Zeev's Turnips Patch-No Politics (ZEEV)

[Kayaker]

Some possible NVEC negatives....

....In April 2002 we entered into a technology exchange agreement with Cypress. Cypress has announced plans to have the world's first production MRAMs by the end of calendar year 2003. We will not receive royalties from Cypress, but have gained rights to certain intellectual property, and Cypress agreed to manufacture MRAMs for us. These devices might be sold in niche markets where NVE has a strong presence such as factory automation or military applications. Alternatively, we may private-label Cypress-manufactured MRAMs for other companies. Such a private-label strategy could provide us with a higher per- device profit than license royalties....

....we expect to receive royalties under the Motorola and USTC agreements if and when those licensees begin selling devices using our intellectual property. There are minimum quantities before royalties are paid, and ceilings on the royalties we will receive.....

....We have licensed rights to another organization's GMR-related patent, and that agreement calls for us to pay royalties on our sales of certain products. Payments under this agreement have not been material to date. The agreement could remain in force until cumulative royalties of $1.2 million have been paid....

....We expect commercial product revenues to continue to grow in Fiscal 2004. In Fiscal 2004, approximately $250,000 per quarter of Agilent contract research and development and recognition of MRAM license revenues of approximately $98,000 per quarter will cease. We hope to replace those revenue and profit sources with expanded commercial product sales and continue to be profitable in Fiscal 2004, but there can be no assurance we will continue to be profitable....

http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0000724910%2D03%2D000005%2Etxt&FilePath....