valuing employee
stock options. Under APB No. 25, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.

Pro forma information regarding net income and income per share is required by
SFAS No. 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that Statement. The fair
value for these options was estimated at the date of grant using the Black-
Scholes option pricing model with the following weighted average assumptions:
risk-free interest rate of 4.8% for fiscal year 2002 and 5.6% for fiscal year
2001, expected volatility of 55%, a weighted-average expected life of the
options of four to seven years, and no dividend yield.

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

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information follows:
<PAGE>
<TABLE>
<CAPTION>
                                                       YEAR ENDED MARCH 31,
                                                        2002         2001
                                                    --------------------------
   <S>                                              <C>            <C>
   Net (loss) income:
        As reported                                 $(2,100,442)   $  127,268
        Pro forma adjustment for stock options         (185,650)     (228,649)
                                                     -------------------------
        Pro forma net (loss)                        $(2,286,092)   $ (101,341)
                                                     =========================
</TABLE>

In fiscal year 2001, the Company issued five-year warrants in return for
leasing rights. The warrants issued were exercisable immediately to purchase
up to 27,345 shares of the Company's Common Stock at an exercise price of $.57
per share. The value assigned to these warrants of $13,823 is being amortized
over the 36-month life of the leases.

8.  COMMON STOCK
The authorized stock of the Company is stated as 30,000,000 shares of Common
Stock, $.01 par value and 50,000,000 shares of all types. The Company's
Board of Directors may designate any series and fix any relative rights and
preferences to authorized but undesignated stock.

9.  SUBLICENSE AGREEMENT
The Company's founder, upon founding the Company, obtained a Technology
License Agreement (the "Agreement") with Honeywell, Inc., now Honeywell
International, Inc. ("Honeywell"). The Agreement, which has been sublicensed to
the Company, allows the use and sublicense of certain property dealing with
MRAM technology in markets which are not central to the present or presently
intended business markets of Honeywell, the developer of the technology.

In December 2000, the Company and Honeywell entered into a new agreement
under which the Company gave up the right to further sublicense Honeywell
MRAM technology from this date forward in exchange for a lump sum payment of
$1.25 million. Under this agreement, the Company retains the right to access
and use the Honeywell MRAM technology for product development.

10.  LICENSE AGREEMENTS
The Company has entered into two separate license agreements which provided for
advanced payments plus royalties of 1% based upon revenue generated by the
respective parties. To date, no royalties have been recognized under either
agreement.

11.  ROYALTIES
We have licensed rights to another organization's GMR-related patents, which
calls for payment of royalties of 1.5% of the sales of certain products.
Payments under this license agreement have not been material.

12.  LEASES
The Company leases its facility under operating leases which expire from May
31, 2003 to December 31, 2003. Operating expenses, including maintenance,
utilities, real estate taxes and insurance, are paid by the Company.
<PAGE>
The Company also leases various pieces of equipment under operating leases.
Terms of the leases range from 36 to 60 months through March 2006, with
payments due the first of each month.

Total rent expense for operating leases, including building and equipment, was
$444,041 and $773,517 for the years ended March 31, 2002 and 2001,
respectively.

Future minimum payments under non-cancelable operating leases consist of the
following at March 31, 2002:

<TABLE>
<CAPTION>
  YEAR                                OPERATING LEASE
 ENDING                                FUTURE MINIMUM
 MARCH 31,                                   PAYMENTS
 ---------                            ---------------
   <S>                                   <C>
   2003                                  $ 431,546
   2004                                    306,179
   2005                                     29,463
                                         ---------
   Total minimum lease payments          $ 767,188
                                         =========
</TABLE>

13.  401(K) SAVINGS PLAN
The Company has a 401(k) savings plan. All employees are eligible to
participate in the plan the first quarter subsequent to attaining the age of
21. Employees may contribute up to 15% of their gross wages. The Company makes
matching contributions equal to 100% of the first 2% of elective salary
deferral contributions made by eligible participants. The Company made matching
contributions of $80,616 and $60,884 for the years ended March 31, 2002 and
2001.

14.  EMPLOYEE STOCK PURCHASE PLAN
Shareholders approved the Company's 2001 Employee Stock Purchase Plan ("ESPP")
on July 19, 2001. The ESPP was implemented October 1, 2001, and provides for
the issuance of up to one million shares of Common Stock. With certain
exceptions, all employees of the Company who have been employed by the Company
for at least one year and who are employed at least 20 hours per week and at
least five months per year, including officers and directors who are employees,
are eligible to participate in the ESPP. The ESPP consists of periodic
offerings for a period determined by the Board of Directors. Under the ESPP, an
employee may elect to have up to 10% deducted from regular salary to purchase
shares. The price at which the employee's shares are purchased is the lower of
(a) 85% of the closing price of the Common Stock on the day that the offering
commences or (b) 85% of the closing price of the Common Stock on the day that
the offering terminates. The Company issued 14,195 shares of Common Stock in
Fiscal 2002 under the ESPP.

15.  SUBSEQUENT EVENT
On April 19, 2002 the Company closed a technology exchange agreement
accompanied by an investment by Cypress Semiconductor Corporation ("Cypress").

Cypress purchased 3.433 million shares of NVE Common Stock for $6.228 million.
Cypress also received a warrant for the purchase of up to an additional two
million shares of Common Stock for $3.00 per share for a term of three years.