0001171843-22-007494 | 10-K | XBRL Viewer | Northern Technologies International Corp

51,090,298

36,920,814

^[1]

Equity in income from joint ventures

23,068,592

19,573,005

JOINT VENTURE OPERATIONS:

4,725,918

7,465,214

Fees for services provided to joint ventures

5,767,682

5,964,260

To Total joint venture operations

10,493,600

13,429,474

OPERATING EXPENSES:

Selling expenses

13,038,180

12,016,974

General and administrative expenses

10,600,603

8,262,173

Research and development expenses

4,775,334

4,400,479

Total operating expenses

28,414,117

24,679,626

OPERATING INCOME

5,148,075

8,322,853

REMEASUREMENT GAIN ON ACQUISITION OF EQUITY METHOD INVESTEE

3,951,550

INTEREST INCOME

49,241

151,875

INTEREST EXPENSE

(89,096)

(16,086)

INCOME BEFORE INCOME TAX EXPENSE

9,059,770

8,458,642

INCOME TAX EXPENSE

1,873,836

1,461,905

NET INCOME

7,185,934

6,996,737

NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS

861,234

715,499

NET INCOME ATTRIBUTABLE TO NTIC

$ 6,324,700

$ 6,281,238

NET INCOME ATTRIBUTABLE TO NTIC PER COMMON SHARE:

Basic (in dollars per share)

$ 0.69

Diluted (in dollars per share)

$ 0.66

$ 0.64

WEIGHTED AVERAGE COMMON SHARES ASSUMED OUTSTANDING:

Basic (in shares)

9,216,216

9,116,472

Diluted (in shares)

9,635,028

9,874,139

Common Stock, Dividends, Per Share, Declared (in dollars per share)

$ 0.28

$ 0.195

[1]	The percent of segment sales is calculated by dividing the direct cost of goods sold for each individual segment category by the net sales for each segment category.

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Net income	$ 7,185,934	$ 6,996,737
OTHER COMPREHENSIVE INCOME – FOREIGN CURRENCY TRANSLATION ADJUSTMENT	(3,912,128)	(92,562)
COMPREHENSIVE INCOME	3,273,806	6,904,175
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS	(669,208)	(737,529)
COMPREHENSIVE INCOME ATTRIBUTABLE TO NTIC	$ 2,604,598	$ 6,166,646

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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Consolidated Statements of Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Noncontrolling Interest [Member]	Total
Balance (in shares) at Aug. 31, 2020	9,099,990
Balance at Aug. 31, 2020	$ 182,000	$ 17,415,043	$ 42,472,810	$ (3,410,438)	$ 3,045,026	$ 59,704,441
Stock options exercised (in shares)	74,950					74,950
Stock options exercised	$ 1,499	582,915	0	0	0	$ 584,414
Stock issued for employee stock purchase plan (in shares)	9,871
Stock issued for employee stock purchase plan	$ 197	74,136	0	0	0	74,333
Stock option expense	0	664,174	0	0	0	664,174
Dividends paid to stockholders	0	0	(1,780,956)		0	(1,780,956)
Dividend received by non-controlling interest	0	0	0	0	(400,000)	(400,000)
Net income	0	0	6,281,238	0	715,499	6,996,737
Other comprehensive income (loss)	$ 0	0	0	(114,592)	22,030	(92,562)
Balance (in shares) at Aug. 31, 2021	9,184,811
Balance at Aug. 31, 2021	$ 183,696	18,736,268	46,973,092	(3,525,030)	3,382,555	65,750,581
Stock options exercised (in shares)	42,071
Stock options exercised	$ 842	197,798	0	0	0	198,640
Stock issued for employee stock purchase plan (in shares)	5,601
Stock issued for employee stock purchase plan	$ 112	73,533	0	0	0	73,645
Stock option expense	0	931,532	0	0	0	931,532
Dividends paid to stockholders	0	0	(2,581,179)		0	(2,581,179)
Dividend received by non-controlling interest	0	0	0	0	(402,729)	(402,729)
Net income	0	0	6,324,700	0	861,234	7,185,934
Other comprehensive income (loss)	$ 0	0	0	(3,720,102)	(192,026)	(3,912,128)
Balance (in shares) at Aug. 31, 2022	9,232,483
Balance at Aug. 31, 2022	$ 184,650	$ 19,939,131	$ 50,716,613	$ (7,245,132)	$ 3,649,034	$ 67,244,296

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 7,185,934	$ 6,996,737
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	931,532	664,174
Depreciation expense	938,489	905,299
Amortization expense	629,843	203,088
Remeasurement gain on acquisition of equity method investee	(3,951,550)	0
Change in allowance for doubtful accounts	57,000	262,000
Equity in income from joint ventures	(4,725,918)	(7,465,214)
Dividends received from joint ventures	5,723,176	3,665,365
Deferred income taxes	(81,500)	114,620
Changes in current assets and liabilities:
Trade, excluding joint ventures	(2,091,353)	(3,030,655)
Trade, joint ventures	(73,053)	(148,908)
Fees for services provided to joint ventures	(259,550)	(577,841)
Income taxes	284,025	(362,438)
Inventories	(4,818,860)	58,314
Prepaid expenses and other	3,111	(487,771)
Accounts payable	3,010,526	866,597
Income tax payable	(493,091)	(160,231)
Accrued liabilities	(1,122,713)	1,389,804
Net cash provided by operating activities	1,146,078	2,892,940
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Zerust India business, net of cash acquired (see Note 3)	(5,062,003)	0
Investment in joint venture	(341,392)	0
Purchase of available for sale securities	0	(800,000)
Proceeds from the sale of available for sale securities	(956)	6,340,088
Purchases of property and equipment	(1,496,674)	(5,532,750)
Investments in patents	(207,149)	(110,654)
Net cash used in investing activities	(7,108,174)	(103,316)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend received by non-controlling interest	(402,729)	(400,000)
Proceeds from line of credit	5,900,000	0
Dividends paid on NTIC common stock	(2,581,179)	(1,780,956)
Proceeds from employee stock purchase plan	73,645	74,333
Proceeds from exercise of stock options	198,640	584,414
Net cash provided by (used in) financing activities	3,188,377	(1,522,209)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	426,968	10,194
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(2,346,751)	1,277,609
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	7,680,641	6,403,032
CASH AND CASH EQUIVALENTS AT END OF YEAR	$ 5,333,890	$ 7,680,641

Note 1 - Nature of Business and Significant Accounting Policies

12 Months Ended

Aug. 31, 2022

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 its Subsidiaries (collectively, the Company) develop and market proprietary environmentally beneficial products and services in over 65 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 prevention products and services to the automotive, electronics, electrical, mechanical, military, and retail consumer markets for almost 50 years and, more recently, has also expanded into the oil and gas industry. The Company also sells a portfolio of proprietary bio-based and 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 Natur-Tec.

The Company participates, either directly or indirectly, in 16 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.

Impact of COVID-19 Pandemic – As a result of the novel coronavirus (COVID-19) pandemic and related government mandated restrictions on the Company’s business as well as the businesses of its joint ventures, customers and suppliers, disruption to the Company’s business and the manufacture and sale of its products and services continued to occur during fiscal 2022 and is expected to continue into fiscal 2023. In fiscal 2022, the Company continued to be impacted by shipping issues, including freight container shortages, shipping delays, and increased costs, and supply chain issues, including longer lead times and raw material cost increases.

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), ZERUST-EXCOR MEXICO, S. de R.L. de C.V (Zerust Mexico), NTIC Europe GmbH (NTI Europe), NTIC’s majority-owned subsidiary in India, Natur-Tec India Private Limited (Natur-Tec India), NTIC’s majority-owned subsidiary in Brazil, Zerust Prevenção de Corrosão S.A. (Zerust Brazil), NTIC’s majority-owned subsidiary in Sri Lanka, Natur Tec Lanka (Pvt) Ltd (Natur Tec Lanka), and NTIC’s majority-owned holding company, NTI Asean LLC (NTI Asean), and its wholly owned subsidiaries Zerust Singapore Pte Ltd (Zerust Singapore) and Zerust Vietnam Co. Ltd (Zerust Vietnam). NTIC’s consolidated financial statements do not include the accounts of any of its joint ventures. Effective as of September 1, 2021, HNTI Limited (Zerust India) has been consolidated in the Company’s consolidated financial statements since the Company purchased the remaining 50% ownership interest of Zerust India effective as of September 1, 2021.

Non-Controlling Interests – The Company owns 75% of Natur-Tec India, 75% of Natur Tec Lanka, 85% of Zerust Brazil, 60% of NTI Asean, Zerust Singapore Pte Ltd and Zerust Vietnam Co Ltd. The remaining ownership of the consolidated entities are 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 results 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.

When determining recognition of revenue arrangements the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods it transfers to, or services it performs for, the customer.

Generally, the Company’s performance obligations are satisfied when the customers take possession of the products, which normally occurs at the shipping point or destination depending on the terms of the contracts. The Company’s services are generally sold based upon quotes or contracts with customers that include a fixed or determinable price, and sales arrangements do not contain any significant financing component for its customers. The Company does not recognize revenue related to product warranties, nor does the Company incur significant contract costs. Customer arrangements do not generate contract assets or liabilities.

Revenue Recognition – Revenue is measured based on consideration specified in the contract with a customer, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, including noncash consideration, consideration paid or payable to customers, and significant financing components. Revenue from all customers is recognized when a performance obligation is satisfied by transferring control of a distinct good or service to a customer.

Individually promised goods and services in a contract are considered a distinct performance obligation and accounted for separately if the customer can benefit from the individual good or service on its own or with other resources that are readily available to the customer and the good or service is separately identifiable from other promises in the arrangement. When an arrangement includes multiple performance obligations, the consideration is allocated between the performance obligations in proportion to their estimated standalone selling price. Costs related to products delivered are recognized in the period incurred, unless criteria for capitalization of costs are met. Costs of revenues consist primarily of direct labor, manufacturing overhead, materials, and components. The Company does not incur significant upfront costs to obtain a contract. If costs to obtain a contract were to become material, the costs would be recorded as an asset and amortized to expense in a manner consistent with the related recognition of revenue.

The Company excludes government assessed and imposed taxes on revenue generating transactions that are invoiced to customers from revenue. The Company includes freight billed to customers in revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold.

The timing of revenue recognition, billing, and cash collections results in accounts receivable on the consolidated balance sheet.

Performance Obligations – A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation in proportion to its standalone selling price and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s various performance obligations and the timing or method of revenue recognition are discussed below. The Company’s technical

service consultants work directly with the end users of NTIC’s ZERUST® rust and corrosion inhibiting products to

analyze their specific needs and develop systems to meet their performance requirements.

The Company sells its products to both distributors and end-users. Each unit of product delivered under a customer order represents a distinct and separate performance obligation, as the customer can benefit from each unit on its own or with other resources that are readily available to the customer, and each unit of product is separately identifiable from other products in the arrangement.

The transaction price for the Company’s products is the invoiced amount. The Company does not have variable consideration in the form of refunds, credits, rebates, price concessions, pricing incentives, or other items impacting transaction price. The purchase order pricing in arrangements with customers is deemed to approximate standalone selling price; therefore, the Company does not need to allocate proceeds on a relative standalone selling price allocation between performance obligations. The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. There are no material obligations that extend beyond one year.

Revenue is recognized when transfer of control occurs, as defined by the terms in the customer agreement. The Company immediately recognizes incidental items that are immaterial in the context of the contract. The Company has applied the practical expedient in paragraph 606-10-25-16A and does not assess if immaterial items are promised goods or services. The Company has also applied the practical expedient in paragraph 606-10-32-18 regarding the adjustment of the promised amount of consideration for the effects of a significant financing component when the customer pays for that good or service within one year or less, as the Company does not have any significant financing components in its customer arrangements since payment is received at or shortly after the point of sale, generally thirty to ninety days.

The Company estimates returns based on an analysis of historical experience if the right to return products is granted to its customers. The Company does not record a return asset, as non-conforming products are generally not returned. The Company’s return policy does not vary by geography. The customer has no rotation or price protection rights, and the Company is not under a warranty obligation.

Sales Commissions – Sales commissions paid to sales representatives are eligible for capitalization, as they are incremental costs that would not have been incurred without entering into a specific sales arrangement and are recoverable through the expected margin on the transaction. The Company has elected to apply the practical expedient provided by ASC 340-40-25-4 and recognize the incremental costs of obtaining contracts as an expense when incurred, as the amortization period of the assets that would have otherwise been recognized is one year or less. The Company records these costs as a selling expense.

Product Warranty – The Company offers warranties on various products and services. These warranties are assurance type warranties that are not sold on a standalone basis; therefore, they are not considered distinct performance obligations. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time the revenue is recognized for the product sale.

International Revenue – The Company markets its products to numerous countries in North America, Europe, Latin America, Asia, and other parts of the world. See Note 13, Segment and Geographic Information, for information regarding revenue disaggregation by geography.

Trade Receivables – 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 $439,000 and $382,000 as of August 31, 2022 and August 31, 2021, respectively. 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 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 that an allowance for doubtful accounts related to its joint venture receivables was not necessary as of August 31, 2022 or 2021.

Fees for Services Provided to Joint Ventures – The Company provides services to its joint ventures including consulting, legal, travel, insurance, technical, and marketing services based on licensing or other agreements with its joint ventures. 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. Under the Company’s agreements with its joint ventures, amounts are earned when product is shipped from joint venture facilities, at which point a sale is deemed to have occurred and results in obligation for the joint venture to pay the royalty and recognition of the fee by the Company. 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 not significant.

Inventories – Inventories are recorded at the lower of cost (first-in, first-out basis) or net realizable value.

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 5-30 years

Machinery and equipment 3-10 years

Patents and Trademarks – Patents and trademarks, 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 a 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 had positive equity as of August 31, 2022 and 2021. The Company considers any of its joint ventures to be significant and discloses entity specific financial information if the joint venture’s income or assets make up more than 20% of the Company’s total assets or income.

The Company classifies distributions received from its joint ventures based on the nature of the distributions, generally, in operating activities on the consolidated statements of cash flows.

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, 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 whether 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. When evaluating assets for impairment, the Company groups long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

Acquisitions of Businesses - Business combinations are accounted for under the acquisition method. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Determining the fair value of assets acquired and liabilities and contingent liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, probabilities of success, discount rates, and asset lives, among other items. The excess of the fair value of the consideration transferred over the fair value of the Company’s share of the identifiable net assets acquired is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are recognized as general and administrative expense as incurred. The Company evaluates the materiality of required disclosures related to our business combinations using quantitative and qualitative measures.

Goodwill and Other Intangible Assets- Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in acquisitions after amounts have been allocated to intangible assets. Goodwill is tested for impairment annually (at August 31), or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition.

The Company assesses qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If after assessing the totality of events or circumstances, the Company were to determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company would perform a quantitative test that compares the fair value to its carrying value to determine the amount of any impairment. The Company has determined there was no goodwill impairment as of August 31, 2022.

Income Taxes – The Company utilizes the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. 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 operations 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 assets in the future in excess of their net recorded amount, the Company makes 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, Natur Tec Lanka, Zerust Mexico, Zerust India, Zerust Singapore, Zerust Vietnam, NTI Europe, 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, Natur Tec Lanka, Zerust India, Zerust Singapore, Zerust Vietnam, NTI Asean, Zerust Mexico, NTI Europe, and NTIC’s 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 do 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.

Common Stock – The Company issues authorized but unissued shares of common stock upon the exercise of stock options.

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).

Subsequent Events – The Company has evaluated events occurring after the date of the consolidated financial statements for events requiring disclosure in the consolidated financial statements.

Use of Estimates – The preparation of the consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Note 2 - Accounting Pronouncements

12 Months Ended

Aug. 31, 2022

Accounting Standards Update and Change in Accounting Principle [Text Block]

2. ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope, and in November 2018, issued ASU No. 2018-19 and in April 2019, issued ASU No. 2019-04 and in May 2019, issued ASU No. 2019-05, and in November 2019, issued ASU No. 2019-11, which amended the standard. The new standard introduces an approach, based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. The new approach to estimating credit losses (referred to as the current expected credit losses model) applies to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt securities, net investments in leases and off-balance-sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption permitted. Entities are required to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is still evaluating the impact 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.

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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Note 3 - Business Combination

12 Months Ended

Aug. 31, 2022

Business Combination Disclosure [Text Block]

3. BUSINESS COMBINATION

On September 21, 2021, the Company announced that it acquired the remaining 50% ownership interest in its Indian joint venture, HNTI Limited (Zerust India), for $6,250,000 in cash, effective as of September 1, 2021, the date the Company obtained control. Prior to September 1, 2021, the Company owned 50% of the outstanding capital stock of Zerust India. The Company had historically accounted for this investment under the equity method of accounting. This purchase was funded with cash on hand and borrowings under the Company’s revolving line of credit. The Company undertook the acquisition to enhance its Zerust business in India.

The purchase price of $6,250,000 was funded with cash on hand and borrowings under the Company’s revolving line of credit, which was increased in connection with the transaction to $5,000,000.

Because the Company increased its ownership interest in Zerust India to 100%, the acquisition of Zerust India has been accounted for in accordance with Accounting Standards Codification (ASC) 805, Business Combinations, by using the acquisition method of accounting. Effective September 1, 2021, Zerust India became a consolidated subsidiary within the Company’s financial statements.

The following table summarizes the purchase price allocation that includes the fair values of the separately identifiable assets acquired and liabilities assumed as of September 1, 2021:

Cash and cash equivalents	$	1,187,997
Trade account receivable		1,954,769
Inventories		886,650
Prepaid expenses and other		396,545
Property, plant and equipment		219,077
Operating lease, right of use asset		355,000
Customer relationships		6,347,000
Goodwill		4,782,376
Current liabilities		(1,370,314	)
Deferred tax liability		(1,904,100	)
Operating lease liability		(355,000	)
Net assets acquired	$	12,500,000
Less:
Fair value of previously held equity method investment		(1,637,362	)
Cumulative foreign currency translation		(661,088	)
Gain recognized on acquisition		(3,951,550	)
		(6,250,000	)
Cash paid for acquisition	$	6,250,000

The excess of the fair value of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The fair values of assets acquired and liabilities assumed may be subject to change as additional information is received.

The fair value of the intangible asset associated with customer relationships was estimated using a discounted cash flow method with the application of the multi-period excess earnings method. Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows attributable to only the subject intangible asset after deducting contributory asset charges.

The rate used to discount the estimated future net cash flows to their present values for the intangible assets was based upon a weighted average cost of capital calculation. The discount rate was determined after consideration of market rates of return on debt and equity capital, the weighted average return on invested capital and the risk associated with achieving forecasted sales related to the assets acquired from Zerust India. The weighted average discount rate used to determine the fair value of the customer relationships was 15.3%.

The amortization period for the intangible assets is 15 years. The intangible assets are being amortized on a straight-line basis, which is consistent with the pattern that the economic benefits of the intangible assets are expected to be utilized based upon estimated cash flows generated from such asset. Goodwill associated with the acquisition was primarily attributable to the expansion opportunity of the Company’s Zerust business in India.

Authoritative guidance on accounting for business combinations requires that an acquirer re-measure its previously held equity interest in the acquisition at its acquisition date fair value and recognize the resulting gain or loss in earnings. As such, since the Company acquired the remaining 50% ownership interest of Zerust India effective September 1, 2021, the Company recognized a gain of $3,951,550 during the year ended August 31, 2022. This gain is included in “Remeasurement gain on acquisition of equity method investee” on the Company’s consolidated statements of operations for the year ended August 31, 2022.

The Company has included the financial results of Zerust India in the consolidated financial statements from September 1, 2021. Net revenue and net income related to Zerust India since the date of acquisition totaled $9,961,464 and $659,794, respectively. The transaction costs associated with the acquisition were approximately $115,000 and are recorded in general and administrative expense as incurred during the year ended August 31, 2022.

Unaudited consolidated pro forma information assuming the acquisition had occurred on September 1, 2020 for the year ended August 31, 2021 would have an increase in net sales of $9,074,240 and an increase in the net income of $1,529,615. The unaudited consolidated pro forma combined financial information does not purport to be indicative of the results which would have been obtained had the acquisition been completed as of the beginning of the earliest period presented or of results that may be obtained in the future. In addition, they do not include any benefits that may result from the acquisition due to synergies that may be derived from the elimination of any duplicative costs.

Note 4 - Inventories

12 Months Ended

Aug. 31, 2022

Inventory Disclosure [Text Block]

4. INVENTORIES

Inventories consisted of the following:

	August 31, 2022		August 31, 2021
Production materials	$	6,496,656	$	4,453,688
Finished goods		9,845,073		6,660,519
	$	16,341,729	$	11,114,207

Note 5 - Property and Equipment, Net

12 Months Ended

Aug. 31, 2022

Property, Plant and Equipment Disclosure [Text Block]

5. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	August 31, 2022			August 31, 2021
Land	$	310,365		$	310,365
Buildings and improvements		14,778,759			13,149,258
Machinery and equipment		5,643,320			5,453,679
		20,732,444			18,913,302
Less accumulated depreciation		(8,561,951	)		(7,091,844	)
	$	12,170,493		$	11,821,458

Note 6 - Patents and Trademarks, Net

12 Months Ended

Aug. 31, 2022

Patents and Trademarks [Member]

Intangible Assets Disclosure [Text Block]

6. PATENTS AND TRADEMARKS, NET

Patents and trademarks, net consisted of the following:

	August 31, 2022			August 31, 2021
Patents and trademarks	$	3,225,655		$	3,018,507
Less accumulated amortization		(2,515,644	)		(2,308,935	)
	$	710,011		$	709,572

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 $206,710 and $203,088 for the years ended August 31, 2022 and 2021, respectively. Amortization expense is estimated to average $178,000 in each of the next four fiscal years.

Note 7 - Investments in Joint Ventures

12 Months Ended

Aug. 31, 2022

Equity Method Investments and Joint Ventures Disclosure [Text Block]

7. INVESTMENTS IN JOINT VENTURES

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

The Company considers the Company’s joint venture in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH (EXCOR) to be individually significant to the Company’s consolidated assets and income as of August 31, 2022 and 2021. Zerust India became a wholly owned subsidiary of the Company effective as of September 1, 2021. Financial information from the audited and unaudited financial statements of EXCOR as well as all the Company’s other joint ventures, are summarized as follows:

	As of August 31, 2022
	Total		EXCOR		OTHER
Current assets	$	52,428,831	$	26,047,914	$	26,380,917
Total assets		55,854,457		27,932,532		27,921,925
Current liabilities		10,981,833		2,943,895		8,037,938
Noncurrent liabilities		1,138,980		-		1,138,980
Joint ventures’ equity		43,733,644		24,988,637		18,745,007
Northern Technologies International Corporation’s share of joint ventures’ equity		21,814,754		12,494,320		9,320,434
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings		21,256,923		12,463,415		8,793,508

	Fiscal Year Ended August 31, 2022
	Total		EXCOR		OTHER
Net sales	$	104,077,748	$	42,853,162	$	61,224,586
Gross profit		41,030,647		20,312,400		20,718,247
Net income		9,302,237		6,487,855		2,814,382
Northern Technologies International Corporation’s share of equity in income of joint ventures		4,725,918		3,236,989		1,488,929
Northern Technologies International Corporation’s dividends received from joint ventures		5,723,176		4,255,200		1,467,976

	As of August 31, 2021
	Total		EXCOR		OTHER⁽¹⁾
Current assets	$	69,394,796	$	33,886,655	$	35,508,141
Total assets		73,814,402		36,211,520		37,602,882
Current liabilities		16,366,398		5,386,377		10,980,021
Noncurrent liabilities		1,455,524		-		1,455,524
Joint ventures’ equity		55,992,480		30,825,144		25,167,336
Northern Technologies International Corporation’s share of joint ventures’ equity		27,623,768		15,412,574		12,211,194
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings		24,702,778		14,697,490		10,005,288

	Fiscal Year Ended August 31, 2021
	Total		EXCOR		OTHER⁽¹⁾
Net sales	$	120,954,550	$	46,522,688	$	74,431,862
Gross profit		53,371,610		25,389,981		27,981,629
Net income		14,921,531		8,798,995		6,122,536
Northern Technologies International Corporation’s share of equity in income of joint ventures		7,465,214		4,400,403		3,064,811
Northern Technologies International Corporation’s dividends received from joint ventures		3,665,365		1,809,900		1,855,465

____________________

(1)	Includes Zerust India since Zerust India was not a consolidated subsidiary of the Company as of August 31, 2021. See Note 3 entitled “Business Combination.”

Note 8 - Intangible Asset, Net

12 Months Ended

Aug. 31, 2022

Customer Relationships and Assembled Workforce [Member]

Intangible Assets Disclosure [Text Block]

8. INTANGIBLE ASSET, NET

Intangible asset, net consisted of the following:

	August 31, 2022			August 31, 2021
Customer relationships	$	6,347,000		$	—
Less accumulated amortization		(423,133	)		—
Net Carrying Amount	$	5,923,867		$	—

The customer relationships were established as a part of purchase accounting related to our Zerust India acquisition. See Note 3 entitled “Business Combination.” The Company amortizes the intangible asset related to the customer relationships using the straight-line method over the estimated useful lives of the asset, which is 15 years. Total amortization expense was $423,133 for the year ended August 31, 2022. Amortization expense is estimated to be $423,000 in each of the next five fiscal years.

Note 9 - Corporate Debt

12 Months Ended

Aug. 31, 2022

Debt Disclosure [Text Block]

9. CORPORATE DEBT

The Company has a revolving line of credit with PNC Bank, National Association (PNC Bank) of $7,000,000 as of August 31, 2022. The line of credit has a maturity date of January 7, 2023 and bears interest at an annual rate equal to the daily Bloomberg Short-Term Bank Yield (BSBY) Index plus 250 basis points (2.50%). The line of credit is governed under an Amended and Restated Loan Agreement dated August 31, 2021.

On January 4, 2022, the Company issued an Amended and Restated Revolving Line of Credit Note, which extended the maturity date to January 7, 2023 and revised the rate at which amounts outstanding under the line of credit bear interest to equal a per annum rate equal to the daily BSBY Index plus 250 basis points (2.50%). The other material terms of the line of credit were not affected by these amendments or other immaterial amendments that have been executed since the execution of the Amended and Restated Loan Agreement dated August 31, 2021.

On May 20, 2022, to maintain financial flexibility, the Company issued an Amended and Restated Revolving Line of Credit Note to PNC Bank, which increased the Company’s line of credit from $5,000,000 to $7,000,000 until August 16, 2022, at which time the line of credit was scheduled to go decrease back to $5,000,000 until its expiration date on January 7, 2023. Subsequently, to maintain future financial flexibility, on August 8, 2022, NTIC and PNC Bank entered into an Amended and Restated Revolving Line of Credit Note and agreed to keep the line of credit at $7,000,000 until its maturity date.

Borrowings of $5,900,000 were outstanding under the line of credit as of August 31, 2022 and no amounts were outstanding as of August 31, 2021. Such outstanding borrowings were used primarily to fund the Company’s acquisition of the remaining ownership interest of Zerust India. The average interest rate during the twelve months ended August 31, 2022 was 3.07%.

The obligations of the Company under the loan agreement are secured by a lien on all of the Company’s personal property, excepting certain liens consented to in writing by PNC. The loan agreement contains covenants, including affirmative financial covenants, such as the maintenance of a minimum fixed charge coverage ratio of 1.10:1.00, 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. As of August 31, 2022, the Company was in compliance with all debt covenants.

As of August 31, 2022 and August 31, 2021, the Company did not have any letters of credit outstanding with respect to the letter of credit sub-facility available under the revolving line of credit with PNC Bank. As of August 31, 2022 and August 31, 2021, the Company had $72,418 and $104,363, respectively, of letters of credit with JP Morgan Chase Bank that are performance based and set to expire between 2022 and 2023.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Note 10 - Stockholders' Equity

12 Months Ended

Aug. 31, 2022

Stockholders' Equity Note Disclosure [Text Block]

10. STOCKHOLDERS’ EQUITY

During fiscal 2022, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to holders of record of NTIC common stock as of the following record dates:

Declaration Date	Amount		Record Date	Payable Date
October 20, 2021	$	0.07	November 3, 2021	November 17, 2021
January 21, 2022	$	0.07	February 2, 2022	February 16, 2022
April 22, 2022	$	0.07	May 4, 2022	May 18, 2022
July 20, 2022	$	0.07	August 3, 2022	August 17, 2022

On April 23, 2020, NTIC announced the temporary suspension of its quarterly cash dividend pending clarity on the financial impact of COVID-19 on NTIC. On January 15, 2021, NTIC announced the reinstatement of its quarterly cash dividend. During fiscal 2021, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to holders of record of NTIC common stock as of the following record dates:

Declaration Date	Amount		Record Date	Payable Date
January 15, 2021	$	0.065	February 3, 2021	February 17, 2021
April 23, 2021	$	0.065	May 5, 2021	May 19, 2021
July 21, 2021	$	0.065	August 4, 2021	August 18, 2021

During fiscal 2022 and fiscal 2021, the Company repurchased no shares of its common stock.

During fiscal 2022, the Company granted stock options under the Northern Technologies International Corporation 2019 Stock Incentive Plan (as amended, the 2019 Plan) to purchase an aggregate of 174,840 shares of its common stock to various employees and directors. The weighted average per share exercise price of the stock options is $16.97. The exercise price of the stock options is equal to the fair market value of the Company’s common stock on the date of grant. During fiscal 2022, stock options to purchase an aggregate of 51,218 shares of common stock were exercised at a weighted average exercise price of $6.60 per share, resulting in the net issuance of 42,071 shares of common stock since some of the options were exercised on a net cashless exercise basis.

During fiscal 2021, the Company granted stock options under the 2019 Plan to purchase an aggregate of 419,874 shares of its common stock to various employees and directors. The weighted average per share exercise price of the stock options is $8.24. The exercise price of the stock options is equal to the fair market value of the Company’s common stock on the date of grant. During fiscal 2021, stock options to purchase an aggregate of 77,645 shares of common stock were exercised at a weighted average exercise price of $8.18 per share, resulting in the net issuance of 74,950 shares of common stock since some of the options were exercised on a net cashless exercise basis.

The Company issued 2,635 and 4,646 shares of common stock on September 1, 2021 and 2020, respectively, under the Northern Technologies International Corporation Employee Stock Purchase Plan (ESPP). The Company issued 2,966 and 5,225 shares of common stock on March 1, 2022 and 2021, respectively, under the ESPP. The ESPP is compensatory for financial reporting purposes. As of August 31, 2022, 69,221 shares of common stock remained available for sale under the ESPP.

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.

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Note 11 - Net Income Per Common Share

12 Months Ended

Aug. 31, 2022

Earnings Per Share [Text Block]

11. NET INCOME PER COMMON SHARE

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

The following is a reconciliation of the net income per share computation for fiscal 2022 and fiscal 2021:

Numerator:	August 31, 2022		August 31, 2021
Net income attributable to NTIC	$	6,324,700	$	6,281,238

Denominator:
Basic-weighted shares outstanding		9,216,216		9,116,472
Weighted shares assumed upon exercise of stock options		418,812		757,667
Diluted – weighted shares outstanding		9,635,028		9,874,139

Basic net income per share:	$	0.69	$	0.69
Diluted net income per share:	$	0.66	$	0.64

The dilutive impact summarized above relates to the periods when the average market price of the Company’s common stock exceeded the exercise price of the potentially dilutive option securities granted. Net income per common share was based on the weighted average number of common shares outstanding during the periods when computing the basic net income per share. When dilutive, stock options are included as equivalents using the treasury stock market method when computing the diluted net income per share. Excluded from the computation of diluted net income per share as of August 31, 2022 were options outstanding to purchase 600,094 shares of common stock. Excluded from the computation of diluted net income per share as of August 31, 2021 were options outstanding to purchase 136,221 shares of common stock.

Note 12 - Stock-based Compensation

12 Months Ended

Aug. 31, 2022

Share-Based Payment Arrangement [Text Block]

12. STOCK-BASED COMPENSATION

The Company has three stock-based compensation plans under which stock options or other stock-based awards have been granted: the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan, 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 2019 Plan replaced the 2007 Plan with respect to future grants; and, therefore, no further awards may be made under the 2007 Plan. The Compensation Committee of the Board of Directors and the Board of Directors administer these plans.

The 2019 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. On January 15, 2021, the Company’s stockholders approved certain amendments to the 2019 Plan, including an increase in the number of shares of common stock available for issuance under the plan by an additional 800,000 shares. Subject to adjustment as provided in the 2019 Plan, up to a maximum of 1,600,000 shares of the Company’s common stock are issuable under the 2019 Plan. Options granted generally have a term of ten years and become exercisable over a one- or three- 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, 2022, options to purchase an aggregate of 867,721 shares of the Company’s common stock were outstanding under the 2019 Plan and 704,516 shares of the Company’s common stock remain available for grant under the 2019 Plan. As of August 31, 2022, options to purchase an aggregate of 649,243 shares of the Company’s common stock were outstanding under the 2007 Plan.

The Company granted options to purchase an aggregate of 174,840 and 419,874 shares of its common stock during fiscal 2022 and 2021, respectively. The fair value of option grants is determined at the date of grant using the Black-Scholes option pricing model with the assumptions listed below. The Company recognized compensation expense of $931,532 during fiscal 2022 and compensation expense of $664,174 during fiscal 2021 related to the options that vested during such time period. As of August 31, 2022, the total compensation cost for non-vested options not yet recognized in the Company’s consolidated statements of operations was $1,009,719. Stock-based compensation expense of $671,526 is expected during fiscal 2023 and $338,193 is expected to be recognized during fiscal 2024, based on outstanding options as of August 31, 2022. 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 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:

	Fiscal Year 2022			Fiscal Year 2021
Dividend yield		2.46	%		1.65	%
Expected volatility		45.2	%		45.4	%
Expected life of option (years)		10			10
Weighted average risk-free interest rate		3.30	%		0.77	%

Stock option activity during the periods indicated was as follows:

	Number of Shares (#)			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at August 31, 2020		1,127,968		$	9.63
Options granted		419,874			8.24
Options exercised		(77,645	)		8.18
Options terminated		(43,546	)		9.63

Outstanding at August 31, 2021		1,426,651		$	9.30
Options granted		174,840			16.97
Options exercised		(51,218	)		6.60
Options terminated		(5,546	)		18.23

Outstanding at August 31, 2022		1,544,727		$	10.23	$	4,151,365

Exercisable at August 31, 2022		1,156,211		$	9.58	$	3,394,957

The weighted average per share fair value of options granted during fiscal 2022 and fiscal 2021 was $16.97 and $8.24, respectively. The weighted average remaining contractual life of the options outstanding as of August 31, 2022 and 2021 was 5.76 years and 6.20 years, respectively.

Note 13 - Segment and Geographic Information

12 Months Ended

Aug. 31, 2022

Segment Reporting Disclosure [Text Block]

13. SEGMENT AND GEOGRAPHIC INFORMATION

Segment Information

The Company’s chief operating decision maker 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 almost 50 years and, more recently, has also expanded into the oil and gas industry. The Company also sells a portfolio of proprietary bio-based and compostable (fully biodegradable) polymer resins and finished products under the Natur-Tec® brand.

The following tables present the Company’s business segment information:

	Fiscal 2022		Fiscal 2021
ZERUST® net sales	$	57,459,382	$	45,554,434
Natur-Tec® net sales		16,699,508		10,939,385
Total net sales	$	74,158,890	$	56,493,819

The following table sets forth the Company’s cost of goods sold by segment:

	Fiscal 2022		Fiscal 2021
Direct cost of goods sold
ZERUST®	$	34,673,146	$	26,028,555
Natur-Tec®		12,859,343		7,717,429
Indirect cost of goods sold		3,557,809		3,174,830
Total net cost of goods sold	$	51,090,298	$	36,920,814

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 for fiscal 2022 and fiscal 2021 were as follows:

	Fiscal Year Ended August 31,
	2022		2021
Inside the U.S.A. to unaffiliated customers	$	25,301,067	$	22,039,456
Outside the U.S.A. to:
Joint ventures in which the Company is a shareholder directly and indirectly		2,968,089		3,023,196
Unaffiliated customers		45,889,734		31,431,167
	$	74,158,890	$	56,493,819

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 2022 and fiscal 2021, respectively, were as follows:

	Fiscal 2022		% of Total Fees for Services Provided to Joint Ventures			Fiscal 2021		% of Total Fees for Services Provided to Joint Ventures
Germany	$	834,725		14.5	%	$	920,902		15.4	%
Poland		730,523		12.7	%		798,570		13.4	%
Japan		669,371		11.6	%		826,403		13.9	%
France		448,579		7.8	%		435,032		7.3	%
Sweden		447,441		7.8	%		528,755		8.9	%
Thailand		344,649		6.0	%		399,563		6.7	%
United Kingdom		342,488		5.9	%		316,786		5.3	%
Finland		340,783		5.9	%		298,663		5.0	%
Czech Republic		300,257		5.2	%		377,395		6.3	%
South Korea		270,309		4.7	%		317,042		5.3	%
Indonesia		156,476		2.7	%		122,513		2.1	%
India		-		-			392,074		6.6	%
Other *		882,081		15.2	%		230,562		3.8	%
	$	5,767,682		100.0	%	$	5,964,260		100.0	%

* NTI Asean recovered $681,859 in previously written-off fees for services related to the termination of its joint venture in China in fiscal 2015.

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

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

The geographical distribution of total property and equipment and net sales is as follows:

	At August 31, 2022		At August 31, 2021
China	$	5,826,898	$	5,110,071
Other		565,022		453,199
United States		5,778,573		6,258,188
Total property and equipment	$	12,170,493	$	11,821,458

	Fiscal Year Ended August 31, 2022		Fiscal Year Ended August 31, 2021
China	$	15,754,051	$	17,343,623
Brazil		5,160,572		4,122,781
India		18,555,603		5,482,989
Other		9,387,597		7,504,970
United States		25,301,067		22,039,456
Total net sales	$	74,158,890	$	56,493,819

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

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

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.

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Note 14 - Retirement Plan

12 Months Ended

Aug. 31, 2022

Retirement Benefits [Text Block]

14. 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 $272,257 and $237,499 for fiscal 2022 and fiscal 2021, respectively.

The entire disclosure for retirement benefits.

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Note 15 - Related Party Transactions

12 Months Ended

Aug. 31, 2022

15. RELATED PARTY TRANSACTIONS

During both fiscal 2022 and fiscal 2021, the Company made consulting payments of $144,000 to Bioplastic Polymers LLC, an entity owned by Ramani Narayan, Ph.D., a director of the Company.

Note 16 - Income Taxes

12 Months Ended

Aug. 31, 2022

Income Tax Disclosure [Text Block]

16. INCOME TAXES

The provision for income taxes for the fiscal years ended August 31, 2022 and 2021 was approximately as follows:

	Fiscal Year Ended August 31,
	2022			2021
Current:
Federal	$	—		$	—
State		98,000			39,000
Foreign		1,894,000			1,307,000
		1,992,000			1,346,000
Deferred:
Federal		—			—
State		—			—
Foreign		(118,164	)		115,905
		(118,164	)		115,905
	$	1,873,836		$	1,461,905

Reconciliations of the expected federal income tax at the statutory rate of 21.0% with the provisions for income taxes for the fiscal years ended August 31, 2022 and 2021 were approximately as follows:

	Fiscal Year Ended August 31,
	2022			2021
Tax computed at statutory rates	$	1,780,000		$	1,794,000
State income tax, net of federal benefit		34,000			37,000
Tax effect on equity in income of international joint ventures		(988,000	)		(1,560,000	)
Tax effect of foreign operations		1,004,000			839,000
Deemed repatriation		10,000			—
Expired foreign tax credit		—			897,000
Research and development credit		(244,000	)		(277,000	)
Valuation allowance		133,000			(492,000	)
Stock based compensation		67,000			75,000
Non-controlling interest		(72,000	)		(83,000	)
Other		149,836			231,905
	$	1,873,836		$	1,461,905

The Company has not provided U.S. income taxes or foreign withholding taxes with respect to its portion of the cumulative undistributed earnings of certain foreign subsidiaries and joint ventures that are essentially permanent in duration. As a result of the 2017 tax law changes, U.S. federal income taxes on dividends received from the Company’s foreign subsidiaries and joint ventures after December 31, 2017 have been generally eliminated. However, the Company continues to be subject to foreign withholding taxes upon repatriation of any undistributed earnings that are not essentially permanent in duration. The Company recorded a tax expense of approximately $8,000 and $113,000 during fiscal 2022 and fiscal 2021, respectively, representing changes in the deferred tax liability for foreign withholding taxes to be paid with respect to the portion of the cumulative undistributed earnings of foreign subsidiaries and joint ventures that the Company determined were not essentially permanent in duration.

The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. The tax effect of the temporary differences and tax carryforwards comprising the net deferred taxes shown on the consolidated balance sheets as of August 31, 2022 and 2021 was approximately as follows:

	August 31,
	2022			2021
Accrued compensation	$	329,100		$	539,300
Inventory costs		93,900			55,100
Other accrued expenses		84,800			103,100
Lease liability		98,300			84,300
Goodwill and other intangible assets		398,600			453,000
Stock-based compensation		547,200			466,300
Property and equipment		9,100			—
Foreign tax credit carryforward		4,892,100			4,893,300
Other credit and loss carryforward		5,455,500			5,243,100
Other		23,000			—
Total deferred tax assets		11,931,600			11,837,500
Valuation allowance		(11,592,900	)		(11,447,500	)
Total deferred tax assets after valuation allowance		338,700			390,000
Property and equipment		—			(7,300	)
Right-of-use asset		(98,300	)		(84,300	)
Intangible assets		(1,777,200	)		—
Unremitted foreign earnings		(163,200	)		(154,900	)
Other		—			(50,900	)
Total deferred tax liabilities		(2,038,700	)		(297,400	)
Net deferred tax assets	$	(1,700,000	)	$	92,600

As of August 31, 2022, the Company has foreign tax credit carryforwards of $4,892,100. This amount will begin to expire if not utilized prior to August 31, 2023. In addition, the Company had federal and state tax credit carryforwards of $3,796,500 as of August 31, 2022, which will begin to expire in fiscal 2023. These federal and state tax credit carryforwards consist primarily of federal and Minnesota research and development credit carryforwards. The Company also has a deferred tax asset of $1,170,100 for federal net operating loss carryforwards and $329,800 for state net operating loss carryforwards as of August 31, 2022. The federal net operating loss carryforward has an indefinite carryforward period. The state net operating loss carryforward will begin to expire to the extent it is not utilized prior to August 31, 2023. The Company has a deferred tax asset of $159,000 for foreign net operating loss carryforwards, which has an indefinite carryforward period.

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 its domestic deferred tax assets will not be realized due to the absence of objectively verifiable sources of taxable income. On the basis of this evaluation, the Company has recorded a valuation allowance of $11,592,900 and $11,447,500 as of August 31, 2022 and 2021, respectively, to recognize only the portion of the deferred tax assets that is more likely than not to be realized. The net deferred tax asset as of August 31, 2022 and 2021 relates entirely to non-US deferred tax assets which are expected to be realized by offset of deferred tax liability for withholding tax on cumulative undistributed earnings in foreign subsidiaries and joint ventures that the Company determined were not essentially permanent. The change in the valuation allowance totaled an increase of $145,400 and a decrease of $114,000 for the years ended August 31, 2022 and 2021, respectively.

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

	Fiscal Year Ended August 31,
	2022		2021
Gross unrecognized tax benefits – beginning balance	$	297,600	$	278,200
Gross increases – prior period tax positions		3,400		4,400
Gross increases – current period tax positions		18,000		15,000
Gross unrecognized tax benefits – ending balance	$	319,000	$	297,600

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

The Company recognizes interest related to unrecognized tax benefits and penalties as income tax expense. 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 as of both August 31, 2022 and August 31, 2021.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States. Among other provisions, the IRA includes a 15% corporate minimum tax rate applied to certain large corporations and a 1% excise tax on corporate stock repurchases made after December 31, 2022. We do not expect the IRA to have a material impact on our consolidated financial statements.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. With few exceptions, as of August 31, 2022, the Company is no longer subject to federal, state, local, or foreign examinations by tax authorities for years prior to August 31, 2019.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Note 17 - Commitments and Contingencies

12 Months Ended

Aug. 31, 2022

Commitments and Contingencies Disclosure [Text Block]

17. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company currently has operating leases for various buildings, equipment and vehicles. These leases are under non-cancelable operating lease agreements with expiration dates between September 30, 2022 and July 31, 2024. The Company has the option to extend certain leases to five or ten-year term(s) and has the right of first refusal on any sale.

The Company records lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments. The Company records its long-term operating leases as right-of-use assets. Upon initial adoption, using the modified retrospective transition approach, no leases with terms less than 12 months have been capitalized to the consolidated balance sheet consistent with ASC 842. Instead, these leases are recognized in the consolidated statement of operations on a straight-line expense throughout the lives of the leases. None of the Company’s leases contain common area maintenance or security agreements.

The Company has made certain assumptions and judgments when applying ASC 842, the most significant of which is that the Company elected the package of practical expedients available for transition that allow the Company to not reassess whether expired or existing contracts contain leases under the new definition of a lease, lease classification for expired or existing leases and whether previously capitalized initial direct costs would qualify for capitalization under ASC 842. Additionally, the Company did not elect to use hindsight when considering judgments and estimates such as assessments of lessee options to extend or terminate a lease or purchase the underlying asset. The Company has no contingent rent agreements.

Present Value of Leases

	August 31, 2022		August 31, 2021
Right-of-use assets, net	$	557,571	$	376,438

Current portion of lease liability		373,330		272,336
Lease liability, less current portion		184,241		104,102
Total lease liability	$	557,571	$	376,438

As of August 31, 2022, the weighted-average remaining lease term was 1.57 years. The Company’s lease agreements do not provide a readily determinable implicit rate nor is it available to the Company from its lessors. Instead, as of August 31, 2022, the Company estimates the weighted-average discount rate for its operating leases to be 5.45% to present value based on the incremental borrowing rate.

Future minimum payments as of August 31, 2022 under these long-term operating leases are as follows (in thousands):

Fiscal 2023	$	373,330
Fiscal 2024		209,802
Total future minimum lease payments		583,132
Less amount representing interest		(25,561	)
Present value of obligations under operating leases		557,571
Less current portion		(373,330	)
Long-term operating lease obligations	$	184,241

Rent expense under these leases was approximately $272,336 and $386,345 as of August 31, 2022 and 2021, respectively.

Annual Bonus Plan

On August 26, 2022, 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, 2023. For fiscal 2023, 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 (EBITOI), 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 2023 compared to a pre-established target EBITOI for fiscal 2023, 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 is discretionary, and bonuses may be paid to executive officer participants in both cash and shares of the Company’s common stock, the exact amount and percentages of which are 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 2023.

On August 26, 2021, 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, 2022. $1,733,336 was recognized for bonuses for the fiscal year ended August 31, 2022, $533,336 of the bonus is comprised of stock options granted to management on September 1, 2021 that will be expensed over three years and $1,200,000 will be paid out in cash and profit sharing subsequent to year end. This is compared to $2,366,668 recognized for bonuses for the fiscal year ended August 31, 2021, $266,667 of the bonus comprised of stock options granted to management on September 1, 2020 and $2,100,000 was paid out in cash and profit sharing subsequent to year end.

Concentrations

Two joint ventures (consisting of the Company’s joint ventures in South Korea and Thailand) accounted for 46.6% of the Company’s trade joint venture receivables as of August 31, 2022, and two joint ventures (consisting of the Company’s joint ventures in the Thailand and Indonesia) accounted for 37.4% of the Company’s trade joint venture receivables as of August 31, 2021.

Legal Matters

From time to time, the Company is subject to various other claims and legal actions in the ordinary course of its business. The Company records a liability in its consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, where the Company has assessed that a loss is probable and an amount could be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that material loss may have been incurred. In the opinion of management, as of August 31, 2022, 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.

Note 18 - Supplemental Cash Flow Information

12 Months Ended

Aug. 31, 2022

Cash Flow, Supplemental Disclosures [Text Block]

18. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental disclosures of cash flow information consist of:

	Fiscal Year Ended August 31,
	2022		2021
Cash paid for income tax	$	1,218,467	$	895,646
Cash paid for interest		89,096		16,086

Note 19 - Fair Value Measurements

12 Months Ended

Aug. 31, 2022

Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block]

19. 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, and the Company estimates that market value approximates costs.

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, 2022

Level 1

Level 2

Level 3

Available for sale securities

5,590

—

Fair Value Measurements

Using Inputs Considered as

Fair value as of

August 31, 2021

Level 1

Level 2

Level 3

Available for sale securities

4,634

—

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, 2022 or August 31, 2021. 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.

Note 20 - Subsequent Events	12 Months Ended
Note 20 - Subsequent Events	Aug. 31, 2022
Notes to Financial Statements
Subsequent Events [Text Block]	*20.* SUBSEQUENT EVENTS On October 20, 2022, NTIC’s Board of Directors declared a cash dividend of $0.07 per share of NTIC’s common stock, payable on November 16, 2022 to stockholders of record on November 3, 2022. Although NTIC’s Board of Directors intends to declare regular quarterly cash dividends going forward, the payment of any future dividends will be determined by NTIC’s Board of Directors in light of conditions then existing, including NTIC’s earnings, financial condition, cash requirements, restrictions in financing agreements, business conditions, and other factors, including without limitation the effect of COVID-19 on its business, operating results, and financial condition.

Significant Accounting Policies (Policies)

12 Months Ended

Aug. 31, 2022

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

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

Revenue Recognition, Deferred Revenue [Policy Text Block]

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.

When determining recognition of revenue arrangements the Company performs the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when or as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods it transfers to, or services it performs for, the customer.

Generally, the Company’s performance obligations are satisfied when the customers take possession of the products, which normally occurs at the shipping point or destination depending on the terms of the contracts. The Company’s services are generally sold based upon quotes or contracts with customers that include a fixed or determinable price, and sales arrangements do not contain any significant financing component for its customers. The Company does not recognize revenue related to product warranties, nor does the Company incur significant contract costs. Customer arrangements do not generate contract assets or liabilities.

Revenue Recognition – Revenue is measured based on consideration specified in the contract with a customer, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, including noncash consideration, consideration paid or payable to customers, and significant financing components. Revenue from all customers is recognized when a performance obligation is satisfied by transferring control of a distinct good or service to a customer.

Individually promised goods and services in a contract are considered a distinct performance obligation and accounted for separately if the customer can benefit from the individual good or service on its own or with other resources that are readily available to the customer and the good or service is separately identifiable from other promises in the arrangement. When an arrangement includes multiple performance obligations, the consideration is allocated between the performance obligations in proportion to their estimated standalone selling price. Costs related to products delivered are recognized in the period incurred, unless criteria for capitalization of costs are met. Costs of revenues consist primarily of direct labor, manufacturing overhead, materials, and components. The Company does not incur significant upfront costs to obtain a contract. If costs to obtain a contract were to become material, the costs would be recorded as an asset and amortized to expense in a manner consistent with the related recognition of revenue.

The Company excludes government assessed and imposed taxes on revenue generating transactions that are invoiced to customers from revenue. The Company includes freight billed to customers in revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold.

The timing of revenue recognition, billing, and cash collections results in accounts receivable on the consolidated balance sheet.

Performance Obligations – A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation in proportion to its standalone selling price and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s various performance obligations and the timing or method of revenue recognition are discussed below. The Company’s technical

service consultants work directly with the end users of NTIC’s ZERUST® rust and corrosion inhibiting products to

analyze their specific needs and develop systems to meet their performance requirements.

The Company sells its products to both distributors and end-users. Each unit of product delivered under a customer order represents a distinct and separate performance obligation, as the customer can benefit from each unit on its own or with other resources that are readily available to the customer, and each unit of product is separately identifiable from other products in the arrangement.

The transaction price for the Company’s products is the invoiced amount. The Company does not have variable consideration in the form of refunds, credits, rebates, price concessions, pricing incentives, or other items impacting transaction price. The purchase order pricing in arrangements with customers is deemed to approximate standalone selling price; therefore, the Company does not need to allocate proceeds on a relative standalone selling price allocation between performance obligations. The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. There are no material obligations that extend beyond one year.

Revenue is recognized when transfer of control occurs, as defined by the terms in the customer agreement. The Company immediately recognizes incidental items that are immaterial in the context of the contract. The Company has applied the practical expedient in paragraph 606-10-25-16A and does not assess if immaterial items are promised goods or services. The Company has also applied the practical expedient in paragraph 606-10-32-18 regarding the adjustment of the promised amount of consideration for the effects of a significant financing component when the customer pays for that good or service within one year or less, as the Company does not have any significant financing components in its customer arrangements since payment is received at or shortly after the point of sale, generally thirty to ninety days.

The Company estimates returns based on an analysis of historical experience if the right to return products is granted to its customers. The Company does not record a return asset, as non-conforming products are generally not returned. The Company’s return policy does not vary by geography. The customer has no rotation or price protection rights, and the Company is not under a warranty obligation.

Sales Commissions – Sales commissions paid to sales representatives are eligible for capitalization, as they are incremental costs that would not have been incurred without entering into a specific sales arrangement and are recoverable through the expected margin on the transaction. The Company has elected to apply the practical expedient provided by ASC 340-40-25-4 and recognize the incremental costs of obtaining contracts as an expense when incurred, as the amortization period of the assets that would have otherwise been recognized is one year or less. The Company records these costs as a selling expense.

Product Warranty – The Company offers warranties on various products and services. These warranties are assurance type warranties that are not sold on a standalone basis; therefore, they are not considered distinct performance obligations. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time the revenue is recognized for the product sale.

International Revenue – The Company markets its products to numerous countries in North America, Europe, Latin America, Asia, and other parts of the world. See Note 13, Segment and Geographic Information, for information regarding revenue disaggregation by geography.

Receivables from Joint Ventures Policy [Policy Text Block ]

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 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 that an allowance for doubtful accounts related to its joint venture receivables was not necessary as of August 31, 2022 or 2021.

Fees for Services Provided to Joint Ventures – The Company provides services to its joint ventures including consulting, legal, travel, insurance, technical, and marketing services based on licensing or other agreements with its joint ventures. 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. Under the Company’s agreements with its joint ventures, amounts are earned when product is shipped from joint venture facilities, at which point a sale is deemed to have occurred and results in obligation for the joint venture to pay the royalty and recognition of the fee by the Company. 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, Policy [Policy Text Block]

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.

Marketable 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 not significant.

Inventory, Policy [Policy Text Block]

Inventories – Inventories are recorded at the lower of cost (first-in, first-out basis) or net realizable value.

Receivable [Policy Text Block]

Trade Receivables – 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 $439,000 and $382,000 as of August 31, 2022 and August 31, 2021, respectively. 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.

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	5-30 years
Machinery and equipment	3-10 years

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

Patents and Trademarks – Patents and trademarks, 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.

Equity Method Investments [Policy Text Block]

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 a 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 had positive equity as of August 31, 2022 and 2021. The Company considers any of its joint ventures to be significant and discloses entity specific financial information if the joint venture’s income or assets make up more than 20% of the Company’s total assets or income.

The Company classifies distributions received from its joint ventures based on the nature of the distributions, generally, in operating activities on the consolidated statements of cash flows.

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, 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.

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

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 whether 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. When evaluating assets for impairment, the Company groups long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Other Intangible Assets- Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in acquisitions after amounts have been allocated to intangible assets. Goodwill is tested for impairment annually (at August 31), or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition.

The Company assesses qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If after assessing the totality of events or circumstances, the Company were to determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company would perform a quantitative test that compares the fair value to its carrying value to determine the amount of any impairment. The Company has determined there was no goodwill impairment as of August 31, 2022.

Income Tax, Policy [Policy Text Block]

Income Taxes – The Company utilizes the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. 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 operations 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 assets in the future in excess of their net recorded amount, the Company makes 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.

Business Combinations Policy [Policy Text Block]

Acquisitions of Businesses - Business combinations are accounted for under the acquisition method. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Determining the fair value of assets acquired and liabilities and contingent liabilities assumed requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash inflows and outflows, probabilities of success, discount rates, and asset lives, among other items. The excess of the fair value of the consideration transferred over the fair value of the Company’s share of the identifiable net assets acquired is recorded as goodwill. Acquisition-related expenses are recognized separately from the business combination and are recognized as general and administrative expense as incurred. The Company evaluates the materiality of required disclosures related to our business combinations using quantitative and qualitative measures.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation (Accumulated Other Comprehensive Income (Loss)) – The functional currency of NTIC China, Zerust Brazil, Natur-Tec India, Natur Tec Lanka, Zerust Mexico, Zerust India, Zerust Singapore, Zerust Vietnam, NTI Europe, 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, Natur Tec Lanka, Zerust India, Zerust Singapore, Zerust Vietnam, NTI Asean, Zerust Mexico, NTI Europe, and NTIC’s 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 do not change the equity in income from joint ventures reflected in the Company’s consolidated statements of operations.

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

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 Cost, Policy [Policy Text Block]

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

Research and Development – The Company expenses all costs related to product research and development as incurred.

Stockholders' Equity, Policy [Policy Text Block]

Common Stock – The Company issues authorized but unissued shares of common stock upon the exercise of stock options.

Share-Based Payment Arrangement [Policy Text Block]

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).

Subsequent Events, Policy [Policy Text Block]

Subsequent Events – The Company has evaluated events occurring after the date of the consolidated financial statements for events requiring disclosure in the consolidated financial statements.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates – The preparation of the consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Note 1 - Nature of Business and Significant Accounting Policies (Tables)

12 Months Ended

Aug. 31, 2022

Property and Equipment Useful Life [Table Text Block]

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

Note 3 - Business Combination (Tables)

12 Months Ended

Aug. 31, 2022

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

Cash and cash equivalents	$	1,187,997
Trade account receivable		1,954,769
Inventories		886,650
Prepaid expenses and other		396,545
Property, plant and equipment		219,077
Operating lease, right of use asset		355,000
Customer relationships		6,347,000
Goodwill		4,782,376
Current liabilities		(1,370,314	)
Deferred tax liability		(1,904,100	)
Operating lease liability		(355,000	)
Net assets acquired	$	12,500,000
Less:
Fair value of previously held equity method investment		(1,637,362	)
Cumulative foreign currency translation		(661,088	)
Gain recognized on acquisition		(3,951,550	)
		(6,250,000	)
Cash paid for acquisition	$	6,250,000

Note 4 - Inventories (Tables)

12 Months Ended

Aug. 31, 2022

Schedule of Inventory, Current [Table Text Block]

	August 31, 2022		August 31, 2021
Production materials	$	6,496,656	$	4,453,688
Finished goods		9,845,073		6,660,519
	$	16,341,729	$	11,114,207

Note 5 - Property and Equipment, Net (Tables)

12 Months Ended

Aug. 31, 2022

Property, Plant and Equipment [Table Text Block]

	August 31, 2022			August 31, 2021
Land	$	310,365		$	310,365
Buildings and improvements		14,778,759			13,149,258
Machinery and equipment		5,643,320			5,453,679
		20,732,444			18,913,302
Less accumulated depreciation		(8,561,951	)		(7,091,844	)
	$	12,170,493		$	11,821,458

Note 6 - Patents and Trademarks, Net (Tables)

12 Months Ended

Aug. 31, 2022

Patents and Trademarks [Member]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	August 31, 2022			August 31, 2021
Patents and trademarks	$	3,225,655		$	3,018,507
Less accumulated amortization		(2,515,644	)		(2,308,935	)
	$	710,011		$	709,572

Note 7 - Investments in Joint Ventures (Tables)

12 Months Ended

Aug. 31, 2022

Condensed Balance Sheet [Table Text Block]

	As of August 31, 2022
	Total		EXCOR		OTHER
Current assets	$	52,428,831	$	26,047,914	$	26,380,917
Total assets		55,854,457		27,932,532		27,921,925
Current liabilities		10,981,833		2,943,895		8,037,938
Noncurrent liabilities		1,138,980		-		1,138,980
Joint ventures’ equity		43,733,644		24,988,637		18,745,007
Northern Technologies International Corporation’s share of joint ventures’ equity		21,814,754		12,494,320		9,320,434
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings		21,256,923		12,463,415		8,793,508

	As of August 31, 2021
	Total		EXCOR		OTHER⁽¹⁾
Current assets	$	69,394,796	$	33,886,655	$	35,508,141
Total assets		73,814,402		36,211,520		37,602,882
Current liabilities		16,366,398		5,386,377		10,980,021
Noncurrent liabilities		1,455,524		-		1,455,524
Joint ventures’ equity		55,992,480		30,825,144		25,167,336
Northern Technologies International Corporation’s share of joint ventures’ equity		27,623,768		15,412,574		12,211,194
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings		24,702,778		14,697,490		10,005,288

Condensed Income Statement [Table Text Block]

	Fiscal Year Ended August 31, 2022
	Total		EXCOR		OTHER
Net sales	$	104,077,748	$	42,853,162	$	61,224,586
Gross profit		41,030,647		20,312,400		20,718,247
Net income		9,302,237		6,487,855		2,814,382
Northern Technologies International Corporation’s share of equity in income of joint ventures		4,725,918		3,236,989		1,488,929
Northern Technologies International Corporation’s dividends received from joint ventures		5,723,176		4,255,200		1,467,976

	Fiscal Year Ended August 31, 2021
	Total		EXCOR		OTHER⁽¹⁾
Net sales	$	120,954,550	$	46,522,688	$	74,431,862
Gross profit		53,371,610		25,389,981		27,981,629
Net income		14,921,531		8,798,995		6,122,536
Northern Technologies International Corporation’s share of equity in income of joint ventures		7,465,214		4,400,403		3,064,811
Northern Technologies International Corporation’s dividends received from joint ventures		3,665,365		1,809,900		1,855,465

Note 8 - Intangible Asset, Net (Tables)

12 Months Ended

Aug. 31, 2022

Customer Relationships and Assembled Workforce [Member]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	August 31, 2022			August 31, 2021
Customer relationships	$	6,347,000		$	—
Less accumulated amortization		(423,133	)		—
Net Carrying Amount	$	5,923,867		$	—

Note 10 - Stockholders' Equity (Tables)

12 Months Ended

Aug. 31, 2022

Dividends Declared [Table Text Block]

Declaration Date	Amount		Record Date	Payable Date
October 20, 2021	$	0.07	November 3, 2021	November 17, 2021
January 21, 2022	$	0.07	February 2, 2022	February 16, 2022
April 22, 2022	$	0.07	May 4, 2022	May 18, 2022
July 20, 2022	$	0.07	August 3, 2022	August 17, 2022

Declaration Date	Amount		Record Date	Payable Date
January 15, 2021	$	0.065	February 3, 2021	February 17, 2021
April 23, 2021	$	0.065	May 5, 2021	May 19, 2021
July 21, 2021	$	0.065	August 4, 2021	August 18, 2021

Note 11 - Net Income Per Common Share (Tables)

12 Months Ended

Aug. 31, 2022

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Numerator:	August 31, 2022		August 31, 2021
Net income attributable to NTIC	$	6,324,700	$	6,281,238

Denominator:
Basic-weighted shares outstanding		9,216,216		9,116,472
Weighted shares assumed upon exercise of stock options		418,812		757,667
Diluted – weighted shares outstanding		9,635,028		9,874,139

Basic net income per share:	$	0.69	$	0.69
Diluted net income per share:	$	0.66	$	0.64

Note 12 - Stock-based Compensation (Tables)

12 Months Ended

Aug. 31, 2022

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

	Fiscal Year 2022			Fiscal Year 2021
Dividend yield		2.46	%		1.65	%
Expected volatility		45.2	%		45.4	%
Expected life of option (years)		10			10
Weighted average risk-free interest rate		3.30	%		0.77	%

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

	Number of Shares (#)			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding at August 31, 2020		1,127,968		$	9.63
Options granted		419,874			8.24
Options exercised		(77,645	)		8.18
Options terminated		(43,546	)		9.63

Outstanding at August 31, 2021		1,426,651		$	9.30
Options granted		174,840			16.97
Options exercised		(51,218	)		6.60
Options terminated		(5,546	)		18.23

Outstanding at August 31, 2022		1,544,727		$	10.23	$	4,151,365

Exercisable at August 31, 2022		1,156,211		$	9.58	$	3,394,957

Note 13 - Segment and Geographic Information (Tables)

12 Months Ended

Aug. 31, 2022

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

	Fiscal 2022		Fiscal 2021
ZERUST® net sales	$	57,459,382	$	45,554,434
Natur-Tec® net sales		16,699,508		10,939,385
Total net sales	$	74,158,890	$	56,493,819

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

	Fiscal 2022		Fiscal 2021
Direct cost of goods sold
ZERUST®	$	34,673,146	$	26,028,555
Natur-Tec®		12,859,343		7,717,429
Indirect cost of goods sold		3,557,809		3,174,830
Total net cost of goods sold	$	51,090,298	$	36,920,814

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

	Fiscal Year Ended August 31,
	2022		2021
Inside the U.S.A. to unaffiliated customers	$	25,301,067	$	22,039,456
Outside the U.S.A. to:
Joint ventures in which the Company is a shareholder directly and indirectly		2,968,089		3,023,196
Unaffiliated customers		45,889,734		31,431,167
	$	74,158,890	$	56,493,819

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

	At August 31, 2022		At August 31, 2021
China	$	5,826,898	$	5,110,071
Other		565,022		453,199
United States		5,778,573		6,258,188
Total property and equipment	$	12,170,493	$	11,821,458

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

	Fiscal Year Ended August 31, 2022		Fiscal Year Ended August 31, 2021
China	$	15,754,051	$	17,343,623
Brazil		5,160,572		4,122,781
India		18,555,603		5,482,989
Other		9,387,597		7,504,970
United States		25,301,067		22,039,456
Total net sales	$	74,158,890	$	56,493,819

Fees for Services Provided to Joint Ventures [Member]

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

	Fiscal 2022		% of Total Fees for Services Provided to Joint Ventures			Fiscal 2021		% of Total Fees for Services Provided to Joint Ventures
Germany	$	834,725		14.5	%	$	920,902		15.4	%
Poland		730,523		12.7	%		798,570		13.4	%
Japan		669,371		11.6	%		826,403		13.9	%
France		448,579		7.8	%		435,032		7.3	%
Sweden		447,441		7.8	%		528,755		8.9	%
Thailand		344,649		6.0	%		399,563		6.7	%
United Kingdom		342,488		5.9	%		316,786		5.3	%
Finland		340,783		5.9	%		298,663		5.0	%
Czech Republic		300,257		5.2	%		377,395		6.3	%
South Korea		270,309		4.7	%		317,042		5.3	%
Indonesia		156,476		2.7	%		122,513		2.1	%
India		-		-			392,074		6.6	%
Other *		882,081		15.2	%		230,562		3.8	%
	$	5,767,682		100.0	%	$	5,964,260		100.0	%

Note 16 - Income Taxes (Tables)

12 Months Ended

Aug. 31, 2022

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	Fiscal Year Ended August 31,
	2022			2021
Current:
Federal	$	—		$	—
State		98,000			39,000
Foreign		1,894,000			1,307,000
		1,992,000			1,346,000
Deferred:
Federal		—			—
State		—			—
Foreign		(118,164	)		115,905
		(118,164	)		115,905
	$	1,873,836		$	1,461,905

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	Fiscal Year Ended August 31,
	2022			2021
Tax computed at statutory rates	$	1,780,000		$	1,794,000
State income tax, net of federal benefit		34,000			37,000
Tax effect on equity in income of international joint ventures		(988,000	)		(1,560,000	)
Tax effect of foreign operations		1,004,000			839,000
Deemed repatriation		10,000			—
Expired foreign tax credit		—			897,000
Research and development credit		(244,000	)		(277,000	)
Valuation allowance		133,000			(492,000	)
Stock based compensation		67,000			75,000
Non-controlling interest		(72,000	)		(83,000	)
Other		149,836			231,905
	$	1,873,836		$	1,461,905

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	August 31,
	2022			2021
Accrued compensation	$	329,100		$	539,300
Inventory costs		93,900			55,100
Other accrued expenses		84,800			103,100
Lease liability		98,300			84,300
Goodwill and other intangible assets		398,600			453,000
Stock-based compensation		547,200			466,300
Property and equipment		9,100			—
Foreign tax credit carryforward		4,892,100			4,893,300
Other credit and loss carryforward		5,455,500			5,243,100
Other		23,000			—
Total deferred tax assets		11,931,600			11,837,500
Valuation allowance		(11,592,900	)		(11,447,500	)
Total deferred tax assets after valuation allowance		338,700			390,000
Property and equipment		—			(7,300	)
Right-of-use asset		(98,300	)		(84,300	)
Intangible assets		(1,777,200	)		—
Unremitted foreign earnings		(163,200	)		(154,900	)
Other		—			(50,900	)
Total deferred tax liabilities		(2,038,700	)		(297,400	)
Net deferred tax assets	$	(1,700,000	)	$	92,600

Summary of Income Tax Contingencies [Table Text Block]

	Fiscal Year Ended August 31,
	2022		2021
Gross unrecognized tax benefits – beginning balance	$	297,600	$	278,200
Gross increases – prior period tax positions		3,400		4,400
Gross increases – current period tax positions		18,000		15,000
Gross unrecognized tax benefits – ending balance	$	319,000	$	297,600

Note 17 - Commitments and Contingencies (Tables)

12 Months Ended

Aug. 31, 2022

Schedule of Components of Operating Lease Assets and Liabilities [Table Text Block]

	August 31, 2022		August 31, 2021
Right-of-use assets, net	$	557,571	$	376,438

Current portion of lease liability		373,330		272,336
Lease liability, less current portion		184,241		104,102
Total lease liability	$	557,571	$	376,438

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Fiscal 2023	$	373,330
Fiscal 2024		209,802
Total future minimum lease payments		583,132
Less amount representing interest		(25,561	)
Present value of obligations under operating leases		557,571
Less current portion		(373,330	)
Long-term operating lease obligations	$	184,241

Note 18 - Supplemental Cash Flow Information (Tables)

12 Months Ended

Aug. 31, 2022

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	Fiscal Year Ended August 31,
	2022		2021
Cash paid for income tax	$	1,218,467	$	895,646
Cash paid for interest		89,096		16,086

Note 19 - Fair Value Measurements (Tables)

12 Months Ended

Aug. 31, 2022

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

Fair Value Measurements

Using Inputs Considered as

Fair value as of

August 31, 2022

Level 1

Level 2

Level 3

Available for sale securities

5,590

—

Fair Value Measurements

Using Inputs Considered as

Fair value as of

August 31, 2021

Level 1

Level 2

Level 3

Available for sale securities

4,634

—

Note 1 - Nature of Business and Significant Accounting Policies (Details Textual)	12 Months Ended
	Aug. 31, 2022 USD ($)	Sep. 01, 2021	Aug. 31, 2021 USD ($)
Number of Countries in which Entity Operates	65
Number of Operating Segments	2
Number of Joint Venture Arrangements	16
Accounts Receivable, Allowance for Credit Loss, Ending Balance	$ 439,000		$ 382,000
Acquisition of Remaining Ownership Interest in Harita-NTI Limited [Member]
Business Acquisition, Percentage of Voting Interests Acquired		50.00%
Natur-Tech India [Member]
Noncontrolling Interest, Ownership Percentage by Parent	75.00%
Natur Tec Lanka [Member]
Noncontrolling Interest, Ownership Percentage by Parent	75.00%
Zerust Brazil [Member]
Noncontrolling Interest, Ownership Percentage by Parent	85.00%
NTI Asean LLC [Member]
Noncontrolling Interest, Ownership Percentage by Parent	60.00%
Maximum [Member] \| Various Joint Ventures [Member]
Noncontrolling Interest, Ownership Percentage by Parent	50.00%

Note 1 - Nature of Business and Significant Accounting Policies - Property and Equipment, Useful Life (Details)	12 Months Ended
	Aug. 31, 2022
Building and Building Improvements [Member] \| Minimum [Member]
Buildings and improvements (Year)	5 years
Building and Building Improvements [Member] \| Maximum [Member]
Buildings and improvements (Year)	30 years
Machinery and Equipment [Member] \| Minimum [Member]
Buildings and improvements (Year)	3 years
Machinery and Equipment [Member] \| Maximum [Member]
Buildings and improvements (Year)	10 years

Note 3 - Business Combination (Details Textual) - USD ($)		12 Months Ended
	Sep. 01, 2021	Aug. 31, 2022	Aug. 31, 2021	Aug. 16, 2022	May 20, 2022
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain (Loss), Net, Total		$ 3,951,550	$ 0
Revolving Credit Facility [Member] \| PNC Bank [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 5,000,000	7,000,000		$ 7,000,000	$ 5,000,000
Harita-NTI Limited [Member]
Business Acquisition, Percentage of Voting Interests Acquired	50.00%
Business Combination, Consideration Transferred, Total	$ 6,250,000
Business Combination, Step Acquisition, Equity Interest in Acquiree, Percentage	50.00%
Business Combination, Step Acquisition, Equity Interest in Acquiree, including Subsequent Acquisition, Percentage, Total	100.00%
Business Combination, Step Acquisition, Equity Interest in Acquiree, Remeasurement Gain (Loss), Net, Total	$ 3,951,550	3,951,550
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual		9,961,464
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual		659,794
Business Combination, Acquisition Related Costs		$ 115,000
Business Acquisition, Pro Forma Revenue			9,074,240
Business Acquisition, Pro Forma Net Income (Loss)			$ 1,529,615
Harita-NTI Limited [Member] \| Customer Relationships [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Discount Rate	15.30%
Harita-NTI Limited [Member] \| Customer Relationships and Assembled Workforce [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life (Year)	15 years

Note 3 - Business Combination - Preliminary Purchase Price Allocation (Details) - USD ($)		12 Months Ended
	Sep. 01, 2021	Aug. 31, 2022	Aug. 31, 2021
Goodwill		$ 4,782,376	$ 0
Gain recognized on acquisition		(3,951,550)	$ 0
Harita-NTI Limited [Member]
Cash and cash equivalents	$ 1,187,997
Trade account receivable	1,954,769
Inventories	886,650
Prepaid expenses and other	396,545
Property, plant and equipment	219,077
Customer relationships	6,347,000
Goodwill	4,782,376
Current liabilities	(1,370,314)
Deferred tax liability	(1,904,100)
Operating lease liability	(355,000)
Net assets acquired	12,500,000
Fair value of previously held equity method investment	(1,637,362)
Cumulative foreign currency translation	(661,088)
Gain recognized on acquisition	(3,951,550)	$ (3,951,550)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest, Total	(6,250,000)
Cash paid for acquisition	6,250,000
Harita-NTI Limited [Member] \| Customer Relationships [Member]
Operating lease, right of use asset	$ 355,000

Note 4 - Inventories - Inventories (Details) - USD ($)	Aug. 31, 2022	Aug. 31, 2021
Production materials	$ 6,496,656	$ 4,453,688
Finished goods	9,845,073	6,660,519
Total inventory	$ 16,341,729	$ 11,114,207

Note 5 - Property and Equipment, Net - Components of Property and Equipment, Net (Details) - USD ($)	Aug. 31, 2022	Aug. 31, 2021
Land	$ 310,365	$ 310,365
Buildings and improvements	14,778,759	13,149,258
Machinery and equipment	5,643,320	5,453,679
Gross	20,732,444	18,913,302
Less accumulated depreciation	(8,561,951)	(7,091,844)
Net	$ 12,170,493	$ 11,821,458

Note 6 - Patents and Trademarks, Net (Details Textual) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Amortization, Total	$ 629,843	$ 203,088
Patents and Trademarks [Member]
Finite-Lived Intangible Asset, Useful Life (Year)	7 years
Amortization, Total	$ 206,710	$ 203,088
Finite-Lived Intangible Asset, Expected Amortization, Year One	178,000
Finite-Lived Intangible Asset, Expected Amortization, Year Two	178,000
Finite-Lived Intangible Asset, Expected Amortization, Year Three	178,000
Finite-Lived Intangible Asset, Expected Amortization, Year Four	$ 178,000

Note 6 - Patents and Trademarks, Net - Patents and Trademarks, Net (Details) - Patents and Trademarks [Member] - USD ($)	Aug. 31, 2022	Aug. 31, 2021
Patents and trademarks	$ 3,225,655	$ 3,018,507
Less accumulated amortization	(2,515,644)	(2,308,935)
Patents and trademarkes, net	$ 710,011	$ 709,572

Note 7 - Investments in Joint Ventures - Condensed Balance Sheet of EXCOR and All Other Joint Ventures (Details) - USD ($)

Aug. 31, 2022

Aug. 31, 2021

$ 40,234,881

$ 33,747,089

86,193,953

74,370,879

17,065,401

8,516,196

1,884,256

104,102

63,595,262

62,368,026

EXCOR and All Other Joint Venturs [Member]

21,814,754

27,623,768

Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings

21,814,754

27,623,768

21,256,923

24,702,778

Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings

12,494,320

15,412,574

12,463,415

14,697,490

Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings

9,320,434

12,211,194

^[1]

8,793,508

10,005,288

^[1]

Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]

52,428,831

69,394,796

55,854,457

73,814,402

10,981,833

16,366,398

1,138,980

1,455,524

43,733,644

55,992,480

26,047,914

33,886,655

27,932,532

36,211,520

2,943,895

5,386,377

24,988,637

30,825,144

26,380,917

35,508,141

^[1]

27,921,925

37,602,882

^[1]

8,037,938

10,980,021

^[1]

1,138,980

1,455,524

^[1]

$ 18,745,007

$ 25,167,336

^[1]

[1]	Includes Zerust India since Zerust India was not a consolidated subsidiary of the Company as of August 31, 2021 or May 31, 2021. See Note 3 entitled “Business Combination.”

Note 7 - Investments in Joint Ventures - Condensed Income Statement of EXCOR and All Other Joint Ventures (Details) - USD ($)

12 Months Ended

Aug. 31, 2022

Aug. 31, 2021

$ 74,158,890

$ 56,493,819

23,068,592

19,573,005

Northern Technologies International Corporation’s share of equity in income of joint ventures

6,324,700

6,281,238

4,725,918

7,465,214

EXCOR and All Other Joint Venturs [Member]

Northern Technologies International Corporation’s share of equity in income of joint ventures

4,725,918

7,465,214

Northern Technologies International Corporation’s dividends received from joint ventures

5,723,176

3,665,365

Northern Technologies International Corporation’s share of equity in income of joint ventures

3,236,989

4,400,403

Northern Technologies International Corporation’s dividends received from joint ventures

4,255,200

1,809,900

Northern Technologies International Corporation’s share of equity in income of joint ventures

1,488,929

Northern Technologies International Corporation’s dividends received from joint ventures

1,467,976

Joint Ventures in France [Member]

Northern Technologies International Corporation’s share of equity in income of joint ventures

3,064,811

Northern Technologies International Corporation’s dividends received from joint ventures

^[1]

1,855,465

Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]

104,077,748

120,954,550

41,030,647

53,371,610

9,302,237

14,921,531

42,853,162

46,522,688

20,312,400

25,389,981

6,487,855

8,798,995

61,224,586

20,718,247

Joint Ventures in France [Member]

$ 2,814,382

^[1]

74,431,862

^[1]

27,981,629

^[1]

$ 6,122,536

[1]	Includes Zerust India since Zerust India was not a consolidated subsidiary of the Company as of August 31, 2021 or May 31, 2021. See Note 3 entitled “Business Combination.”

Note 8 - Intangible Asset, Net (Details Textual) - Customer Relationships and Assembled Workforce [Member]	9 Months Ended	12 Months Ended
	Aug. 31, 2022 USD ($)	Aug. 31, 2022 USD ($)
Finite-Lived Intangible Asset, Useful Life (Year)	15 years
Amortization of Intangible Assets		$ 423,133
Finite-Lived Intangible Asset, Expected Amortization, Year One	$ 423,000	423,000
Finite-Lived Intangible Asset, Expected Amortization, Year Two	423,000	423,000
Finite-Lived Intangible Asset, Expected Amortization, Year Three	423,000	423,000
Finite-Lived Intangible Asset, Expected Amortization, Year Four	423,000	423,000
Finite-Lived Intangible Asset, Expected Amortization, Year Five	$ 423,000	$ 423,000

Note 8 - Intangible Asset, Net (Details) - Customer Relationships [Member] - USD ($)	Aug. 31, 2022	Aug. 31, 2021
Patents and trademarks	$ 6,347,000	$ 0
Less accumulated amortization	(423,133)	0
Patents and trademarkes, net	$ 5,923,867	$ 0

Note 9 - Corporate Debt (Details Textual)		12 Months Ended
Note 9 - Corporate Debt (Details Textual)	Jan. 04, 2022	Aug. 31, 2022 USD ($)	Aug. 16, 2022 USD ($)	May 20, 2022 USD ($)	Sep. 01, 2021 USD ($)	Aug. 31, 2021 USD ($)
PNC Bank [Member] \| Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 7,000,000	$ 7,000,000	$ 5,000,000	$ 5,000,000
Long-Term Line of Credit, Total		$ 5,900,000				$ 0
Line of Credit Facility, Interest Rate During Period		3.07%
Debt Instrument, Covenants, Fixed Charge Coverage Ratio		1.10
Letters of Credit Outstanding, Amount		$ 0				0
PNC Bank [Member] \| Revolving Credit Facility [Member] \| London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument, Basis Spread on Variable Rate	2.50%	2.50%
JP Morgan Chase Bank [Member]
Letters of Credit Outstanding, Amount		$ 72,418				$ 104,363

Note 10 - Stockholders' Equity (Details Textual) - $ / shares					12 Months Ended
	Mar. 01, 2022	Sep. 01, 2021	Mar. 01, 2021	Sep. 01, 2020	Aug. 31, 2022	Aug. 31, 2021
Stock Repurchased and Retired During Period, Shares (in shares)					0	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)					174,840	419,874
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)					$ 16.97	$ 8.24
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Including Cashless Exercises (in shares)					51,218	77,645
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in dollars per share)					$ 6.60	$ 8.18
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares)						74,950
Stock Issued During Period, Shares, Employee Stock Purchase Plans (in shares)	2,966	2,635	5,225	4,646
The 2019 Plan [member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)					704,516
The 2019 Plan [member] \| Employees and Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)					174,840	419,874
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)					$ 16.97	$ 8.24
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Including Cashless Exercises (in shares)					51,218
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in dollars per share)					$ 6.60
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in shares)					42,071
ESPP [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)					69,221

Note 10 - Stockholders' Equity - Cash Dividends Declared (Details) - $ / shares								12 Months Ended
	Jul. 20, 2022	Apr. 22, 2022	Jan. 21, 2022	Oct. 20, 2021	Jul. 21, 2021	Apr. 23, 2021	Jan. 15, 2021	Aug. 31, 2022	Aug. 31, 2021
Amount (in dollars per share)	$ 0.07	$ 0.07	$ 0.07	$ 0.07	$ 0.065	$ 0.065	$ 0.065	$ 0.28	$ 0.195
Record date	Aug. 03, 2022	May 04, 2022	Feb. 02, 2022	Nov. 03, 2021	Aug. 04, 2021	May 05, 2021	Feb. 03, 2021
Payable date	Aug. 17, 2022	May 18, 2022	Feb. 16, 2022	Nov. 17, 2021	Aug. 18, 2021	May 19, 2021	Feb. 17, 2021

Note 11 - Net Income Per Common Share (Details Textual) - shares	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	600,094	136,221

Note 11 - Net Income Per Common Share - Reconciliation of the Earnings Per Share Computations (Details) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Net income attributable to NTIC	$ 6,324,700	$ 6,281,238
Basic-weighted shares outstanding (in shares)	9,216,216	9,116,472
Weighted shares assumed upon exercise of stock options (in shares)	418,812	757,667
Diluted – weighted shares outstanding (in shares)	9,635,028	9,874,139
Basic net income per share: (in dollars per share)	$ 0.69	$ 0.69
Diluted net income per share: (in dollars per share)	$ 0.66	$ 0.64

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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Note 12 - Stock-based Compensation (Details Textual) - USD ($)		12 Months Ended
	Jan. 15, 2021	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2020
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Ending Balance (in shares)		1,544,727	1,426,651	1,127,968
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)		174,840	419,874
Share-Based Payment Arrangement, Expense		$ 931,532	$ 664,174
Share-Based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount		1,009,719
Allocated Share-based Compensation Expense, Estimate Next Twelve Months		671,526
Allocated Share-based Compensation Expense, Estimate, Fiscal Year Two		$ 338,193
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)		$ 16.97	$ 8.24
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term (Year)		5 years 9 months 3 days	6 years 2 months 12 days
The 2019 Plan [member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in shares)	800,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)		1,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)		10 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Ending Balance (in shares)		867,721
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)		704,516
The 2019 Plan [member] \| One Year after Date of Grant [Member] \| Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)		1 year
The 2019 Plan [member] \| One Year after Date of Grant [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)		3 years
The 2007 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number, Ending Balance (in shares)		649,243

Note 12 - Stock-based Compensation - Black-Scholes Option-pricing Model Assumptions (Details)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Dividend yield	2.46%	1.65%
Expected volatility	45.20%	45.40%
Expected life of option (years) (Year)	10 years	10 years
Weighted average risk-free interest rate	3.30%	0.77%

Note 12 - Stock-based Compensation - Stock Option Activity (Details) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Number of shares, Outstanding (in shares)	1,426,651	1,127,968
Weighted average exercise price, Outstanding (in dollars per share)	$ 9.30	$ 9.63
Number of shares, Options granted (in shares)	174,840	419,874
Weighted average exercise price, Options granted (in dollars per share)	$ 16.97	$ 8.24
Number of shares, Options exercised (in shares)	(51,218)	(77,645)
Weighted average exercise price, Options exercised (in dollars per share)	$ 6.60	$ 8.18
Number of shares, Options terminated (in shares)	(5,546)	(43,546)
Weighted average exercise price, Options terminated (in dollars per share)	$ 18.23	$ 9.63
Number of shares, Outstanding (in shares)	1,544,727	1,426,651
Weighted average exercise price, Outstanding (in dollars per share)	$ 10.23	$ 9.30
Aggregate intrinsic value, Outstanding	$ 4,151,365
Number of shares, Exercisable (in shares)	1,156,211
Weighted average exercise price, Exercisable (in dollars per share)	$ 9.58
Aggregate intrinsic value, Exercisable	$ 3,394,957

Note 13 - Segment and Geographic Information (Details Textual)	12 Months Ended
	Aug. 31, 2022 USD ($)
Number of Reportable Segments	2
NTI Asean LLC [Member]
Recovery of Fees Previously Written Off	$ 681,859

Note 13 - Segment and Geographic Information - Net Sales by Segment (Details) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Net sales by segment	$ 74,158,890	$ 56,493,819
ZERUST [Member]
Net sales by segment	57,459,382	45,554,434
NaturTec [Member]
Net sales by segment	$ 16,699,508	$ 10,939,385

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 942
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-Name Accounting Standards Codification
-Topic 470
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 220
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Note 13 - Segment and Geographic Information - Cost of Goods Sold by Segment (Details) - USD ($)

12 Months Ended

Aug. 31, 2022

Aug. 31, 2021

^[1]

Direct Cost of Goods Sold [Member] | ZERUST [Member]

$ 51,090,298

$ 36,920,814

Direct Cost of Goods Sold [Member] | NaturTec [Member]

34,673,146

26,028,555

Indirect Cost of Goods Sold [Member]

12,859,343

7,717,429

$ 3,557,809

$ 3,174,830

[1]	The percent of segment sales is calculated by dividing the direct cost of goods sold for each individual segment category by the net sales for each segment category.

Note 13 - Segment and Geographic Information - Net Sales by Geographic Location (Details) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Net sales by segment	$ 74,158,890	$ 56,493,819
Inside the USA to Unaffiliated Customers [Member]
Net sales by segment	25,301,067	22,039,456
Joint Ventures in Which the Company is a Shareholder Directly and Indirectly Outside the USA [Member]
Net sales by segment	2,968,089	3,023,196
Unaffiliated Customers Outside the USA [Member]
Net sales by segment	$ 45,889,734	$ 31,431,167

Note 13 - Segment and Geographic Information - Fees for Services Provided to Joint Ventures by Geographic Location as a Percentage of Total Fees (Details) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Fees	$ 5,767,682	$ 5,964,260
Percentage of Total Fees	100.00%	100.00%
GERMANY
Fees	$ 834,725	$ 920,902
Percentage of Total Fees	14.50%	15.40%
POLAND
Fees	$ 730,523	$ 798,570
Percentage of Total Fees	12.70%	13.40%
JAPAN
Fees	$ 669,371	$ 826,403
Percentage of Total Fees	11.60%	13.90%
FRANCE
Fees	$ 448,579	$ 435,032
Percentage of Total Fees	7.80%	7.30%
SWEDEN
Fees	$ 447,441	$ 528,755
Percentage of Total Fees	7.80%	8.90%
THAILAND
Fees	$ 344,649	$ 399,563
Percentage of Total Fees	6.00%	6.70%
UNITED KINGDOM
Fees	$ 342,488	$ 316,786
Percentage of Total Fees	5.90%	5.30%
FINLAND
Fees	$ 340,783	$ 298,663
Percentage of Total Fees	5.90%	5.00%
CZECHIA
Fees	$ 300,257	$ 377,395
Percentage of Total Fees	5.20%	6.30%
KOREA, REPUBLIC OF
Fees	$ 270,309	$ 317,042
Percentage of Total Fees	4.70%	5.30%
INDONESIA
Fees	$ 156,476	$ 122,513
Percentage of Total Fees	2.70%	2.10%
INDIA
Fees	$ 0	$ 392,074
Percentage of Total Fees	0.00%	6.60%
Other Countries [Member]
Fees	$ 882,081	$ 230,562
Percentage of Total Fees	15.20%	3.80%

Note 13 - Segment and Geographic Information - Total Long-lived Assets by Geographic Distribution (Details) - USD ($)	Aug. 31, 2022	Aug. 31, 2021
Total property and equipment	$ 12,170,493	$ 11,821,458
CHINA
Total property and equipment	5,826,898	5,110,071
Other Countries [Member]
Total property and equipment	565,022	453,199
UNITED STATES
Total property and equipment	$ 5,778,573	$ 6,258,188

Note 13 - Segment and Geographic Information - Total Net Sales by Geographic Distribution (Details) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Net sales by segment	$ 74,158,890	$ 56,493,819
CHINA
Net sales by segment	15,754,051	17,343,623
BRAZIL
Net sales by segment	5,160,572	4,122,781
INDIA
Net sales by segment	18,555,603	5,482,989
Other Countries [Member]
Net sales by segment	9,387,597	7,504,970
UNITED STATES
Net sales by segment	$ 25,301,067	$ 22,039,456

Note 14 - Retirement Plan (Details Textual) - USD ($)	12 Months Ended
Note 14 - Retirement Plan (Details Textual) - USD ($)	Aug. 31, 2022	Aug. 31, 2021
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent	15.00%
Defined Contribution Plan Maximum Amount of Employees Contributions Percent	50.00%
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay	3.50%
Defined Contribution Plan, Cost	$ 272,257	$ 237,499

Note 15 - Related Party Transactions (Details Textual) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Bioplastic Polymers LLC [Member] \| Consulting Payment Expense [Member]
Related Party Transaction, Amounts of Transaction	$ 144,000	$ 144,000

Note 16 - Income Taxes (Details Textual) - USD ($)	12 Months Ended
Note 16 - Income Taxes (Details Textual) - USD ($)	Aug. 31, 2022	Aug. 31, 2021
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	21.00%
Foreign Withholding Tax	$ 8,000	$ 113,000
Deferred Tax Assets, Operating Loss Carryforwards, Domestic	1,170,100
Deferred Tax Assets, Operating Loss Carryforwards, State and Local	329,800
Deferred Tax Assets, Operating Loss Carryforwards, Foreign	159,000
Tax Credit Carryforward, Valuation Allowance	11,592,900	11,447,500
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	145,400	114,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued, Total	0	$ 0
Foreign Tax Authority [Member]
Tax Credit Carryforward, Amount	4,892,100
Federal and State Tax [Member]
Tax Credit Carryforward, Amount	$ 3,796,500

Note 16 - Income Taxes - Provision for Income Taxes (Details) - USD ($)	12 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Federal	$ 0	$ 0
State	98,000	39,000
Foreign	1,894,000	1,307,000
Total current	1,992,000	1,346,000
Federal	0	0
State	0	0
Foreign	(118,164)	115,905
Total deferred	(118,164)	115,905
Total income tax expense	$ 1,873,836	$ 1,461,905