Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

– Northern Technologies International Corporation and Subsidiaries (the Company) develop and market proprietary environmentally beneficial products and services in over 60 countries either directly or via a network of joint ventures, independent distributors and agents. The Company’s primary business is corrosion prevention marketed mainly under the ZERUST

brand. The Company has been selling its proprietary ZERUST

rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets for over 40 years, and more recently, has targeted and expanded into the oil and gas industry. The Company also sells a portfolio of biobased and certified compostable (fully biodegradable) polymer resin compounds and finished products under the Natur-Tec

brand. These products are intended to reduce the Company’s customers’ carbon footprint and provide environmentally sound disposal options. The Company’s two operating segments are ZERUST and Nature-Tec.

The Company participates, either directly or indirectly, in 19 active joint venture arrangements in North America, Europe and Asia. Each of these joint ventures generally manufactures and markets products in the geographic territory to which it is assigned. While most of the Company’s joint ventures exclusively sell rust and corrosion inhibiting products, some of the joint ventures also sell the Company’s Natur-Tec

resin compounds and finished products. The profits of joint ventures are shared by the respective joint venture owners in accordance with their respective ownership percentages. The Company typically owns 50% or less of its joint venture entities and does not control the decisions of these entities, including dividend declaration or amount in any given year.

The Company has evaluated events occurring after the date of the consolidated financial statements for events requiring recording or disclosure in the financial statements.

Principles of Consolidation

- NTIC evaluates its voting and variable interests in entities on a qualitative and quantitative basis. NTIC consolidates entities in which it concludes it has the power to direct the activities that most significantly impact an entity’s economic success and has the obligation to absorb losses or the right to receive benefits that could be significant to the entity. The consolidated financial statements include the accounts of Northern Technologies International Corporation, its wholly-owned subsidiaries, Northern Technologies Holding Company, LLC, NTIC (Shanghai) Co., Ltd. (NTIC China), Natur-Tec India Private Limited (Natur-Tec India), and ZERUST-EXCOR MEXICO, S. de R.L. de C.V (Zerust Mexico), NTIC’s majority-owned subsidiary in Brazil, Zerust Prevenção de Corrosão S.A. (Zerust Brazil) and NTIC’s majority-owned holding company, NTI Asean LLC (NTI Asean). NTIC’s consolidated financial statements do not include the accounts of any of its joint ventures.

Non-Controlling Interests

– The Company owns 85% of Zerust Brazil, 60% of NTI Asean, and 90% of Natur-Tec India. The remaining ownership is accounted for as non-controlling interests and reported as part of equity in the consolidated financial statements. The Company allocates gains and losses to the non-controlling interest even when such allocation might result in a deficit balance, reducing the losses attributed to the controlling interest, changes in ownership interests are treated as equity transactions if the Company maintains control.

Net Sales

–The Company includes net sales to its joint ventures and net sales to unaffiliated customers as separate line items on its consolidated statements of operations. There are no sales originating from the Company’s joint ventures included in the amount, as the Company’s investments in its joint ventures are accounted for using the equity method.

Revenue Recognition

– The Company recognizes revenue from the sale of its products when persuasive evidence of an arrangement exists, the product has been delivered, the price is fixed and determinable and collection of the resulting receivable is reasonably assured. These criteria are met when risk of loss and title pass to the customer, distributor or joint venture entity. Sales and use taxes charged to customers are reported on a net basis.

Trade Receivable

– Payment terms for the Company’s unaffiliated customers are determined based on credit risk and vary by customer. The Company typically offers standard payment terms to unaffiliated customers of net 30 days. The Company does not accrue interest on past due accounts receivable. The Company reviews the credit histories of its customers before extending unsecured credit. The Company presents accounts and notes receivable, net of an allowance for doubtful accounts. Each quarter, the Company prepares an analysis of its ability to collect outstanding receivables that provides a basis for an allowance estimate for doubtful accounts. In doing so, the Company evaluates the age of its receivables, past collection history, current financial conditions of key customers and its joint ventures, and economic conditions. Based on this evaluation, the Company establishes a reserve for specific accounts and notes receivable that it believes are uncollectible, as well as an estimate of uncollectible receivables not specifically known. The Company believes that an analysis of historical trends and its current knowledge of potential collection problems provide the Company with sufficient information to establish a reasonable estimate for an allowance for doubtful accounts. In the event the Company determines that a smaller or larger uncollectible accounts reserve is appropriate, the Company records a credit or charge to selling expense in the period that it made such determination. Accounts receivable have been reduced by an allowance for uncollectible accounts of $40,000 at August 31, 2016 and 2015. Accounts are considered past due based on terms agreed upon between the Company and the customer. Accounts receivable are written-off only after all collection attempts have failed and are based on individual credit evaluation and specific circumstances of the customer.

Trade Receivables from Joint Ventures

– Trade receivables from joint ventures arise from sales of products the Company makes to its joint ventures. Payment terms for the Company’s joint ventures also are determined based on credit risk; however, additional consideration also is given to the individual joint venture due to the transportation time associated with ocean delivery of most products and certain other factors. Generally, accounts receivable from the Company’s joint ventures unpaid after 90 days are considered past due. The Company does not accrue interest on past due balances. The Company periodically reviews amounts due from its joint ventures for collectability, and based on past experience and continuous review of the balances due, determined an allowance for doubtful accounts related to its joint venture receivables is not necessary at August 31, 2016 or 2015.

Fees for Services Provided to Joint Ventures –

The Company provides services to its joint ventures including consulting, legal, travel, insurance, technical and marketing services. The Company receives fees for the services it provides to its joint ventures. The fees for services received by the Company from its joint ventures are generally based on either a flat fee or a percentage of net sales by the Company’s joint ventures depending on local laws and tax regulations. The Company recognizes revenues related to fees for services provided to its joint ventures when earned, amounts are determinable and collectability is reasonably assured. Under the Company’s agreements with its joint ventures, amounts are earned when product is shipped from joint venture facilities. The Company reviews the financial situation of each of its joint ventures to assist in the likelihood of collections on amounts earned. The Company accounts for these fees on a cash basis if uncertainty exists surrounding the collection of such fees.

Cash and Cash Equivalents

- The Company includes as cash and cash equivalents highly liquid, short-term investments with maturity of three months or less when purchased, which are readily convertible into known amounts of cash. The Company maintains its cash in high quality financial institutions. The balances, at times, may exceed federally insured limits.

Available for Sale Securities

– Available for sale securities are recorded at fair value. Unrealized holding gains and losses on available for sale securities are excluded from earnings.

Inventories

- Inventories are recorded at the lower of cost (first-in, first-out basis) or market.

Property and Depreciation

- Property and equipment are stated at cost. Depreciation is computed using the straight-line method based on the estimated service lives of the various assets as follows:

Buildings and improvements (years)		5	-	30
Machinery and equipment (years)		3	-	10

Patents

– Patents, including acquisition costs, are stated at cost, less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the respective assets. Upon retirement, the cost of assets disposed and the related accumulated amortization are removed from the accounts and any resulting gain or loss is credited or charged to operations.

Investments in Joint Ventures

- Investments in the Company’s joint ventures are accounted for using the equity method. Under the equity method, investments are initially recorded at cost and are adjusted for dividends, distributed and undistributed earnings and losses, changes in foreign currency exchange rates and additional investments. In the event the Company’s share of joint venture’s cumulative losses exceeds the Company’s investment balance, the balance is reported at zero value until proportionate income exceeds the losses. The Company assesses its joint ventures for impairment on an annual basis as of August 31 of each year as part of its fiscal year end analysis. In addition to the annual review for impairment, the Company reviews the operating results of each joint venture on a quarterly basis in comparison to its historical operating results and its accrual of fees for services provided to joint ventures. If the operating results of a joint venture do not meet financial performance expectations, an additional evaluation is performed on the joint venture. The Company’s evaluation of its investments in joint ventures requires the Company to make assumptions about future cash flows of its joint ventures. These assumptions require significant judgment and actual results may differ from assumed or estimated amounts. All investments in joint ventures have positive equity as of August 31, 2016 and 2015.

Investment at Carrying Value

– If the Company is no longer able to exercise significant influence over operating and financial policy of a joint venture previously accounted for under the equity method, it maintains the investment at the carrying value as of the date that significant influence no longer exists and discontinues accruing the proportionate earnings or losses of the investment.

Investments are considered to be impaired when a decline in fair value is judged to be other-than-temporary. Fair value is calculated based on publicly available market information or other estimates determined by management. The Company employs a systematic methodology on a quarterly basis that considers available quantitative and qualitative evidence in evaluating potential impairment of our investments. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, credit quality of debt instrument issuers, the duration and extent to which the fair value is less than cost, and for equity securities, the Company’s intent and ability to hold, or plans to sell, the investment. The Company also considers specific adverse conditions related to the financial health of and business outlook for the investee, including industry and sector performance, changes in technology, and operational and financing cash flow factors. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded to other income (expense) and a new cost basis in the investment is established.

Recoverability of Long-Lived Assets

- The Company reviews its long-lived assets whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. The Company determines potential impairment by comparing the carrying value of the assets with expected net cash flows expected to be provided by operating activities of the business or related products. If the sum of the expected undiscounted future net cash flows is less than the carrying value, the Company evaluates if an impairment loss should be recognized. An impairment loss is measured by comparing the amount by which the carrying value exceeds the fair value of the asset.

Income Taxes

- The Company utilizes the liability method of accounting for income taxes which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process whereby the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and those tax positions that meet the more-likely-than-not recognition threshold. The Company recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

Foreign Currency Translation (Accumulated Other Comprehensive Income (Loss))

- The functional currency of NTIC China, Zerust Brazil, Natur-Tec India, Zerust Mexico and each unconsolidated international joint venture is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average monthly exchange rate. Translation gains or losses are reported as an element of other comprehensive income (loss).

The Company (excluding NTIC China, Zerust Brazil, Natur-Tec India, NTI Asean, Zerust Mexico and its joint ventures) conducts all foreign transactions based on the U.S. dollar. Since investments in joint ventures are accounted for using the equity method, any changes in foreign currency exchange rates are reflected as a foreign currency translation adjustment and does not change the equity in income from joint ventures reflected in the Company’s consolidated statements of operations.

Fair Value of Financial Instruments

– The carrying value of cash and cash equivalents, available for sale securities, short-term accounts and notes receivable, notes payable, trade accounts payables, and other accrued expenses approximate fair value because of the short maturity of those instruments.

Shipping and Handling

- The Company records all amounts billed to customers in a sales transaction related to shipping and handling as sales. The Company records costs related to shipping and handling in cost of goods sold.

Research and Development

- The Company expenses all costs related to product research and development as incurred. The costs related to product research and development are the net amount after being reduced by reimbursements related to certain research and development contracts. The Company accrues proceeds received under such contracts and offsets research and development expenses incurred in equal installments over the timelines associated with completion of the contracts’ specific objectives and milestones.

Common Stock

– The Company issues authorized but unissued shares of common stock upon the exercise of stock options, as opposed to treasury shares.

Stock-Based Compensation

– The Company recognizes compensation cost relating to share-based payment transactions, including grants of employee stock options and transactions under the Company’s employee stock purchase plan, in its consolidated financial statements. That cost is measured based on the fair value of the equity or liability instruments issued. The Company measures the cost of employee services received in exchange for stock options and other stock-based awards based on the grant-date fair value of the award, and recognizes the cost over the period the employee is required to provide services for the award (generally the vesting term).

Use of Estimates

- The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Note 2 - Recently Issued Accounting Pronouncements

12 Months Ended

Aug. 31, 2016

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (FASB) issued

Revenue from Contracts with Customers, Topic 606

(Accounting Standards Update (ASU) No. 2014-09), which provides a framework for the recognition of revenue, with the objective that recognized revenues properly reflect amounts an entity is entitled to receive in exchange for goods and services. This guidance, which includes additional disclosure requirements regarding revenue, cash flows and obligations related to contracts with customers, was originally to be effective for the Company beginning in fiscal year 2018. In July 2015, the FASB confirmed a one-year deferral of the effective date of the new revenue standard which also allows early adoption as of the original effective date. The updated guidance will be effective for the Company’s first quarter of 2019. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements, but believes there will be no material impact, if any.

In July 2015, the FASB issued ASU No. 2015-11, “

Inventory

”, which modifies the subsequent measurement of inventories recorded under a first-in-first-out or average cost method. Under the new standard, such inventories are required to be measured at the lower of cost and net realizable value. The new standard is effective for the Company’s fiscal year 2018, with prospective application. The Company does not expect the adoption of the provisions of ASU 2015-11 to have a material impact on its consolidated financial statements.

In November 2015, FASB issued ASU 2015-17,

Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes

which requires that deferred tax assets and liabilities be classified as noncurrent in a classified balance sheet. The amendment takes effect for public entities for fiscal years beginning after December 15, 2017, with early adoption available. The Company adopted ASU 2015-17 as of August 31, 2016, however, there was no material impact on its consolidated financial statements. Prior periods were not retrospectively adjusted.

During February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, “

Leases

.” ASU No. 2016-02 was issued to increase transparency and comparability among organizations by recognizing all lease transactions (with terms in excess of 12 months) on the balance sheet as a lease liability and a right-of-use asset (as defined). ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The Company is currently assessing the effect that ASU No. 2016-02 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, “

Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting

.” Among other things, the amendments in ASU 2016-07 eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Early adoption is permitted. The Company is currently assessing the impact that ASU 2016-07 will have on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09,

Stock Compensation

, which is intended to simplify several aspects of the accounting for share-based payment award transactions. The guidance will be effective for the fiscal year beginning after December 15, 2016, including interim periods within that year. The Company is in the process of evaluating the impacts of the adoption of this ASU.

Although there are several other new accounting pronouncements issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial position or operating results.

Note 4 - Property and Equipment, Net

12 Months Ended

Aug. 31, 2016

Property, Plant and Equipment Disclosure [Text Block]

4. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	August 31, 2016			August 31, 2015
Land	$	310,365		$	310,365
Buildings and improvements		6,528,252			6,180,089
Machinery and equipment		3,590,063			4,090,619
		10,428,680			10,581,073
Less accumulated depreciation		(3,152,808	)		(3,287,910	)
	$	7,275,872		$	7,293,163

Note 5 - Patents and Trademarks, Net

12 Months Ended

Aug. 31, 2016

Intangible Assets Disclosure [Text Block]

5. PATENTS AND TRADEMARKS, NET

Patents and trademarks, net consisted of the following:

	August 31, 2016			August 31, 2015
Patents and trademarks	$	2,575,435		$	2,440,022
Less accumulated amortization		(1,296,838	)		(1,177,803	)
	$	1,278,597		$	1,262,219

Patent and trademark costs are amortized over seven years. Costs incurred related to patents and trademarks are capitalized until filed and approved, at which time the amounts capitalized to date are amortized and any further costs, including maintenance costs, are expensed as incurred. Amortization expense was $119,032 and $87,663 for the years ended August 31, 2016 and 2015, respectively. Amortization expense is estimated to approximate $120,000 in each of the next five fiscal years.

Note 6 - Investments in Joint Ventures

12 Months Ended

Aug. 31, 2016

Equity Method Investments and Joint Ventures Disclosure [Text Block]

6. INVESTMENTS IN JOINT VENTURES

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

Financial information of the Company’s joint venture in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH (EXCOR), and all of the Company’s other joint ventures, are summarized as follows:

	As of August 31, 2016
	Total		EXCOR		All Other
Current assets	$	48,922,924	$	22,928,810	$	25,994,114
Total assets		52,407,026		24,733,340		27,673,686
Current liabilities		12,433,700		3,485,231		8,948,469
Noncurrent liabilities		100,783		—		100,783
Joint ventures’ equity		39,872,543		21,248,109		18,624,434
Northern Technologies International Corporation’s share of joint ventures’ equity		19,840,774		10,624,056		9,216,728
Northern Technologies International Corporation's share of joint ventures’ undistributed earnings		17,779,912	$	10,593,151	$	7,186,761
Northern Technologies International Corporation's dividends received from joint ventures	$	5,503,314	$	4,364,700	$	1,165,614

	Fiscal Year Ended August 31, 2016
	Total		EXCOR		All Other
Net sales	$	90,646,833	$	35,138,214	$	55,508,619
Gross profit		40,440,726		18,635,421		21,805,305
Net income		9,534,771		7,049,462		2,485,309
Northern Technologies International Corporation’s share of equity in income from joint ventures	$	4,743,831	$	3,534,113	$	1,209,718

	As of August 31, 2015
	Total		EXCOR		All Other
Current assets	$	49,295,116	$	22,620,323	$	26,674,793
Total assets		52,853,938		24,606,880		28,247,058
Current liabilities		12,288,383		3,360,142		8,928,241
Noncurrent liabilities		1,215,139		—		1,215,139
Joint ventures’ equity		39,350,417		21,246,738		18,103,679
Northern Technologies International Corporation’s share of joint ventures’ equity		20,544,238		11,571,361		8,972,877
Northern Technologies International Corporation's share of joint ventures’ undistributed earnings		18,483,377		11,540,456		6,942,921
Northern Technologies International Corporation's dividends received from joint ventures	$	2,983,338	$	2,440,200	$	543,138

	Fiscal Year Ended August 31, 2015
	Total		EXCOR		All Other
Net sales	$	99,026,251	$	36,872,664	$	62,153,587
Gross profit		48,397,318		19,993,763		28,403,555
Net income		11,849,107		8,201,659		3,647,448
Northern Technologies International Corporation’s share of equity in income from joint ventures	$	5,936,565	$	4,091,608	$	1,844,957

On January 2, 2015, the Company announced that, effective as of December 31, 2014, the Company terminated its joint venture agreements with its previous joint venture in China, Tianjin Zerust, and began the process of liquidating the joint venture entity. Since December 31, 2014, the Company has conducted business in China through a wholly-owned subsidiary, NTIC (Shanghai) Co. Ltd. As of December 31, 2014, the Company started recognizing Tianjin Zerust based on its carrying value instead of the equity method since the Company no longer expects to significantly affect the joint venture’s operations or decision making. See Note 7.

The Company records expenses that are directly attributable to its joint ventures on its consolidated statements of operations in the line item “Expenses incurred in support of joint ventures.” The expenses include items such as employee compensation and benefit expenses, travel expense and consulting expense. See note 16 regarding ongoing litigation involving Tianjin Zerust.

The Company did not make any joint venture investments during fiscal 2016 or fiscal 2015.

On November 30, 2013, the Company agreed to sell its indirect ownership interest in Mütec GmbH (Mütec), the Company’s former joint venture in Germany which manufactures proprietary electronic sensing instruments. In connection with the transaction, the owner of Mütec borrowed $168,000 from the Company to be repaid over four years with no interest. As of August 31, 2016 and 2015, $92,874 and $125,891 was due to the Company related to this transaction, respectively.

Note 7 - China Operations

12 Months Ended

Aug. 31, 2016

Fair Value Disclosures [Text Block]

7. CHINA OPERATIONS

Effective December 31, 2014, the Company terminated its joint venture agreements with its previous joint venture in China, Tianjin Zerust, began the process of liquidating the joint venture entity, and commenced operations in China through a wholly-owned subsidiary, NTIC (Shanghai) Co. Ltd. on January 1, 2015. Effective December 31, 2014, the Company’s investment in Tianjin Zerust is reported at carrying value based on the Company’s decreased level of influence over the entity, and the Company has reclassified previously unrecognized gains on foreign currency translation from accumulated other comprehensive income. Any declines in the fair value are reflected as adjustments to the carrying value.

Since it began the process of liquidating the joint venture entity on December 31, 2014, the Company has not received any proceeds from the assets of Tianjin Zerust. In addition, the Company has not received financial information or cooperation from its joint venture partner in determining the investment value for the year ended August 31, 2016. During the fourth quarter of fiscal 2016, the Company obtained additional information regarding the financial position of the investment through the legal proceedings that have been ongoing (See Note 16). These circumstances have resulted in the Company concluding an indication of impairment exists and that the fair value of the investment is $0 based on accounting principles generally accepted in the United States of America.

The investment in Tianjin Zerust is as follows:

	Investment
Equity method investment – August 31, 2015	$	2,243,524
Equity in earnings – fiscal year 2016		132,824
Reclassification of translation gains on foreign currency translation		(492,680	)
Recording the impairment of the cost basis investment		(1,883,668	)
Investment at carrying value – August 31, 2016	$	-

See Note 16 regarding ongoing litigation involving Tianjin Zerust.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Note 8 - Corporate Debt	12 Months Ended
Note 8 - Corporate Debt	Aug. 31, 2016
Notes to Financial Statements
Debt Disclosure [Text Block]	8. CORPORATE DEBT The Company has a revolving line of credit with PNC Bank of $3,000,000. No amounts were outstanding under the line of credit as of both August 31, 2016 and 2015. At the option of the Company, outstanding advances under the line of credit bear interest at either (a) an annual rate based on LIBOR plus 2.15% for the applicable LIBOR interest period selected by the Company or (b) at the rate publicly announced by PNC Bank from time to time as its prime rate. The line of credit matures on January 7, 2017. The line of credit is subject to standard covenants, including affirmative financial covenants, such as the maintenance of a minimum fixed charge coverage ratio, and negative covenants, which, among other things, limit the incurrence of additional indebtedness, loans and equity investments, disposition of assets, mergers and consolidations and other matters customarily restricted in such agreements. Under the loan agreement, the Company is subject to a minimum fixed charge coverage ratio of 1.10:1.00. As of August 31, 2016, the Company was in compliance with all debt covenants. The revolving credit facility allows the Company to request that PNC Bank issue letters of credit up to $1,200,000. The Company did not have any letters of credit reserved against the available letters of credit balance as of August 31, 2016 and 2015 with PNC Bank. The availability of advances under the line of credit will be reduced by the face amount of any letter of credit issued and outstanding (whether or not drawn) under the revolving credit facility. As of August 31, 2016, the Company had $71,599 of letters of credit with JP Morgan Chase Bank that are performance based and set to expire between 2020 and 2022.

Note 9 - Stockholders' Equity

12 Months Ended

Aug. 31, 2016

Stockholders' Equity Note Disclosure [Text Block]

9. STOCKHOLDERS’ EQUITY

On January 15, 2015, the Company’s Board of Directors authorized the repurchase of up to $3,000,000 in shares of common stock through open market purchases or unsolicited or solicited privately negotiated transactions. This program has no expiration date but may be terminated by the Company’s Board of Directors at any time. As of August 31, 2016, up to $2,836,656 in shares of common stock remained available for repurchase under the stock repurchase program. During fiscal 2016, the Company repurchased and retired 11,211 shares of its common stock at an average price of $12.40 per share. No stock options to purchase shares of common stock were exercised during fiscal 2016.

The Company granted stock options under the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan (the 2007 Plan) to purchase an aggregate of 53,447 shares of its common stock to various employees and directors during fiscal 2016. The weighted average per share exercise price of the stock options is $14.85, which was equal to the fair market value of the Company’s common stock on the date of grant.

No stock options to purchase shares of common stock were exercised during fiscal 2016.

The following stock options to purchase shares of common stock were exercised during fiscal 2015:

Options Exercised	Exercise Price
18,000	$	9.76
18,000		7.65
2,333		10.20

The total intrinsic value of the options exercised during fiscal 2015 was $297,696.

The Company granted stock options under the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan (the 2007 Plan) to purchase an aggregate of 45,067 shares of its common stock to various employees and directors during fiscal 2015. The weighted average per share exercise price of the stock options is $20.10, which was equal to the fair market value of the Company’s common stock on the date of grant.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Note 10 - Net Income (Loss) Per Common Share

12 Months Ended

Aug. 31, 2016

Earnings Per Share [Text Block]

10. NET INCOME (LOSS) PER COMMON SHARE

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

Options to purchase shares of common stock of 45,067 were excluded from the computation of common share equivalents for fiscal 2015, as the exercise prices of such options were greater than market price of a share of common stock.

The following is a reconciliation of the earnings per share computation:

Numerator:	August 31, 2016			August 31, 2015
Net (loss) income attributable to NTIC	$	(867,514	)	$	1,789,571

Denominator:
Basic-weighted shares outstanding		4,537,504			4,521,788
Weighted shares assumed upon exercise of stock options		0			127,272
Diluted – weighted shares outstanding		4,537,504			4,649,060

Basic income (loss) earnings per share:	$	(0.19	)	$	0.40
Diluted income (loss) earnings per share:	$	(0.19	)	$	0.38

The dilutive impact summarized above relates to the periods when the average market price of Company stock exceeded the exercise price of the potentially dilutive option securities granted. Earnings per common share were based on the weighted average number of common shares outstanding during the periods when computing the basic earnings per share. When dilutive, stock options are included as equivalents using the treasury stock market method when computing the diluted earnings per share. 170,887 of shares of common stock were excluded because the effect was anti-dilutive due to the Company’s net loss for fiscal 2016.

Note 11 - Stock-based Compensation

12 Months Ended

Aug. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

11. STOCK-BASED COMPENSATION

The Company has two stock-based compensation plans under which stock options and other stock-based awards have been granted, the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan (the 2007 Plan) and the Northern Technologies International Corporation Employee Stock Purchase Plan (the ESPP). The Compensation Committee of the Board of Directors and the Board of Directors administer these plans.

The 2007 Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, stock unit awards, performance awards and stock bonuses to eligible recipients to enable the Company and its subsidiaries to attract and retain qualified individuals through opportunities for equity participation in the Company, and to reward those individuals who contribute to the achievement of the Company’s economic objectives. Subject to adjustment as provided in the 2007 Plan, up to a maximum of 800,000 shares of the Company’s common stock are issuable under the 2007 Plan. Options granted under the 2007 Plan generally have a term of ten years and become exercisable over a three- or four-year period beginning on the one-year anniversary of the date of grant. Options are granted at per share exercise prices equal to the market value of the Company’s common stock on the date of grant. The Company issues new shares upon the exercise of options. As of August 31, 2016, only stock options and stock bonuses had been granted under the 2007 Plan.

The maximum number of shares of common stock of the Company available for issuance under the ESPP is 100,000 shares, subject to adjustment as provided in the ESPP. The ESPP provides for six-month offering periods beginning on September 1 and March 1 of each year. The purchase price of the shares is 90% of the lower of the fair market value of common stock at the beginning or end of the offering period. This discount may not exceed the maximum discount rate permitted for plans of this type under Section 423 of the Internal Revenue Code of 1986, as amended. The ESPP is compensatory for financial reporting purposes. The Company issued 2,438 and 3,206 shares of common stock on September 1, 2015 and 2014, respectively, under the ESPP. The Company issued 3,144 shares on March 1, 2016 under the ESPP.

The fair value of option grants is determined at date of grant, using the Black-Scholes option pricing model with the assumptions listed below. The volatility factor used in the Black-Scholes option pricing model is based on historical stock price fluctuations and the risk-free interest rate is based on U.S. treasury rates appropriate for the expected term. Dividend yield and expected volatility are estimated using historical amounts that are anticipated to be consistent with current values. Expected life of the option is based on the life of the option agreements. Based on these valuations, the Company recognized compensation expense of $427,437 and $495,683 during fiscal 2016 and fiscal 2015, respectively, related to the options that vested during such time period. As of August 31, 2016, the total compensation cost for non-vested options not yet recognized in the Company’s consolidated statements of operations was $239,400. Stock-based compensation expense of $159,600 and $79,800 is expected to be recognized during fiscal 2017 and 2018, based on outstanding options as of August 31, 2016. Future option grants will impact the compensation expense recognized. Stock-based compensation expense is included in general and administrative expense on the consolidated statements of operations.

The Company currently estimates a ten percent forfeiture rate for stock options, and continually reviews this estimate in future periods.

The fair value of each option grant is estimated on the grant date using the Black-Scholes option-pricing model with the following assumptions and results for the grants:

	August 31, 2016			August 31, 2015
Dividend yield		0.00	%		0.00	%
Expected volatility		46.0	%		46.6	%
Expected life of option (years)		10			10
Weighted average risk-free interest rate		1.63	%		1.63	%

Stock option activity during the periods indicated is as follows:

	Number of Shares (#)			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at August 31, 2014		239,000		$	11.66
Options granted		45,067			20.10
Options exercised		(38,333	)		9.00
Options terminated		(4,000	)		10.20

Outstanding at August 31, 2015		241,734			13.72
Options granted		53,447			14.85
Options exercised		0			0.00
Options terminated		(12,000	)		13.38

Outstanding at August 31, 2016		283,181		$	13.95	$	392,370

Exercisable at August 31, 2016		188,600		$	13.45	$	336,683

The weighted average per share fair value of options granted during fiscal 2016 and fiscal 2015 was $8.48 and $11.58, respectively. The weighted average remaining contractual life of the total options and exercisable options outstanding as of August 31, 2016 was 6.46 years and 5.60 years, respectively.

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Note 12 - Segment and Geographic Information

12 Months Ended

Aug. 31, 2016

Segment Reporting Disclosure [Text Block]

12. SEGMENT AND GEOGRAPHIC INFORMATION

Segment Information

The Company’s chief operating decision maker (CODM) is its Chief Executive Officer. The Company’s business is organized into two reportable segments: ZERUST

and Natur-Tec

. The Company has been selling its proprietary ZERUST

rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets for over 40 years, and more recently, has targeted and expanded into the oil and gas industry. The Company also sells a portfolio of bio-based and compostable (fully biodegradable) polymer resin compounds and finished products under the Natur-Tec

brand.

The following tables present the Company’s business segment information in fiscal 2016 and fiscal 2015:

	Fiscal 2016		Fiscal 2015
ZERUST ® net sales	$	27,577,566	$	26,042,909
Natur-Tec ® net sales		5,355,999		4,279,784
Total net sales	$	32,933,565	$	30,322,693

The following table sets forth the Company’s cost of goods sold for fiscal 2016 and fiscal 2015 by segment:

	Fiscal 2016		Fiscal 2015
Direct cost of goods sold
ZERUST ®	$	15,588,133	$	14,399,456
Natur-Tec ®		4,076,249		3,232,353
Indirect cost of goods sold		2,655,774		2,924,124
Total net cost of goods sold	$	22,320,156	$	20,555,932

The Company utilizes product net sales and direct and indirect cost of goods sold for each product in reviewing the financial performance of a product type. Further allocation of Company expenses or assets, aside from amounts presented in the tables above, is not utilized in evaluating product performance, nor does such allocation occur for internal financial reporting.

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

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

Geographic Information

Net sales by geographic location were as follows:

	Fiscal Year Ended August 31,
	2016		2015
Inside the U.S.A. to unaffiliated customers	$	20,304,480	$	19,329,979
Outside the U.S.A. to:
Joint ventures in which the Company is a shareholder directly and indirectly		2,721,905		2,831,301
Unaffiliated customers		9,907,180		8,161,413
	$	32,933,565	$	30,322,693

Net sales by geographic location are based on the location of the customer.

Fees for services provided to joint ventures by geographic location as a percentage of total fees for services provided to joint ventures during fiscal 2016 and fiscal 2015, respectively, were as follows:

	Fiscal 2016		Fiscal 2015
Germany	$	845,857	$	873,400
Japan		646,015		599,108
Poland		599,391		600,255
Thailand		537,212		554,881
United Kingdom		386,761		396,514
Korea		352,393		192,539
France		329,805		412,608
India		300,506		277,548
Sweden		265,745		323,610
Finland		252,578		281,620
Czech		237,062		229,185
China		0		494,080
Other		384,385		480,143
	$	5,137,710	$	5,715,491

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

See Note 6 for additional details on geographical information regarding equity in income from joint ventures.

The geographical distribution of key financial statement data is as follows:

	At August 31, 2016		At August 31, 2015
China	$	253,931	$	45,220
Brazil		66,938		46,918
India		13,645		16,402
United States		8,219,955		8,446,842
Total long-lived assets	$	8,554,469	$	8,555,382

	Fiscal Year Ended August 31, 2016		Fiscal Year Ended August 31, 2015
China	$	4,114,288	$	1,070,422
Brazil		2,172,297		2,623,938
India		1,104,947		967,241
Other		5,237,553		6,331,113
United States		20,304,480		19,329,979
Total net sales	$	32,933,565	$	30,322,693

Total long-lived assets located in China, Brazil and India primarily consist of property, plant and equipment. These assets are periodically reviewed to assure the net realizable value from the estimated future production based on forecasted sales exceeds the carrying value of the assets.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Note 13 - Retirement Plan	12 Months Ended
Note 13 - Retirement Plan	Aug. 31, 2016
Notes to Financial Statements
Pension and Other Postretirement Benefits Disclosure [Text Block]	13. RETIREMENT PLAN The Company has a 401(k) employee savings plan. Employees who meet certain age and service requirements may elect to contribute up to 15% of their salaries. The Company typically contributes the lesser of 50% of the participant’s contributions or 3.5% of the employee’s salary. The Company recognized expense for the savings plan of $215,785 and $214,008 for fiscal 2016 and fiscal 2015, respectively.

Note 14 - Related Party Transactions	12 Months Ended
Note 14 - Related Party Transactions	Aug. 31, 2016
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	14. RELATED PARTY TRANSACTIONS During fiscal 2016 and fiscal 2015, the Company made consulting payments of $100,000 per year to Bioplastic Polymers LLC, an entity owned by Ramani Narayan, Ph.D., a director of the Company, and paid royalties of $31,463 and $21,327, respectively, based on net sales of the Company’s bioplastics products.

Note 15 - Income Taxes

12 Months Ended

Aug. 31, 2016

Income Tax Disclosure [Text Block]

15. INCOME TAXES

The provision for income taxes for the fiscal years ended August 31, 2016 and 2015 consists of the following:

	Fiscal Year Ended August 31,
	2016			2015
Current:
Federal	$	—		$	—
State		20,000			(37,000	)
Foreign		647,000			542,000
		667,000			505,000
Deferred:
Federal		6,000			87,000
State		—			5,000
Foreign		(47,000	)		52,000
		(41,000	)		144,000
	$	626,000		$	649,000

Reconciliations of the expected federal income tax at the statutory rate with the provisions for income taxes for the fiscal years ended August 31, 2016 and 2015 are as follows:

	Fiscal Year Ended August 31,
	2016			2015
Tax computed at statutory rates	$	(195,000	)	$	1,076,000
State income tax, net of federal benefit		20,000			(32,000	)
Tax effect on equity in (income) loss of international joint ventures		(956,000	)		(1,986,000	)
Tax effect on dividends received from joint ventures and investment at carrying value		2,681,000			1,470,000
Tax effect of foreign operations		997,000			996,000
Foreign tax credit		(3,178,000	)		(1,937,000	)
Research and development credit		(408,000	)		(314,000	)
Valuation allowance		1,620,000			1,379,000
Stock based compensation		90,000			99,000
Non-controlling interest		(148,000	)		(204,000	)
Other		103,000			102,000
	$	626,000		$	649,000

The Company has not provided U.S. income taxes or foreign withholding taxes with respect to its portion of the cumulative undistributed earnings of foreign joint ventures that are essentially permanent in duration. The Company’s portion of the cumulative undistributed earnings of foreign joint ventures that are essentially permanent in duration were $17,779,912 and $18,483,377 at August 31, 2016 and 2015, respectively. During fiscal 2016, the Company recorded deferred income tax expense of $32,000 representing foreign withholding taxes to be paid with respect to the portion of the cumulative undistributed earnings of foreign joint ventures that it determined were not essentially permanent in duration. If some or all of the undistributed earnings of the joint ventures are remitted to the Company in the future, income taxes, if any, after the application of foreign tax credits will be provided at that time. To the extent undistributed earnings of the Company’s joint ventures are distributed in the future, it is not expected to result in any material additional U.S. income tax liability after the application of foreign tax credits.

The tax effect of the temporary differences and tax carryforwards comprising the net deferred taxes shown on the consolidated balance sheets at August 31, 2016 and 2015 are as follows:

	August 31,
	2016			2015
Accrued compensation	$	150,600		$	237,700
Inventory costs		95,300			81,200
Accrued joint venture expenses		54,200			93,200
Other accrued expenses		87,000			53,800
Goodwill and other intangible assets		1,332,000			1,123,200
Stock-based compensation		210,600			308,900
Foreign tax credit carryforward		5,679,000			4,654,800
Other credit and loss carryforwards		3,214,300			2,262,000
Total deferred tax assets		10,823,000			8,814,800
Valuation allowance		(8,893,300	)		(6,889,900	)
Total deferred tax assets after valuation allowance		1,929,700			1,924,900
Property and equipment		(215,600	)		(204,000	)
Other		(74,300	)		(120,800	)
Total deferred tax liabilities		(289,900	)		(324,800	)
Net deferred tax assets	$	1,639,800		$	1,600,100

The Company has revised the presentation of net deferred tax assets to comply with the disclosure guidance in ASC 740 to reflect total deferred tax assets and total deferred tax liabilities, rather than current deferred taxes and non-current deferred taxes.

In November 2015, the FASB issued ASU 2015-17 which simplifies the presentation of deferred income taxes and requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in ASU 2015-17 are effective for annual periods beginning after December 15, 2016. The Company has elected to early adopt ASU 2015-17 prospectively as of August 31, 2016. Prior periods were not retroactively adjusted.

At August 31, 2016, the Company had foreign tax credit carryforwards of approximately $5,679,000, of which approximately $350,600 will expire if not utilized by August 31, 2017. In addition, the Company had federal and state tax credit carryforwards of $2,643,300 at August 31, 2016 which begin to expire in fiscal 2019. These federal and state tax credit carryforwards consist primarily of federal and Minnesota research and development credit carryforwards. The Company also has foreign net operating loss carryforwards of $571,000 at August 31, 2016 which begin to expire in fiscal 2020.

As of August 31, 2016, the Company recorded a valuation allowance of $5,679,000 with respect to the foreign tax credit carryforwards. In addition, the Company has recorded a valuation allowance of $2,643,300 with respect to federal and state tax credit carryforwards, and had recorded a valuation allowance of $571,000 with respect to the foreign net operating loss carryforwards.

As of August 31, 2015, the Company had recorded a valuation allowance of $4,654,800 with respect to the foreign tax credit carryforwards. In addition, the Company had recorded a valuation allowance of $2,335,200 with respect to federal and state tax credit carryforwards.

The Company records a tax valuation allowance to reduce deferred tax assets to the amount expected to be realized when it is more likely than not that some portion or all of its deferred tax assets will not be realized. The Company determined based on all available evidence, including historical data and projections of future results, that it is more likely than not that all of its deferred tax assets, except for its foreign tax credit carryforward, federal and Minnesota research and development credit carryforwards, and capital loss carryforwards will be fully realized. The Company determined that its deferred tax asset related to foreign tax credit carryforwards will not be realized due to insufficient federal taxable income within the carryforward period and the fact that for ordering purposes the foreign tax credit carryforwards are not allowed to be used until after any current year foreign tax credits are utilized. In addition, based on historical data and future projections, the Company determined that it is more likely than not that its deferred tax asset related to federal and Minnesota research and development credit carryforwards will not be realized due to insufficient federal and Minnesota taxable income within the carryforward period after considering the foreign tax credit usage.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:

	Fiscal Year Ended August 31,
	2016		2015
Gross unrecognized tax benefits – beginning balance	$	203,000	$	180,000
Gross increases - prior period tax positions		15,000		15,000
Gross increases – current period tax positions		20,000		8,000
Gross unrecognized tax benefits – ending balance	$	238,000	$	203,000

The entire amount of unrecognized tax benefits would affect the effective tax rate. It is not expected that the amount of unrecognized tax benefits will change significantly in the next 12 months.

The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the Company’s income tax provision. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet. There was no liability for the payment of interest and penalties at both August 31, 2016 and August 31, 2015.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. With few exceptions, as of August 31, 2016, the Company is no longer subject to federal, state, local, or foreign examinations by tax authorities for years prior to August 31, 2013.

Note 16 - Commitments and Contingencies

12 Months Ended

Aug. 31, 2016

Commitments and Contingencies Disclosure [Text Block]

16. COMMITMENTS AND CONTINGENCIES

On August 26, 2016, the Compensation Committee of the Board of Directors of the Company approved the material terms of an annual bonus plan for the Company’s executive officers as well as certain officers and employees for the fiscal year ending August 31, 2017. For fiscal 2017 as in past years, the total amount available under the bonus plan for all plan participants, including executive officers, is dependent upon the Company’s earnings before interest, taxes and other income, as adjusted to take into account amounts to be paid under the bonus plan and certain other adjustments (Adjusted EBITOI). Each plan participant’s percentage of the overall bonus pool is based upon the number of plan participants, the individual’s annual base salary and the individual’s position and level of responsibility within the company. In the case of each of the Company’s executive officer participants, 75% of the amount of their individual bonus payout will be determined based upon the Company’s actual EBITOI for fiscal 2017 compared to a pre-established target EBITOI for fiscal 2017 and 25% of the payout will be determined based upon such executive officer’s achievement of certain pre-established individual performance objectives. The payment of bonuses under the plan are discretionary and may be paid to executive officer participants in both cash and shares of NTIC common stock, the exact amount and percentages will be determined by the Company’s Board of Directors, upon recommendation of the Compensation Committee, after the completion of the Company’s consolidated financial statements for fiscal 2017.

On August 18, 2015, the Compensation Committee of the Board of Directors of the Company approved the material terms of an annual bonus plan for the Company’s executive officers as well as certain officers and employees for the fiscal year ending August 31, 2016. For fiscal 2016 as in past years, the total amount available under the bonus plan for all plan participants, including executive officers, is dependent upon the Company’s earnings before interest, taxes and other income, as adjusted to take into account amounts to be paid under the bonus plan and certain other adjustments (Adjusted EBITOI). Each plan participant’s percentage of the overall bonus pool is based upon the number of plan participants, the individual’s annual base salary and the individual’s position and level of responsibility within the company. In the case of each of the Company’s executive officer participants, 75% of the amount of their individual bonus payout will be determined based upon the Company’s actual EBITOI for fiscal 2016 compared to a pre-established target EBITOI for fiscal 2016 and 25% of the payout will be determined based upon such executive officer’s achievement of certain pre-established individual performance objectives. The payment of bonuses under the plan are discretionary and may be paid to executive officer participants in both cash and shares of NTIC common stock, the exact amount and percentages will be determined by the Company’s Board of Directors, upon recommendation of the Compensation Committee, after the completion of the Company’s consolidated financial statements for fiscal 2016.

Accrued bonuses as of August 31, 2016 and 2015 were $450,000 and $620,000, respectively.

Three joint ventures (consisting of the Company’s joint ventures in Korea, India and Thailand) accounted for 55.8% of the Company’s trade joint venture receivables at August 31, 2016. Four joint ventures (consisting of the Company’s joint ventures in Korea, India, Thailand and Tianjin Zerust) accounted for 67.0% of the Company’s trade joint venture receivables at August 31, 2015.

On March 23, 2015, the Company and NTI Asean filed a lawsuit in Tianjin No 1 Intermediate People’s Court against two individuals, Mr. Tao Meng and his wife, Ms. Hui Xu, related to breaches of duties and contractual commitments owed to NTI Asean under certain agreements related to the Company’s former joint venture in China, Tianjin Zerust Anti-Corrosion Technologies Ltd. The lawsuit alleges, among other things, that Mr. Tao Meng and Ms. Hui Xu have engaged in self-dealing, usurped business opportunities, and received economic benefits that were required to go to Tianjin Zerust. As of August 31, 2016, the Company is not able to reasonably estimate the amount of any recovery to NTI Asean, if any.

On April 21, 2015, the Company and NTI Asean initiated a lawsuit in the District Court for the Second Judicial District, County of Ramsey, State of Minnesota against Cortec Corporation alleging, among other things, that Cortec Corporation aided and abetted breaches of duties and contractual commitments owed to the Company and NTI Asean related to the Company’s joint venture in China, Tianjin Zerust. The case has been set for a mandatory settlement conference with the court on May 30, 2017 and the case will be set for the trial block beginning July 31, 2017 and ending August 18, 2017.

From time to time, the Company is subject to various other claims and legal actions in the ordinary course of its business. The Company records a liability in its consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, where the Company has assessed that a loss is probable and an amount could be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that material loss may be have been incurred. In the opinion of management, as of August 31, 2016, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect the Company’s consolidated results of operations, financial position or cash flows.

The Company has leases for office and warehouse space in the United States of America, China, India, Germany and Brazil with monthly rents ranging from $1,090 to $11,539, which expire through August 31, 2023. Future minimum rents due under these leases are as follows for each of the next five years ended August 31:

FY 2017		191,631
FY 2018		176,040
FY 2019		60,652
FY 2020		40,579
FY 2021		40,579
Thereafter		88,463
	$	597,944

Note 17 - Statements of Cash Flows

12 Months Ended

Aug. 31, 2016

Cash Flow, Supplemental Disclosures [Text Block]

17. STATEMENTS OF CASH FLOWS

Supplemental disclosures of cash flow information consist of:

	Fiscal Year Ended August 31,
	2016		2015
Cash paid during the year for income tax	$	610,000	$	542,000
Cash paid during the year for interest		13,261		20,960

Note 18 - Fair Value Measurements

12 Months Ended

Aug. 31, 2016

Fair Value, Measurement Inputs, Disclosure [Text Block]

18.

Fair Value Measurements

The Company follows the authoritative guidance on fair value measurements and disclosures with respect to assets and liabilities that are measured at fair value on both a recurring and non-recurring basis. Under this guidance, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability, developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is broken down into three levels defined as follows:

Level 1 -

Inputs are quoted prices in active markets for identical assets or liabilities.

Level 2 -

Inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.

Level 3 -

Inputs are unobservable for the asset or liability.

See the section below titled Valuation Techniques for further discussion of how the Company determines fair value for investments.

Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis

Assets and liabilities that are measured at fair value on a recurring basis primarily relate to marketable equity securities. These items are marked-to-market at each reporting period.

The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis:

			Fair Value Measurements Using Inputs Considered as
	Fair value as of August 31, 2016		Level 1		Level 2		Level 3
Available for sale securities	$	2,243,864	$	2,243,864	$	—	$	—

			Fair Value Measurements Using Inputs Considered as
	Fair value as of August 31, 2015		Level 1		Level 2		Level 3
Available for sale securities	$	2,027,441	$	2,027,441	$	—	$	—

Valuation Techniques

Financial assets that are classified as Level 1 securities include cash equivalents and available for sale securities. These are valued using quoted market prices in an active market.

The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy. The Company’s policy is to recognize transfers into and out of levels within the fair value hierarchy at the end of the fiscal quarter in which the actual event or change in circumstances that caused the transfer occurs. There were no transfers between Level 1, Level 2, or Level 3 during the fiscal years ended August 31, 2016 or August 31, 2015. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.

Significant Accounting Policies (Policies)

12 Months Ended

Aug. 31, 2016

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block]

Non-Controlling Interests

Revenue Recognition, Deferred Revenue [Policy Text Block]

Net Sales

Revenue Recognition

Receivables, Policy [Policy Text Block]

Trade Receivable

Receivables from Joint Ventures Policy [Policy Text Block ]

Trade Receivables from Joint Ventures

Fees for Services Provided to Joint Ventures –

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Marketable Securities, Available-for-sale Securities, Policy [Policy Text Block]

Available for Sale Securities

– Available for sale securities are recorded at fair value. Unrealized holding gains and losses on available for sale securities are excluded from earnings.

Inventory, Policy [Policy Text Block]

Inventories

- Inventories are recorded at the lower of cost (first-in, first-out basis) or market.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Depreciation

- Property and equipment are stated at cost. Depreciation is computed using the straight-line method based on the estimated service lives of the various assets as follows:

Buildings and improvements (years)		5	-	30
Machinery and equipment (years)		3	-	10

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Patents

Equity Method Investments, Policy [Policy Text Block]

Investments in Joint Ventures

Investment at Carrying Value

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Recoverability of Long-Lived Assets

Income Tax, Policy [Policy Text Block]

Income Taxes

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation (Accumulated Other Comprehensive Income (Loss))

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

Shipping and Handling Cost, Policy [Policy Text Block]

Shipping and Handling

Research, Development, and Computer Software, Policy [Policy Text Block]

Research and Development

Stockholders' Equity, Policy [Policy Text Block]

Common Stock

– The Company issues authorized but unissued shares of common stock upon the exercise of stock options, as opposed to treasury shares.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

Note 3 - Inventories (Tables)

12 Months Ended

Aug. 31, 2016

Schedule of Inventory, Current [Table Text Block]

	August 31, 2016		August 31, 2015
Production materials	$	1,452,396	$	1,445,014
Finished goods		6,258,891		6,023,427
	$	7,711,287	$	7,468,441

Note 6 - Investments in Joint Ventures (Tables)

12 Months Ended

Aug. 31, 2016

Condensed Balance Sheet [Table Text Block]

	As of August 31, 2016
	Total		EXCOR		All Other
Current assets	$	48,922,924	$	22,928,810	$	25,994,114
Total assets		52,407,026		24,733,340		27,673,686
Current liabilities		12,433,700		3,485,231		8,948,469
Noncurrent liabilities		100,783		—		100,783
Joint ventures’ equity		39,872,543		21,248,109		18,624,434
Northern Technologies International Corporation’s share of joint ventures’ equity		19,840,774		10,624,056		9,216,728
Northern Technologies International Corporation's share of joint ventures’ undistributed earnings		17,779,912	$	10,593,151	$	7,186,761
Northern Technologies International Corporation's dividends received from joint ventures	$	5,503,314	$	4,364,700	$	1,165,614

	As of August 31, 2015
	Total		EXCOR		All Other
Current assets	$	49,295,116	$	22,620,323	$	26,674,793
Total assets		52,853,938		24,606,880		28,247,058
Current liabilities		12,288,383		3,360,142		8,928,241
Noncurrent liabilities		1,215,139		—		1,215,139
Joint ventures’ equity		39,350,417		21,246,738		18,103,679
Northern Technologies International Corporation’s share of joint ventures’ equity		20,544,238		11,571,361		8,972,877
Northern Technologies International Corporation's share of joint ventures’ undistributed earnings		18,483,377		11,540,456		6,942,921
Northern Technologies International Corporation's dividends received from joint ventures	$	2,983,338	$	2,440,200	$	543,138

Condensed Income Statement [Table Text Block]

	Fiscal Year Ended August 31, 2016
	Total		EXCOR		All Other
Net sales	$	90,646,833	$	35,138,214	$	55,508,619
Gross profit		40,440,726		18,635,421		21,805,305
Net income		9,534,771		7,049,462		2,485,309
Northern Technologies International Corporation’s share of equity in income from joint ventures	$	4,743,831	$	3,534,113	$	1,209,718

	Fiscal Year Ended August 31, 2015
	Total		EXCOR		All Other
Net sales	$	99,026,251	$	36,872,664	$	62,153,587
Gross profit		48,397,318		19,993,763		28,403,555
Net income		11,849,107		8,201,659		3,647,448
Northern Technologies International Corporation’s share of equity in income from joint ventures	$	5,936,565	$	4,091,608	$	1,844,957

Note 9 - Stockholders' Equity (Tables)

12 Months Ended

Aug. 31, 2016

Exercised [Member]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

Options Exercised	Exercise Price
18,000	$	9.76
18,000		7.65
2,333		10.20

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Shares (#)			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at August 31, 2014		239,000		$	11.66
Options granted		45,067			20.10
Options exercised		(38,333	)		9.00
Options terminated		(4,000	)		10.20

Outstanding at August 31, 2015		241,734			13.72
Options granted		53,447			14.85
Options exercised		0			0.00
Options terminated		(12,000	)		13.38

Outstanding at August 31, 2016		283,181		$	13.95	$	392,370

Exercisable at August 31, 2016		188,600		$	13.45	$	336,683

Note 11 - Stock-based Compensation (Tables)

12 Months Ended

Aug. 31, 2016

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	August 31, 2016			August 31, 2015
Dividend yield		0.00	%		0.00	%
Expected volatility		46.0	%		46.6	%
Expected life of option (years)		10			10
Weighted average risk-free interest rate		1.63	%		1.63	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Number of Shares (#)			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at August 31, 2014		239,000		$	11.66
Options granted		45,067			20.10
Options exercised		(38,333	)		9.00
Options terminated		(4,000	)		10.20

Outstanding at August 31, 2015		241,734			13.72
Options granted		53,447			14.85
Options exercised		0			0.00
Options terminated		(12,000	)		13.38

Outstanding at August 31, 2016		283,181		$	13.95	$	392,370

Exercisable at August 31, 2016		188,600		$	13.45	$	336,683

Note 12 - Segment and Geographic Information (Tables)

12 Months Ended

Aug. 31, 2016

Fees for Services Provided to Joint Ventures [Member]

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Fiscal 2016		Fiscal 2015
Germany	$	845,857	$	873,400
Japan		646,015		599,108
Poland		599,391		600,255
Thailand		537,212		554,881
United Kingdom		386,761		396,514
Korea		352,393		192,539
France		329,805		412,608
India		300,506		277,548
Sweden		265,745		323,610
Finland		252,578		281,620
Czech		237,062		229,185
China		0		494,080
Other		384,385		480,143
	$	5,137,710	$	5,715,491

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	Fiscal 2016		Fiscal 2015
ZERUST ® net sales	$	27,577,566	$	26,042,909
Natur-Tec ® net sales		5,355,999		4,279,784
Total net sales	$	32,933,565	$	30,322,693

Reconciliation of Cost of Goods Sold from Segments to Consolidated [Table Text Block]

	Fiscal 2016		Fiscal 2015
Direct cost of goods sold
ZERUST ®	$	15,588,133	$	14,399,456
Natur-Tec ®		4,076,249		3,232,353
Indirect cost of goods sold		2,655,774		2,924,124
Total net cost of goods sold	$	22,320,156	$	20,555,932

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

	Fiscal Year Ended August 31,
	2016		2015
Inside the U.S.A. to unaffiliated customers	$	20,304,480	$	19,329,979
Outside the U.S.A. to:
Joint ventures in which the Company is a shareholder directly and indirectly		2,721,905		2,831,301
Unaffiliated customers		9,907,180		8,161,413
	$	32,933,565	$	30,322,693

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

	At August 31, 2016		At August 31, 2015
China	$	253,931	$	45,220
Brazil		66,938		46,918
India		13,645		16,402
United States		8,219,955		8,446,842
Total long-lived assets	$	8,554,469	$	8,555,382

Revenue from External Customers by Geographic Areas [Table Text Block]

	Fiscal Year Ended August 31, 2016		Fiscal Year Ended August 31, 2015
China	$	4,114,288	$	1,070,422
Brazil		2,172,297		2,623,938
India		1,104,947		967,241
Other		5,237,553		6,331,113
United States		20,304,480		19,329,979
Total net sales	$	32,933,565	$	30,322,693

Note 15 - Income Taxes (Tables)

12 Months Ended

Aug. 31, 2016