
markdown PART I—FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for Northern Technologies International Corporation and its subsidiaries, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, along with detailed notes explaining accounting policies, segment information, and other financial disclosures for the periods ended May 31, 2025, and August 31, 2024 [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show an increase in total assets, driven by higher cash and cash equivalents and intangible assets, while current liabilities also increased, primarily due to a rise in the line of credit | Metric | May 31, 2025 ($) | August 31, 2024 ($) | | :-------------------------------- | :----------- | :-------------- | | Cash and cash equivalents | $6,773,401 | $4,952,184 | | Total current assets | $42,600,386 | $41,579,219 | | Investments in joint ventures | $27,139,197 | $25,397,287 | | Intangible assets, net | $8,464,861 | $5,682,945 | | Total assets | $99,303,381 | $94,676,502 | | Line of credit | $7,369,949 | $4,291,608 | | Total current liabilities | $20,938,671 | $17,896,943 | | Total equity | $76,576,495 | $75,175,321 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended May 31, 2025, net sales increased, but net income attributable to NTIC significantly decreased due to lower equity in income from joint ventures and higher operating expenses; for the nine months, net sales saw a slight increase, but net income attributable to NTIC also declined substantially | Metric | Three Months Ended May 31, 2025 ($) | Three Months Ended May 31, 2024 ($) | Nine Months Ended May 31, 2025 ($) | Nine Months Ended May 31, 2024 ($) | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net sales | $21,508,563 | $20,686,197 | $61,919,022 | $61,710,410 | | Gross profit | $8,259,440 | $7,893,094 | $23,217,977 | $23,566,532 | | Equity in income from joint ventures | $970,314 | $1,396,731 | $2,720,637 | $3,676,962 | | Total operating expenses | $9,665,165 | $8,978,405 | $27,954,669 | $25,901,387 | | Operating income | $867,187 | $1,523,917 | $1,640,925 | $5,106,621 | | Net income attributable to NTIC | $121,775 | $976,604 | $1,117,185 | $3,573,294 | | Basic EPS | $0.01 | $0.10 | $0.12 | $0.38 | | Diluted EPS | $0.01 | $0.10 | $0.12 | $0.36 | [Consolidated Statements of Comprehensive Income](index=8&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the three months ended May 31, 2025, increased significantly year-over-year, primarily driven by a positive foreign currency translation adjustment, despite a decrease in net income; for the nine-month period, comprehensive income decreased due to lower net income, partially offset by a positive foreign currency translation adjustment | Metric | Three Months Ended May 31, 2025 ($) | Three Months Ended May 31, 2024 ($) | Nine Months Ended May 31, 2025 ($) | Nine Months Ended May 31, 2024 ($) | | :---------------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $332,451 | $1,155,322 | $1,729,225 | $4,108,791 | | Other comprehensive income (loss) – foreign currency translation adjustment | $2,292,208 | $(251,995) | $272,859 | $(296,281) | | Comprehensive income | $2,624,659 | $903,327 | $2,002,084 | $3,812,510 | | Comprehensive income attributable to NTIC | $2,323,190 | $1,029,905 | $1,481,919 | $4,267,068 | [Consolidated Statements of Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Equity) Total equity increased from August 31, 2024, to May 31, 2025, primarily due to stock-based compensation expense and net income, partially offset by dividends paid to stockholders; accumulated other comprehensive loss improved due to foreign currency translation adjustments | Metric | May 31, 2025 ($) | August 31, 2024 ($) | | :-------------------------------- | :----------- | :-------------- | | Common stock | $189,487 | $189,340 | | Additional paid-in capital | $24,715,123 | $23,615,564 | | Retained earnings | $53,467,780 | $53,771,211 | | Accumulated other comprehensive loss | $(6,017,390) | $(6,382,124) | | Stockholders' equity | $72,355,000 | $71,193,991 | | Non-controlling interests | $4,221,495 | $3,981,330 | | Total equity | $76,576,495 | $75,175,321 | - For the nine months ended May 31, 2025, key changes in equity included: stock issued for employee stock purchase plan (**$81,496**), stock-based compensation expense (**$1,018,210**), dividends paid to stockholders (**$(1,420,616)**), net income (**$1,117,185**), and other comprehensive income (**$272,859**)[21](index=21&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased significantly for the nine months ended May 31, 2025, compared to the prior year, primarily due to lower net income and dividends received from joint ventures; investing activities used more cash, mainly for intangible assets and property/equipment, while financing activities shifted from a net use to a net provide, driven by line of credit activity | Cash Flow Activity ($) | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $3,808,450 | $7,583,905 | | Net cash used in investing activities | $(3,378,123) | $(2,601,176) | | Net cash provided by (used in) financing activities | $1,459,221 | $(4,587,474) | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on the company's financial statements, covering interim financial information, new accounting policies (ASU 2023-07 adoption), recently issued accounting pronouncements, breakdowns of inventories, property and equipment, intangible assets, and investments in joint ventures; they also detail corporate debt, stockholders' equity, net income per common share, stock-based compensation, segment and geographic information, commitments and contingencies, supplemental cash flow data, income taxes, and a one-time Employee Retention Credit (ERC) payment - The Company adopted ASU No. 2023-07, Segment Reporting, retrospectively, resulting in enhanced disclosures related to segment expense information without impacting financial position, results of operations, or cash flows[28](index=28&type=chunk) Inventories (May 31, 2025) | Category | Amount ($) | | :--------------- | :----------- | | Production materials | $6,339,081 | | Finished goods | $8,583,804 | | **Total** | **$14,922,885** | Inventories (August 31, 2024) | Category | Amount ($) | | :--------------- | :----------- | | Production materials | $5,513,409 | | Finished goods | $8,877,435 | | **Total** | **$14,390,844** | Intangible Assets, Net (May 31, 2025) | Category | Gross Carrying Amount ($) | Accumulated Amortization ($) | Net Carrying Amount ($) | | :-------------------- | :-------------------- | :----------------------- | :------------------ | | Patents and trademarks | $3,530,296 | $(2,940,992) | $589,304 | | Capitalized software | $3,490,026 | $(374,719) | $3,115,307 | | Customer relationships | $6,347,000 | $(1,586,750) | $4,760,250 | | **Total** | **$13,367,322** | **$(4,902,461)** | **$8,464,861** | Estimated Future Amortization Expense | Fiscal Year | Amount ($) | | :----------------- | :----------- | | Remainder of 2025 | $310,619 | | Fiscal 2026 | $805,760 | | Fiscal 2027 | $770,685 | | Fiscal 2028 | $770,685 | | Fiscal 2029 | $770,685 | | Thereafter | $5,036,427 | | **Total** | **$8,464,861** | NTIC's Share of Joint Ventures' Financials (Nine Months Ended May 31, 2025) | Metric | Total ($) | EXCOR ($) | All Other ($) | | :------------------------------------ | :---------- | :---------- | :---------- | | NTIC's share of equity | $27,139,197 | $16,441,653 | $10,697,544 | | NTIC's share of equity in income from joint ventures | $2,720,637 | $1,340,674 | $1,379,963 | | NTIC's dividends received from joint ventures | $1,566,946 | $0 | $1,566,946 | - The Company received a one-time Employee Retention Credit (ERC) payment of **$1,139,756**, recognized as Other Income, and **$181,529** in related interest income during the nine months ended May 31, 2025[69](index=69&type=chunk)[70](index=70&type=chunk) Net Sales by Segment | Segment | Three Months Ended May 31, 2025 ($) | Three Months Ended May 31, 2024 ($) | Nine Months Ended May 31, 2025 ($) | Nine Months Ended May 31, 2024 ($) | | :-------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | ZERUST® | $15,728,637 | $14,837,235 | $45,316,457 | $45,461,075 | | Natur-Tec® | $5,779,926 | $5,848,962 | $16,602,565 | $16,249,335 | | **Total** | **$21,508,563** | **$20,686,197** | **$61,919,022** | **$61,710,410** | Net Sales by Geographic Location (to unaffiliated customers and JVs) | Location | Three Months Ended May 31, 2025 ($) | Three Months Ended May 31, 2024 ($) | Nine Months Ended May 31, 2025 ($) | Nine Months Ended May 31, 2024 ($) | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Inside the U.S. | $7,341,392 | $7,086,859 | $21,492,193 | $21,160,095 | | Outside the U.S. to JVs | $630,653 | $441,067 | $1,802,906 | $1,904,444 | | Outside the U.S. to unaffiliated customers | $13,536,518 | $13,158,271 | $38,623,923 | $38,645,871 | | **Total** | **$21,508,563** | **$20,686,197** | **$61,919,022** | **$61,710,410** | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=24&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides an in-depth analysis of NTIC's financial performance and condition, highlighting business operations, the impact of tariffs, key financial results, liquidity, capital resources, and market risks, detailing segment performance, changes in revenues and expenses, and factors influencing profitability, including a significant one-time Employee Retention Credit [Business Overview](index=24&type=section&id=Business%20Overview) NTIC develops and markets proprietary, environmentally beneficial products and services globally, primarily focusing on ZERUST® corrosion prevention for various industries and Natur-Tec® bio-based and compostable polymer products, strategically expanding its ZERUST® offerings into the oil and gas industry - NTIC's primary business is ZERUST® corrosion prevention, serving automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets[73](index=73&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk) - NTIC also markets Natur-Tec® bio-based and compostable polymer resins and finished products, aiming to replace petroleum-based plastics and reduce carbon footprint[73](index=73&type=chunk)[78](index=78&type=chunk) - A strategic initiative is to expand ZERUST® corrosion prevention technologies into the oil and gas industry, which typically involves long sales cycles[76](index=76&type=chunk)[77](index=77&type=chunk) [Tariffs](index=25&type=section&id=Tariffs) NTIC expects to continue incurring additional costs due to tariffs but is implementing mitigation strategies such as targeted price increases, supplier diversification, and cost reductions; NTIC China's exposure to tariffs is limited as most of its production and sales are for local consumption - NTIC anticipates continued additional costs from tariffs for the remainder of fiscal **2025**[80](index=80&type=chunk) - Mitigation strategies include targeted price increases, supplier diversification, strategic sourcing adjustments, cost reductions, and manufacturing optimization[80](index=80&type=chunk) - NTIC China's tariff exposure is limited because the majority of its production and sales are for local consumption[80](index=80&type=chunk) [Financial Overview](index=25&type=section&id=Financial%20Overview) NTIC's consolidated net sales increased slightly for both the three and nine months ended May 31, 2025; however, total joint venture operations decreased, and net income attributable to NTIC saw a significant decline for both periods, primarily due to increased operating expenses and reduced joint venture income, partially offset by a one-time ERC payment | Metric | Three Months Ended May 31, 2025 ($) | Three Months Ended May 31, 2024 ($) | Nine Months Ended May 31, 2025 ($) | Nine Months Ended May 31, 2024 ($) | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Consolidated Net Sales | $21,508,563 | $20,686,197 | $61,919,022 | $61,710,410 | | Cost of Goods Sold (% of Net Sales) | 61.6% | 61.8% | 62.5% | 61.8% | | Total Joint Venture Operations | $2,272,912 | $2,609,228 | $6,377,617 | $7,441,476 | | Net Income Attributable to NTIC | $121,775 | $976,604 | $1,117,185 | $3,573,294 | | Diluted EPS | $0.01 | $0.10 | $0.12 | $0.36 | - The increase in three-month net sales was primarily due to increased demand for ZERUST® products, while the nine-month increase was driven by Natur-Tec® products, partially offset by decreased ZERUST® sales[82](index=82&type=chunk) - Decreases in total joint venture operations were primarily due to decreased equity in income from joint ventures, driven by lower sales at most joint ventures[82](index=82&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Net sales increased for the three-month period due to ZERUST® industrial products, but slightly decreased for ZERUST® oil and gas; Natur-Tec® sales decreased for three months but increased for nine months due to demand in India and new applications; gross profit margins remained relatively stable; equity in income from joint ventures and total joint venture operations decreased significantly; operating expenses rose due to strategic investments in sales and marketing, and general and administrative costs; net income attributable to NTIC declined substantially for both periods, primarily due to increased operating expenses and decreased joint venture income, partially offset by a one-time ERC payment Net Sales by Segment (YoY Change) | Segment | 3 Months Ended May 31, 2025 ($) | 3 Months Ended May 31, 2024 ($) | % Change | 9 Months Ended May 31, 2025 ($) | 9 Months Ended May 31, 2024 ($) | % Change | | :-------------------- | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | ZERUST® Industrial | $14,440,591 | $13,477,181 | **7.1%** | $40,965,696 | $40,431,379 | **1.3%** | | ZERUST® Oil & Gas | $1,288,046 | $1,360,054 | (5.3%) | $4,350,761 | $5,029,696 | (13.5%) | | Total ZERUST® Sales | $15,728,637 | $14,837,235 | **6.0%** | $45,316,457 | $45,461,075 | (0.3%) | | Natur-Tec® Sales | $5,779,926 | $5,848,962 | (1.2%) | $16,602,565 | $16,249,335 | **2.2%** | | **Total Net Sales** | **$21,508,563** | **$20,686,197** | **4.0%** | **$61,919,022** | **$61,710,410** | **0.3%** | Key Financial Metrics (YoY Change) | Metric | 3 Months Ended May 31, 2025 ($) | 3 Months Ended May 31, 2024 ($) | % Change | 9 Months Ended May 31, 2025 ($) | 9 Months Ended May 31, 2024 ($) | % Change | | :------------------------------------ | :-------------------------- | :-------------------------- | :------- | :-------------------------- | :-------------------------- | :------- | | Cost of Goods Sold | $13,249,123 | $12,793,103 | **3.6%** | $38,701,045 | $38,143,878 | **1.5%** | | Equity in Income from Joint Ventures | $970,314 | $1,396,731 | (30.5%) | $2,720,637 | $3,676,962 | (26.0%) | | Fees for Services Provided to Joint Ventures | $1,302,598 | $1,212,497 | **7.4%** | $3,656,980 | $3,764,514 | (2.9%) | | Selling Expenses | $4,375,956 | $4,232,887 | **3.4%** | $12,515,638 | $12,053,839 | **3.8%** | | General and Administrative Expenses | $4,150,966 | $3,500,113 | **18.6%** | $11,668,492 | $10,253,966 | **13.8%** | | Research and Development Expenses | $1,138,243 | $1,245,405 | (8.6%) | $3,770,539 | $3,593,582 | **4.9%** | | Interest Income | $37,821 | $23,744 | **59.3%** | $273,544 | $99,396 | **175.2%** | | Interest Expense | $(162,096) | $(59,939) | **170.4%** | $(421,471) | $(248,835) | **69.4%** | | Other Income | $0 | $0 | N/A | $1,139,756 | $0 | N/A | | Net Income Attributable to NTIC | $121,775 | $976,604 | (87.5%) | $1,117,185 | $3,573,294 | (68.7%) | - Interest income increased significantly due to **$181,529** earned on a delayed IRS payment related to Employee Retention Credit (ERC) claims[97](index=97&type=chunk) - Other income of **$1,139,756** was recognized from a one-time ERC payment, which does not represent recurring operational revenue[99](index=99&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) NTIC's working capital decreased, but cash and cash equivalents increased; the company relies on existing cash, forecasted cash flows, joint venture distributions, and financing arrangements to fund operations and investments; the Credit Facility with JPM was amended to extend maturity and increase availability, and NTIC China secured new term loans; operating cash flow decreased, while investing cash flow increased, and financing cash flow shifted from a net use to a net provide; the company temporarily adjusted its quarterly dividend to **$0.01** per share Liquidity Metrics | Metric | May 31, 2025 ($) | August 31, 2024 ($) | | :------------------------------------ | :----------- | :-------------- | | Working Capital | $21,661,715 | $23,682,276 | | Cash and Cash Equivalents | $6,773,401 | $4,952,184 | | Outstanding Line of Credit | $7,369,949 | $4,291,608 | | Outstanding Term Loans (NTIC China) | $2,778,125 | $2,820,835 | - The Credit Facility with JPMorgan Chase Bank, N.A. was amended on July 8, 2025, to increase availability from **$8.0 million** to **$10.0 million**, with a maturity date extended to January 5, 2026[41](index=41&type=chunk)[71](index=71&type=chunk)[112](index=112&type=chunk) - NTIC China entered into two new term loan agreements totaling RMB **20,000,000** (USD **$2.78 million**) with China Construction Bank Corporation, maturing in April and May 2026[48](index=48&type=chunk)[120](index=120&type=chunk) Cash Flow Activities (Nine Months Ended) | Activity ($) | May 31, 2025 | May 31, 2024 | | :------------------------------------ | :----------- | :----------- | | Net cash provided by operating activities | $3,808,450 | $7,583,905 | | Net cash used in investing activities | $(3,378,123) | $(2,601,176) | | Net cash provided by (used in) financing activities | $1,459,221 | $(4,587,474) | - The Board of Directors temporarily adjusted the quarterly cash dividend to **$0.01** per share, effective with the fiscal **2025** third-quarter dividend[128](index=128&type=chunk) - Capital expenditures for the nine months ended May 31, 2025, totaled **$3,398,123**, primarily for facility improvements and ERP software implementation[129](index=129&type=chunk) [Inflation and Seasonality](index=33&type=section&id=Inflation%20and%20Seasonality) Inflation has had a minimal effect on NTIC's gross margins during the first nine months of fiscal 2025; the business experiences seasonality, with net sales in the second fiscal quarter typically lower due to the Chinese New Year, North American holiday season, and lower winter temperatures - Inflation has had minimal adverse effect on NTIC's gross margins during the first nine months of fiscal **2025**[130](index=130&type=chunk) - NTIC's net sales in the second fiscal quarter are typically adversely affected by the long Chinese New Year, North American holiday season, and lower winter temperatures worldwide[131](index=131&type=chunk) [Market Risk](index=34&type=section&id=Market%20Risk) NTIC is exposed to market risks from foreign currency exchange rates, commodity prices, and interest rates; the company does not hedge against foreign currency risk, and its floating-rate Credit Facility and fixed-rate term loans contribute to interest rate exposure - NTIC is exposed to foreign currency exchange rate risk, primarily with the Euro, Japanese Yen, Indian Rupee, Chinese Renminbi, South Korean Won, and English Pound against the U.S. Dollar, and does not hedge this risk[133](index=133&type=chunk) - Commodity price exposures primarily relate to plastic and bioplastic resins used in NTIC's products[134](index=134&type=chunk) - Interest rate risk stems from its floating-rate Credit Facility (**$7,369,949** outstanding as of May 31, 2025) and fixed-rate term loans from NTIC China (**$2,778,125** outstanding as of May 31, 2025)[134](index=134&type=chunk)[135](index=135&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no material changes to NTIC's critical accounting policies and estimates; the adoption of ASU No. 2023-07 enhanced segment disclosures but did not impact accounting estimates - No material changes to critical accounting policies and estimates from the prior annual report[136](index=136&type=chunk) - The adoption of ASU No. 2023-07 resulted in enhanced segment disclosures but did not impact accounting estimates or the identification of critical accounting policies[137](index=137&type=chunk) [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 3 of the consolidated financial statements for a discussion of recently issued accounting pronouncements - Refer to Note 3 to NTIC's consolidated financial statements for details on recent accounting pronouncements[138](index=138&type=chunk) [Forward-Looking Statements](index=34&type=section&id=Forward-Looking%20Statements) This section contains forward-looking statements subject to various uncertainties and factors that could cause actual results to differ materially; key risks include changes in trade regulations, global economic conditions, supply chain disruptions, geopolitical events, volatility in specific product sales (oil & gas, Natur-Tec®), foreign currency fluctuations, dependence on joint ventures, raw material costs, new product success, competition, and the impact of rapid advancements in AI technologies - Forward-looking statements are subject to uncertainties and factors beyond NTIC's control, including changes to trade regulation, quotas, duties, or tariffs[139](index=139&type=chunk)[140](index=140&type=chunk) - Risks include the effect of current worldwide economic conditions (inflation, recessionary indicators), slowdowns in the automotive industry, worldwide supply chain disruptions, and ongoing wars/sanctions affecting energy and commodity prices[140](index=140&type=chunk) - Other significant risks are variability in sales of ZERUST® oil and gas products and Natur-Tec® products, dependence on joint ventures, fluctuations in raw material costs, and the potential disruptive impact of rapid advancements in artificial intelligence (AI) technologies[140](index=140&type=chunk)[141](index=141&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=37&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) NTIC is exposed to market risks from foreign currency exchange rates, commodity prices, and interest rates; the company does not hedge foreign currency risk, and its debt instruments include both floating and fixed interest rates - NTIC is exposed to foreign currency exchange rate risk, particularly with the Euro, Japanese Yen, Indian Rupee, Chinese Renminbi, South Korean Won, and English Pound against the U.S. Dollar, and does not hedge this risk[144](index=144&type=chunk) - Commodity price exposure primarily relates to plastic and bioplastic resins used in its products[146](index=146&type=chunk) - Interest rate risk arises from its floating-rate Credit Facility (**$7,369,949** outstanding as of May 31, 2025) and fixed-rate term loans from NTIC China (**$2,778,125** outstanding as of May 31, 2025)[147](index=147&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=38&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, evaluated the effectiveness of NTIC's disclosure controls and procedures and concluded they were effective as of May 31, 2025; there were no material changes in internal control over financial reporting during the quarter - NTIC's disclosure controls and procedures were evaluated and deemed effective as of May 31, 2025[148](index=148&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended May 31, 2025[149](index=149&type=chunk) PART II—OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=39&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 13 of the consolidated financial statements for details on legal matters; management believes that any liability from these matters will not materially affect the Company's consolidated results of operations, financial position, or cash flows - Refer to Note 13 for information on legal proceedings[150](index=150&type=chunk) - Management believes that any liability from legal matters will not materially affect the Company's consolidated results of operations, financial position, or cash flows[66](index=66&type=chunk) [ITEM 1A. RISK FACTORS](index=39&type=section&id=ITEM%201A.%20RISK%20FACTORS) NTIC discloses updated risk factors, including the negative impact of changes to trade regulations, quotas, duties, or tariffs, particularly due to evolving U.S. and geopolitical environments; the company is also subject to extensive governmental regulations and taxes, with compliance costs and potential penalties, and faces uncertainty from political climate changes that could affect environmental and other regulations - Changes to trade regulation, quotas, duties, or tariffs, including potential new tariffs from the Trump administration, may negatively impact NTIC's business, operating results, and financial condition[151](index=151&type=chunk) - NTIC's business is subject to various international, federal, state, and local laws and regulations related to environmental protection, natural resources, worker health and safety, and hazardous substances, with potential for compliance costs, penalties, and adverse effects on product demand[152](index=152&type=chunk) - Governmental regulation, such as PHMSA rules, can delay work and adversely impact demand for certain products and operating results, with further slowdowns expected due to the current political climate[153](index=153&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=40&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) NTIC did not issue any unregistered equity securities during the three months ended May 31, 2025; the company's stock repurchase program had **$2,640,548** remaining available as of May 31, 2025, with no repurchases made during the third quarter of fiscal 2025 - No unregistered equity securities were issued during the three months ended May 31, 2025[154](index=154&type=chunk) - As of May 31, 2025, **$2,640,548** remained available for repurchase under NTIC's stock repurchase program, and no shares were repurchased during the third quarter of fiscal **2025**[156](index=156&type=chunk)[157](index=157&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=41&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This item is not applicable to NTIC for the reporting period - Not applicable[160](index=160&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=41&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to NTIC for the reporting period - Not applicable[161](index=161&type=chunk) [ITEM 5. OTHER INFORMATION](index=41&type=section&id=ITEM%205.%20OTHER%20INFORMATION) On July 8, 2025, NTIC amended its Credit Agreement with JPMorgan Chase Bank, N.A. to increase the Credit Facility's availability from **$8.0 million** to **$10.0 million**; additionally, no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, terminated, or modified by directors or officers during the three months ended May 31, 2025 - On July 8, 2025, the Credit Agreement with JPMorgan Chase Bank, N.A. was amended to increase the Credit Facility's availability from **$8.0 million** to **$10.0 million**[162](index=162&type=chunk) - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, terminated, or modified by NTIC's directors or officers during the three months ended May 31, 2025[164](index=164&type=chunk) [ITEM 6. EXHIBITS](index=41&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed or furnished with the quarterly report on Form 10-Q, including amendments to the Credit Agreement, various certifications (e.g., CEO, CFO), and Inline XBRL data for the financial statements - Exhibits include the Third Amendment to Credit Agreement, Line of Credit Note, Certifications of President and CEO, and CFO (pursuant to SEC Rule 13a-14(a) and 18 U.S.C. Section 1350), and Inline XBRL formatted financial statements[165](index=165&type=chunk) SIGNATURES The report is formally signed by Matthew C. Wolsfeld, CPA, Chief Financial Officer, on behalf of Northern Technologies International Corporation, confirming its due authorization - The report was signed by Matthew C. Wolsfeld, CPA, Chief Financial Officer, on July 10, 2025[168](index=168&type=chunk)