NORTHERN TECHNOLOGIES INTERNATIONAL CORP

Previous wording

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. 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.

Current wording

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.

Previous wording

Highlights of NTIC’s financial results for the three and six months ended February 28, 2025 include the following, with increases or decreases in each case as compared to the respective prior fiscal year period:

Current wording

Highlights of NTIC’s financial results for the three and nine months ended May 31, 2025 include the following, with increases or decreases in each case as compared to the respective prior fiscal year period:

Previous wording

The following table sets forth NTIC’s results of operations for the three and six months ended February 28, 2025 and February 29, 2024.

Current wording

The following table sets forth NTIC’s results of operations for the three and nine months ended May 31, 2025 and 2024.

Previous wording

Net Sales. NTIC’s consolidated net sales decreased 8.5% and 1.5% to $19,072,066 and $40,410,459 during the three and six months ended February 28, 2025, respectively, compared to the three and six months ended February 29, 2024. These decreases were primarily due to decreased sales and demand for ZERUST® products, partially offset by an increase in sales of Natur-Tec® products during the six months ended February 28, 2025.

Current wording

Net Sales. NTIC’s consolidated net sales increased 4.0% and 0.3% to $21,508,563 and $61,919,022 during the three and nine months ended May 31, 2025, respectively, compared to the three and nine months ended May 31, 2024. The increase for the three-month comparison was primarily due to increased sales and demand for ZERUST® products. The increase for the nine-month comparison was primarily due to increased sales and demand for Natur-Tec® products, partially offset by decreased sales of ZERUST® products.

Previous wording

The following table sets forth NTIC’s net sales by product segment for the three and six months ended February 28, 2025 and February 29, 2024:

Current wording

The following table sets forth NTIC’s net sales by product segment for the three and nine months ended May 31, 2025 and 2024:

Previous wording

During the three and six months ended February 28, 2025, 74.0% and 73.2% of NTIC’s consolidated net sales, respectively, were derived from sales of ZERUST® products and services, which decreased 7.3% and 3.4% to $14,112,017 and $29,587,820, respectively, compared to $15,218,095 and $30,623,840 during the three and six months ended February 29, 2024, respectively. These decreases were primarily a result of decreased demand for ZERUST® oil and gas products, and to a lesser extent, ZERUST® industrial products.

Current wording

During the three and nine months ended May 31, 2025, 73.1% and 73.2% of NTIC’s consolidated net sales, respectively, were derived from sales of ZERUST® products and services. Sales of ZERUST® products and services increased 6.0% to $15,728,637 compared to $14,837,235 during the three months ended May 31, 2024 and decreased slightly to $45,361,457, compared to $45,461,075 during the nine months ended May 31, 2024. The increase for the three-month comparison was primarily due to increased demand for ZERUST® industrial products, and was partially offset by decreased demand for ZERUST® oil and gas products.

Previous wording

The following table sets forth NTIC’s net sales of ZERUST® products for the three and six months ended February 28, 2025 and February 29, 2024:

Current wording

The following table sets forth NTIC’s net sales of ZERUST® products for the three and nine months ended May 31, 2025 and 2024:

Previous wording

ZERUST® industrial net sales decreased 3.7% and 1.6% during the three and six months ended February 28, 2025, respectively compared to the same prior fiscal year periods, primarily due to decreased 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.

Current wording

ZERUST® industrial net sales increased 7.1% and 1.3% during the three and nine months ended May 31, 2025, respectively, compared to the respective prior fiscal year periods, 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.

Previous wording

ZERUST® oil and gas net sales decreased 28.5% and 16.5% during the three and six months ended February 28, 2025, respectively, compared to the same prior fiscal year periods primarily due to decreased demand. 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.

Current wording

ZERUST® oil and gas net sales decreased 5.3% and 13.5% during the three and nine months ended May 31, 2025, respectively, compared to the respective prior fiscal year periods primarily due to decreased demand. 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.

Previous wording

During the three and six months ended February 28, 2025, 26.0% and 26.8% of NTIC’s consolidated net sales, respectively, were derived from sales of Natur-Tec® products, compared to 27.0% and 25.4% during the three and six months ended February 29, 2024, respectively. Sales of Natur-Tec® products decreased 11.8% to $4,960,049 during the three months ended February 28, 2025 compared to $5,624,443 during the three months ended February 29, 2024. Sales of Natur-Tec® products increased 4.1% to $10,822,639 during the six months ended February 28, 2025 compared to $10,400,373 during the six months ended February 29, 2024. The decrease for the three-month comparison was primarily due to a combination of timing and seasonal variations in demand in Asia, and a temporary reduction in shipments to a major resin customer due to onetime tooling changes. The increase for the six-month comparison was primarily due to higher demand for apparel packaging from major brands in India, and the launch of new customer applications. 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.

Current wording

During the three and nine months ended May 31, 2025, 26.9% and 26.8% of NTIC’s consolidated net sales, respectively, were derived from sales of Natur-Tec® products, compared to 28.3% and 26.3% during the three and nine months ended May 31, 2024, respectively. Sales of Natur-Tec® products decreased 1.2% to $5,779,926 during the three months ended May 31, 2025 compared to $5,848,962 during the three months ended May 31, 2024. Sales of Natur-Tec® products increased 2.2% to $16,602,565 during the nine months ended May 31, 2025 compared to $16,249,335 during the nine months ended May 31, 2024. The decrease for the three-month comparison was primarily due to a combination of timing and seasonal variations in demand in Asia, and a temporary reduction in shipments to a major resin customer due to one-time tooling changes. The increase for the nine-month comparison was primarily due to higher demand for apparel packaging from major brands in India, and the launch of new customer applications. 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.

Previous wording

Cost of Goods Sold. Cost of goods sold decreased 1.8% and increased 0.4% for the three and six months ended February 28, 2025, respectively, compared to the three and six months ended February 29, 2024 primarily as a result of the fluctuations in corresponding sales. Cost of goods sold as a percentage of net sales increased to 64.4% and 63.0% for the three and six months ended February 28, 2025, respectively, compared to 60.0% and 61.8% for the three and six months ended February 29, 2024, respectively, primarily due to higher raw material prices overall.

Current wording

Cost of Goods Sold. Cost of goods sold increased 3.6% and 1.5% for the three and nine months ended May 31, 2025, respectively, compared to the three and nine months ended May 31, 2024 primarily due to the fluctuations in corresponding sales. Cost of goods sold as a percentage of net sales was 61.6% and 62.5% for the three and nine months ended May 31, 2025, respectively, compared to 61.8% during each of the three and nine months ended May 31, 2024, respectively. The slight decrease for the three-month comparison was primarily due to the corresponding change in sales. The increase for the nine-month comparison was primarily due to slightly higher raw material prices and discounts on selling prices during the nine months ended May 31, 2025.

Previous wording

Equity in Income from Joint Ventures. NTIC’s equity in income from joint ventures decreased 47.3% and 23.2% to $620,730 and $1,750,323 during the three and six months ended February 28, 2025, respectively, compared to $1,177,990 and $2,280,231 during the three and six months ended February 29, 2024, respectively. NTIC’s equity in income from joint ventures fluctuates based on the net sales and profitability of its joint ventures during the respective periods. Of the total equity in income from joint ventures, NTIC had equity in income from joint ventures of $892,001 attributable to EXCOR during the six months ended February 28, 2025, compared to $1,204,335 attributable to EXCOR during the six months ended February 29, 2024. This decrease was due to a decrease in net sales by EXCOR compared to the same prior year fiscal period. NTIC had equity in income from all other joint ventures of $858,322 during the six months ended February 28, 2025, compared to $1,075,896 during the six months ended February 29, 2024.

Current wording

Equity in Income from Joint Ventures. NTIC’s equity in income from joint ventures decreased 30.5% and 26.0% to $970,314 and $2,720,637 during the three and nine months ended May 31, 2025, respectively, compared to $1,396,731 and $3,676,962 during the three and nine months ended May 31, 2024, respectively. NTIC’s equity in income from joint ventures fluctuates based on the net sales and profitability of its joint ventures during the respective periods. Of the total equity in income from joint ventures, NTIC had equity in income from joint ventures of $1,340,674 attributable to EXCOR during the nine months ended May 31, 2025, compared to $2,015,734 attributable to EXCOR during the nine months ended May 31, 2024. This decrease was primarily due to a decrease in net sales by EXCOR compared to the same prior year fiscal period. NTIC had equity in income from all other joint ventures of $1,379,963 during the nine months ended May 31, 2025, compared to $1,661,227 during the nine months ended May 31, 2024.

Previous wording

Fees for Services Provided to Joint Ventures. NTIC recognized fee income for services provided to joint ventures of $1,070,263 and $2,354,382 during the three and six months ended February 28, 2025, respectively, compared to $1,303,059 and $2,552,017 during the three and six months ended February 29, 2024, respectively, representing decreases of 17.9% and 7.7%, respectively. 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 and six months ended February 28, 2025, specifically EXCOR. Net sales at the joint ventures decreased 15.7% and 7.2% to $19,799,875 and $43,636,885 during the three and six months ended February 28, 2025, respectively, compared to $23,479,980 and $47,040,641 during the three and six months ended February 29, 2024, respectively. These decreases were primarily a result of decreased demand during the current fiscal year periods at NTIC’s joint venture in Germany primarily, as described above. 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 $408,056 were attributable to EXCOR during the six months ended February 28, 2025, compared to fees of $412,383 attributable to EXCOR during the six months ended February 29, 2024.

Current wording

Fees for Services Provided to Joint Ventures. NTIC recognized fee income for services provided to joint ventures of $1,302,598 and $3,656,980 during the three and nine months ended May 31, 2025, respectively, compared to $1,212,497 and $3,764,514 during the three and nine months ended May 31, 2024, respectively, representing an increase of 7.4% and a decrease of 2.9%, respectively. 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 and nine months ended May 31, 2025, specifically EXCOR. Net sales at the joint ventures decreased 9.3% and 8.0% to $23,211,613 and $66,848,498 during the three and nine months ended May 31, 2025, respectively, compared to $25,602,072 and $72,642,714 during the three and nine months ended May 31, 2024, respectively. These decreases were primarily due to decreased demand during the current fiscal year periods 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 $626,999 were attributable to EXCOR during the nine months ended May 31, 2025, compared to fees of $618,236 attributable to EXCOR during the nine months ended May 31, 2024.

Previous wording

Selling Expenses. NTIC’s selling expenses decreased 6.4% during the three months ended February 28, 2025 compared to the same prior fiscal year period and increased 4.1% during the six months ended February 28, 2025 compared to the same prior fiscal year period. The decrease for the three-month comparison was due primarily to cost savings initiatives put in place in North America and at various subsidiaries. The increase for the six-month comparison was due primarily to increased personnel expense in the current fiscal year period as a result of an expansion in the ZERUST® oil and gas sales team. As a percentage of net sales, selling expenses increased to 20.3% and 20.1% for the three and six months ended February 28, 2025, respectively, from 19.7% and 19.1% for the three and six months ended February 29, 2024, respectively, due primarily to decreased net sales, as described above.

Current wording

Selling Expenses. NTIC’s selling expenses increased 3.4% and 3.8% during the three and nine months ended May 31, 2025 compared to the respective prior fiscal year periods. The increases were primarily due to increased personnel expense in the current fiscal year periods as a result of an expansion in the ZERUST® oil and gas sales team. As a percentage of net sales, selling expenses were 20.3% and 20.2% for the three and nine months ended May 31, 2025, respectively, compared to 20.5% and 19.5% for the three and nine months ended May 31, 2024, respectively.

Previous wording

General and Administrative Expenses. NTIC’s general and administrative expenses increased 13.0% and 11.3% for the three and six months ended February 28, 2025, respectively, compared to the same respective periods in fiscal 2024 due primarily to increased professional services and travel and personnel expenses during the current fiscal year periods compared to the same prior fiscal year periods. As a percentage of net sales, general and administrative expenses increased to 19.2% and 18.6% for the three and six months ended February 28, 2025, respectively, from 15.5% and 16.5% for the same respective periods in fiscal 2024 primarily due to increased general and administrative expenses and decreased net sales, as described above.

Current wording

General and Administrative Expenses. NTIC’s general and administrative expenses increased 18.6% and 13.8% for the three and nine months ended May 31, 2025, respectively, compared to the same respective periods in fiscal 2024 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 periods compared to the respective prior fiscal year periods. As a percentage of net sales, general and administrative expenses increased to 19.3% and 18.8% for the three and nine months ended May 31, 2025, respectively, from 16.9% and 16.6% for the same respective periods in fiscal 2024 primarily due to increased general and administrative expenses as described above.

Previous wording

Research and Development Expenses. NTIC’s research and development expenses increased 3.8% and 12.1% for the three and six months ended February 28, 2025, respectively, compared to the same respective periods in fiscal 2024 primarily due to continued investment in new product development. As these initiatives transition into commercialization, the costs will shift from research and development expenses to selling expenses, reflecting our advancement toward bringing these innovations to market.

Current wording

Research and Development Expenses. NTIC’s research and development expenses decreased 8.6% and increased 4.9% for the three and nine months ended May 31, 2025, respectively, compared to the same respective periods in fiscal 2024. These changes were primarily due to continued investment in new product development in the first and second quarters of fiscal 2025, which did not continue into the third quarter of fiscal 2025 since the new product initiatives transitioned into commercialization in the third quarter of fiscal 2025 and the costs began to shift from research and development expenses to selling expenses, reflecting our advancement toward bringing these innovations to market.

Previous wording

Interest Income. NTIC’s interest income increased to $210,156 and $235,723 during the three and six months ended February 28, 2025, respectively, compared to $29,210 and $75,652 during the three and six months ended February 29, 2024, respectively, primarily due to $181,529 in interest income earned on delayed IRS payments related to Employee Retention Credit (ERC) claims, as described in Note 16 to NTIC’s consolidated financial statements, and changes in the invested cash balances and rate of return at various subsidiaries.

Current wording

Interest Income. NTIC’s interest income increased to $37,821 and $273,544 during the three and nine months ended May 31, 2025, respectively, compared to $23,744 and $99,396 during the three and nine months ended May 31, 2024, respectively. These increases were primarily due to $181,529 in interest income earned on a delayed IRS payment related to Employee Retention Credit (ERC) claims recognized in the second quarter of fiscal 2025, as described in Note 16 to NTIC’s consolidated financial statements, and changes in the invested cash balances and rate of return at various subsidiaries.

Previous wording

Interest Expense. NTIC’s interest expense increased to $139,155 and $259,375 during the three and six months ended February 28, 2025, respectively, compared to $77,758 and $188,896 during the three and six months ended February 29, 2024, respectively, due primarily to increased average outstanding borrowings during the current fiscal year periods.

Current wording

Interest Expense. NTIC’s interest expense increased to $162,096 and $421,471 during the three and nine months ended May 31, 2025, respectively, compared to $59,939 and $248,835 during the three and nine months ended May 31, 2024, respectively, primarily due to increased average outstanding borrowings during the current fiscal year periods.

Previous wording

Other Income. NTIC recognized $1,139,756 in other income during the three and six months ended February 28, 2025 due to the receipt of an ERC payment. No other income was recognized during the prior year periods. The ERC income was recognized upon receipt of a cash payment in accordance with applicable accounting guidance and was claimed under the suspension test criteria, as described in Note 16 to NTIC’s consolidated financial statements. The ERC payment is a one-time event and does not represent recurring operational revenue.

Current wording

Other Income. NTIC recognized $1,139,756 in other income during the nine months ended May 31, 2025 due to the receipt of an ERC payment. No other income was recognized during the three months ended May 31, 2025 or during the prior year periods. The ERC income was recognized upon receipt of a cash payment in accordance with applicable accounting guidance and was claimed under the suspension test criteria, as described in Note 16 to NTIC’s consolidated financial statements. The ERC payment is a one-time event and does not represent recurring operational revenue.

Previous wording

Income Before Income Tax Expense. NTIC had income before income tax expense of $877,824 and $1,889,842 for the three and six months ended February 28, 2025, respectively, compared to $2,157,723 and $3,469,460 for the three and six months ended February 29, 2024, respectively.

Current wording

Income Before Income Tax Expense. NTIC had income before income tax expense of $742,912 and $2,632,754 for the three and nine months ended May 31, 2025, respectively, compared to $1,487,722 and $4,957,182 for the three and nine months ended May 31, 2024, respectively.

Previous wording

Income Tax Expense. Income tax expense was $275,197 and $493,068 for the three and six months ended February 28, 2025, respectively, compared to $289,195 and $515,991 during the three and six months ended February 29, 2024, respectively. Income tax expense was calculated based on management’s estimate of NTIC’s annual effective income tax rate.

Current wording

Income Tax Expense. Income tax expense was $410,461 and $903,529 for the three and nine months ended May 31, 2025, respectively, compared to $332,400 and $848,391 during the three and nine months ended May 31, 2024, respectively. Income tax expense was calculated based on management’s estimate of NTIC’s annual effective income tax rate.

Previous wording

Net Income Attributable to NTIC. Net income attributable to NTIC decreased to $434,319, or $0.04 per diluted common share, for the three months ended February 28, 2025, compared to $1,701,169, or $0.17 per diluted common share, for the three months ended February 29, 2024. Net income attributable to NTIC decreased to $995,410, or $0.10 per diluted common share, for the six months ended February 28, 2025, compared to $2,596,690, or $0.27 per diluted common share, for the six months ended February 29, 2024. These decreases were primarily due to the decrease in gross profit as a result of a decrease in sales and decreases in income from our joint venture operations, partially offset by the one-time ERC payment.

Current wording

Net Income Attributable to NTIC. Net income attributable to NTIC decreased to $121,775, or $0.01 per diluted common share, for the three months ended May 31, 2025, compared to $976,604, or $0.10 per diluted common share, for the three months ended May 31, 2024. Net income attributable to NTIC decreased to $1,117,185, or $0.12 per diluted common share, for the nine months ended May 31, 2025, compared to 3,573,294, or $0.36 per diluted common share, for the nine months ended May 31, 2024. These decreases were primarily due to the increases in operating expenses and decreases in income from our joint venture operations, and were partially offset by the one-time ERC payment.

Previous wording

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 and six months ended February 28, 2025 compared to the same respective periods in fiscal 2024.

Current wording

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 and nine months ended May 31, 2025 compared to the same respective periods in fiscal 2024.

Previous wording

Sources of Cash and Working Capital. NTIC’s working capital, defined as current assets less current liabilities, was $21,416,426 as of February 28, 2025, including $5,090,630 in cash and cash equivalents, $5,354,664 outstanding under NTIC’s line of credit, and $2,746,121 outstanding under NTIC China’s term loans, compared to $23,682,276 as of August 31, 2024, including $4,952,184 in cash and cash equivalents, $4,291,608 outstanding under NTIC’s line of credit, and $2,820,835 outstanding under NTIC China’s term loans.

Current wording

Sources of Cash and Working Capital. NTIC’s working capital, defined as current assets less current liabilities, was $21,661,715 as of May 31, 2025, including $6,773,401 in cash and cash equivalents, $7,369,949 outstanding under NTIC’s line of credit, and $2,778,125 outstanding under NTIC China’s term loans, compared to $23,682,276 as of August 31, 2024, including $4,952,184 in cash and cash equivalents, $4,291,608 outstanding under NTIC’s line of credit, and $2,820,835 outstanding under NTIC China’s term loans.

Previous wording

On January 6, 2025, the Company and JPM entered into an amendment to the Credit Agreement to extend the maturity date of the Credit Facility from January 6, 2025 to January 5, 2026, reduce the availability under the Credit Facility from $10.0 million to $8.0 million, and increase the applicable margin for Adjusted SOFR Rate (as defined below) advances from 2.15% to 2.35%. All other material terms of the Credit Facility and the Credit Agreement remain the same.

Current wording

On January 6, 2025, NTIC and JPM entered into an amendment to the Credit Agreement to extend the maturity date of the Credit Facility from January 6, 2025 to January 5, 2026, reduce the availability under the Credit Facility from $10.0 million to $8.0 million, and increase the applicable margin for Adjusted SOFR Rate (as defined below) advances from 2.15% to 2.35%. On July 8, 2025, NTIC and JPM entered into an amendment to the Credit Agreement to increase the availability under the Credit Facility from $8.0 million to $10.0 million. All other material terms of the Credit Facility and the Credit Agreement remain the same.

Previous wording

Borrowings of $5,354,664 were outstanding under the Credit Facility as of February 28, 2025. The Company was in compliance with all covenants under the Credit Agreement as of February 28, 2025.

Current wording

Borrowings of $7,369,949 were outstanding under the Credit Facility as of May 31, 2025. NTIC was in compliance with all covenants under the Credit Agreement as of May 31, 2025.

Previous wording

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 2.15% applied per annum. There is no applicable margin with respect to borrowings using a CB Floating Rate. The weighted average interest rate was 6.76% and 7.44% for the six months ended February 28, 2025 and February 29, 2024.

Current wording

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 2.15% applied per annum. There is no applicable margin with respect to borrowings using a CB Floating Rate. The weighted average interest rate was 6.65% and 7.44% for the nine months ended May 31, 2025 and 2024, respectively.

Previous wording

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

Current wording

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.

Previous wording

Other Credit Arrangements. On each of April 10, 2023 and May 30, 2023, the Company’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 $1.45 million). The term loans mature in April 2025 and June 2025, respectively, unless extended. Both term loans have an annual interest rate of 3.25% 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 February 28, 2025. The current outstanding balance as of February 28, 2025 for both term loans is a total of USD $2,746,121.

Current wording

*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 $1.39 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. NTIC was in compliance with the covenants as of May 31, 2025. The outstanding balance for both term loans was USD $2,778,125 as of May 31, 2025 and USD $2,820,835 as of August 31, 2024.

Previous wording

Uses of Cash and Cash Flow. Net cash provided by operating activities during the six months ended February 28, 2025 was $3,198,741, which resulted principally from changes in assets and liabilities and NTIC’s net income, dividends received from joint ventures, depreciation and amortization expense, and stock-based compensation, partially offset by equity in income from joint ventures. Net cash provided by operating activities during the six months ended February 29, 2024 was $5,643,007, which resulted principally from changes in assets and liabilities and NTIC’s net income, dividends received from joint ventures, dividend receivables from joint ventures, depreciation and amortization expense, and stock-based compensation, partially offset by equity in income from joint ventures.

Current wording

Uses of Cash and Cash Flow. Net cash provided by operating activities during the nine months ended May 31, 2025 was $3,808,450, which resulted principally from NTIC’s net income, trade receivables, dividends received from joint ventures, and stock-based compensation, and was partially offset by equity in income from joint ventures. Net cash provided by operating activities during the nine months ended May 31, 2024 was $7,583,905, which resulted principally from NTIC’s net income, dividends received from joint ventures, dividend receivables from joint ventures, depreciation and amortization expense, and stock-based compensation, and was partially offset by equity in income from joint ventures.

Previous wording

NTIC experienced a decrease in trade receivables as of February 28, 2025, compared to August 31, 2024. Trade receivables as of February 28, 2025, decreased $3,768,524 compared to August 31, 2024, primarily related to timing differences of sales.

Current wording

NTIC experienced a decrease in trade receivables as of May 31, 2025, compared to August 31, 2024. Trade receivables, excluding joint ventures as of May 31, 2025 decreased $2,575,562, compared to August 31, 2024, primarily related to timing differences of sales.

Previous wording

Outstanding trade receivables decreased an average of 3 days to an average of 72 days from balances outstanding from these customers as of February 28, 2025 from an average of 75 days as of August 31, 2024.

Current wording

Outstanding trade receivables decreased an average of 4 days to an average of 71 days from balances outstanding from these customers as of May 31, 2025 from an average of 75 days as of August 31, 2024.

Previous wording

Outstanding receivables for services provided to joint ventures as of February 28, 2025 decreased $277,796 compared to August 31, 2024, and the average days to pay increased an average of 4 days to an average of 80 days from an average of 76 days as of August 31, 2024.

Current wording

Outstanding receivables for services provided to joint ventures as of May 31, 2025 decreased $121,670 compared to August 31, 2024, and the average days to pay increased an average of 3 days to an average of 79 days from an average of 76 days as of August 31, 2024.

Previous wording

Net cash used in investing activities for the six months ended February 28, 2025 was $2,580,757, which was primarily the result of investments in intangibles and purchases of property and equipment. Net cash used in investing activities for the six months ended February 29, 2024 was $1,505,927, which was primarily the result of the purchases of property and equipment and investments in patents.

Current wording

Net cash used in investing activities for the nine months ended May 31, 2025 was $3,378,123, which was primarily the result of the investments in intangible assets and purchases of property and equipment. Net cash used in investing activities for the nine months ended May 31, 2024 was $2,601,176, which was primarily the result of the purchases of property and equipment and investments in patents.

Previous wording

Net used in financing activities for the six months ended February 28, 2025 was $320,345, which resulted from 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 used in financing activities for the six months ended February 29, 2024 was $4,762,201, which resulted from dividends paid to shareholders, the repayment of borrowings under the line of credit, and dividends received by non-controlling interests, partially offset by proceeds from NTIC’s employee stock purchase plan.

Current wording

Net cash provided by financing activities for the nine months ended May 31, 2025 was $1,459,221, which resulted from net payments under the line of credit and proceeds from NTIC’s employee stock purchase plan, and was partially offset by dividends paid to shareholders and dividends received by non-controlling interest. Net cash used in financing activities for the nine months ended May 31, 2024 was $4,587,474, which resulted from dividends paid to shareholders, the repayment of borrowings under the line of credit, and dividends received by non-controlling interest, and was partially offset by proceeds from NTIC’s employee stock purchase plan.

Previous wording

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 February 28, 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 six months ended February 28, 2025.

Current wording

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 May 31, 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 nine months ended May 31, 2025.

Previous wording

Cash Dividends. During the six months ended February 28, 2025, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to the following holders of NTIC’s common stock:

Current wording

Cash Dividends. During the nine months ended May 31, 2025, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to the following holders of NTIC’s common stock:

Previous wording

During the six months ended February 29, 2024, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to the following holders of NTIC’s common stock:

Current wording

During the nine months ended May 31, 2024, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to the following holders of NTIC’s common stock:

Previous wording

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 financing agreements, business conditions, and other factors. On April 10, 2025, NTIC announced that it has determined to temporarily adjust its quarterly dividend to $0.01 per share effective with its fiscal 2025 third quarter dividend in light of the current global environment.

Current wording

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 financing agreements, business conditions, and other factors. On April 10, 2025, NTIC announced that it had determined to temporarily adjust its quarterly dividend to $0.01 per share effective with its fiscal 2025 third quarter dividend in light of the current global environment.

Previous wording

Capital Expenditures and Commitments. NTIC spent $2,600,757 on capital expenditures during the six months ended February 28, 2025, which related primarily to facility improvements to the warehouse facility NTIC purchased during fiscal 2023 and the installation of a new Enterprise Resource Planning (ERP) software system and associated equipment. NTIC expects to spend an aggregate of approximately $600,000 to $800,000 on capital expenditures during the remainder of fiscal 2025, which it expects will relate primarily to final implementation of the ERP software and the purchase of new equipment and facility improvements.

Current wording

Capital Expenditures and Commitments. NTIC spent $3,398,123 on capital expenditures during the nine months ended May 31, 2025, which related primarily to facility improvements to the warehouse facility NTIC purchased during fiscal 2023 and the installation of a new Enterprise Resource Planning (ERP) software system and associated equipment. NTIC expects to spend an aggregate of approximately $200,000 to $300,000 on capital expenditures during the remainder of fiscal 2025, which it expects will relate primarily to final implementation of the ERP software and the purchase of new equipment and facility improvements.