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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2025

☐ 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: 001-11038

____________________

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

41-0857886

(I.R.S. Employer Identification No.)

4201 Woodland Road

P.O. Box 69

Circle Pines, Minnesota 55014

(Address of principal executive offices) (Zip Code)

(763) 225-6600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.02 per share	NTIC	The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of January 5, 2026, there were 9,492,001 shares of common stock of the registrant outstanding.

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

FORM 10-Q

November 30, 2025

TABLE OF CONTENTS

Description		Page

PART I—FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of November 30, 2025 (unaudited) and August 31, 2025 (audited)	1

	Consolidated Statements of Operations (unaudited) for the Three Months Ended November 30, 2025 and 2024	2

	Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the Three Months Ended November 30, 2025 and 2024	3

	Consolidated Statements of Equity (unaudited) for the Three Months Ended November 30, 2025 and 2024	4

	Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended November 30, 2025 and 2024	5

	Notes to Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	31

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults Upon Senior Securities	32

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	33

Item 6.	Exhibits	33

SIGNATURES		34

_________________

This quarterly report on Form 10-Q contains certain forward-looking statements that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by those sections. For more information, see “Part I. Financial Information – Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements.”

_________________

As used in this report, references to “NTIC,” the “Company,” “we,” “our” or “us,” unless the context otherwise requires, refer to Northern Technologies International Corporation and its wholly owned and majority-owned subsidiaries, all of which are consolidated on NTIC’s consolidated financial statements.

As used in this report, references to: (1) “NTIC China” refer to NTIC’s wholly owned subsidiary in China, NTIC (Shanghai) Co., Ltd.; (2) “NTI Europe” refer to NTIC’s wholly owned subsidiary in Germany, NTIC Europe GmbH; (3) “Zerust Mexico” refer to NTIC’s wholly owned subsidiary in Mexico, ZERUST-EXCOR MEXICO, S. de R.L. de C.V.; (4) “Zerust India” refer to NTIC’s wholly owned subsidiary in India, HNTI Limited (formerly Harita-NTI Limited); and (5)“NTI Asean” refer to NTIC’s majority-owned holding company subsidiary, NTI Asean LLC, which holds investments in certain entities that operate in the Association of Southeast Asian Nations (ASEAN) region.

NTIC’s consolidated financial statements do not include the accounts of any of its joint ventures. Except as otherwise indicated, references in this report to NTIC’s joint ventures do not include any of NTIC’s wholly owned or majority-owned subsidiaries.

As used in this report, references to “EXCOR” refer to NTIC’s joint venture in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH.

All trademarks, trade names or service marks referred to in this report are the property of their respective owners.

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AS OF NOVEMBER 30, 2025 (UNAUDITED) AND

AUGUST 31, 2025 (AUDITED)


	November 30, 2025			August 31, 2025
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,389,809		$	7,250,523
Receivables:
Trade, less allowance for credit losses of $290,493 as of November 30, 2025 and $235,000 as of August 31, 2025		18,202,077			18,443,230
Fees for services provided to joint ventures		1,033,486			1,077,552
Income taxes		590,483			340,002
Inventories, net		16,107,563			15,525,230
Prepaid expenses		2,301,076			1,706,279
Total current assets		44,624,494			44,342,816

PROPERTY AND EQUIPMENT, NET		15,800,929			15,183,918
OTHER ASSETS:
Investments in joint ventures		29,277,113			28,611,777
Deferred income tax, net		453,113			503,575
Intangible assets, net		8,594,926			8,827,768
Goodwill		4,782,376			4,782,376
Operating lease right of use assets		496,441			493,050
Total other assets		43,603,969			43,218,546
Total assets	$	104,029,392			102,745,280

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Line of credit	$	9,134,428		$	9,329,021
Term loan, current portion		2,887,310			2,860,256
Accounts payable		9,665,387			8,044,196
Income taxes payable		368,589			414,304
Accrued liabilities:
Payroll and related benefits		2,119,349			1,844,817
Other		721,893			1,066,761
Current portion of operating leases		286,352			344,739
Total current liabilities		25,183,308			23,904,094
LONG-TERM LIABILITIES:
Deferred income tax, net		1,513,166			1,513,166
Term loans, noncurrent portion		445,766			466,984
Operating leases, less current portion		210,089			148,311
Total long-term liabilities	$	2,169,021			2,128,461

COMMITMENTS AND CONTINGENCIES (Note 13)

EQUITY:
Preferred stock, no par value; authorized 10,000 shares; none issued and outstanding		—			—
Common stock, $0.02 par value per share; authorized 15,000,000 shares; issued and outstanding 9,480,688 and 9,475,490, as of November 30, 2025 and August 31, 2025, respectively		189,614			189,510
Additional paid-in capital		25,402,605			25,056,976
Retained earnings		52,416,480			52,273,469
Accumulated other comprehensive loss		(5,643,901	)		(5,371,201	)
Stockholders’ equity		72,364,798			72,148,754
Non-controlling interests		4,312,265			4,563,971
Total equity		76,677,063			76,712,725
Total liabilities and equity	$	104,029,392		$	102,745,280

See notes to consolidated financial statements.

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024


	Three Months Ended November 30,
	2025			2024
NET SALES:
Net sales	$	23,308,881		$	21,338,393
Cost of goods sold		14,925,255			13,175,440
Gross profit		8,383,626			8,162,953

JOINT VENTURE OPERATIONS:
Equity in income from joint ventures		1,222,116			1,129,593
Fees for services provided to joint ventures		1,069,257			1,284,119
Total income from joint venture operations		2,291,373			2,413,712

OPERATING EXPENSES:
Selling expenses		4,371,502			4,267,654
General and administrative expenses		4,148,953			3,858,943
Research and development expenses		1,220,912			1,343,397
Total operating expenses		9,741,367			9,469,994

OPERATING INCOME		933,632			1,106,671

INTEREST INCOME		37,242			25,567
INTEREST EXPENSE		(199,966	)		(120,220	)
INCOME BEFORE INCOME TAX EXPENSE		770,908			1,012,018

INCOME TAX EXPENSE		265,029			217,871
NET INCOME		505,879			794,147

NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		268,060			233,056
NET INCOME ATTRIBUTABLE TO NTIC	$	237,819		$	561,091

NET INCOME ATTRIBUTABLE TO NTIC PER COMMON SHARE:
Basic	$	0.03		$	0.06
Diluted	$	0.03		$	0.06

WEIGHTED AVERAGE COMMON SHARES ASSUMED OUTSTANDING:
Basic		9,480,688			9,470,507
Diluted		9,492,694			9,754,209

CASH DIVIDENDS DECLARED PER COMMON SHARE	$	0.01		$	0.07

See notes to consolidated financial statements.

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024


	Three Months Ended November 30,
	2025			2024
NET INCOME	$	505,879		$	794,147
OTHER COMPREHENSIVE INCOME (LOSS) – FOREIGN CURRENCY TRANSLATION ADJUSTMENT (NET OF TAX)		(307,113	)		(1,383,843	)
COMPREHENSIVE INCOME (LOSS)		198,766			(589,696	)
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (NET OF TAX)		(233,647	)		(112,387	)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NTIC	$	(34,881	)	$	(702,083	)

See notes to consolidated financial statements.

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024


	STOCKHOLDERS’ EQUITY
										Accumulated
					Additional					Other			Non-
	Common Stock				Paid-in		Retained			Comprehensive			Controlling			Total
	Shares		Amount		Capital		Earnings			Income (Loss)			Interests			Equity
BALANCE AT AUGUST 31, 2024		9,466,980	$	189,340	$	23,615,564	$	53,771,211		$	(6,382,124	)	$	3,981,330		$	75,175,321
Stock issued for employee stock purchase plan		3,527		71		42,400		—			—			—			42,471
Stock-based compensation expense		—		—		341,890		—			—			—			341,890
Dividends paid to stockholders ($0.07 per share)		—		—		—		(662,936	)		—			—			(662,936	)
Net income		—		—		—		561,091			—			233,056			794,147
Comprehensive loss		—		—		—		—			(1,263,174	)		(120,669	)		(1,383,843	)
BALANCE AT NOVEMBER 30, 2024		9,470,507	$	189,410	$	23,999,854	$	53,669,366		$	(7,645,298	)	$	4,093,717		$	74,307,049

BALANCE AT AUGUST 31, 2025		9,475,490	$	189,510	$	25,056,976	$	52,273,469		$	(5,371,201	)	$	4,563,971		$	76,712,725
Stock issued for employee stock purchase plan		5,198		104		34,827		—			—			—			34,931
Stock-based compensation expense		—		—		310,802		—			—			—			310,802
Dividend received by non-controlling interest		—		—		—		—			—			(485,353	)		(485,353	)
Dividends paid to stockholders ($0.01 per share)		—		—		—		(94,808	)		—			—			(94,808	)
Net income		—		—		—		237,819			—			268,060			505,879
Comprehensive loss		—		—		—		—			(272,700	)		(34,413	)		(307,113	)
BALANCE AT NOVEMBER 30, 2025		9,480,688	$	189,614	$	25,402,605	$	52,416,480		$	(5,643,901	)	$	4,312,265		$	76,677,063

See notes to consolidated financial statements.

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024


	Three Months Ended November 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	505,879		$	794,147
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense		310,802			341,890
Depreciation expense		248,190			267,155
Amortization expense		232,842			147,720
Change in allowance for credit losses		51,212			—
Equity in income from joint ventures		(1,222,116	)		(1,129,593	)
Dividends received from joint ventures		218,332			—
Deferred income taxes		49,715			22,755
Changes in current assets and liabilities:
Receivables:
Trade		(583,845	)		2,874,595
Fees for services provided to joint ventures		44,067			64,687
Income taxes		(254,195	)		(344,621	)
Inventories, net		(596,344	)		(73,223	)
Prepaid expenses and other		(595,696	)		(1,046,973	)
Accounts payable		2,029,381			195,752
Income taxes payable		(105,315	)		(19,024	)
Accrued liabilities		8,999			299,800
Net cash provided by operating activities		341,908			2,395,066

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(821,624	)		(1,219,616	)
Investments in patents and capitalized software costs		—			(38,720	)
Net cash used in investing activities		(821,624	)		(1,258,336	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit		6,313,617			8,400,393
Repayments of line of credit		(6,508,210	)		(8,173,269	)
Payments on term loans		(9,281	)		—
Dividends paid on NTIC common stock		(94,808	)		(662,936	)
Dividends received by non-controlling interest		(120,000	)		—
Proceeds from employee stock purchase plan		34,931			42,471
Net cash used in financing activities		(383,751	)		(393,341	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS:		2,753			(125,739	)


NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(860,714	)		617,650
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		7,250,523			4,952,184

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	6,389,809		$	5,569,834

See notes to consolidated financial statements.

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. INTERIM FINANCIAL INFORMATION

In the opinion of management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, which are of a normal recurring nature, and present fairly the consolidated financial position of Northern Technologies International Corporation and its subsidiaries (the Company) as of November 30, 2025 and August 31, 2025, the results of the Company’s operations for the three months ended November 30, 2025 and 2024, the changes in stockholders’ equity for the three months ended November 30, 2025 and 2024 and the Company’s cash flows for the three months ended November 30, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).

These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2025. These consolidated financial statements also should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section appearing in this report.

Operating results for the three months ended November 30, 2025 are not necessarily indicative of the results that may be expected for the full fiscal year ending August 31, 2026.

The Company identified an immaterial prior period classification error related to the presentation of borrowings and repayments under its revolving line of credit in its consolidated statements of cash flows. For the three months ended November 30, 2024, the Company had previously presented net proceeds of $227,124 as a single line item in the consolidated statements of cash flows. In accordance with Accounting Standards Codification 230, Statement of Cash Flows, the Company has updated the prior period presentation to separately report gross borrowings of $8,400,393 and gross repayments of $8,173,269 under its line of credit. This change had no impact on the Company’s total cash flows, financial position, or results of operations for the three months ended November 30, 2024.

The Company has evaluated events occurring after the date of these consolidated financial statements through the date January 8, 2026 for events requiring disclosure in these consolidated financial statements.

2. NEW SIGNIFICANT ACCOUNTING POLICIES

For the three months ended November 30, 2025, there have been no new significant accounting policies from those disclosed in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2025.

3. ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance is expected to improve income tax disclosures primarily related to the rate reconciliation and income taxes paid information by requiring 1) consistent categories and greater disaggregation of information in the rate reconciliation and 2) income taxes paid disaggregated by jurisdiction. The guidance is effective on a prospective basis, although retrospective application and early adoption is permitted. The Company is evaluating its disclosure approach for ASU 2023-09 and anticipates adopting the standard for the annual period starting September 1, 2025.

In November 2024, the Financial Accounting Standards Board issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregation of certain costs in a separate note to the financial statements, such as the amounts of employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption in annual and interim consolidated financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted. The Company is evaluating the effect that ASU 2024-03 will have on its consolidated financial statement disclosures.

4. INVENTORIES

Inventories consisted of the following:

	November 30, 2025		August 31, 2025
Production materials	$	4,650,277	$	5,059,298
Finished goods		11,457,286		10,465,932
Total inventories	$	16,107,563	$	15,525,230

5. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	November 30, 2025			August 31, 2025
Land	$	1,860,312		$	1,260,312
Buildings and improvements		14,663,308			14,650,361
Assets in process		920,713			817,946
Machinery and equipment		9,230,124			9,154,728
		26,674,457			25,883,347
Less accumulated depreciation		(10,873,528	)		(10,699,429	)
Property and equipment, net	$	15,800,929		$	15,183,918

Depreciation expense was $248,190 for the three months ended November 30, 2025, compared to $267,155 for the three months ended November 30, 2024. A portion of assets in process include capitalized software costs incurred until the capitalized software is placed in service. Once placed in service, these costs are reclassed to intangible assets, net in the consolidated balance sheet.

6. INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

	As of November 30, 2025
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patents and trademarks	$	3,546,542	$	(2,996,551	)	$	549,991
Capitalized software		4,089,695		(593,443	)		3,496,252
Customer relationships		6,347,000		(1,798,317	)		4,548,683
Total intangible assets, net	$	13,983,237	$	(5,388,311	)	$	8,594,926

	As of August 31, 2025
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patents and trademarks	$	3,546,542	$	(2,969,571	)	$	576,971
Capitalized software		4,089,695		(493,365	)		3,596,330
Customer relationships		6,347,000		(1,692,533	)		4,654,467
Total intangible assets, net	$	13,983,237	$	(5,155,469	)	$	8,827,768

Amortization expense related to intangible assets was $232,842 and $147,720 for the three months ended November 30, 2025 and 2024, respectively.

As of November 30, 2025, future amortization expense related to intangible assets for each of the next five fiscal years and thereafter is estimated as follows:

Remainder of fiscal 2026	$	636,516
Fiscal 2027		834,284
Fiscal 2028		834,284
Fiscal 2029		834,284
Fiscal 2030		834,284
Thereafter		4,621,274
Total	$	8,594,926

7. INVESTMENTS IN JOINT VENTURES

The consolidated financial statements of the Company’s foreign joint ventures are initially prepared using the accounting principles accepted in the respective joint ventures’ countries of domicile. Amounts related to foreign joint ventures reported in the below tables and the accompanying consolidated financial statements have subsequently been adjusted to conform with U.S. GAAP in all material respects. All material profits on sales recorded that remain on the consolidated balance sheet from the Company to its joint ventures and from joint ventures to other joint ventures have been eliminated for financial reporting purposes.

Financial information from the audited and unaudited financial statements of the Company’s joint ventures in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH (EXCOR), France, ACOBAL SAS (Acobal), Finland, Zerust OY and all the Company’s other joint ventures are summarized as follows:

	As of November 30, 2025
	Total		EXCOR		Acobal		Zerust OY		Other
Current assets	$	62,315,846	$	30,645,129	$	7,489,137	$	3,614,017	$	20,567,563
Total assets		71,930,748		37,625,093		8,417,881		3,886,715		22,001,059
Current liabilities		12,602,929		2,343,356		2,617,057		1,036,382		6,606,134
Non-current liabilities		266,024		—		—		—		266,024
Joint ventures’ equity		59,044,410		35,282,871		5,800,823		2,850,332		15,110,384
NTIC’s share of joint ventures’ equity		29,277,113		17,641,437		2,900,410		1,425,155		7,310,111
NTIC’s share of joint ventures’ undistributed earnings		28,322,052		17,610,532		2,900,410		1,405,155		6,405,955

	Three Months Ended November 30, 2025
	Total		EXCOR		Acobal		Zerust OY		Other
Net sales	$	24,531,431	$	8,765,717	$	3,602,353	$	1,400,114	$	10,763,247
Gross profit		10,682,740		4,572,720		1,400,759		859,358		3,849,903
Net income		2,444,234		1,036,271		608,676		279,141		520,146
NTIC’s share of equity in income from joint ventures		1,222,116		518,135		304,338		139,571		260,072
NTIC’s dividends received from joint ventures		218,332		—		—		—		218,332

	As of August 31, 2025
	Total		EXCOR		Acobal		Zerust OY		Other
Current assets	$	60,062,085	$	29,870,525	$	6,971,262	$	3,029,614	$	20,190,684
Total assets		69,815,251		36,941,008		7,900,298		3,313,909		21,660,036
Current liabilities		11,743,525		2,391,029		2,660,430		719,172		5,972,894
Noncurrent liabilities		336,557		—		—		—		336,557
Joint ventures’ equity		57,735,169		34,549,979		5,239,868		2,594,737		15,350,585
NTIC’s share of joint ventures’ equity		28,611,777		17,274,991		2,619,932		1,297,358		7,419,496
NTIC’s share of joint ventures’ undistributed earnings		27,667,432		17,244,086		2,619,932		1,277,358		6,526,056

	Three Months Ended November 30, 2024
	Total		EXCOR		Other
Net sales	$	23,837,010	$	8,738,814	$	15,098,196
Gross profit		10,315,283		4,757,686		5,557,597
Net income		2,259,187		1,247,500		1,011,687
NTIC’s share of equity in income from joint ventures		1,129,593		623,750		505,843
NTIC’s dividends received from joint ventures		—		—		—

8. CORPORATE DEBT

The Company is party to a Credit Agreement (as amended, the Credit Agreement) with JPMorgan Chase Bank, N.A. (JPM), which provides NTIC with a senior secured revolving line of credit (the Credit Facility) of up to $10.0 million. The Credit Facility includes a $5.0 million sublimit for standby letters of credit. Borrowings of $9,134,428 and $9,329,021 were outstanding under the Credit Facility as of November 30, 2025 and August 31, 2025, respectively. The Company was in compliance with all debt covenants as of November 30, 2025.

On December 17, 2025, the Company and JPM renewed the Company’s Credit Agreement to extend the maturity date of the Credit Facility from January 5, 2026 to February 5, 2027. All other material terms of the Credit Facility and the Credit Agreement remain the same. The principal amount under the Credit Facility, together with all accrued unpaid interest and other amounts owing thereunder, if any, will be payable in full on the maturity date unless the Credit Facility is extended or renewed or terminated earlier.

Borrowings under the Credit Agreement bear interest at a floating rate, at the option of the Company, equal to either the CB Floating Rate or the Adjusted SOFR Rate. The term “CB Floating Rate” means the greater of the Prime Rate in the United States or 2.50%. The term “Adjusted SOFR Rate” means the term secured overnight financing rate for either one, three or six months (depending on the interest period selected by the Company) plus 0.10% per annum. With respect to any borrowings using an Adjusted SOFR Rate, there is an applicable margin of 2.35% applied per annum. There is no applicable margin with respect to borrowings using a CB Floating Rate. The weighted average interest rate was 6.25% and 7.07% for the three months ended November 30, 2025 and 2024, respectively.

To secure the Credit Agreement, the Company assigned JPM a continuing security interest in all of its right, title and interest in collateral made up of the assets of the Company.

The Credit Agreement contains customary affirmative and negative covenants, including, among other matters, limitations on the Company’s ability to incur additional debt, grant liens, engage in certain business operations and transactions, make certain investments, modify its organizational documents or form any new subsidiaries, subject to certain exceptions. Further, the Credit Agreement contains a negative covenant that restricts the ability of the Company to redeem or repurchase its common stock or pay dividends if the result of which would cause an event of default under the Credit Agreement. The Credit Agreement also requires the Company to maintain a Fixed Charge Coverage Ratio of at least 1.25 to 1.00. The term “Fixed Charge Coverage Ratio” means the ratio, computed for the Company on a consolidated basis, of net income plus income tax expense, plus amortization expense, plus depreciation expense, plus interest expense, and plus dividends received from joint ventures, minus unfinanced capital expenditures and equity in income from joint ventures, all computed for the twelve month period then ending, to scheduled principal payments made, plus scheduled finance lease payments made, plus interest expense paid, plus income tax expense paid, and plus cash distributions and dividends paid, all computed for the same twelve month period then ending.

The Credit Agreement also contains customary events of default, including, without limitation, payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy and insolvency proceedings, cross-defaults to certain other agreements, breach of any financial covenant and change of control. Upon the occurrence and during the continuance of any event of default, JPM may accelerate the payment of the obligations thereunder and exercise various other customary default remedies.

On each of April 22, 2025 and May 29, 2025, the Company’s wholly owned subsidiary in China, NTIC China, renewed its loan agreements with China Construction Bank Corporation. Each term loan provided NTIC China with a RMB 10,000,000 (USD $1.41 million). The term loans mature in April 2026 and May 2026, respectively, unless extended. The term loan that matures in April 2026 has an annual interest rate of 2.75% with interest due monthly, and the term loan that matures in May 2026 has an annual interest rate of 2.96% with interest due monthly. Both term loans are secured by an office building owned by NTIC China and the loan agreements contain certain financial and other covenants. The Company was in compliance with the covenants as of August 31, 2025. The outstanding balance as of November 30, 2025 for both term loans is a total of USD $2,826,615. The outstanding balance as of August 31, 2025 for both term loans was a total of USD $2,804,695.

On August 30, 2025, the Company’s majority owned subsidiary in India, Natur-Tec India, entered into a Foreign Currency Term Loan Agreement with IDFC FIRST Bank Limited (the Bank). The term loan provides Natur-Tec India with a facility of INR 500 lakhs (USD $600,000) to finance the purchase of land in Chennai, India. The loan was disbursed on August 30, 2025 for INR 461 lakhs (USD $522,545) and is repayable in 85 monthly installments to a US dollar account of USD $7,899 each beginning October 5, 2025 and continuing through September 5, 2032. Borrowings bear interest at a fixed rate of 6.45% per annum. The loan is secured by a lien over Natur-Tec India’s cash deposits with the Bank totaling INR 476 lakhs (USD $539,731), and the related land purchase, which was registered in November 2025. The outstanding balance as of November 30, 2025 was INR 452.6 lakhs (USD $506,461), of which INR 54.2 lakhs (USD $60,695) was classified as current and INR 398.4 lakhs (USD $445,766) as long-term. The term loan contains customary affirmative and negative covenants applicable to Natur-Tec India, including, among other matters, restrictions on incurring additional indebtedness, creating liens, or changing the nature of its business. Natur-Tec India was in compliance with all covenants as of November 30, 2025.

9. STOCKHOLDERS’ EQUITY

On October 15, 2025, the Company’s Board of Directors declared a cash dividend of $0.01 per share of the Company’s common stock, payable on November 12, 2025 to stockholders of record on October 29, 2025. On October 16, 2024, the Company’s Board of Directors declared a cash dividend of $0.07 per share of the Company’s common stock, payable on November 13, 2024 to stockholders of record on October 30, 2024.

During the three months ended November 30, 2025 and 2024, the Company repurchased no shares of its common stock.

During the three months ended November 30, 2025 and 2024, the Company issued 11,313 and no shares of common stock upon the settlement of restricted stock units, respectively.

The Company issued 5,198 and 3,527 shares of common stock on September 1, 2025 and 2024, respectively, under the Northern Technologies International Corporation Employee Stock Purchase Plan (the ESPP). The ESPP is compensatory for financial reporting purposes. As of November 30, 2025, 42,673 shares of common stock remained available for sale under the ESPP.

10. NET INCOME PER COMMON SHARE

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding. Diluted net income per share assumes the exercise of stock options and the settlement of restricted stock units using the treasury stock method, if dilutive.

The following is a reconciliation of the net income per share computation for the three months ended November 30, 2025 and 2024:

	Three Months Ended November 30,
Numerator:	2025		2024
Net income attributable to NTIC	$	237,819	$	561,091

Denominator:
Basic – weighted shares outstanding		9,480,688		9,470,507
Weighted shares assumed upon exercise of stock options and settlement of restricted stock units		12,006		283,702
Diluted – weighted shares outstanding		9,492,694		9,754,209
Basic net income per share:	$	0.03	$	0.06
Diluted net income per share:	$	0.03	$	0.06

The dilutive impact summarized above relates to the periods when the average market price of the Company’s common stock exceeded the exercise price of the potentially dilutive option securities granted. Net income per common share was based on the weighted average number of common shares outstanding during the periods when computing basic net income per share. When dilutive, stock options and restricted stock units are included as equivalents using the treasury stock market method when computing the diluted net income per share. Excluded from the computation of diluted net income per share for the three months ended November 30, 2025 were options outstanding to purchase 2,085,086 shares of common stock. Excluded from the computation of diluted net income per share for the three months ended November 30, 2024 were options outstanding to purchase 751,153 shares of common stock.

11. STOCK-BASED COMPENSATION

Stock Options

A summary of stock option activities under the Northern Technologies International Corporation 2024 Stock Incentive Plan (2024 Plan), the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan and the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan is as follows:

	Number of Options Outstanding		Weighted Average Exercise Price
Outstanding as of August 31, 2025		1,923,138	$	11.86
Options granted		251,301		7.42
Options exercised		—		—
Options cancelled		—		—
Outstanding as of November 30, 2025		2,174,439	$	11.34

The weighted average per share fair value of options granted during the three months ended November 30, 2025 and 2024 was $3.05 and $4.95, respectively. The weighted average remaining contractual life of the options outstanding as of November 30, 2025 and 2024 was 5.98 years and 6.27 years, respectively.

The Company recognized stock option compensation expense of $258,181 and $304,930 during the three months ended November 30, 2025 and 2024, respectively. As of November 30, 2025, there was $1,518,441 of unrecognized stock option compensation expense. The amount is expected to be recognized over a period of 2.75 years.

Restricted Stock Units

Restricted stock units (RSUs) were granted under the 2024 Plan to certain non-employee directors during the three months ended November 30, 2025 and vest in full on the one-year anniversary of the date of grant. A summary of RSU activity for the three months ended November 30, 2025 is as follows:

	Number of RSUs		Weighted Average Grant Date Fair Value
Outstanding as of August 31, 2025		11,313	$	13.14
RSUs granted		28,303		7.42
RSUs vested/settled		—		—
RSUs cancelled		—		—
Outstanding as of November 30, 2025		39,616	$	9.05

RSUs are valued using the closing stock price on the grant date. The Company recognizes the grant date fair value of the RSUs over the vesting term, or one year. The Company recognized RSU stock-based compensation expense of $52,621 and $36,960 during the three months ended November 30, 2025 and 2024, respectively. As of November 30, 2025, there was $157,793 in unrecognized stock-based compensation expense relating to outstanding RSUs, which is expected to be recognized over a period of 0.75 years.

12. SEGMENT AND GEOGRAPHIC INFORMATION

Segment Information

The Company’s chief operating decision maker (CODM) is its Chief Executive Officer. The Company’s business is organized into two reportable segments: ZERUST® and Natur-Tec®. The Company has been selling its proprietary ZERUST® rust and corrosion inhibiting products and services to the automotive, general industrial, mechanical, mining, agricultural, and retail consumer markets for over 50 years and, more recently, has also expanded into the oil and gas industry. The Company also sells a portfolio of proprietary bio-based and compostable (fully biodegradable) polymer resins and finished products under the Natur-Tec® brand.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2025. There are no intersegment sales and no operating segments have been aggregated.

The following table presents the Company’s net sales by segment for the three months ended November 30, 2025 and 2024, respectively:

	Three Months Ended November 30,
	2025		2024
ZERUST® net sales	$	17,316,196	$	15,475,803
Natur-Tec® net sales		5,992,685		5,862,590
Total net sales	$	23,308,881	$	21,338,393

The following table sets forth the Company’s cost of goods sold by segment for the three months ended November 30, 2025 and 2024, respectively:

	November 30, 2025		November 30, 2024
Direct cost of goods sold
ZERUST®	$	10,151,261	$	8,678,706
Natur-Tec®		3,992,659		3,689,183
Indirect cost of goods sold		781,335		807,551
Total net cost of goods sold	$	14,925,255	$	13,175,440

The following table sets forth the Company’s gross profit by segment for the three months ended November 30, 2025 and 2024, respectively:

	Three Months Ended November 30,
	2025			2024
ZERUST® gross profit	$	7,164,935		$	6,797,097
Natur-Tec® gross profit		2,000,026			2,173,407
Total segment gross profit		9,164,961			8,970,504
Indirect cost of goods sold		(781,335	)		(807,551	)
Total gross profit		8,383,626			8,162,953
Total joint venture operations		2,291,373			2,413,712
Selling expenses		(4,371,502	)		(4,267,654	)
General and administrative expenses		(4,148,953	)		(3,858,943	)
Research and development expenses		(1,220,912	)		(1,343,397	)
Interest income		37,242			25,567
Interest expense		(199,966	)		(120,220	)
Income before income tax expense	$	770,908		$	1,012,018

The Company utilizes product net sales, direct and indirect cost of goods sold, and gross profit for each product in reviewing the financial performance of a product type. Further allocation of Company expenses or assets, aside from amounts presented in the tables above, is not utilized in evaluating product performance, nor does such allocation occur for internal financial reporting. The CODM uses gross profit and considers budget-to-actual variances on a quarterly basis when making decisions about the allocation of operating and capital resources to each segment. The CODM also uses segment gross profit for evaluating pricing strategy to assess the performance of each segment by comparing the results of each segment with one another and in determining the compensation of certain employees. The CODM has ultimate responsibility for enterprise decisions and making resource allocation decisions for the company and the segments. Asset information, including capital expenditures are reviewed by the CODM at the consolidated entity level and not by segment. Refer to total assets on the consolidated balance sheets.

Geographic Information

Net sales by geographic location for the three months ended November 30, 2025 and 2024, respectively, were as follows:

	Three Months Ended November 30,
	2025		2024
Inside the U.S. to unaffiliated customers	$	7,456,767	$	13,088,319
Outside the U.S. to:
Joint ventures in which the Company is a shareholder directly and indirectly		421,695		767,456
Unaffiliated customers		15,430,419		7,482,618
	$	23,308,881	$	21,338,393

Net sales by geographic location are based on the location of the customer. No single customer accounted for more than 10% of consolidated revenue.

Fees for services provided to joint ventures by geographic location as a percentage of total fees for services provided to joint ventures during the three months ended November 30, 2025 and 2024, respectively, were as follows:

	Three Months Ended November 30,
	2025		% of Total Fees for Services Provided to Joint Ventures			2024		% of Total Fees for Services Provided to Joint Ventures
Poland	$	214,302		20.0	%	$	220,010		17.1	%
Finland		137,007		12.8	%		131,460		10.2	%
Japan		133,650		12.5	%		148,538		11.6	%
Thailand		111,058		10.4	%		94,165		7.3	%
United Kingdom		108,522		10.1	%		116,226		9.1	%
Sweden		94,380		8.8	%		66,928		5.2	%
Czech Republic		80,581		7.5	%		72,631		5.7	%
Germany		74,081		6.9	%		206,329		16.1	%
South Korea		44,989		4.2	%		67,701		5.3	%
Other		70,687		6.6	%		160,132		12.5	%
	$	1,069,257		100.0	%	$	1,284,119		100.0	%

Sales to the Company’s joint ventures are included in the foregoing segment and geographic information; however, sales by the Company’s joint ventures to other parties are not included. The foregoing segment and geographic information represents only sales recognized directly by the Company and sold in that geographic territory.

See Note 7 for additional details on geographical information regarding equity in income from joint ventures.

The geographical distribution of total property and equipment and net sales, which are based on the geographical location of the customer, is as follows:

	At November 30, 2025		At August 31, 2025
China	$	5,355,509	$	5,355,918
Other		1,939,926		1,296,988
United States		8,505,494		8,531,012
Total property and equipment, net	$	15,800,929	$	15,183,918

	Three Months Ended November 30,
	2025		2024
China	$	4,934,938	$	3,994,769
Brazil		2,126,170		1,385,194
India		5,464,811		6,045,735
Other		2,904,499		2,430,077
United States		7,878,463		7,482,618
Total net sales	$	23,308,881	$	21,338,393

Long-lived assets consist of property and equipment. These assets are periodically reviewed to assure the net realizable value from the estimated future production based on forecasted sales exceeds the carrying value of the assets.

All joint venture operations, including equity in income, fees for services and related dividends, are primarily related to ZERUST® products and services.

13. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is subject to various other claims and legal actions in the ordinary course of its business. The Company records a liability in its consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, where the Company has assessed that a loss is probable, and an amount could be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that material loss may have been incurred. In the opinion of management, as of November 30, 2025, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect the Company’s consolidated results of operations, financial position or cash flows.

14. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental disclosures of cash flow information consisted of:

	Three Months Ended November 30,
	2025		2024
Cash paid for interest	$	199,966	$	120,220

15. INCOME TAXES

Income tax expense for the three months ended November 30, 2025 was $265,029 compared to $217,871 for the three months ended November 30, 2024. The expense was largely due to foreign operations. The Company has federal and state tax credit carry forwards, net operating loss carry forwards and foreign tax carry forwards. The Company has recorded a full valuation allowance against the U.S. deferred tax assets as of November 30, 2025 and August 31, 2025.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis provides material historical and prospective disclosures intended to enable investors and other users to assess NTIC’s financial condition and results of operations. Statements that are not historical are forward-looking and involve risks and uncertainties discussed under the heading “Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Forward-Looking Statements” in this report and under “Part 1. Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended August 31, 2025. The following discussion of the results of the operations and financial condition of NTIC should be read in conjunction with NTIC’s consolidated financial statements and the related notes thereto included under the heading “Part I. Item 1. Financial Statements.”

Business Overview

NTIC develops and markets proprietary, environmentally beneficial products and services in over 65 countries either directly or via a network of subsidiaries, joint ventures, independent distributors, and agents. NTIC’s primary business is corrosion prevention marketed mainly under the ZERUST® brand. NTIC has been selling its proprietary ZERUST® products and services to the automotive, general industrial, mechanical, mining, agricultural, and retail consumer markets for over 50 years and, more recently, has also expanded into the oil and gas industry. Additionally, NTIC markets and sells a portfolio of proprietary bio-based and certified compostable (fully biodegradable) polymer resin compounds and finished products under the Natur-Tec® brand. These sustainable packaging products are intended to reduce NTIC’s customers’ carbon footprint and provide environmentally sound waste disposal options.

NTIC’s ZERUST® rust and corrosion inhibiting products include plastic and paper packaging, liquids, coatings, rust removers, cleaners, and diffusers as well as engineered solutions designed specifically for the industries it serves. NTIC also offers worldwide, on-site, technical consulting for rust and corrosion prevention issues. In North America, NTIC sells its ZERUST® corrosion prevention solutions through a network of independent distributors and agents supported by a direct sales force.

Internationally, NTIC sells its ZERUST® corrosion prevention solutions through its wholly owned subsidiary in China, NTIC (Shanghai) Co., Ltd. (NTIC China), its wholly owned subsidiary in India, HNTI Limited (Zerust India), its wholly owned subsidiary in the United Arab Emirates, Zerust Integrity Solutions Trading LLC (ZIS UAE), its majority-owned joint venture holding company for NTIC’s joint venture investments in the Association of Southeast Asian Nations (ASEAN) region, NTI Asean LLC (NTI Asean), its majority-owned subsidiary in Brazil, Zerust Provenção de Corrosão S.A. (Zerust Brazil), and certain majority-owned and wholly owned subsidiaries, and joint venture arrangements in North America, Europe, and Asia. NTIC also sells products directly to its European joint venture partners through its wholly owned subsidiary in Germany, NTIC Europe GmbH (NTI Europe).

One of NTIC’s strategic initiatives is to expand into and penetrate other markets for its ZERUST® corrosion prevention technologies. Consequently, for the past several years, NTIC has focused significant sales and marketing efforts on the oil and gas industry, as the infrastructure that supports that industry is typically constructed using metals that are highly susceptible to corrosion. NTIC believes that its ZERUST® corrosion prevention solutions will minimize maintenance downtime on critical oil and gas industry infrastructure, extend the life of such infrastructure, and reduce the risk of environmental pollution due to leaks caused by corrosion. During the three months ended November 30, 2025, NTIC continued to make strategic investments in its ZERUST® oil and gas sales infrastructure specifically to support ZIS UAE.

NTIC markets and sells its ZERUST® rust and corrosion prevention solutions to customers in the oil and gas industry in a continuously increasing number of countries either directly, through its subsidiaries, or through its joint venture partners and other strategic partners. The sale of ZERUST® corrosion prevention solutions to customers in the oil and gas industry typically involves long sales cycles, often including multi-year trial periods with each customer and a slow integration process thereafter. In November 2025, Zerust Brazil secured a three-year offshore oil and gas production asset preservation contract with a leading global engineering, procurement, and construction company to provide advanced corrosion protection solutions for floating production storage and offloading units. The project under this agreement is expected to ramp during fiscal 2026 and run through calendar 2028 with an estimated total value of approximately R$70 million (US$13.1 million). This includes approximately R$40 million (US$7.5 million) in materials and approximately R$30 million (US$5.6 million) in engineering and field services. The amount and timing of revenue anticipated to be generated under this agreement may materially and positively affect NTIC’s future quarterly sales and other operating results.

Natur-Tec® bio-based and compostable plastics are manufactured using NTIC’s patented and/or proprietary technologies and are intended to replace conventional petroleum-based plastics. The Natur-Tec® biopolymer resin compound portfolio includes formulations that have been optimized for a variety of applications, including blown-film extrusion, coatings, injection molding, thermoforming, profile extrusion and engineered plastics. These resin compounds are certified to be fully biodegradable in a commercial composting environment and are currently being used to produce finished products, including can liners, shopping and grocery bags, lawn and leaf bags, branded apparel packaging bags and accessories, and various foodservice items, such as disposable cutlery, drinking straws, food-handling gloves, and coated paper products. In North America, NTIC markets its Natur-Tec® resin compounds and finished products primarily through a network of regional and national distributors as well as independent agents. NTIC continues to see significant opportunities for finished bioplastic products and, therefore, continues to strengthen and expand its North American distribution network for finished Natur-Tec® bioplastic products. We recently entered into a preferred supplier agreement with the nation’s leading specialized distributor for a foodservice and industrial packaging company, which we expect to translate into higher Natur-Tec® sales growth in fiscal 2026 compared to fiscal 2025.

Internationally, NTIC sells its Natur-Tec® resin compounds and finished products both directly and through its wholly owned subsidiary in China and majority-owned subsidiaries in India and Sri Lanka, and through distributors and certain joint ventures.

Financial Overview

NTIC’s management, including its chief executive officer, who is NTIC’s chief operating decision maker, reports and manages NTIC’s operations in two reportable business segments based on products sold, customer base and distribution center: ZERUST® products and services and Natur-Tec® products.

Highlights of NTIC’s financial results for the three months ended November 30, 2025 include the following, with increases or decreases in each case as compared to the prior fiscal year quarterly period:

●

NTIC’s consolidated net sales increased 9.2% primarily due to increased sales and demand for ZERUST® and Natur-Tec® products. 74.3% of NTIC’s consolidated net sales were derived from sales of ZERUST® products and services, which increased 11.9%. 25.7% of NTIC’s consolidated net sales were derived from sales of Natur-Tec® products, which increased 2.2%.

●

Cost of goods sold as a percentage of net sales increased to 64.0% from 61.7% primarily due to slightly higher raw material prices and discounts on selling prices.

●

NTIC’s total income from joint venture operations decreased 5.1% to $2,291,373 in the three months ended November 30, 2025, compared to $2,413,712 during the three months ended November 30, 2024 primarily due to a slight increase in operating expenses at the joint ventures. Net sales at NTIC’s joint ventures, which are not consolidated with NTIC’s net sales, increased 2.9% to $24,531,431 in the three months ended November 30, 2025, compared to $23,837,010 during the three months ended November 30, 2024.

●

NTIC’s total operating expenses increased 2.9% to $9,741,367 during the three months ended November 30, 2025 compared to $9,469,994 for the three months ended November 30, 2024. This small increase was primarily due to strategic investments in ZERUST® oil and gas marketing and sales efforts, including personnel expenses and the corresponding benefits, as well as increased travel and professional fees.

●

NTIC earned net income attributable to NTIC of $237,819, or $0.03 per diluted common share, for the three months ended November 30, 2025 compared to $561,091, or $0.06 per diluted common share, for the three months ended November 30, 2024.

During the three months ended November 30, 2025, NTIC incurred additional costs related to tariffs and expects such costs to continue throughout fiscal 2026. Management has implemented, and expects to continue to implement, proactive measures to mitigate inflationary and supply chain pressures resulting from tariffs through a combination of supplier diversification, regional sourcing initiatives, cost-reduction programs, and manufacturing optimization. Management continues to monitor global trade developments and evaluate opportunities to further reduce its exposure to tariffs by localizing production and developing alternative sourcing options where practicable. With respect to NTIC China, a majority of its production and sales are for local consumption. Accordingly, management believes that NTIC China’s exposure to tariffs, including those imposed by the United States, is limited. However, given the complex and evolving nature of global trade policy, there can be no assurance that tariffs or other trade restrictions will not adversely affect NTIC’s net sales, gross margins, or operating results in future periods. Tariffs have had a particular impact on NTIC’s Natur-Tec® business, which relies on the global procurement of raw materials and finished goods. These factors may affect production economics, customer pricing, and competitive positioning, particularly in markets where NTIC competes with local producers not subject to comparable tariff exposure.

Results of Operations

The following table sets forth NTIC’s results of operations for the three months ended November 30, 2025 and 2024.

	Three Months Ended November 30,
	2025		% of Net Sales			2024		% of Net Sales			$ Change			% Change
Net sales	$	23,308,881		N/A		$	21,338,393		N/A		$	1,970,488			9.2	%
Cost of goods sold		14,925,255		64.0	%		13,175,440		61.7	%		1,749,815			13.3	%
Equity in income from joint ventures		1,222,116		N/A			1,129,593		N/A			92,523			8.2	%
Fees for services provided to joint ventures		1,069,257		N/A			1,284,119		N/A			(214,862	)		(16.7	)%
Selling expenses		4,371,502		18.8	%		4,267,654		20.0	%		103,848			2.4	%
General and administrative expenses		4,148,953		17.8	%		3,858,943		18.1	%		290,010			7.5	%
Research and development expenses		1,220,912		5.2	%		1,343,397		6.3	%		(122,485	)		(9.1	)%

Net Sales. NTIC’s consolidated net sales increased 9.2% to $23,308,881 during the three months ended November 30, 2025 compared to $21,338,393 during the three months ended November 30, 2024. This increase was primarily due to increased sales and demand for ZERUST® and Natur-Tec® products.

The following table sets forth NTIC’s net sales by product segment for the three months ended November 30, 2025 and 2024:

	Three Months Ended November 30,
	2025		2024		$ Change		% Change
Total ZERUST® sales	$	17,316,196	$	15,475,803	$	1,840,393		11.9	%
Total Natur-Tec® sales		5,992,685		5,862,590		130,095		2.2	%
Total net sales	$	23,308,881	$	21,338,393	$	1,970,488		9.2	%

During the three months ended November 30, 2025, 74.3% of NTIC’s consolidated net sales were derived from sales of ZERUST® products and services, which increased 11.9% to $17,316,196 during the three months ended November 30, 2025 compared to $15,475,803 during the three months ended November 30, 2024. This increase was primarily due to increased demand for ZERUST®oil and gas products and ZERUST®industrial products.

The following table sets forth NTIC’s net sales of ZERUST® products for the three months ended November 30, 2025 and 2024:

	Three Months Ended November 30,
	2025		2024		$ Change		% Change
ZERUST® industrial net sales	$	14,922,518	$	13,962,252	$	960,266		6.9	%
ZERUST® oil & gas net sales		2,393,678		1,513,551		880,127		58.1	%
Total ZERUST® net sales	$	17,316,196	$	15,475,803	$	1,840,393		11.9	%

ZERUST® industrial net sales increased during the three months ended November 30, 2025, compared to the same prior fiscal year period, primarily due to increased demand for North American ZERUST® industrial products. Overall, demand for ZERUST® products and services depends heavily on the overall health of the markets in which NTIC sells its products, including the automotive, construction, agriculture, and mining markets in particular.

ZERUST® oil and gas net sales increased 58.1% during the three months ended November 30, 2025 compared to the same period last fiscal year primarily due to increased demand, primarily in Brazil. NTIC anticipates that its sales of ZERUST® products and services into the oil and gas industry will continue to remain subject to significant volatility from quarter to quarter as sales are recognized. Demand for oil and gas products around the world depends primarily on market acceptance and the reach of NTIC’s distribution network. Because of the typical size of individual orders and overall size of NTIC’s net sales derived from sales of oil and gas products, the timing of one or more orders can materially affect NTIC’s quarterly sales compared to prior fiscal year quarters. For example, in November 2025, Zerust Brazil secured a three-year offshore oil and gas production asset preservation contract with a leading global engineering, procurement, and construction company to provide advanced corrosion protection solutions for floating production storage and offloading units. The project under this agreement is expected to ramp during fiscal 2026 and run through calendar 2028 with an estimated total value of approximately R$70 million (US$13.1 million). This includes approximately R$40 million (US$7.5 million) in materials and approximately R$30 million (US$5.6 million) in engineering and field services. The amount and timing of revenue anticipated to be generated under this agreement may materially and positively affect NTIC’s future quarterly sales and other operating results.

During the three months ended November 30, 2025, 25.7% of NTIC’s consolidated net sales were derived from sales of Natur-Tec® products, compared to 27.5% during the three months ended November 30, 2024. Sales of Natur-Tec® products increased 2.2% to $5,992,685 during the three months ended November 30, 2025 compared to $5,862,590 during the three months ended November 30, 2024 due to timing differences in sales specifically to customers in India. The market for biodegradable plastics is expanding worldwide, driven by increasing environmental awareness, regulatory support for sustainable materials, and growing demand for eco-friendly alternatives. As consumers and industries seek to reduce plastic waste, biodegradable plastics offer a viable solution, particularly in sectors like packaging, agriculture, and consumer goods. This trend is further supported by government policies promoting sustainable practices and by advances in biodegradable technology, which make these materials more accessible and cost-effective.

Cost of Goods Sold. Cost of goods sold increased 13.3% for the three months ended November 30, 2025 compared to the three months ended November 30, 2024 primarily due to the increase in sales and slightly higher raw material prices. Cost of goods sold as a percentage of net sales increased to 64.0% for the three months ended November 30, 2025 compared to 61.7% for the three months ended November 30, 2024 due primarily to the factors noted above.

Equity in Income from Joint Ventures. NTIC’s equity in income from joint ventures increased 8.2% to $1,222,116 during the three months ended November 30, 2025 compared to $1,129,593 during the three months ended November 30, 2024 primarily due to a modification of the fees for services plans due to tax planning in the first quarter of fiscal 2026 for two joint ventures which resulted in a decrease in fees for services and an increase in equity in income for both entities. This was partially offset by a decrease in net income at NTIC’s joint venture in Germany, EXCOR. NTIC’s equity in income from joint ventures fluctuates based on net sales and profitability of the joint ventures during the respective periods. Additionally, of the total equity in income from joint ventures, NTIC had equity in income from joint ventures of $518,135 attributable to EXCOR during the three months ended November 30, 2025 compared to $623,750 attributable to EXCOR during the three months ended November 30, 2024. This decrease was due to a decrease in net sales by EXCOR during the three months ended November 30, 2025 compared to the three months ended November 30, 2024. NTIC had equity in income from all other joint ventures of $703,981 during the three months ended November 30, 2025, compared to $505,843 during the three months ended November 30, 2024.

Fees for Services Provided to Joint Ventures. NTIC recognized fee income for services provided to joint ventures of $1,069,257 during the three months ended November 30, 2025 compared to $1,284,119 during the three months ended November 30, 2024, representing a decrease of 16.7% primarily due to a modification of the fees for services plans due to tax planning in the first quarter of fiscal 2026 for two joint ventures which resulted in a decrease in fees for services and an increase in equity in income for both entities. Fee income for services provided to joint ventures is traditionally a function of the sales made by NTIC’s joint ventures; however, at various joint ventures, the fee income for services is a fixed amount that does not fluctuate with the change in sales experienced by certain joint ventures during the three months ended November 30, 2024, specifically EXCOR. Net sales at the joint ventures increased to $24,531,431 during the three months ended November 30, 2025 compared to $23,837,010 for the three months ended November 30, 2024, representing an increase of 2.9%. This increase was primarily due to increases in demand for products at most joint ventures, partially offset by continued decreased demand at NTIC’s joint venture in Germany. Net sales of NTIC’s joint ventures are not included in NTIC’s product sales and are not included in NTIC’s consolidated financial statements. Of the total fee income for services provided to joint ventures, fees of $74,081 were attributable to EXCOR during the three months ended November 30, 2025 compared to $206,329 attributable to EXCOR during the three months ended November 30, 2024, only one month of fees for services was recorded prior to modifying the agreement for tax purposes.

Selling Expenses. NTIC’s selling expenses increased 2.4% for the three months ended November 30, 2025 compared to the same period in fiscal 2025 primarily due to increased personnel expense during the current fiscal year period compared to the same prior fiscal year period. Selling expenses as a percentage of net sales decreased to 18.8% for the three months ended November 30, 2025 compared to 20.0% during the three months ended November 30, 2024 primarily due to increased net sales, partially offset by increased selling expenses.

General and Administrative Expenses. NTIC’s general and administrative expenses increased 7.5% for the three months ended November 30, 2025 compared to the same period in fiscal 2025 primarily due to increased professional services and travel and personnel expenses, which relate in part to increased information technology infrastructure, during the current fiscal year period compared to the same prior fiscal year period. As a percentage of net sales, general and administrative expenses decreased to 17.8% for the three months ended November 30, 2025 from 18.1% for the three months ended November 30, 2024 primarily due to increased net sales, partially offset by increased general and administrative expenses.

Research and Development Expenses. NTIC’s research and development expenses decreased 9.1% for the three months ended November 30, 2025 compared to the same period in fiscal 2025 primarily due to the transition of expenses from research and development to selling expenses.

Interest Income. NTIC’s interest income increased to $37,242 during the three months ended November 30, 2025 compared to $25,567 during the three months ended November 30, 2024 primarily due to changes in the invested cash balances and rate of return at various subsidiaries.

Interest Expense. NTIC’s interest expense increased to $199,966 during the three months ended November 30, 2025 compared to $120,220 during the three months ended November 30, 2024 primarily due to increased outstanding average borrowings during the current fiscal year period.

Income Before Income Tax Expense. NTIC had income before income tax expense of $770,908 for the three months ended November 30, 2025 compared to income before income tax expense of $1,012,018 for the three months ended November 30, 2024.

Income Tax Expense. Income tax expense was $265,029 during the three months ended November 30, 2025 compared to $217,871 during the three months ended November 30, 2024. Income tax expense was calculated based on management’s estimate of NTIC’s annual effective income tax rate.

NTIC considers the earnings of certain foreign joint ventures to be indefinitely invested outside the United States on the basis of estimates that NTIC’s future domestic cash generation will be sufficient to meet future domestic cash needs. As a result, U.S. income and foreign withholding taxes have not been recognized on the cumulative undistributed earnings of $28,322,052 and $27,667,432 as of November 30, 2025 and August 31, 2025, respectively. To the extent undistributed earnings of NTIC’s joint ventures are distributed in the future, they are not expected to result in any material additional income tax liability after the application of foreign tax credits.

Net Income Attributable to NTIC. Net income attributable to NTIC decreased to $237,819, or $0.03 per diluted common share, for the three months ended November 30, 2025 compared to $561,091, or $0.06 per diluted common share, for the three months ended November 30, 2024. This decrease was primarily due to the increase in operating expenses and an increase in interest expense and decreases in joint venture operating income, partially offset by the increase in gross profit, in each case in the current fiscal year period compared to the prior fiscal year period.

NTIC anticipates that its earnings will continue to be adversely affected to some extent by inflation and worldwide supply chain disruptions, among other factors. Additionally, NTIC anticipates that its quarterly net income will continue to remain subject to significant volatility primarily due to the financial performance of its subsidiaries and joint ventures, sales of its ZERUST® products and services into the oil and gas industry, and sales of its Natur-Tec® bioplastics products, which sales fluctuate more on a quarterly basis than the traditional ZERUST® business.

Other Comprehensive Income – Foreign Currency Translations Adjustment. The changes in the foreign currency translations adjustment were due to the fluctuation of the U.S. dollar compared to the Euro and other foreign currencies during the three months ended November 30, 2025 compared to the same period in fiscal 2025.

Liquidity and Capital Resources

Sources of Cash and Working Capital. NTIC’s working capital, defined as current assets less current liabilities, was $19,441,186 as of November 30, 2025, including $6,389,809 in cash and cash equivalents, $9,134,428 outstanding under NTIC’s line of credit and $2,887,310 of outstanding term loans, current, compared to $20,438,722 as of August 31, 2025, including $7,250,523 in cash and cash equivalents, $9,329,021 outstanding under NTIC’s line of credit, and $2,860,256 of outstanding term loans, current. Reducing debt through positive operating cash flow and improving working capital efficiencies is a strategic focus for fiscal 2026.

NTIC believes that a combination of its existing cash and cash equivalents, available for sale securities, forecasted cash flows from future operations, anticipated distributions of earnings, anticipated fees to NTIC for services provided to its joint ventures, and funds available through existing or anticipated financing arrangements will be adequate to fund its existing operations, investments in new or existing joint ventures or subsidiaries, capital expenditures, debt repayments, cash dividends, and any stock repurchases for at least the next 12 months. During the remainder of fiscal 2026, NTIC expects to continue to invest through its use of working capital in Zerust India, NTIC China, NTI Europe, its joint ventures, research and development, marketing efforts, resources for the application of its corrosion prevention technology in the oil and gas industry, and its Natur-Tec® bio-plastics business, although the amounts of these various investments are not known at this time.

NTIC also expects to use some of its capital resources to acquire the remaining ownership interests of joint ventures not owned by NTIC as they become available or appropriate and for the formation of one or more new subsidiaries to assume the operations of a joint venture. Some of these joint venture transitions may materially impact NTIC’s results of operations for a particular reporting period.

NTIC traditionally has used the cash generated from its operations, distributions of earnings from joint ventures and fees for services provided to its joint ventures to fund NTIC’s new technology investments and capital contributions to new and existing subsidiaries and joint ventures. NTIC’s joint ventures traditionally have operated with little or no debt and have been self-financed with minimal initial capital investment and minimal additional capital investment from their respective owners. Therefore, NTIC believes there is limited exposure by NTIC’s joint ventures that could materially impact their respective operations and/or liquidity.

In order to take advantage of new product and market opportunities to expand its business and increase its revenues and assist with joint venture transitions, NTIC may decide to finance such opportunities by additional borrowings under its revolving line of credit or raising additional financing through the issuance of debt or equity securities. There is no assurance that any financing transaction will be available on terms acceptable to NTIC or at all or that any financing transaction will not be dilutive to NTIC’s current stockholders.

Credit Agreement with JPMorgan Chase Bank, N.A. NTIC is party to a Credit Agreement (as amended, the Credit Agreement) with JPMorgan Chase Bank, N.A. (JPM), which provides NTIC with a senior secured revolving line of credit (the Credit Facility) of up to $10.0 million. The Credit Facility includes a $5.0 million sublimit for standby letters of credit.

Borrowings of $9,134,428 were outstanding under the Credit Facility as of November 30, 2025. The Company was in compliance with all covenants under the Credit Agreement as of November 30, 2025.

Borrowings under the Credit Agreement bear interest at a floating rate, at the option of NTIC, equal to either the CB Floating Rate or the Adjusted SOFR Rate. The term “CB Floating Rate” means the greater of the Prime Rate in the United States or 2.50%. The term “Adjusted SOFR Rate” means the term secured overnight financing rate for either one, three or six months (depending on the interest period selected by NTIC) plus 0.10% per annum. With respect to any borrowings using an Adjusted SOFR Rate, there is an applicable margin of 2.35% applied per annum. There is no applicable margin with respect to borrowings using a CB Floating Rate. The weighted average interest rate was 6.25% and 7.07% for the three months ended November 30, 2025 and 2024.

To secure the Credit Agreement, NTIC assigned to JPM a continuing security interest in all of its right, title and interest in collateral made up of the assets of NTIC.

The Credit Agreement contains customary affirmative and negative covenants, including, among other matters, limitations on NTIC’s ability to incur additional debt, grant liens, engage in certain business operations and transactions, make certain investments, modify its organizational documents or form any new subsidiaries, subject to certain exceptions. Further, the Credit Agreement contains a negative covenant that restricts the ability of NTIC to redeem or repurchase its common stock or pay dividends if the result of which would cause an event of default under the Credit Agreement. The Credit Agreement also requires the Company to maintain a Fixed Charge Coverage Ratio of at least 1.25 to 1.00. The term “Fixed Charge Coverage Ratio” means the ratio, computed for NTIC on a consolidated basis, of net income plus income tax expense, plus amortization expense, plus depreciation expense, plus interest expense, and plus dividends received from joint ventures, minus unfinanced capital expenditures and equity in income from joint ventures, all computed for the twelve month period then ending, to scheduled principal payments made, plus scheduled finance lease payments made, plus interest expense paid, plus income tax expense paid, and plus cash distributions and dividends paid, all computed for the same twelve month period then ending.

Other Credit Arrangements. On each of April 22, 2025 and May 29, 2025, NTIC’s wholly owned subsidiary in China, NTIC China, entered into a loan agreement with China Construction Bank Corporation. Each term loan provided NTIC China with a RMB 10,000,000 (USD $1.41 million). The term loans mature in April 2026 and May 2026, respectively, unless extended. It is anticipated that each term loan will be extended for an additional one-year period. The term loan that matures in April 2026 has an annual interest rate of 2.75% with interest due monthly, and the term loan that matures in May 2026 has an annual interest rate of 2.96% with interest due monthly. Both term loans are secured by an office building owned by NTIC China and the loan agreements contain certain financial and other covenants. NTIC was in compliance with the covenants as of November 30, 2025. The outstanding balance as of November 30, 2025 for both term loans is a total of USD $2,826,615.

On August 30, 2025, NTIC’s majority owned subsidiary in India, Natur-Tec India, entered into a Foreign Currency Term Loan Agreement with IDFC FIRST Bank Limited (the Bank). The term loan provides Natur-Tec India with a facility of INR 500 lakhs (USD $600,000) to finance the purchase of land in Chennai, India. The loan was disbursed on August 30, 2025 for INR 461 lakhs (USD $522,545) and is repayable in 85 monthly installments to a US dollar account of USD $7,899 each beginning October 5, 2025 and continuing through September 5, 2032. Borrowings bear interest at a fixed rate of 6.45% per annum. The loan is secured by a lien over Natur-Tec India’s cash deposits with the Bank totaling INR 476 lakhs (USD $539,731), and the related land purchase is expected to be registered in late November 2025. The outstanding balance as of November 30, 2025 was INR 452.6 lakhs (USD $506,461), of which INR 54.2 lakhs (USD $60,695) was classified as current and INR 398.4 lakhs (USD $445,766) as long-term. The term loan contains customary affirmative and negative covenants applicable to Natur-Tec India, including, among other matters, restrictions on incurring additional indebtedness, creating liens, or changing the nature of its business. Natur-Tec India was in compliance with all covenants as of November 30, 2025.

Uses of Cash and Cash Flow. Net cash provided by operating activities during the three months ended November 30, 2025 was $341,908 which resulted principally from NTIC’s net income, an increase in accounts payable, dividends received from joint ventures, depreciation and amortization expense, and stock-based compensation, and was partially offset by equity in income from joint ventures, and decreases in accounts receivable, income taxes, inventory and prepaid expenses. Net cash provided by operating activities during the three months ended November 30, 2024 was $2,395,066, which resulted principally from decreases in trade receivables and technical fee receivables, NTIC’s net income, increases in accounts payable, depreciation and amortization expense, and stock-based compensation, and was partially offset by equity in income from joint ventures and increases in inventory and prepaid expenses.

NTIC’s cash flows from operations are impacted by significant changes in certain components of NTIC’s working capital, including inventory turnover and changes in receivables and payables. NTIC considers internal and external factors when assessing the use of its available working capital, specifically when determining inventory levels and credit terms of customers. Key internal factors include existing inventory levels, stock reorder points, customer forecasts and customer requested payment terms. Key external factors include the availability of primary raw materials and sub-contractor production lead times. NTIC’s typical contractual terms for trade receivables, excluding joint ventures, are traditionally 30 days and 90 days for trade receivables from its joint ventures. Before extending unsecured credit to customers, excluding NTIC’s joint ventures, NTIC reviews customers’ credit histories and will establish an allowance for uncollectible accounts based upon factors surrounding the credit risk of specific customers and other information. Accounts receivable over 30 days are considered past due for most customers. NTIC does not accrue interest on past due accounts receivable. If accounts receivables in excess of the provided allowance are determined uncollectible, they are charged to selling expense in the period that the determination is made. Accounts receivable are deemed uncollectible based on NTIC exhausting reasonable efforts to collect. NTIC’s typical contractual terms for receivables for services provided to its joint ventures are 90 days. NTIC records receivables for services provided to its joint ventures on an accrual basis, unless circumstances exist that make the collection of the balance uncertain, in which case the fee income will be recorded on a cash basis until there is consistency in payments. This determination is handled on a case-by-case basis.

NTIC experienced a decrease in trade receivables and an increase in inventory as of November 30, 2025 compared to August 31, 2025. Trade receivables as of November 30, 2025 decreased $241,153 compared to August 31, 2025, primarily related to timing differences of sales and collections.

Outstanding trade receivables increased by an average of 2 days to an average of 78 days from balances outstanding from these customers as of November 30, 2025 from an average of 76 days as of August 31, 2025.

Outstanding receivables for services provided to joint ventures as of November 30, 2025 decreased $44,067 compared to August 31, 2025, and the average days to pay increased an average of 15 days to an average of 88 days from an average of 73 days as of August 31, 2025.

Net cash used in investing activities for the three months ended November 30, 2025 was $821,624, which was primarily the result of the purchases of property and equipment. Net cash used in investing activities for the three months ended November 30, 2024 was $1,258,336, which was primarily the result of the purchases of property and equipment, and investments in patents.

Net cash used in financing activities for the three months ended November 30, 2025 was $383,751, which resulted from repayments under the line of credit, dividends paid to shareholders, and dividends received by non-controlling interests, partially offset by borrowings under the line of credit and proceeds from NTIC’s employee stock purchase plan. Net cash used in financing activities for the three months ended November 30, 2024 was $393,341, which resulted from dividends paid to shareholders, partially offset by borrowings under the line of credit and proceeds from NTIC’s employee stock purchase plan.

Share Repurchase Plan. On January 15, 2015, NTIC’s Board of Directors authorized the repurchase of up to $3,000,000 in shares of NTIC common stock through open market purchases or unsolicited or solicited privately negotiated transactions. This program has no expiration date but may be terminated by NTIC’s Board of Directors at any time. As of November 30, 2025, up to $2,640,548 in shares of NTIC common stock remained available for repurchase under NTIC’s stock repurchase program. No repurchases occurred during the three months ended November 30, 2025.

Cash Dividends. On October 15, 2025, the Company’s Board of Directors declared a cash dividend of $0.01 per share of the Company’s common stock, payable on November 12, 2025 to stockholders of record on October 29, 2025. On October 16, 2024, the Company’s Board of Directors declared a cash dividend of $0.07 per share of the Company’s common stock, payable on November 13, 2024 to stockholders of record on October 30, 2024. The declaration of future dividends is not guaranteed and will be determined by NTIC’s Board of Directors in light of conditions then existing, including NTIC’s earnings, financial condition, cash requirements, restrictions in financial agreements, business conductions and other factors.

Capital Expenditures and Commitments. NTIC spent $821,624 on capital expenditures during the three months ended November 30, 2025, which related primarily to investments in land at a planned new facility for Natur Tec India in Chenai, India. NTIC expects to spend an aggregate of approximately $2,000,000 to $2,500,000 on capital expenditures during fiscal 2026, which it expects will relate primarily to construction of new buildings and warehouses in India and Brazil, as well as the purchase of new equipment and facility improvements in the United States.

Inflation and Seasonality

Inflation in the United States and abroad historically has had minimal effect on NTIC and did not adversely affect NTIC’s gross margins during the first quarter of fiscal 2026. NTIC believes there is some seasonality in its business. NTIC anticipates its net sales in the second fiscal quarter may be adversely affected by the long Chinese New Year, the North American holiday season and overall less corrosion taking place at lower winter temperatures worldwide.

Market Risk

NTIC is exposed to some market risk stemming from changes in foreign currency exchange rates, commodity prices and interest rates.

Because the functional currency of NTIC’s foreign operations and investments in its foreign joint ventures is the applicable local currency, NTIC is exposed to foreign currency exchange rate risk arising from transactions in the normal course of business. NTIC’s principal exchange rate exposure is with the Euro, the Japanese Yen, the Indian Rupee, the Chinese Renminbi, the South Korean Won, and the English Pound against the U.S. Dollar. NTIC’s fees for services provided to joint ventures and dividend distributions from these foreign entities are paid in foreign currencies and, thus, fluctuations in foreign currency exchange rates could result in declines in NTIC’s reported net income. Since NTIC’s investments in its joint ventures are accounted for using the equity method, any changes in foreign currency exchange rates would be reflected as a foreign currency translation adjustment and would not change NTIC’s equity in income from joint ventures reflected in its consolidated statements of operations. NTIC does not hedge against its foreign currency exchange rate risk.

Some raw materials used in NTIC’s products are exposed to commodity price changes. The primary commodity price exposures are with a variety of plastic and bioplastic resins.

Any outstanding advances under NTIC’s Credit Facility with JPM bear interest at a floating rate, at the option of NTIC, equal to either the CB Floating Rate or the Adjusted SOFR Rate, as defined above. Borrowings of $9,134,428 were outstanding under the Credit Facility as of November 30, 2025.

Both term loans undertaken by NTIC China with China Construction Bank Corporation have an annual interest rate of 3.25% with interest due monthly. The current outstanding balance as of November 30, 2025 for both term loans is a total of USD $2,826,615.

The Foreign Currency Term Loan taken out with IDFC FIRST Bank Limited (the Bank) has an interest at a fixed rate of 6.45% per annum. The current outstanding balance as of November 30, 2025 was INR 452.6 lakhs (USD $506,461).

Critical Accounting Policies and Estimates

There have been no material changes to NTIC’s critical accounting policies and estimates from the information provided in “Part II. Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” included in NTIC’s annual report on Form 10-K for the fiscal year ended August 31, 2025.

Recent Accounting Pronouncements

See Note 3 to NTIC’s consolidated financial statements for a discussion of recent accounting pronouncements.

Forward-Looking Statements

This quarterly report on Form 10-Q contains not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to the safe harbor created by those sections. In addition, NTIC or others on NTIC’s behalf may make forward-looking statements from time to time in oral presentations, including telephone conferences and/or web casts open to the public, in press releases or reports, on NTIC’s Internet web site, or otherwise. All statements other than statements of historical facts included in this report or expressed by NTIC orally from time to time that address activities, events, or developments that NTIC expects, believes, or anticipates will or may occur in the future are forward-looking statements, including, in particular, the statements about NTIC’s plans, objectives, strategies, and prospects regarding, among other things, NTIC’s financial condition, results of operations and business, and the outcome of contingencies, such as legal proceedings. NTIC has identified some of these forward-looking statements in this report with words like “believe,” “can,” “may,” “could,” “would,” “might,” “forecast,” “possible,” “potential,” “project,” “will,” “should,” “expect,” “intend,” “plan,” “predict,” “anticipate,” “estimate,” “approximate,” “outlook,” or “continue” or the negative of these words or other words and terms of similar meaning. The use of future dates is also an indication of a forward-looking statement. Forward-looking statements may be contained in the notes to NTIC’s consolidated financial statements and elsewhere in this report, including under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Forward-looking statements are based on current expectations about future events affecting NTIC and are subject to uncertainties and factors that affect all businesses operating in a global market as well as matters specific to NTIC. These uncertainties and factors are difficult to predict, and many of them are beyond NTIC’s control. The following are some of the uncertainties and factors known to us that could cause NTIC’s actual results to differ materially from what NTIC has anticipated in its forward-looking statements:

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The effect of changes to trade regulation, quotas, duties, or tariffs, caused by the changing U.S. and geopolitical environments or otherwise;

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The effect of current worldwide economic conditions, including in particular in the United States, Europe, India and China, and in the automotive industry, and the effect of inflation, recessionary indicators and any turmoil and disruption in the global credit, financial and banking markets or the perception of adverse conditions on NTIC’s business and the business of NTIC’s customers, suppliers, vendors and other third parties with whom NTIC conducts business;

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The effect of slowdowns within the automotive industry and decreased exports of automotive products resulting from tariffs between the U.S. and both Mexico and Canada on NTIC’s business and the evolution of the automotive industry towards electric vehicles;

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The effect of worldwide disruption in supply chains on NTIC’s business, operating results and financial condition;

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The effect of disruptions to distribution channels for NTIC’s products and disruptions to our customers, suppliers and subcontractors, as well as the global economy and financial markets;

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The effects of the ongoing war between Russia and Ukraine and sanctions against Russia by U.S. and European governments on energy prices, which have adversely affected our joint venture sales, and on commodity price fluctuations, which have decreased our margins and the margins of our joint ventures and resulted in decreased joint venture profitability, which will likely continue through the end of fiscal 2026;

●

NTIC’s operations in China and the risks associated therewith, including trade or other issues that may result from increasing tensions between the U.S. and China, including the implementation of higher tariffs;

●

Variability in NTIC’s sales of ZERUST® products and services to the oil and gas industry and Natur-Tec® products and NTIC’s equity income of joint ventures, which variability in sales and equity in income from joint ventures, in turn, subject NTIC’s earnings to quarterly fluctuations;

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Risks associated with NTIC’s international operations and exposure to fluctuations in foreign currency exchange rates, import duties, taxes, and tariffs;

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NTIC’s dependence on the success of its joint ventures and fees and dividend distributions that NTIC receives from them;

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NTIC’s relationships with its joint ventures and its ability to maintain those relationships, especially in light of anticipated succession planning issues, and risks associated with possible future acquisitions of the remaining ownership interests of certain joint ventures;

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Fluctuations in the cost and availability of raw materials, including resins and other commodities, due to higher demand and freight costs, supply chain disruptions and the impact of government sanctions;

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The success of and risks associated with NTIC’s emerging new businesses and products and services, including in particular NTIC’s ability and the ability of NTIC’s joint ventures to sell ZERUST® products and services to the oil and gas industry and Natur-Tec® products and the often lengthy and extensive sales process involved in selling such products and services;

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NTIC’s ability to introduce new products and services that respond to changing market conditions and customer demand;

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Market acceptance of NTIC’s existing and new products, especially in light of existing and new competitive products;

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Maturation of certain existing markets for NTIC’s ZERUST® products and services and NTIC’s ability to grow market share and succeed in penetrating other existing and new markets;

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Increased competition, especially with respect to NTIC’s ZERUST® products and services, and the effect of such competition on NTIC’s and its joint ventures’ pricing, net sales, and margins;

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The enforcement or lack thereof of rules and regulations favorable to the market for biodegradable plastics and the Trump administration’s reversal of certain policies related to the market for biodegradable plastics;

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NTIC’s reliance upon and its relationships with its distributors, independent sales representatives, and joint ventures;

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NTIC’s reliance upon suppliers;

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Oil prices, which may affect sales of NTIC’s ZERUST® products and services to the oil and gas industry, and which may be impacted by the ongoing war between Russia and Ukraine and the conflicts in the Middle East;

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Zerust Brazil’s ability to perform and realize revenue and other benefits under its three-year offshore oil and gas production asset preservation contract with a global engineering, procurement, and construction company;

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The costs and effects of complying with laws and regulations and changes in tax, fiscal, government, and other regulatory policies, including rules relating to environmental, health, and safety matters;

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Unforeseen product quality or other problems in the development, production, and usage of new and existing products;

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Unforeseen production expenses incurred in connection with new customers and new products;

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Rapid advancements in artificial intelligence (AI) technologies, which may disrupt our industry at an accelerated pace and adversely affect our competitive position, customer expectations, and operational performance if we fail to adapt or implement AI innovations effectively or if competitors leverage AI more effectively or quickly;

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Loss of or changes in executive management or key employees and the need to hire and train local support in a timely manner in order to support customer needs;

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Ability of management to manage around unplanned events;

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Pending and future litigation;

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NTIC’s reliance on its intellectual property rights and the absence of infringement of the intellectual property rights of others;

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Changes in applicable laws or regulations and NTIC’s failure to comply with applicable laws, rules, and regulations;

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Changes in generally accepted accounting principles and the effect of new accounting pronouncements;

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Fluctuations in NTIC’s effective tax rate;

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The effect of extreme weather conditions on NTIC’s operating results; and

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NTIC’s reliance upon its management information systems and risks associated with its recent implementation of a new Enterprise Resource Planning system.

For more information regarding these and other uncertainties and factors that could cause NTIC’s actual results to differ materially from what NTIC has anticipated in its forward-looking statements or otherwise could materially adversely affect its business, financial condition or operating results, see NTIC’s annual report on Form 10-K for the fiscal year ended August 31, 2025 under the heading “Part I. Item 1A. Risk Factors.”

All forward-looking statements included in this report are expressly qualified in their entirety by the foregoing cautionary statements. NTIC wishes to caution readers not to place undue reliance on any forward-looking statement that speaks only as of the date made and to recognize that forward-looking statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results due to the uncertainties and factors described above and others that NTIC may consider immaterial or does not anticipate at this time. Although NTIC believes that the expectations reflected in its forward-looking statements are reasonable, NTIC does not know whether its expectations will prove correct. NTIC’s expectations reflected in its forward-looking statements can be affected by inaccurate assumptions NTIC might make or by known or unknown uncertainties and factors, including those described above. The risks and uncertainties described above are not exclusive, and further information concerning NTIC and its business, including factors that potentially could materially affect its financial results or condition, may emerge from time to time. NTIC assumes no obligation to update, amend, or clarify forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements. NTIC advises you, however, to consult any further disclosures NTIC makes on related subjects in its annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K that NTIC files with or furnishes to the Securities and Exchange Commission.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NTIC is exposed to some market risk stemming from changes in foreign currency exchange rates, tariffs, commodity prices and interest rates.

Because the functional currency of NTIC’s foreign operations and investments in its foreign joint ventures is the applicable local currency, NTIC is exposed to foreign currency exchange rate risk arising from transactions in the normal course of business. NTIC’s principal exchange rate exposure is with the Euro, the Japanese Yen, the Indian Rupee, the Chinese Renminbi, the South Korean Won, and the English Pound against the U.S. Dollar. NTIC’s fees for services provided to joint ventures and dividend distributions from these foreign entities are paid in foreign currencies, and, thus, fluctuations in foreign currency exchange rates could result in declines in NTIC’s reported net income. Since NTIC’s investments in its joint ventures are accounted for using the equity method, any changes in foreign currency exchange rates would be reflected as a foreign currency translation adjustment and would not change NTIC’s equity in income from joint ventures reflected in its consolidated statements of operations. NTIC does not hedge against its foreign currency exchange rate risk.

The tariff environment is complex and evolving. NTIC’s business incurred in the three months ended November 30, 2025, and expects to continue to incur throughout fiscal 2026, additional costs as it relates to tariffs. NTIC has taken and will continue to take action to mitigate inflationary pressures caused by tariffs through a combination of targeted price increases, supplier diversification and other strategic sourcing adjustments, cost reductions, and manufacturing optimization. With respect to NTIC China, specifically, the majority of NTIC China’s production and sales are for local consumption; and therefore, NTIC believes NTIC China’s exposure to tariffs, included those imposed by the United States is limited.

Some raw materials used in NTIC’s products are exposed to commodity price changes. The primary commodity price exposures are with a variety of plastic resins.

With respect to interest rate risk, borrowings under the Credit Agreement bear interest at a floating rate, at the option of NTIC, equal to either the CB Floating Rate or the Adjusted SOFR Rate. The term “CB Floating Rate” means the greater of the Prime Rate in the United States or 2.50%. The term “Adjusted SOFR Rate” means the term secured overnight financing rate for either one, three or six months (depending on the interest period selected by NTIC) plus 0.10% per annum. With respect to any borrowings using an Adjusted SOFR Rate, there is an applicable margin of 2.35% applied per annum. There is no applicable margin with respect to borrowings using a CB Floating Rate. The weighted average interest rate was 6.25% for the three months ended November 30, 2025. Borrowings of $9,134,428 were outstanding under the Credit Facility as of November 30, 2025. The two term loans undertaken by NTIC China with China Construction Bank Corporation have annual interest rates of 2.75% and 2.96%, respectively, with interest due monthly. The outstanding balance as of November 30, 2025 for both term loans is a total of USD $2,826,615. In addition, the foreign currency term loan entered into by Natur-Tec India with IDFC FIRST Bank Limited bears interest at a fixed rate of 6.45% per annum. The outstanding balance as of November 30, 2025 for this term loan is USD $506,461.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

NTIC maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to provide reasonable assurance that information required to be disclosed by NTIC in the reports it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to NTIC’s management, including NTIC’s principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. NTIC’s management evaluated, with the participation of its Chief Executive Officer and its Chief Financial Officer, the effectiveness of the design and operation of NTIC’s disclosure controls and procedures as of the end of the period covered in this report. Based on that evaluation, NTIC’s Chief Executive Officer and Chief Financial Officer concluded that NTIC’s disclosure controls and procedures were effective as of the end of such period to provide reasonable assurance that information required to be disclosed in the reports that NTIC files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to NTIC’s management, including NTIC’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in NTIC’s internal control over financial reporting that occurred during the quarter ended November 30, 2025 that has materially affected or is reasonably likely to materially affect NTIC’s internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 13 to NTIC’s consolidated financial statements in Part I. Item 1. Financial Statements of this report.

ITEM 1A. RISK FACTORS

This Item 1A. is inapplicable to NTIC as a smaller reporting company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Equity Securities

During the three months ended November 30, 2025, NTIC did not issue any shares of its common stock or other equity securities of NTIC that were not registered under the Securities Act of 1933, as amended.

Issuer Purchases of Equity Securities

The following table shows NTIC’s first quarter of fiscal 2025 stock repurchase activity.

Period	Total Number of Shares (or Units) Purchased		Average Price Paid Per Share (or Unit)		Total Number of Shares (or Units) Purchased As Part of Publicly Announced Plans or Programs		Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
September 1, 2025 through September 30, 2025		0	$	0		0		(1)
October 1, 2025 through October 31, 2025		0	$	0		0		(1)
November 1, 2025 through November 30, 2025		0	$	0		0		(1)
Total		0	$	0		0		(1)(2)

_______________________________

(1)

On January 15, 2015, NTIC’s Board of Directors authorized the repurchase of up to $3,000,000 in shares of NTIC common stock through open market purchases or unsolicited or solicited privately negotiated transactions. This program has no expiration date but may be terminated by NTIC’s Board of Directors at any time.

(2)	As of November 30, 2025, up to $2,640,548 in shares of NTIC common stock remained available for repurchase under NTIC’s stock repurchase program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications

During the three months ended November 30, 2025, none of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of SEC Regulation S-K.

ITEM 6. EXHIBITS

The following exhibits are being filed or furnished with this quarterly report on Form 10-Q:

Exhibit No.		Description

31.1		Certification of President and Chief Executive Officer pursuant to SEC Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

31.2		Certification of Chief Financial Officer pursuant to SEC Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

32.1		Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

101		The following materials from NTIC’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2025, formatted in Inline XBRL (Extensible Business Reporting Language): (i) the unaudited Consolidated Balance Sheets, (ii) the unaudited Consolidated Statements of Operations, (iii) the unaudited Consolidated Statements of Comprehensive Loss, (iv) the unaudited Consolidated Statements of Equity, (v) the unaudited Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements (filed herewith)

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION


	/s/ Matthew C. Wolsfeld
Date: January 8, 2026	Matthew C. Wolsfeld, CPA
	Chief Financial Officer
	(Principal Financial and Accounting Officer and
	Duly Authorized to Sign on Behalf of the Registrant)

NORTHERN TECHNOLOGIES INTERNATIONAL CORP 10-Q