NORTHERN TECHNOLOGIES INTERNATIONAL CORP

Previous wording

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, electronics, electrical, mechanical, military, 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.

Current wording

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.

Previous wording

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 oil and gas industry. 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.

Current wording

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.

Previous wording

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 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), 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).

Current wording

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).

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.

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. 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.

Previous wording

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

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.

Previous wording

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.

Current wording

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.

Previous 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:

Current wording

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:

Previous wording

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

Current wording

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

Previous 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.

Current wording

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.

Previous 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:

Current wording

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

Previous 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.

Current wording

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.

Previous 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:

Current wording

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

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

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 $24,096,958 and $23,465,685 as of May 31, 2025 and August 31, 2024, 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.

Current wording

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.

Previous 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.

Current wording

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.

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 nine months ended May 31, 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 months ended November 30, 2025 compared to the same period in fiscal 2025.

Previous 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.

Current wording

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.

Previous wording

Credit Agreement with JPMorgan Chase Bank, N.A. On January 6, 2023, NTIC entered into a Credit Agreement (the Credit Agreement) with JPMorgan Chase Bank, N.A. (JPM), which provided NTIC with a senior secured revolving line of credit (the Credit Facility) of up to $10.0 million, and replaced NTIC’s prior loan agreement. The Credit Facility included a $5.0 million sublimit for standby letters of credit.

Current wording

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.

Previous 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.

Current wording

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.

Previous wording

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 January 5, 2026 maturity date, unless the Credit Facility is extended or renewed or terminated earlier. It is anticipated that the Credit Facility will be renewed each year for one additional year for the immediate foreseeable future.

Current wording

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.

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 6.65% and 7.44% for the nine months ended May 31, 2025 and 2024, respectively.

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 2.35% 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.

Previous 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.

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 $1.41 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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.

Previous 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.

Current wording

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.