false
--08-31
FY
2018
2018-08-31
10-K
0000875582
4542177
Yes
false
Accelerated Filer
84100000
Northern Technologies International Corporation
true
false
No
No
ntic
65234
153901
5000000
1.1
15200
0.5
3159000
0.741
0.607
6142139
5452687
1357255
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79000
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0
54311
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space: nowrap; font-size: 10pt; text-align: left; padding-left: 1.7in; width: 50%">Buildings and improvements (years)</td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30</div></td> <td style="font-size: 10pt; text-align: left; width: 37%"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="font-size: 10pt; text-align: left; padding-left: 1.7in">Machinery and equipment (years)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table></div>
489000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Trade Receivables from Joint Ventures </div>– Trade receivables from joint ventures arise from sales of products the Company makes to its joint ventures. Payment terms for the Company’s joint ventures also are determined based on credit risk; however, additional consideration also is given to the individual joint venture due to the transportation time associated with ocean delivery of most products and certain other factors. Generally, accounts receivable from the Company’s joint ventures unpaid after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">90</div> days are considered past due. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> accrue interest on past due balances. The Company periodically reviews amounts due from its joint ventures for collectability and based on past experience and continuous review of the balances due, determined an allowance for doubtful accounts related to its joint venture receivables is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> necessary as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Fees for Services Provided to Joint Ventures – </div>The Company provides services to its joint ventures including consulting, legal, travel, insurance, technical and marketing services. The Company receives fees for the services it provides to its joint ventures. The fees for services received by the Company from its joint ventures are generally based on either a flat fee or a percentage of net sales by the Company’s joint ventures depending on local laws and tax regulations. The Company recognizes revenues related to fees for services provided to its joint ventures when earned, amounts are determinable, and collectability is reasonably assured. Under the Company’s agreements with its joint ventures, amounts are earned when product is shipped from joint venture facilities. The Company reviews the financial situation of each of its joint ventures to assist in the likelihood of collections on amounts earned. The Company accounts for these fees on a cash basis if uncertainty exists surrounding the collection of such fees.</div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Direct cost of goods sold</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 74%; font-size: 10pt; text-align: justify; padding-left: 10pt">ZERUST®</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">24,326,493</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18,996,264</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Natur-Tec®</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,303,439</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,925,061</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Indirect cost of goods sold</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,535,508</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,395,186</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; padding-left: 10pt">Total net cost of goods sold</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">34,165,440</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26,316,511</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
604000
6407
900316
838628
775319
661226
759418
641699
600336
472819
532565
410842
429319
448013
377844
314834
370171
376002
365018
322677
352585
295761
320501
292225
358747
377961
6142139
5452687
9920108
5912631
761506
691752
-12000
-4000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of August 31, 2018</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">EXCOR</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All Other</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Current assets</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58,086,747</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,354,788</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30,731,959</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Total assets</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">62,803,261</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30,033,750</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">32,769,511</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Current liabilities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,991,886</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,535,954</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,455,932</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Noncurrent liabilities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">403,653</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">403,653</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Joint ventures’ equity</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46,407,722</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,497,796</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,909,926</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of joint ventures’ equity</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,950,995</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,748,899</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,195,263</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,921,783</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,717,994</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,203,789</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table></div><div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of August 31, 2017</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">EXCOR</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All Other</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Current assets</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">51,518,210</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,142,514</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">29,375,696</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Total assets</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">55,633,891</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">24,301,194</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,332,697</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Current liabilities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,118,074</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,469,567</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,648,507</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Noncurrent liabilities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">181,210</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">181,210</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Joint ventures’ equity</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">40,334,607</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,831,627</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,502,980</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of joint ventures’ equity</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,035,074</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,915,816</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,119,258</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,960,860</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,884,911</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,075,949</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2018</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">EXCOR</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All Other</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Net sales</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">120,060,897</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,537,949</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">72,522,948</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Gross profit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53,348,459</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,584,666</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,763,793</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Net income</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,300,276</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,095,523</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,204,753</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of equity in income of joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,527,383</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,549,765</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,977,618</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s dividends received from joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,697,503</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,357,544</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,339,959</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table></div><div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="text-indent: 0; border-collapse: collapse; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2017</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">EXCOR</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All Other</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Net sales</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">101,261,132</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39,849,757</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">61,411,375</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Gross profit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">44,861,300</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21,133,632</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23,727,668</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Net income</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,839,933</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,369,728</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,470,205</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of equity in income of joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,898,908</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,185,988</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,712,920</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s dividends received from joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,377,054</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,379,062</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">997,992</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table></div>
3905034
2676610
2153000
1015000
70892
4749095
3969267
-3597199
-2471064
14619777
14163509
252313
119033
252312
119033
391664
391664
413010
413010
50000
40000
50000
40000
0
48067
63549236
56612693
30567773
26067618
25812637
23185413
3300110
3300110
3766984
3766984
3300110
3766984
6927484
6847177
6360201
3395274
4163023
-2197178
2964927
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Cash and Cash Equivalents</div> - The Company includes as cash and cash equivalents highly liquid, short-term investments with maturity of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> 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, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>exceed federally insured limits.</div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16.</div> STATEMENTS OF CASH FLOWS</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Supplemental disclosures of cash flow information consist of:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended <br />August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left">Cash paid during the year for income tax</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">876,103</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">699,519</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Cash paid during the year for interest</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,962</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,382</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table> </div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15.</div> COMMITMENTS AND CONTINGENCIES </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2019. </div>For fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019</div> as in past years, the total amount available under the bonus plan for all plan participants, including executive officers, is dependent upon the Company’s earnings before interest, taxes and other income, as adjusted to take into account amounts to be paid under the bonus plan and certain other adjustments (Adjusted EBITOI). Each plan participant’s percentage of the overall bonus pool is based upon the number of plan participants, the individual’s annual base salary and the individual’s position and level of responsibility within the company. In the case of each of the Company’s executive officer participants, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">75%</div> of the amount of their individual bonus payout will be determined based upon the Company’s actual EBITOI for fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019</div> compared to a pre-established target EBITOI for fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25%</div> of the payout will be determined based upon such executive officer’s achievement of certain pre-established individual performance objectives. The payment of bonuses under the plan are discretionary and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be paid to executive officer participants in both cash and shares of NTIC common stock, the exact amount and percentages will be determined by the Company’s Board of Directors, upon recommendation of the Compensation Committee, after the completion of the Company’s consolidated financial statements for fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 83 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 26, 2017, </div>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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Accrued bonuses as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2,153,000</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1,015,000,</div> respectively.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Three joint ventures (consisting of the Company’s joint ventures in South Korea, Thailand and India) accounted for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">74.1%</div> of the Company’s trade joint venture receivables as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> joint ventures (consisting of the Company’s joint ventures in South Korea, India and Thailand) accounted for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60.7%</div> of the Company’s trade joint venture receivables as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2017.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 23, 2015, </div>NTIC and NTI Asean LLC, a majority-owned subsidiary of NTIC, filed a lawsuit in Tianjin <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div> Intermediate People’s Court against <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> individuals, Tao Meng and Xu Hui, related to breaches of duties and contractual commitments owed to NTI Asean under certain agreements related to NTIC’s former joint venture in China, Tianjin Zerust Anti-Corrosion Technologies Ltd. The lawsuit alleges, among other things, that Mr. Tao Meng and Xu Hui have engaged in self-dealing, usurped business opportunities, and received economic benefits that were required to go to Tianjin Zerust. At this point it is too early in the lawsuit to reasonably estimate the amount of any recovery to NTI Asean.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> probable or the amount is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> estimable, or both, if there is a reasonable possibility that material loss <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be have been incurred. In the opinion of management, as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>the amount of liability, if any, with respect to these matters, individually or in the aggregate, will <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> materially affect the Company’s consolidated results of operations, financial position or cash flows.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company has leases for office and warehouse space in the United States of America, China, India, Germany and Brazil with monthly rents ranging from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$576</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$9,729,</div> which expire at various dates through <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2022. </div>Future minimum rents due under these leases are as follows for each of the next <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div> years ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31:</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="text-indent: 0; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 85%; font-size: 10pt">Fiscal 2019</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">131,840</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Fiscal 2020</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">66,762</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Fiscal 2021</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,404</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 1pt">Fiscal 2022</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,454</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">214,460</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div></div>
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Principles of Consolidation</div> - 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), and, 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) and NTIC’s majority-owned holding company, NTI Asean LLC (NTI Asean). NTIC’s consolidated financial statements do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> include the accounts of any of its joint ventures.</div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Non-Controlling Interests</div> – The Company owns <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">90%</div> of Natur-Tec India, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">85%</div> of Zerust Brazil and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60%</div> of NTI Asean. The remaining ownership is accounted for as non-controlling interests and reported as part of equity in the consolidated financial statements. The Company allocates gains and losses to the non-controlling interest even when such allocation might result in a deficit balance, reducing the losses attributed to the controlling interest, changes in ownership interests are treated as equity transactions if the Company maintains control.</div></div></div></div>
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.</div> CORPORATE DEBT</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company has a revolving line of credit with PNC Bank, National Association (PNC Bank) of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3,000,000.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No</div> </div>amounts were outstanding under the line of credit as of both <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div> At the option of the Company, outstanding advances under the line of credit bear interest at either (a) an annual rate based on LIBOR plus <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.15%</div> for the applicable LIBOR interest period selected by the Company or (b) at the rate publicly announced by PNC Bank from time to time as its prime rate. The line of credit matures on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 7, 2019.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The line of credit is governed under a loan agreement. The loan agreement contains standard covenants, including affirmative financial covenants, such as the maintenance of a minimum fixed charge coverage ratio, and negative covenants, which, among other things, limit the incurrence of additional indebtedness, loans and equity investments, disposition of assets, mergers and consolidations and other matters customarily restricted in such agreements. Under the loan agreement, the Company is subject to a minimum fixed charge coverage ratio of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.10:1.00.</div> As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>the Company was in compliance with all debt covenants.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The revolving credit facility allows the Company to request that PNC Bank issue letters of credit up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$1,200,000.</div> The Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> </div>have any letters of credit reserved against the available letters of credit balance as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> with PNC Bank. The availability of advances under the line of credit are reduced by the face amount of any letter of credit issued and outstanding (whether or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> drawn) under the revolving credit facility. </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>the Company had <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$88,831</div> of letters of credit with JP Morgan Chase Bank that are performance based and set to expire between <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2020</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2022.</div></div></div>
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.</div> ACCOUNTING PRONOUNCEMENTS</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">New Accounting Pronouncements Adopted</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> July 2015, </div>the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2015</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,</div> “<div style="display: inline; font-style: italic;">Inventory</div>,” which modifies the subsequent measurement of inventories recorded under a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div>-in-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div>-out or average cost method. Under the new standard, such inventories are required to be measured at the lower of cost and net realizable value. The Company has adopted this new standard in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> on a prospective basis. The adoption of this standard did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have a material impact on the Company’s consolidated financial statements.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 2016, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">07,</div> “<div style="display: inline; font-style: italic;">Investments - Equity Method and Joint Ventures (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">323</div>): Simplifying the Transition to the Equity Method of Accounting.</div>” Among other things, the amendments in ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">07</div> eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> retroactive adjustment of the investment is required. The amendments require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The Company adopted this new standard in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> on a prospective basis. The adoption of this standard did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have a material impact on the Company’s consolidated financial statements.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 69 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 2016, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">09,</div> <div style="display: inline; font-style: italic;">Stock Compensation, (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">718</div>),</div> which is intended to simplify several aspects of the accounting for share-based payment award transactions. The Company adopted this new guidance in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018.</div> The adoption of this guidance did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have a material effect on the Company’s consolidated financial statements.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Recently Issued Accounting Pronouncements</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> May 2014, </div>the Financial Accounting Standards Board (FASB) issued guidance creating Accounting Standards Codification (ASC) Section <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606,</div> <div style="display: inline; font-style: italic;">Revenue from Contracts with Customers</div>, which establishes a comprehensive new model for the recognition of revenue from contracts with customers. This model is based on the core principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company has performed a review of the requirements of the new guidance and has identified which of its revenue streams will be within the scope of ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606.</div> The Company has applied the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div>-step model of the new standard to a selection of contracts within each of its revenue streams and has compared the results to its current accounting practices. The Company is expecting to utilize the modified retrospective transition method of adoption. The Company is continuing to work through the remaining steps of the adoption plan to facilitate adoption effective <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 1, 2018. </div>As part of this, the Company is assessing changes that might be necessary to information technology systems, processes, and internal controls to capture new data and address changes in financial reporting. The Company will be revising its revenue recognition accounting policy and expanding revenue disclosures to reflect the requirements of ASC <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">606,</div> which include disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and assets recognized from the costs to obtain or fulfill a contract. Based on its assessment to date, the Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> expect the adoption of this standard to have a material impact on the way it recognizes revenue.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">During <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2016, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02,</div> <div style="display: inline; font-style: italic;">Leases</div>. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02</div> was issued to increase transparency and comparability among organizations by recognizing all lease transactions (with terms more than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12</div> months) on the balance sheet as a lease liability and a right-of-use asset (as defined). ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02</div> is effective for fiscal years beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2018, </div>including interim periods within those fiscal years, with earlier application permitted. Upon adoption, the lessee will apply the new standard retrospectively to all periods presented or retrospectively using a cumulative effect adjustment in the year of adoption. The guidance will be effective for the Company’s <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div> quarter of fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2020.</div> The Company is currently assessing the effect that ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02</div> will have on its consolidated financial statements.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 2016, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,</div> <div style="display: inline; font-style: italic;">Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments</div>. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15</div> eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayments or extinguishment costs, the maturing of a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">zero</div>-coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15</div> designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The guidance is effective for fiscal years beginning after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 15, 2017. </div>Early adoption is permitted. The Company is currently evaluating the effects of adopting ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15</div> on its consolidated financial statements.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 70 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 2018, </div>the FASB issued ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02,</div> <div style="display: inline; font-style: italic;">Income Statement – Reporting Comprehensive Income </div>(Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">220</div>) <div style="display: inline; font-style: italic;">Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income</div>, which will allow a reclassification from accumulated other comprehensive income to retained earnings for the tax effects resulting from the Tax Cuts and Jobs Act (Tax Reform Act) that are stranded in accumulated other comprehensive income. This standard also requires certain disclosures about stranded tax effects. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02,</div> however, does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> change the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations. ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">02</div> will be effective for the Company’s fiscal year <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2020,</div> with the option for early adoption at any time prior to the effective date. It must be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Reform Act is recognized. The Company is currently assessing the impact this new accounting guidance will have on its consolidated financial statements.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">In <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 2017, </div>the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">118</div> (as further clarified by FASB ASU <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div>-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">05,</div> <div style="display: inline; font-style: italic;">Income Taxes</div> (Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740</div>): “Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">118”</div>) to provide guidance for companies that <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have completed their accounting for the income tax effects of the Tax Reform Act in the period of enactment, which is the period that includes <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 22, 2017. </div>SAB <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">118</div> provides for a provisional <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div>-year measurement period for entities to finalize their accounting for certain income tax effects related to the Tax Reform Act. SAB <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">118</div> provides guidance where: (i) the accounting for the income tax effect of the Tax Reform Act is complete and reported in the Tax Reform Act’s enactment period, (ii) the accounting for the income tax effect of the Tax Reform Act is incomplete and reported as provisional amounts based on reasonable estimates (to the extent determinable) subject to adjustments during a limited measurement period until complete, and (iii) accounting for the income tax effect of the Tax Reform Act is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> reasonably estimable (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> related provisional amounts are reported in the enactment period) and entities would continue to apply accounting based on tax law provisions in effect prior to the Tax Reform Act enactment until provisional amounts are reasonably estimable. SAB <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">118</div> requires disclosure of the reasons for incomplete accounting additional information or analysis needed, among other relevant information (see Note <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14</div> - Income Taxes).</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> believe any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial position or operating results.</div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.</div> STOCK-BASED COMPENSATION</div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></div> <div style=" font-size: 10pt; margin: 0pt 0">The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> stock-based compensation plans under which stock options and other stock-based awards have been granted, the Northern Technologies International Corporation Amended and Restated <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007</div> Stock Incentive Plan (the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007</div> Plan) and the Northern Technologies International Corporation Employee Stock Purchase Plan (the ESPP). The Compensation Committee of the Board of Directors and the Board of Directors administer these plans.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007</div> Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, stock unit awards, performance awards and stock bonuses to eligible recipients to enable the Company and its subsidiaries to attract and retain qualified individuals through opportunities for equity participation in the Company, and to reward those individuals who contribute to the achievement of the Company’s economic objectives. Subject to adjustment as provided in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007</div> Plan, up to a maximum of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">800,000</div> shares of the Company’s common stock are issuable under the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007</div> Plan. Options granted under the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007</div> Plan generally have a term of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">ten</div> years and become exercisable over a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div>- or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">four</div>-year period beginning on the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div>-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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>only stock options and stock bonuses had been granted under the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007</div> Plan.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The maximum number of shares of common stock of the Company available for issuance under the ESPP is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">100,000</div> shares, subject to adjustment as provided in the ESPP. The ESPP provides for <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">six</div>-month offering periods beginning on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 1 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 1 </div>of each year. The purchase price of the shares is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">90%</div> of the lower of the fair market value of common stock at the beginning or end of the offering period. This discount <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> exceed the maximum discount rate permitted for plans of this type under Section <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">423</div> of the Internal Revenue Code of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1986,</div> as amended. The ESPP is compensatory for financial reporting purposes. The Company issued <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">985</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,098</div> shares on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> March 1, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">890</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,029</div> shares on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> September 1, 2017 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2016,</div> respectively, under the ESPP.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The fair value of option grants is determined at date of grant, using the Black-Scholes option pricing model with the assumptions listed below. The volatility factor used in the Black-Scholes option pricing model is based on historical stock price fluctuations and the risk-free interest rate is based on U.S. treasury rates appropriate for the expected term. Dividend yield and expected volatility are estimated using historical amounts that are anticipated to be consistent with current values. Expected life of the option is based on the life of the option agreements. Based on these valuations, the Company recognized compensation expense of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$413,010</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$391,664</div> during fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively, related to the options that vested during such time. As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> the total compensation cost for non-vested options <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> yet recognized in the Company’s consolidated statements of operations was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$219,135.</div> Stock-based compensation expense of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$153,901</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$65,234</div> is expected to be recognized during fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2020,</div> respectively, based on outstanding options as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018. </div>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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 76 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">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:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="border-collapse: collapse; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Dividend yield</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 12%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.18%</div></td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 12%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.00%</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Expected volatility</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">45.9%</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46.0%</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Expected life of option (years)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Weighted average risk-free interest rate</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.87%</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.63%</div></td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0">Stock option activity during the periods indicated is as follows:</div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares (#)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">Aggregate <br />Intrinsic Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Outstanding at August 31, 2016</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">283,181</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.95</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Options granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">56,677</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.40</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Options exercised</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(12,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.25</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; padding-left: 10pt">Options terminated</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(20,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15.21</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Outstanding at August 31, 2017</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">307,858</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.93</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Options granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,252</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18.35</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Options exercised</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(6,407</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11.59</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; padding-left: 10pt">Options terminated</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt">Outstanding at August 31, 2018</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">348,703</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14.57</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">$</td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,737,763</div></td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt">Exercisable at August 31, 2018</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">267,850</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.97</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">$</td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,007,547</div></td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0">The weighted average per share fair value of options granted during fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$7.75</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$7.69,</div> respectively. The weighted average remaining contractual life of the options outstanding and exercisable options outstanding as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.27</div> years and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.60</div> years, respectively.</div></div>
2017-12-21
2018-02-21
2018-05-23
2018-08-22
1815508
1815508
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table style="border-collapse: collapse; min-; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Declaration Date</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Record Date</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Payable Date</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 25%; font-size: 10pt; text-align: center">November 20, 2017</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 24%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.10</div></td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 24%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">December 8, 2017</div></td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 24%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">December 21, 2017</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: center">January 24, 2018</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.10</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">February 8, 2018</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">February 21, 2018</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: center">April 25, 2018</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.10</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">May 9, 2018</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">May 23, 2018</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: center">July 25, 2018</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.10</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">August 8, 2018</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">August 22, 2018</div></td> </tr> </table></div>
2017-11-20
2018-01-24
2018-04-25
2018-07-25
2017-12-08
2018-02-08
2018-05-09
2018-08-08
1.48
0.76
1.43
0.75
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9.</div> NET INCOME PER COMMON SHARE </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The following is a reconciliation of the earnings per share computation:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellspacing="0" cellpadding="0" style="text-indent: 0; border-collapse: collapse; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 1pt">Numerator:</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Net income attributable to NTIC</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,701,366</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,422,126</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; font-weight: bold; text-align: justify">Denominator:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Basic-weighted shares outstanding</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,538,838</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,528,611</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Weighted shares assumed upon exercise of stock options</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">146,364</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">48,748</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt">Diluted – weighted shares outstanding</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,685,202</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,577,359</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Basic earnings per share:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.48</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.76</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Diluted earnings per share:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.43</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.75</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The dilutive impact summarized above relates to the periods when the average market price of Company stock exceeded the exercise price of the potentially dilutive option securities granted. Earnings per common share were based on the weighted average number of common shares outstanding during the periods when computing the basic earnings per share. When dilutive, stock options are included as equivalents using the treasury stock market method when computing the diluted earnings per share. There were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> shares excluded from the computation of diluted income per share as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018. </div>Excluded from the computation of diluted earnings per share as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2017 </div>were options outstanding to purchase <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">48,067</div> shares of common stock.</div></div>
-133632
63841
0.257
0.078
2747303
1540386
219135
3697503
2357544
1339959
6377054
5379062
997992
62803261
30033750
32769511
55633891
24301194
31332697
58086747
27354788
30731959
51518210
22142514
29375696
15991886
4535954
11455932
15118074
4469567
10648507
46407722
25497796
20909926
40334607
19831627
20502980
53348459
25584666
27763793
44861300
21133632
23727668
15300276
11095523
4204753
11839933
8369728
3470205
403653
403653
181210
181210
120060897
47537949
72522948
101261132
39849757
61411375
22950995
12748899
10195263
20035074
9915816
10119258
22950995
20035074
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6.</div> INVESTMENTS IN JOINT VENTURES</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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 accounting principles generally accepted in the United States of America in all material respects. All material profits recorded that remain on the balance sheet on sales from the Company to its joint ventures and from joint ventures to other joint ventures have been eliminated for financial reporting purposes.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 72 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">Financial information from the audited and unaudited financial statements of the Company’s joint ventures in Germany, Excor Korrosionsschutz – Technologien und Produkte GmbH (EXCOR) and all the Company’s other joint ventures, are summarized as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of August 31, 2018</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">EXCOR</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All Other</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Current assets</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58,086,747</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,354,788</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30,731,959</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Total assets</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">62,803,261</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30,033,750</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">32,769,511</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Current liabilities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,991,886</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,535,954</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,455,932</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Noncurrent liabilities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">403,653</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">403,653</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Joint ventures’ equity</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46,407,722</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,497,796</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,909,926</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of joint ventures’ equity</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,950,995</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,748,899</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,195,263</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,921,783</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,717,994</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,203,789</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="border-collapse: collapse; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2018</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">EXCOR</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All Other</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Net sales</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">120,060,897</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,537,949</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">72,522,948</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Gross profit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53,348,459</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,584,666</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">27,763,793</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Net income</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,300,276</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,095,523</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,204,753</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of equity in income of joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,527,383</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,549,765</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,977,618</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s dividends received from joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,697,503</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,357,544</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,339,959</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="border-collapse: collapse; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of August 31, 2017</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">EXCOR</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All Other</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Current assets</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">51,518,210</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,142,514</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">29,375,696</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Total assets</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">55,633,891</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">24,301,194</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,332,697</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Current liabilities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,118,074</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,469,567</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,648,507</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Noncurrent liabilities</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">181,210</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">181,210</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Joint ventures’ equity</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">40,334,607</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,831,627</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,502,980</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of joint ventures’ equity</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,035,074</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,915,816</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,119,258</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,960,860</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,884,911</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,075,949</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" margin: 0"> </div> <div> <table style="text-indent: 0; border-collapse: collapse; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2017</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">EXCOR</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All Other</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Net sales</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">101,261,132</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39,849,757</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">61,411,375</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Gross profit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">44,861,300</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21,133,632</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23,727,668</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Net income</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,839,933</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8,369,728</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,470,205</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s share of equity in income of joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,898,908</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,185,988</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,712,920</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt; text-indent: -10pt">Northern Technologies International Corporation’s dividends received from joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,377,054</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,379,062</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">997,992</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> make any joint venture investments during fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> or fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Investments in Joint Ventures</div> - Investments in the Company’s joint ventures are accounted for using the equity method. Under the equity method, investments are initially recorded at cost and are adjusted for dividends, distributed and undistributed earnings and losses, changes in foreign currency exchange rates and additional investments. In the event the Company’s share of joint venture’s cumulative losses exceeds the Company’s investment balance, the balance is reported at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">zero</div> value until proportionate income exceeds the losses. The Company assesses its joint ventures for impairment on an annual basis as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31 </div>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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>differ from assumed or estimated amounts. All investments in joint ventures have positive equity as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20%</div> of the Company’s total assets or income.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company classifies distributions received from its joint ventures based on the nature of the distributions, generally, as a return on its investment in operating activities on the consolidated statements of cash flows.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">If the Company is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> longer exists and discontinues accruing the proportionate earnings or losses of the investment.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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.</div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value Measurements <br />Using Inputs Considered as</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair value as of <br />August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 1</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 2</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 3</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; font-size: 10pt; text-align: left">Available for sale securities</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,300,110</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,300,110</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> </table></div><div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value Measurements <br />Using Inputs Considered as</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair value as of <br />August 31, 2017</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 1</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 2</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 3</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; font-size: 10pt; text-align: left">Available for sale securities</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,766,984</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,766,984</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17.</div> <div style="display: inline; text-transform: uppercase">Fair Value Measurements</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The hierarchy is broken down into <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> levels defined as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in">Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div> - Inputs are quoted prices in active markets for identical assets or liabilities.</div> <div style=" font-size: 10pt; text-indent: -45pt; margin: 0pt 0 0pt 63pt">Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2</div> - 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> active, and inputs (other than quoted prices) that are observable for the asset or liability, either directly or indirectly.</div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in">Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div> - Inputs are unobservable for the asset or liability.</div> <div style=" font-size: 10pt; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; margin: 0pt 0">See the section below titled Valuation Techniques for further discussion of how the Company determines fair value for investments.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Assets and Liabilities That Are Measured at Fair Value on a Recurring Basis</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 85 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value Measurements <br />Using Inputs Considered as</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair value as of <br />August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 1</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 2</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 3</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; font-size: 10pt; text-align: left">Available for sale securities</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,300,110</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,300,110</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: center"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="11" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value Measurements <br />Using Inputs Considered as</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair value as of <br />August 31, 2017</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 1</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 2</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 3</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%; font-size: 10pt; text-align: left">Available for sale securities</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,766,984</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,766,984</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;"> </div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Valuation Techniques</div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Financial assets that are classified as Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1</div> securities include cash equivalents and available for sale securities. These are valued using quoted market prices in an active market.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company reviews the fair value hierarchy classification on a quarterly basis. Changes in the ability to observe valuation inputs <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> transfers between Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,</div> Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,</div> or Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div> during the fiscal years ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2017. </div>When a determination is made to classify an asset or liability within Level <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,</div> the determination is based upon the significance of the unobservable inputs to the overall fair value measurement.</div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Fair Value of Financial Instruments</div> – 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.</div></div></div></div>
P7Y
1668183
1415870
260000
260000
260000
260000
260000
2824440
2737959
1156257
1322089
1156257
1322089
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Foreign Currency Translation (Accumulated Other Comprehensive Income (Loss))</div> - The functional currency of NTIC China, Zerust Brazil, Natur-Tec India, Zerust Mexico, 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).</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company (excluding NTIC China, Zerust Brazil, Natur-Tec India, NTI Asean, Zerust Mexico, NTI Europe and its joint ventures) conducts all foreign transactions based on the U.S. dollar. Since investments in joint ventures are accounted for using the equity method, any changes in foreign currency exchange rates are reflected as a foreign currency translation adjustment and does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> change the equity in income from joint ventures reflected in the Company’s consolidated statements of operations.</div></div></div></div>
10723
-50000
8500490
7807563
17259381
13252612
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Recoverability of Long-Lived Assets</div> - The Company reviews its long-lived assets whenever events or changes in circumstances indicate the carrying amount of the assets <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be recoverable. The Company determines potential impairment by comparing the carrying value of the assets with expected net cash flows expected to be provided by operating activities of the business or related products. If the sum of the expected undiscounted future net cash flows is less than the carrying value, the Company evaluates if an impairment loss should be recognized. An impairment loss is measured by comparing the amount by which the carrying value exceeds the fair value of the asset.</div></div></div></div>
7527383
5898908
5549765
1977618
4185988
1712920
8098950
4624098
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14.</div> INCOME TAXES</div></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"> </div></div> <div style=" font-size: 10pt; margin: 0pt 0">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 22, 2017, </div>the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, or Tax Reform Act. The Tax Reform Act makes broad and complex changes to the U.S. tax code that will affect the Company’s fiscal year ending <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31 2018, </div>including, but <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> limited to, reducing the U.S. federal corporate tax rate from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35%</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21%</div> effective <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2018, </div>generally eliminating U.S. federal income taxes on dividends received from foreign subsidiaries and joint ventures after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2017, </div>and imposing a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div>-time deemed repatriation tax on certain unremitted earnings of foreign subsidiaries and joint ventures. The Company is subject to a blended U.S. federal tax rate of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25.7%</div> for the fiscal year ending <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>as a result of the reduction of the U.S. federal corporate tax rate from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35%</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21%</div> effective <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2018.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company recognized provisional amounts for certain income tax effects of the Tax Reform Act in its <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> interim consolidated financial statements for the period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 28, 2018 </div>in accordance with SAB <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">118,</div> which provides SEC staff guidance for the application of ASC Topic <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">740,</div> <div style="display: inline; font-style: italic;">Income Taxes</div>, in the reporting period in which the Tax Reform Act was signed into law. SAB <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">No.</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">118</div> provides a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">one</div>-year measurement period beginning with the period of enactment of the Tax Reform Act during which the Company can record adjustments to the provisional amounts previously recorded. Accordingly, the Company’s deferred tax assets and liabilities were re-measured to reflect the reduction in the U.S. corporate income tax rate from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35%</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21%</div> effective <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 1, 2018 </div>resulting in provisional income tax expense of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$700,000,</div> and a corresponding decrease of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$700,000</div> in net deferred tax assets recognized during the year ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">In addition, the Company calculated a provisional deemed repatriation tax of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$489,000,</div> which the Company expects to fully offset with foreign tax credit carryforwards for which the Company had <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> previously recognized a tax benefit, resulting in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> change in income tax expense for the year ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company completed its accounting for the income tax effects of the Tax Reform Act during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018. </div>For fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> the Company recorded tax expense of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$632,523</div> due to the re-measurement of the Company’s net deferred tax assets to reflect the reduction in the U.S. corporate income tax rate which included income tax expense of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$700,000</div> recognized during the interim period ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> February 28, 2018, </div>and a tax benefit of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$67,477</div> recorded upon completion of the accounting for the income tax effects of the Tax Reform Act during the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> months ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018. </div>The re-measurement of the Company’s net deferred tax assets to reflect the reduction in the U.S. corporate income tax rate increased the Company’s fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> effective tax rate by approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7.8%.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">In addition, the Company completed its accounting for the deemed repatriation tax during the year ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018. </div>The Company recognized deemed repatriation tax of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$604,000</div> for fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> which was fully offset with foreign tax credit carryforwards for which the Company had <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> previously recognized a tax benefit, resulting in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> change to income tax expense for fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> due to the utilization of foreign tax credit carryforwards.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 80 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">The provision for income taxes for the fiscal years ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> approximates the following:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify">Current:</td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: justify"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; text-indent: 11pt">Federal</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 74%; font-size: 10pt; text-align: justify; text-indent: 11pt">State</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">62,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 11pt">Foreign</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">671,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">754,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">672,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">816,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Deferred:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; text-indent: 11pt">Federal</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">477,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(135,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; text-indent: 11pt">State</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">24,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(9,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 11pt">Foreign</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(297,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">28,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">204,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(116,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">876,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">700,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Reconciliations of the expected federal income tax at the statutory rate (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25.7%</div> in fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">35%</div> in fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div>) with the provisions for income taxes for the fiscal years ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> are as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left">Tax computed at statutory rates</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,081,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,591,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">State income tax, net of federal benefit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Tax effect on equity in income of international joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,903,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,998,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Tax effect on dividends received from joint ventures and investment at carrying value</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,159,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Tax effect of foreign operations</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">101,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">841,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Deemed repatriation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,011,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Foreign tax credit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(3,783,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(3,680,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Research and development credit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(10,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(212,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Valuation allowance</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(173,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">989,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Stock based compensation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">57,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">81,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Non-controlling interest</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(103,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(143,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Deferred rate change</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">633,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 1pt">Other</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(60,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">876,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">700,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; text-indent: -0.25in; margin: 0pt 0 0pt 0.25in"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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. The Tax Reform Act generally eliminated U.S. federal income taxes on dividends received from the Company’s foreign subsidiaries and joint ventures after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> December 31, 2017. </div>However, the Company will still be subject to foreign withholding taxes upon repatriation of any undistributed earnings that are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> essentially permanent in duration. The Company recorded tax expense of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$79,000</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3,000</div> during fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively, representing 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> essentially permanent in duration.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 81 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">31,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> are as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left">Accrued compensation</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">430,600</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">310,300</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Inventory costs</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58,900</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">87,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Accrued joint venture expenses</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt; line-height: 115%">—</div></div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,200</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Other accrued expenses</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">63,700</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">74,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Goodwill and other intangible assets</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">695,800</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,317,700</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Stock-based compensation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">197,500</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">241,600</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Foreign tax credit carryforward</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,789,600</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,105,700</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Other credit and loss carryforwards</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,241,200</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,473,100</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Total deferred tax assets</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,477,300</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,624,600</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Valuation allowance</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(8,654,500</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(9,578,700</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 20pt; text-indent: -10pt">Total deferred tax assets after valuation allowance</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,822,800</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,045,900</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Property and equipment</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(124,600</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(206,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 1pt">Other</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(146,200</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(83,300</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Total deferred tax liabilities</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(270,800</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(289,300</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net deferred tax assets</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,552,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,756,600</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>the Company had foreign tax credit carryforwards of approximately <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$5,789,600</div> which will begin to expire if <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> utilized prior to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2021. </div>In addition, the Company had federal and state tax credit carryforwards of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2,865,000</div> as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>which begin to expire in fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2019.</div> These federal and state tax credit carryforwards consist primarily of federal and Minnesota research and development credit carryforwards. The Company also has foreign net operating loss carryforwards of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$376,100</div> as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>which will begin to expire in fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2021.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>the Company has recorded a valuation allowance of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$5,789,600</div> with respect to the foreign tax credit carryforwards. In addition, the Company has recorded a valuation allowance of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2,864,900</div> with respect to federal and state tax credit carryforwards.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2017, </div>the Company had recorded a valuation allowance of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$6,105,700</div> with respect to the foreign tax credit carryforwards. In addition, the Company had recorded a valuation allowance of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2,855,100</div> with respect to federal and state tax credit carryforwards and had recorded a valuation allowance of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$618,000</div> with respect to its foreign net operating loss carryforwards.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> that some portion or all its deferred tax assets will <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be realized. The Company determined based on all available evidence, including historical data and projections of future results, that it is more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> that all its deferred tax assets, except for its foreign tax credit carryforward and federal and Minnesota research and development credit carryforwards will be fully realized. The Company determined that its deferred tax asset related to foreign tax credit carryforwards will <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be realized due to insufficient foreign source taxable income within the carryforward period and the fact that for ordering purposes the foreign tax credit carryforwards are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> allowed to be utilized until after any current year foreign tax credits are utilized. In addition, based on historical data and future projections, the Company determined that it is more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> that its deferred tax asset related to federal and Minnesota research and development credit carryforwards will <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be realized due to insufficient federal and Minnesota taxable income within the carryforward period after considering the foreign tax credit usage.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 82 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">The following is a tabular reconciliation of the total amounts of unrecognized tax benefits:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify; padding-left: -20pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify; padding-left: -20pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: -40pt">Gross unrecognized tax benefits – beginning balance</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">250,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">238,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: -20pt">Gross decreases - prior period tax positions</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(12,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(4,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: -40pt">Gross increases – current period tax positions</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 0pt; padding-left: -30pt">Gross unrecognized tax benefits – ending balance</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">242,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">250,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The entire amount of unrecognized tax benefits would affect the effective tax rate if recognized. It is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> expected that the amount of unrecognized tax benefits will change significantly in the next <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12</div> months.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the Company’s income tax provision. Accrued interest and penalties are included within the related tax liability line in the consolidated balance sheet. There was <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> liability for the payment of interest and penalties as of both <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2017.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0">The Company is subject to taxation in the United States and various states and foreign jurisdictions. With few exceptions, as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>the Company is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> longer subject to federal, state, local, or foreign examinations by tax authorities for years prior to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2015.</div></div></div>
876103
699519
700000
632523
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Income Taxes</div> - 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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company records net deferred tax assets to the extent the Company believes these assets will more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, the Company makes an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company records uncertain tax positions on the basis of a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div>-step process whereby the Company determines whether it is more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> recognition threshold. The Company recognizes the largest amount of tax benefit that is greater than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">50</div> percent likely to be realized upon ultimate settlement with the related tax authority.</div></div></div></div>
-173000
989000
-67477
633000
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1998000
101000
841000
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1591000
103000
143000
57000
81000
-60000
19000
4011000
25000
53000
10000
212000
3783000
3680000
876103
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273333
137256
1641132
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5.</div> PATENTS AND TRADEMARKS, NET</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Patents and trademarks, net consisted of the following:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Patents and trademarks</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,824,440</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,737,959</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Less accumulated amortization</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,668,183</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,415,870</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,156,257</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,322,089</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Patent and trademark costs are amortized over <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">seven</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$252,313</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$119,033</div> for the years ended <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively. Amortization expense is estimated to approximate <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"></div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$260,000</div></div></div></div></div> in each of the next <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">five</div> fiscal years.</div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Patents and Trademarks</div> – 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.</div></div></div></div>
17962
20382
17962
20382
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.</div> INVENTORIES</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Inventories consisted of the following:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Production materials</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,824,489</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,746,916</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Finished goods</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,306,372</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,709,636</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,130,861</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,456,552</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div></div>
7306372
5709636
9130861
7456552
9130861
7456552
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Inventories</div> - Inventories are recorded at the lower of cost (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div>-in, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div>-out basis) or net realizable value.</div></div></div></div>
1824489
1746916
99463
43539
310365
310365
0
88831
0
63549236
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3000000
1200000
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Available for Sale Securities</div> – Available for sale securities are recorded at fair value. Unrealized holding gains and losses on available for sale securities are excluded from earnings.</div></div></div></div>
2742309
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600000
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<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.</div> NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES</div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Nature of Business </div>– Northern Technologies International Corporation and Subsidiaries (the Company) develop and market proprietary environmentally beneficial products and services in over <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60</div> 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<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> brand. The Company has been selling its proprietary ZERUST<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets for over <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">40</div> years, and more recently, has targeted and expanded into the oil and gas industry. The Company also sells a portfolio of biobased and certified compostable (fully biodegradable) polymer resin compounds and finished products under the Natur-Tec<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> brand. These products are intended to reduce the Company’s customers’ carbon footprint and provide environmentally sound disposal options. The Company’s <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> operating segments are ZERUST and Natur-Tec.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company participates, either directly or indirectly, in <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20</div> 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<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">50%</div> or less of its joint venture entities and does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> control the decisions of these entities, including dividend declaration or amount in any given year.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company has evaluated events occurring after the date of the consolidated financial statements for events requiring recording or disclosure in the financial statements.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Principles of Consolidation</div> - 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), and, 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) and NTIC’s majority-owned holding company, NTI Asean LLC (NTI Asean). NTIC’s consolidated financial statements do <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> include the accounts of any of its joint ventures.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Non-Controlling Interests</div> – The Company owns <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">90%</div> of Natur-Tec India, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">85%</div> of Zerust Brazil and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">60%</div> of NTI Asean. The remaining ownership is accounted for as non-controlling interests and reported as part of equity in the consolidated financial statements. The Company allocates gains and losses to the non-controlling interest even when such allocation might result in a deficit balance, reducing the losses attributed to the controlling interest, changes in ownership interests are treated as equity transactions if the Company maintains control.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 65 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Net Sales </div>–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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> 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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Revenue Recognition</div> – The Company recognizes revenue from the sale of its products when persuasive evidence of an arrangement exists, the product has been delivered, the price is fixed and determinable and collection of the resulting receivable is reasonably assured. These criteria are met when risk of loss and title pass to the customer, distributor or joint venture entity. Sales and use taxes charged to customers are reported on a net basis.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Trade Receivable</div> – 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30</div> days. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$50,000</div> as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$40,000</div> as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2017. </div>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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Trade Receivables from Joint Ventures </div>– Trade receivables from joint ventures arise from sales of products the Company makes to its joint ventures. Payment terms for the Company’s joint ventures also are determined based on credit risk; however, additional consideration also is given to the individual joint venture due to the transportation time associated with ocean delivery of most products and certain other factors. Generally, accounts receivable from the Company’s joint ventures unpaid after <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">90</div> days are considered past due. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> accrue interest on past due balances. The Company periodically reviews amounts due from its joint ventures for collectability and based on past experience and continuous review of the balances due, determined an allowance for doubtful accounts related to its joint venture receivables is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> necessary as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Fees for Services Provided to Joint Ventures – </div>The Company provides services to its joint ventures including consulting, legal, travel, insurance, technical and marketing services. The Company receives fees for the services it provides to its joint ventures. The fees for services received by the Company from its joint ventures are generally based on either a flat fee or a percentage of net sales by the Company’s joint ventures depending on local laws and tax regulations. The Company recognizes revenues related to fees for services provided to its joint ventures when earned, amounts are determinable, and collectability is reasonably assured. Under the Company’s agreements with its joint ventures, amounts are earned when product is shipped from joint venture facilities. The Company reviews the financial situation of each of its joint ventures to assist in the likelihood of collections on amounts earned. The Company accounts for these fees on a cash basis if uncertainty exists surrounding the collection of such fees.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 66 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Cash and Cash Equivalents</div> - The Company includes as cash and cash equivalents highly liquid, short-term investments with maturity of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">three</div> 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, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>exceed federally insured limits.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Available for Sale Securities</div> – Available for sale securities are recorded at fair value. Unrealized holding gains and losses on available for sale securities are excluded from earnings.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Inventories</div> - Inventories are recorded at the lower of cost (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div>-in, <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">first</div>-out basis) or net realizable value.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Property and Depreciation</div> - 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:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space: nowrap; font-size: 10pt; text-align: left; padding-left: 1.7in; width: 50%">Buildings and improvements (years)</td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30</div></td> <td style="font-size: 10pt; text-align: left; width: 37%"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="font-size: 10pt; text-align: left; padding-left: 1.7in">Machinery and equipment (years)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" margin-top: 0; margin-bottom: 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Patents and Trademarks</div> – 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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Investments in Joint Ventures</div> - Investments in the Company’s joint ventures are accounted for using the equity method. Under the equity method, investments are initially recorded at cost and are adjusted for dividends, distributed and undistributed earnings and losses, changes in foreign currency exchange rates and additional investments. In the event the Company’s share of joint venture’s cumulative losses exceeds the Company’s investment balance, the balance is reported at <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">zero</div> value until proportionate income exceeds the losses. The Company assesses its joint ventures for impairment on an annual basis as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31 </div>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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>differ from assumed or estimated amounts. All investments in joint ventures have positive equity as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20%</div> of the Company’s total assets or income.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company classifies distributions received from its joint ventures based on the nature of the distributions, generally, as a return on its investment in operating activities on the consolidated statements of cash flows.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">If the Company is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> longer exists and discontinues accruing the proportionate earnings or losses of the investment.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 67 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Recoverability of Long-Lived Assets</div> - The Company reviews its long-lived assets whenever events or changes in circumstances indicate the carrying amount of the assets <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be recoverable. The Company determines potential impairment by comparing the carrying value of the assets with expected net cash flows expected to be provided by operating activities of the business or related products. If the sum of the expected undiscounted future net cash flows is less than the carrying value, the Company evaluates if an impairment loss should be recognized. An impairment loss is measured by comparing the amount by which the carrying value exceeds the fair value of the asset.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Income Taxes</div> - 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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company records net deferred tax assets to the extent the Company believes these assets will more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, the Company makes an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company records uncertain tax positions on the basis of a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div>-step process whereby the Company determines whether it is more likely than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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-<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> recognition threshold. The Company recognizes the largest amount of tax benefit that is greater than <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">50</div> percent likely to be realized upon ultimate settlement with the related tax authority.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Foreign Currency Translation (Accumulated Other Comprehensive Income (Loss))</div> - The functional currency of NTIC China, Zerust Brazil, Natur-Tec India, Zerust Mexico, 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).</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company (excluding NTIC China, Zerust Brazil, Natur-Tec India, NTI Asean, Zerust Mexico, NTI Europe and its joint ventures) conducts all foreign transactions based on the U.S. dollar. Since investments in joint ventures are accounted for using the equity method, any changes in foreign currency exchange rates are reflected as a foreign currency translation adjustment and does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> change the equity in income from joint ventures reflected in the Company’s consolidated statements of operations.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 68 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Fair Value of Financial Instruments</div> – 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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Shipping and Handling</div> - 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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Research and Development</div> - The Company expenses all costs related to product research and development as incurred.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Common Stock</div> – The Company issues authorized but unissued shares of common stock upon the exercise of stock options.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Stock-Based Compensation</div> – 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).</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Subsequent Events</div> – The Company has evaluated events occurring after the date of the consolidated financial statements for events requiring disclosure in the consolidated financial statements.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Use of Estimates</div> - 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.</div></div>
1006953
677621
153849
71685
-1162755
552575
13669522
11351595
196225
1815508
600000
200000
1518596
3000000
86481
162525
0
0
680502
922270
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12.</div> RETIREMENT PLAN </div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company has a <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">401</div>(k) employee savings plan. Employees who meet certain age and service requirements <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>elect to contribute up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15%</div> of their salaries. The Company typically contributes the lesser of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">50%</div> of the participant’s contributions or <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3.5%</div> of the employee’s salary. The Company recognized expense for the savings plan of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$219,379</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$202,559</div> for fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively.</div></div>
0
0
10000
10000
0
0
0
0
1661577
439298
3697503
6377054
1985470
1476880
15433
122999
27951
46536
7222847
3924579
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4.</div> PROPERTY AND EQUIPMENT, NET</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Property and equipment, net consisted of the following:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Land</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">310,365</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">310,365</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Buildings and improvements</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,927,484</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,847,177</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Machinery and equipment</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,680,072</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,171,387</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,917,921</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,328,929</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Less accumulated depreciation</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(4,749,095</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(3,969,267</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,168,826</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,359,662</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div></div>
11917921
11328929
7168826
7359662
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Property and Depreciation</div> - 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:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="VERTICAL-ALIGN: bottom"> <td style="white-space: nowrap; font-size: 10pt; text-align: left; padding-left: 1.7in; width: 50%">Buildings and improvements (years)</td> <td style="font-size: 10pt; width: 1%"> </td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center; width: 4%"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30</div></td> <td style="font-size: 10pt; text-align: left; width: 37%"> </td> </tr> <tr style="VERTICAL-ALIGN: bottom"> <td style="font-size: 10pt; text-align: left; padding-left: 1.7in">Machinery and equipment (years)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">-</div></td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table> </div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Land</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">310,365</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">310,365</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Buildings and improvements</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,927,484</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,847,177</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Machinery and equipment</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,680,072</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,171,387</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,917,921</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,328,929</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Less accumulated depreciation</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(4,749,095</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(3,969,267</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,168,826</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,359,662</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
P5Y
P30Y
P3Y
P10Y
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Trade Receivable</div> – 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">30</div> days. The Company does <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> 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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$50,000</div> as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018 </div>and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$40,000</div> as of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2017. </div>Accounts are considered past due based on terms agreed upon between the Company and the customer. Accounts receivable are written-off only after all collection attempts have failed and are based on individual credit evaluation and specific circumstances of the customer.</div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify"><div style="display: inline; font-size: 10pt">ZERUST<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> net sales</div></td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">41,374,305</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">32,789,283</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt"><div style="display: inline; font-size: 10pt">Natur-Tec<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> net sales</div></td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,050,516</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,779,840</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; padding-left: 10pt">Total net sales</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">51,424,821</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39,569,123</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Germany</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">900,316</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">838,628</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Poland</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">775,319</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">661,226</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Japan</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">759,418</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">641,699</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Sweden</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">600,336</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">472,819</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">France</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">532,565</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">410,842</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Thailand</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">429,319</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">448,013</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Czech</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">377,844</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">314,834</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">South Korea</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">370,171</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">376,002</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">India</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">365,018</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">322,677</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">United Kingdom</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">352,585</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">295,761</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Finland</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">320,501</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">292,225</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Other</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">358,747</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">377,961</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,142,139</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,452,687</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
144000
137666
0
10136
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.</div> RELATED PARTY TRANSACTIONS</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">During fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> the Company made consulting payments of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$144,000</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$137,666,</div> respectively, to Bioplastic Polymers LLC, an entity owned by Ramani Narayan, Ph.D., a director of the Company, and paid royalties of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0</div> and <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10,136,</div> respectively, based on net sales of the Company’s bioplastics products.</div></div>
3524953
2912393
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Research and Development</div> - The Company expenses all costs related to product research and development as incurred.</div></div></div></div>
4163023
6360201
41963341
37077483
20921783
12717994
8203789
17960860
9884911
8075949
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">China</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,507,039</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,225,659</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Brazil</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,093,697</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,394,730</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">India</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,052,741</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,816,929</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Other</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,470,101</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,344,111</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">United States</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,301,243</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21,787,694</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; padding-left: 10pt">Total net sales</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">51,424,821</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39,569,123</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Net Sales </div>–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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> 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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Revenue Recognition</div> – The Company recognizes revenue from the sale of its products when persuasive evidence of an arrangement exists, the product has been delivered, the price is fixed and determinable and collection of the resulting receivable is reasonably assured. These criteria are met when risk of loss and title pass to the customer, distributor or joint venture entity. Sales and use taxes charged to customers are reported on a net basis.</div></div></div></div>
51424821
39569123
41374305
32789283
10050516
6779840
12507039
7225659
3093697
2394730
3052741
1816929
7470101
6344111
25301243
21787694
25301243
21787694
2908072
3222478
23215506
14558951
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended <br />August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left">Cash paid during the year for income tax</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">876,103</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">699,519</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Cash paid during the year for interest</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">17,962</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">20,382</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify">Current:</td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td colspan="3" style="font-size: 10pt; text-align: justify"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; text-indent: 11pt">Federal</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 74%; font-size: 10pt; text-align: justify; text-indent: 11pt">State</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">62,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 11pt">Foreign</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">671,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">754,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">672,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">816,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Deferred:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; text-indent: 11pt">Federal</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">477,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(135,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; text-indent: 11pt">State</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">24,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(9,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; text-indent: 11pt">Foreign</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(297,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">28,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">204,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(116,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">876,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">700,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left">Accrued compensation</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">430,600</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">310,300</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Inventory costs</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">58,900</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">87,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Accrued joint venture expenses</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"><div style="display: inline; font-size: 10pt; line-height: 115%">—</div></div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,200</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Other accrued expenses</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">63,700</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">74,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Goodwill and other intangible assets</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">695,800</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,317,700</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Stock-based compensation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">197,500</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">241,600</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Foreign tax credit carryforward</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,789,600</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,105,700</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Other credit and loss carryforwards</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,241,200</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,473,100</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 10pt">Total deferred tax assets</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,477,300</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11,624,600</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt">Valuation allowance</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(8,654,500</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(9,578,700</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-left: 20pt; text-indent: -10pt">Total deferred tax assets after valuation allowance</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,822,800</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,045,900</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Property and equipment</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(124,600</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(206,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 1pt">Other</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(146,200</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(83,300</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 10pt">Total deferred tax liabilities</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(270,800</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(289,300</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt">Net deferred tax assets</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,552,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,756,600</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="text-indent: 0; border-collapse: collapse; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: justify; padding-bottom: 1pt">Numerator:</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Net income attributable to NTIC</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,701,366</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,422,126</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; font-weight: bold; text-align: justify">Denominator:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Basic-weighted shares outstanding</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,538,838</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,528,611</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; padding-left: 10pt; text-indent: -10pt">Weighted shares assumed upon exercise of stock options</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">146,364</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">48,748</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt">Diluted – weighted shares outstanding</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,685,202</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,577,359</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Basic earnings per share:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.48</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.76</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Diluted earnings per share:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.43</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left">$</td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.75</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left">Tax computed at statutory rates</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,081,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,591,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">State income tax, net of federal benefit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">53,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Tax effect on equity in income of international joint ventures</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,903,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,998,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Tax effect on dividends received from joint ventures and investment at carrying value</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,159,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Tax effect of foreign operations</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">101,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">841,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Deemed repatriation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,011,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Foreign tax credit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(3,783,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(3,680,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Research and development credit</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(10,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(212,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Valuation allowance</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(173,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">989,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Stock based compensation</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">57,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">81,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left">Non-controlling interest</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(103,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(143,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Deferred rate change</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">633,000</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 1pt">Other</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(60,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">19,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">876,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">700,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Patents and trademarks</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,824,440</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,737,959</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Less accumulated amortization</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,668,183</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(1,415,870</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,156,257</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,322,089</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="text-indent: 0; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif; min-; min-width: 700px;"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 85%; font-size: 10pt">Fiscal 2019</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 12%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">131,840</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt">Fiscal 2020</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">66,762</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt">Fiscal 2021</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,404</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; padding-bottom: 1pt">Fiscal 2022</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,454</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">214,460</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Production materials</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,824,489</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,746,916</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Finished goods</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,306,372</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,709,636</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">9,130,861</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,456,552</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left">Inside the U.S.A. to unaffiliated customers</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,301,243</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21,787,694</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Outside the U.S.A. to:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Joint ventures in which the Company is a shareholder directly and indirectly</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,908,072</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,222,478</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 11pt">Unaffiliated customers</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23,215,506</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,558,951</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">51,424,821</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39,569,123</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">At August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">At August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">China</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">205,490</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">228,458</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Brazil</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">71,677</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">54,646</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Germany</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,058</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,171</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">India</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,220</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,712</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">United States</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,862,381</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,047,675</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; padding-left: 10pt">Total long-lived assets</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,168,826</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,359,662</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares (#)</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted Average Exercise Price</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">Aggregate <br />Intrinsic Value</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 61%; font-size: 10pt; text-align: justify">Outstanding at August 31, 2016</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">283,181</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.95</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Options granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">56,677</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.40</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Options exercised</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(12,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10.25</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; padding-left: 10pt">Options terminated</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(20,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15.21</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Outstanding at August 31, 2017</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">307,858</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.93</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Options granted</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">47,252</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18.35</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Options exercised</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(6,407</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11.59</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt; padding-left: 10pt">Options terminated</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">—</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> </div></td> <td style="padding-bottom: 1pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt">Outstanding at August 31, 2018</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">348,703</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14.57</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">$</td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,737,763</div></td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt">Exercisable at August 31, 2018</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">267,850</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">13.97</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left">$</td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,007,547</div></td> <td style="padding-bottom: 2.25pt; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Dividend yield</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 12%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2.18%</div></td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 12%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">0.00%</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Expected volatility</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">45.9%</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">46.0%</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Expected life of option (years)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Weighted average risk-free interest rate</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.87%</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1.63%</div></td> </tr> </table></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">11.</div> SEGMENT AND GEOGRAPHIC INFORMATION</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Segment Information</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company’s chief operating decision maker (CODM) is its Chief Executive Officer. The Company’s business is organized into <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">two</div> reportable segments: ZERUST<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> and Natur-Tec<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div>. The Company has been selling its proprietary ZERUST<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> rust and corrosion inhibiting products and services to the automotive, electronics, electrical, mechanical, military and retail consumer markets for over <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">40</div> years, and more recently, has targeted and expanded into the oil and gas industry. The Company also sells a portfolio of bio-based and compostable (fully biodegradable) polymer resins and finished products under the Natur-Tec<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> brand.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The following tables present the Company’s business segment information in fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017:</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify"><div style="display: inline; font-size: 10pt">ZERUST<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> net sales</div></td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">41,374,305</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">32,789,283</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt"><div style="display: inline; font-size: 10pt">Natur-Tec<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">®</div> net sales</div></td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,050,516</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,779,840</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; padding-left: 10pt">Total net sales</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">51,424,821</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39,569,123</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"><div style="display: inline; font-style: italic;"> </div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"><div style="display: inline; font-style: italic;"></div></div> <!-- Field: Page; Sequence: 77 --> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"><div style="display: inline; font-style: italic;"></div></div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0">The following table sets forth the Company’s cost of goods sold for fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017</div> by segment:</div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Direct cost of goods sold</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="width: 74%; font-size: 10pt; text-align: justify; padding-left: 10pt">ZERUST®</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">24,326,493</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18,996,264</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-left: 10pt">Natur-Tec®</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,303,439</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,925,061</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Indirect cost of goods sold</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,535,508</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,395,186</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; padding-left: 10pt">Total net cost of goods sold</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">34,165,440</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">26,316,511</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> utilized in evaluating product performance, nor does such allocation occur for internal financial reporting.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">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 <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> included. The foregoing geographic and segment information represents only sales and cost of goods sold recognized directly by the Company.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">All joint venture operations including equity in income, fees for services and related dividends are related to ZERUST<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">® </div>products and services.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Geographic Information</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Net sales by geographic location were as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left">Inside the U.S.A. to unaffiliated customers</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,301,243</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21,787,694</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left">Outside the U.S.A. to:</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"> </td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; text-indent: -10pt; padding-left: 20pt">Joint ventures in which the Company is a shareholder directly and indirectly</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,908,072</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,222,478</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 11pt">Unaffiliated customers</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">23,215,506</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,558,951</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">51,424,821</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39,569,123</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Net sales by geographic location are based on the location of the customer.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Fees for services provided to joint ventures by geographic location as a percentage of total fees for services provided to joint ventures during fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> respectively, were as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">Germany</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">900,316</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">838,628</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Poland</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">775,319</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">661,226</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Japan</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">759,418</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">641,699</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Sweden</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">600,336</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">472,819</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">France</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">532,565</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">410,842</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Thailand</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">429,319</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">448,013</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Czech</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">377,844</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">314,834</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">South Korea</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">370,171</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">376,002</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">India</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">365,018</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">322,677</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">United Kingdom</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">352,585</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">295,761</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Finland</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">320,501</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">292,225</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">Other</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">358,747</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">377,961</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,142,139</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,452,687</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 78 --> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">Sales to the Company’s joint ventures are included in the foregoing segment and geographic information; however, sales by the Company’s joint ventures to other parties are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> included. The foregoing segment and geographic information represents only sales and cost of goods sold recognized directly by the Company.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">See Note <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6</div> for additional details on geographical information regarding equity in income from joint ventures.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The geographical distribution of total long-lived assets and net sales is as follows:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">At August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">At August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">China</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">205,490</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">228,458</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Brazil</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">71,677</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">54,646</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">Germany</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,058</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,171</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">India</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">22,220</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,712</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">United States</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,862,381</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,047,675</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; padding-left: 10pt">Total long-lived assets</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,168,826</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,359,662</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div> <table style="; border-collapse: collapse; text-indent: 0px; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: justify">China</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,507,039</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,225,659</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Brazil</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,093,697</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2,394,730</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify">India</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">3,052,741</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">1,816,929</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify">Other</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">7,470,101</div></td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,344,111</div></td> <td style="font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 1pt">United States</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">25,301,243</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">21,787,694</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: justify; padding-bottom: 2.25pt; padding-left: 10pt">Total net sales</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">51,424,821</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">39,569,123</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table> </div> <div style=" font-size: 10pt; text-align: justify; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Long-lived assets located in China, Brazil, Germany and India 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.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">Sales to the Company’s joint ventures are included in the foregoing segment and geographic information; however, sales by the Company’s joint ventures to other parties are <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> included. The foregoing segment and geographic information represents only sales recognized directly by the Company and sold in that geographic territory.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">All joint venture operations including equity in income, fees for services and related dividends are related to ZERUST<div style="display: inline; bottom:.33em; font-size: 82%; position: relative; vertical-align: baseline;">® </div>products and services.</div></div>
10886011
9283310
413010
391664
P3Y
P4Y
0.0218
0
0.459
0.46
0.0187
0.0163
800000
100000
267850
13.97
20000
56677
56677
47252
7.75
7.69
7737763
283181
307858
348703
13.95
13.93
14.57
10.25
11.59
15.21
13.40
13.40
18.35
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Stock-Based Compensation</div> – 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).</div></div></div></div>
P10Y
P10Y
P10Y
6007547
P6Y98D
P5Y219D
0.9
4533416
4535018
4541303
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Shipping and Handling</div> - 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.</div></div></div></div>
985
1098
890
3029
4127
1875
4410
12000
12000
4410
83
46453
46536
38
27913
27951
240
122759
122999
88
15345
15433
413010
391664
3000000
2640548
0
14525
14525
291
195934
196225
53076745
48860628
55819054
51718076
90668
13798567
33655357
-3009617
2540973
47075948
90700
14163509
37077483
-2471064
2857448
90826
14619777
41963341
-3597199
2742309
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">8.</div> STOCKHOLDERS’ EQUITY</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">During fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> the Company’s Board of Directors declared cash dividends on the following dates in the following amounts to the following holders of the Company’s common stock:</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div> <table style="border-collapse: collapse; min-width: 700px;" cellspacing="0" cellpadding="0"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Declaration Date</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Record Date</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Payable Date</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 25%; font-size: 10pt; text-align: center">November 20, 2017</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 24%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.10</div></td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 24%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">December 8, 2017</div></td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 24%; font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">December 21, 2017</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: center">January 24, 2018</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.10</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">February 8, 2018</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">February 21, 2018</div></td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: center">April 25, 2018</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.10</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">May 9, 2018</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">May 23, 2018</div></td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: center">July 25, 2018</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.10</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">August 8, 2018</div></td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: center"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">August 22, 2018</div></td> </tr> </table> </div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 15, 2015, </div>the Company’s Board of Directors authorized the repurchase of up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$3,000,000</div> in shares of common stock through open market purchases or unsolicited or solicited privately negotiated transactions. This program has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">no</div> expiration date but <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>be terminated by the Company’s Board of Directors at any time. As of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> August 31, 2018, </div>up to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$2,640,548</div> in shares of common stock remained available for repurchase under the stock repurchase program.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">During fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> the Company did <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> repurchase or retire any shares of its common stock.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">During fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018,</div> stock options to purchase an aggregate of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">6,407</div> shares of common stock were exercised at a weighted average exercise price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$11.59</div> per share, some of the shares were cashless exercises, the resulting net shares issued were <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,410.</div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">During fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> the Company repurchased and retired <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14,525</div> shares of its common stock at an average price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$13.51</div> per share. During fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017,</div> stock options to purchase an aggregate of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">12,000</div> shares of common stock at an exercise price of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$10.25</div> per share were exercised.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0"></div> <!-- Field: Page; Sequence: 74 --> <div style=" font-size: 10pt; margin: 0pt 0"></div> <div style=" font-size: 10pt; margin: 0pt 0">The Company granted stock options under the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2007</div> Plan to purchase an aggregate of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">56,677</div> shares of its common stock to various employees and directors during fiscal <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2017.</div> The weighted average per share exercise price of the stock options is <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$13.40,</div> which was equal to the fair market value of the Company’s common stock on the date of grant.</div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">The Company held its <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> Annual Meeting of Stockholders (<div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> Annual Meeting) on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January 12, 2018. </div>At the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> Annual Meeting, a proposal to approve an amendment to the Company’s Restated Certificate of Incorporation to increase the Company’s authorized shares of common stock from <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">10,000,000</div> to <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">15,000,000</div> (Share Increase Amendment) was approved by the Company’s stockholders by the required vote. The Share Increase Amendment was filed with the Office of the Secretary of State of the State of Delaware on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> January </div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,</div> <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> and it became effective the same day. In determining that the Share Increase Amendment was approved by the required vote, votes cast by brokers, banks or other nominees without instruction from the beneficial owners of certain of our outstanding shares were counted in favor of the proposal in accordance with the rules of the New York Stock Exchange that govern how brokers <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>cast such votes. Because a disclosure in the definitive proxy statement for the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> Annual Meeting, which was filed on Schedule <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">14A</div> with the Securities and Exchange Commission (SEC) on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 27, 2017 (</div><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> Proxy Statement), anticipated that brokers would <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> have discretion to vote for the proposal to approve the Share Increase Amendment, a question has been raised as to the validity of the vote taken on the proposal to approve the Share Increase Amendment. The Company believes that the Share Increase Amendment was properly approved and is effective. However, because the description of the authority of brokers to vote on proposals without instruction in the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> Proxy Statement <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> may </div>create some uncertainty as to the effect of the vote obtained at the <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">2018</div> Annual Meeting and out of an abundance of caution, the Company intends to ask its stockholders at either a special meeting or the next annual meeting of the Company’s stockholders to ratify the filing and effectiveness of the Share Increase Amendment pursuant to Delaware law in order to eliminate any uncertainty related to the effectiveness of the Share Increase Amendment. The Company has <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> issued, or reserved for issuance, and will <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">not</div> issue, or reserve for issuance, any of the additional <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">5,000,000</div> authorized shares as part of the Share Increase Amendment unless the vote at the special or annual meeting of the Company’s stockholders is in favor of the ratification of the Share Increase Amendment.</div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Common Stock</div> – The Company issues authorized but unissued shares of common stock upon the exercise of stock options.</div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-style: italic;">Subsequent Events</div> – The Company has evaluated events occurring after the date of the consolidated financial statements for events requiring disclosure in the consolidated financial statements.</div></div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; margin: 0pt 0"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">18.</div> <div style="display: inline; text-transform: uppercase">SUBSEQUENT EVENT</div></div></div> <div style=" font-size: 10pt; margin: 0pt 0"> </div> <div style=" font-size: 10pt; margin: 0pt 0">On <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> October 24, 2018, </div>NTIC’s Board of Directors declared a cash dividend of <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">$0.12</div> per share of NTIC’s common stock, payable on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 21, 2018 </div>to stockholders of record on <div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;"> November 7, 2018.</div></div></div>
<div style="display: inline; font-family: times new roman; font-size: 10pt"><table cellspacing="0" cellpadding="0" style="; border-collapse: collapse; text-indent: 0px; min-; min-width: 700px;"> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify; padding-left: -20pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="7" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31,</td> </tr> <tr style="vertical-align: bottom"> <td style="font-size: 10pt; text-align: justify; padding-left: -20pt"> </td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2018</td> <td style="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="3" style="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2017</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 74%; font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: -40pt">Gross unrecognized tax benefits – beginning balance</td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">250,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> <td style="width: 1%; font-size: 10pt"> </td> <td style="width: 1%; font-size: 10pt; text-align: left">$</td> <td style="width: 10%; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">238,000</div></td> <td style="width: 1%; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; text-indent: 0pt; padding-left: -20pt">Gross decreases - prior period tax positions</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(12,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">(4,000</div></td> <td style="font-size: 10pt; text-align: left">)</td> </tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-size: 10pt; text-align: left; padding-bottom: 1pt; text-indent: 0pt; padding-left: -40pt">Gross increases – current period tax positions</td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">4,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">16,000</div></td> <td style="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"> </td> </tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-size: 10pt; text-align: left; padding-bottom: 2.25pt; text-indent: 0pt; padding-left: -30pt">Gross unrecognized tax benefits – ending balance</td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">242,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> <td style="font-size: 10pt; padding-bottom: 2.25pt"> </td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left">$</td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: right"><div style="display: inline; font-style: italic; font-weight: inherit; font-style: normal;">250,000</div></td> <td style="border-bottom: Black 2.25pt double; font-size: 10pt; text-align: left"> </td> </tr> </table></div>
5789600
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250000
238000
242000
0
0
4000
16000
<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt">Use of Estimates</div> - 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.</div></div>
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