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What changed in NORTHERN TECHNOLOGIES INTERNATIONAL CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NORTHERN TECHNOLOGIES INTERNATIONAL CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+357 added−333 removedSource: 10-K (2025-11-20) vs 10-K (2024-11-19)

Top changes in NORTHERN TECHNOLOGIES INTERNATIONAL CORP's 2025 10-K

357 paragraphs added · 333 removed · 255 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

75 edited+11 added−14 removed113 unchanged
Biggest changeWhile the industry predominantly uses various paints/coatings, engineered alloys, cathodic protection, etc. to mitigate corrosion, there are several situations where such options are not feasible and, in many such cases, NTIC believes that its ZERUST® oil and gas corrosion prevention solutions are more effective at minimizing maintenance downtime on critical oil and gas industry infrastructure, extend the life of such infrastructure, and reduce the risk of environmental pollution due to leaks caused by corrosion.
Biggest changeWhile the industry predominantly uses various paints/coatings, engineered alloys, cathodic protection, etc. to mitigate corrosion, there are several situations where such options are not feasible and, in many such cases, NTIC believes that its ZERUST® oil and gas corrosion prevention solutions are more effective at minimizing maintenance downtime on critical oil and gas industry infrastructure, extend the life of such infrastructure, and reduce the risk of environmental pollution due to leaks caused by corrosion. 4 NTIC’s rust and corrosion inhibiting products for the oil and gas industry include ZERUST® Flange Savers®, ZERUST® Zif Tape, ZERUST® ReCAST-SSB solutions, and ZERUST® chemicals, including Zerion powders and gels, in addition to many of the standard industrial ZERUST® rust and corrosion inhibiting products previously described.
Item 1. BUSINESS Overview Northern Technologies International Corporation (NTIC) develops and markets proprietary, environmentally beneficial products and services in over 65 countries either directly or via a network of subsidiaries, joint ventures, independent distributors, and agents. NTIC’s primary business is corrosion prevention products and services, marketed mainly under the ZERUST® brand.
Item 1. BUSINESS Overview Northern Technologies International Corporation (NTIC) develops and markets proprietary, environmentally beneficial products and services in over 65 countries either directly or via a network of subsidiaries, joint ventures, independent distributors, and agents. NTIC’s primary business is corrosion prevention marketed mainly under the ZERUST® brand.
In addition, because certain barriers to entry are low, additional competitors may emerge, which likely would lead to the further commoditization of NTIC’s rust and corrosion inhibiting products. 7 With respect to the sales and marketing of ZERUST® rust and corrosion inhibiting products and services to the oil and gas industry, NTIC uses a combination of direct sales personnel, independent sales agents, and its joint venture network.
In addition, because certain barriers to entry are low, additional competitors may emerge, which likely would lead to further commoditization of NTIC’s rust and corrosion inhibiting products. 7 With respect to the sales and marketing of ZERUST® rust and corrosion inhibiting products and services to the oil and gas industry, NTIC uses a combination of direct sales personnel, independent sales agents, and its joint venture network.
In addition, in an attempt to penetrate the oil and gas industry within certain markets more quickly, NTIC has entered into various agreements with specific organizations that have existing long-term relationships with key oil and gas industry clients.
In addition, in an attempt to penetrate the oil and gas industry within certain markets more quickly, NTIC has entered into various agreements with specific organizations that have existing long-term relationships with key oil and gas industry clients.
NTIC continues to believe the sale of its ZERUST® corrosion prevention solutions to customers in the oil and gas industry will involve long sales cycles, likely including multi-year trial periods with each user and a slow integration process thereafter. Natur-Tec ® Resin Compounds and Finished Products.
NTIC continues to believe the sale of its ZERUST® corrosion prevention solutions to customers in the oil and gas industry will involve long sales cycles, likely including multi-year trial periods with each user and a slow integration process thereafter. Natur-Tec ® Resin Compounds and Finished Products.
Turnover NTIC continually monitors employee turnover rates as its success depends upon retaining highly trained engineering, manufacturing and operations personnel. The average tenure of our employees is nine years. Management Team NTIC believes its management team has the experience necessary to effectively execute its strategy and advance its product and technology leadership.
Turnover NTIC continually monitors employee turnover rates as its success depends upon retaining highly trained engineering, manufacturing and operations personnel. The average tenure of our employees is nine years. Management Team NTIC believes its management team has the necessary experience to effectively execute its strategy and advance its product and technology leadership.
NTIC is dedicated to investing in the future of the planet and NTIC’s people and intends to continue to invest in HSE protection and improvements in a timely manner consistent with available technology. 10 NTIC is guided by its Policy Statement on HSE, which sets forth NTIC’s HSE objectives, including ensuring that all activities across the value chain are conducted in a manner which is consistent with NTIC’s quality management standard and HSE programs, ensuring that business activities are conducted to prevent harm and protect health and safety, and developing, manufacturing, distributing and marketing products and services with full regard for HSE aspects.
NTIC is dedicated to investing in the future of the planet and NTIC’s people and intends to continue to invest in HSE&S protection and improvements in a timely manner consistent with available technology. 10 NTIC is guided by its Policy Statement on HSE&S, which sets forth NTIC’s HSE&S objectives, including ensuring that all activities across the value chain are conducted in a manner which is consistent with NTIC’s quality management standard and HSE&S programs, ensuring that business activities are conducted to prevent harm and protect health and safety, and developing, manufacturing, distributing and marketing products and services with full regard for HSE&S aspects.
Natur-Tec® flexible film resin compounds are fully commercially compostable and meet the requirements of international standards for compostable plastics, such as ASTM (American Society for Testing and Materials) D6400 (U.S.), EN 13432 (European standards for products and services by European Committee for Standardization), and ISO (International Organization for Standardization) 17088, and are certified as 100% compostable by organizations including the BPI (Biodegradable Products Institute) in the United States and TÜV Austria in Europe.
Natur-Tec® flexible film resin compounds are fully commercially and home compostable and meet the requirements of international standards for compostable plastics, such as ASTM (American Society for Testing and Materials) D6400 (U.S.), EN 13432 (European standards for products and services by European Committee for Standardization), and ISO (International Organization for Standardization) 17088, and are certified as 100% compostable by organizations including the BPI (Biodegradable Products Institute) in the United States and TÜV Austria in Europe.
Turkey 50% ZERUST AB Sweden 50% ZERUST CONSUMER PRODUCTS, LLC United States 50% ZERUST OY Finland 50% ZERUST SPECIALTY TECH CO. LTD. Thailand (1) 30% ____________________ (1) Indirect ownership interest through NTI Asean. For more information regarding NTIC’s joint ventures and their effect on NTIC’s operating results, see NTIC’s consolidated financial statements in “ Part II. Item 8.
Turkey 50% ZERUST AB Sweden 50% ZERUST CONSUMER PRODUCTS, LLC United States 50% ZERUST OY Finland 50% ZERUST SPECIALTY TECH CO. LTD. Thailand (1) 30% ____________________ (1) Indirect ownership interest through NTI Asean. 2 For more information regarding NTIC’s joint ventures and their effect on NTIC’s operating results, see NTIC’s consolidated financial statements in “ Part II. Item 8.
Natur-Tec® finished products include totally biodegradable and compostable trash bags, agricultural film, and other single-use disposable products, such as food and consumer goods packaging currently marketed under the Natur-Bag® brand. The Natur-Bag® product line offers 15 different compostable trash bag sizes, from 3-gallon to 96-gallon, as well as shopper bags, produce bags and gloves.
Natur-Tec® finished products include biodegradable and compostable trash bags, agricultural film, and other single-use disposable products, such as food and consumer goods packaging currently marketed under the Natur-Bag® brand. The Natur-Bag® product line offers 15 different compostable trash bag sizes, from 3-gallon to 96-gallon, as well as shopper bags, produce bags and gloves.
To accomplish these objectives, NTIC intends to, among other things, establish targets within its quality management standard and HSE programs to measure progress and ensure continuous improvement, provide safe and healthy workplaces for its employees, contractors and other service providers, and provide continued training to enable employees to meet their responsibility to contribute to compliance with NTIC’s HSE objectives.
To accomplish these objectives, NTIC intends to, among other things, establish targets within its quality management standard and HSE&S programs to measure progress and ensure continuous improvement, provide safe and healthy workplaces for its employees, contractors and other service providers, and provide continued training to enable employees to meet their responsibility to contribute to compliance with NTIC’s HSE&S objectives.
NTIC’s Human Rights Policy was designed to align with the United Nations Global Compact and core elements of the United Nations Universal Declaration of Human Rights. NTIC is committed to providing an environment free of discrimination and harassment, where all individuals are treated with respect and dignity, can contribute fully, and have equal opportunities.
NTIC’s Human Rights Policy was designed to align with the United Nations Global Compact and core elements of the United Nations Universal Declaration of Human Rights. NTIC is committed to providing an environment free of discrimination and harassment, where all individuals are accepted and treated with respect and dignity, can contribute fully, and have equal opportunities.
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations .” Forward-looking statements are based on current expectations about future events affecting NTIC and are subject to uncertainties and factors that affect all businesses operating in a global market as well as matters specific to NTIC.
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations .” 12 Forward-looking statements are based on current expectations about future events affecting NTIC and are subject to uncertainties and factors that affect all businesses operating in a global market as well as matters specific to NTIC.
In addition, because potential customers may prefer or require manufacturers to have achieved ISO certification, such ISO certifications may provide NTIC with certain competitive advantages. Availability of Raw Materials NTIC does not typically carry excess quantities of raw materials because of historically widespread availability for such materials from various suppliers.
In addition, because potential customers may prefer or require manufacturers to have achieved ISO certification, such ISO certifications may provide NTIC with certain competitive advantages. Availability of Raw Materials NTIC does not typically carry excess quantities of raw materials because of historically widespread availability of such materials from various suppliers.
ZERUST® Flange Savers® are specially designed covers that have been impregnated with a proprietary ZERUST® inhibitor formulation to provide corrosion protection for flanges, valves, and welded joints. Oil and gas pipeline segments are connected by flanges and welded joints of varying sizes, designs, and materials.
ZERUST® Zif Tape and ZERUST® Flange Savers® are specially designed covers that have been impregnated with a proprietary ZERUST® inhibitor formulation to provide corrosion protection for flanges, valves, and welded joints. Oil and gas pipeline segments are connected by flanges and welded joints of varying sizes, designs, and materials.
In addition to plastic packaging, NTIC has also developed VCI compounds to imbue kraft paper, corrugated cardboard, solid fiber, and chipboard packaging materials with corrosion protection properties. NTIC’s ZERUST® plastic and paper packaging products come in various thicknesses, strength enhancements, protection types, shapes, and sizes.
In addition to plastic packaging, NTIC has also developed VCI compounds to imbue kraft paper, corrugated cardboard, solid fiber, and chipboard packaging materials with corrosion protection properties. NTIC’s ZERUST® plastic and paper packaging products come in various thicknesses, strength enhancements, protection types, shapes, and sizes. Liquids and Coatings .
In fiscal 2024, 25.8% of NTIC’s consolidated net sales were derived from a broad range of bioplastic packaging solutions, including bio-based and certified compostable (fully biodegradable) polymer resin compounds, and finished products under the Natur-Tec® brand.
In fiscal 2025, 25.8% of NTIC’s consolidated net sales were derived from a broad range of bioplastic packaging solutions, including bio-based and certified compostable (fully biodegradable) polymer resin compounds, and finished products under the Natur-Tec® brand.
The average tenure of the members of NTIC’s management team is 17 years. Employee Unions, Collective Bargaining Agreements and Work Councils There are no unions representing NTIC’s employees, and NTIC believes that its relations with its employees are good. Health, Safety and Environment Health, safety and environment (HSE) are the cornerstones of NTIC.
The average tenure of the members of NTIC’s management team is 17 years. Employee Unions, Collective Bargaining Agreements and Work Councils There are no unions representing NTIC’s employees, and NTIC believes that its relations with its employees are good. Health, Safety, Environment and Security Health, safety, environment and security (HSE&S) are the cornerstones of NTIC.
Lynch held various positions with NTIC, including Vice President of Strategic Planning, Corporate Secretary and Project Manager. Mr. Lynch is also an officer and director of Inter Alia Holding Company, which is a significant stockholder of NTIC. Prior to joining NTIC, Mr.
Prior to May 2004, Mr. Lynch held various positions with NTIC, including Vice President of Strategic Planning, Corporate Secretary and Project Manager. Mr. Lynch is also an officer and director of Inter Alia Holding Company, which is a significant stockholder of NTIC. Prior to joining NTIC, Mr.
The Natur-Bag® products are manufactured from the Natur-Tec® flexible film resin compounds and thus are fully biodegradable and compostable. These products are certified fully commercially compostable and carry the BPI Compostable logo in the United States and the TÜV Austria OK Compost logo in Europe.
The Natur-Bag® products are manufactured from the Natur-Tec® flexible film resin compounds and thus are fully biodegradable and compostable. These products are certified fully commercially and home compostable and carry the BPI Compostable logo in the United States and the TÜV Austria OK Compost and OK Home Compost logos in Europe.
NTIC owns several patents outside the area of corrosion protection both in the United States and in countries of strategic relevance to NTIC, including the above-noted countries. NTIC holds 5 patents and patent applications in the Unites States covering various applications for biobased and compostable plastics.
NTIC owns several patents outside the area of corrosion protection both in the United States and in countries of strategic relevance to NTIC, including the above-noted countries. NTIC holds five patents and patent applications in the Unites States covering various applications for biobased and compostable plastics.
In the United States, NTIC markets its Natur-Tec® resin compounds and finished products through a network of national and regional distributors and independent manufacturer’s sales representatives and two NTIC direct sales employees as of August 31, 2024.
In the United States, NTIC markets its Natur-Tec® resin compounds and finished products through a network of national and regional distributors and independent manufacturer’s sales representatives and two NTIC direct sales employees as of August 31, 2025.
The following table sets forth a list of NTIC’s operating subsidiaries as of November 19, 2024, the country in which the subsidiary is organized, and NTIC’s ownership percentage in each subsidiary: Subsidiary Name Country NTIC Percent (%) Ownership HNTI Limited India 100% Natur Tec Lanka (Pvt) Ltd Sri Lanka (1) 75% Natur-Tec India Private Limited India 75% NTI Asean LLC United States 60% NTIC (Shanghai) Co., Ltd China 100% NTIC Europe GmbH Germany 100% Zerust Prevenção de Corrosão S.A.
The following table sets forth a list of NTIC’s operating subsidiaries as of November 20, 2025, the country in which the subsidiary is organized, and NTIC’s ownership percentage in each subsidiary: Subsidiary Name Country NTIC Percent (%) Ownership HNTI Limited India 100% Natur Tec Lanka (Pvt) Ltd Sri Lanka (1) 75% Natur-Tec India Private Limited India 75% NTI Asean LLC United States 60% NTIC (Shanghai) Co., Ltd China 100% NTIC Europe GmbH Germany 100% Zerust Prevenção de Corrosão S.A.
NTIC ’ s Subsidiaries and Joint Venture Network NTIC has ownership interests in 11 operating subsidiaries in North America, South America, Europe, and Asia, the results of which are fully consolidated in NTIC’s consolidated financial statements.
NTIC ’ s Subsidiaries and Joint Venture Network NTIC has ownership interests in 12 operating subsidiaries in North America, South America, Europe, and Asia, the results of which are fully consolidated in NTIC’s consolidated financial statements.
NTIC makes available, free of charge and through its Internet web site, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to any such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after NTIC electronically files such material with, or furnishes it to, the Securities and Exchange Commission (SEC).
NTIC makes available, free of charge, through its website, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to any such reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after NTIC electronically files such material with, or furnishes it to, the Securities and Exchange Commission (SEC).
Wolsfeld received a B.A. degree in Accounting from the University of Notre Dame and received his M.B.A. degree at the University of Minnesota, Carlson School of Business. Mr. Wolsfeld is a Certified Public Accountant. Other corporate officers of NTIC, their ages, and offices held, as of November 8, 2024, are as follows: Name Age Position with NTIC Vineet R.
Wolsfeld received a B.A. degree in Accounting from the University of Notre Dame and received his M.B.A. degree at the University of Minnesota, Carlson School of Business. Mr. Wolsfeld is a Certified Public Accountant. Other corporate officers of NTIC, their ages, and offices held, as of November 20, 2025, are as follows: Name Age Position with NTIC Vineet R.
With respect to NTIC’s Natur-Tec® resin compounds and finished products, Ramani Narayan, Ph.D., a current director of NTIC and Distinguished Professor in the Department of Chemical Engineering & Materials Science at Michigan State University, provides his expertise and technical support to NTIC. NTIC anticipates that it will spend between $4,800,000 and $5,000,000 in fiscal 2025 on research and development activities.
With respect to NTIC’s Natur-Tec® resin compounds and finished products, Ramani Narayan, Ph.D., a current director of NTIC and Distinguished Professor in the Department of Chemical Engineering & Materials Science at Michigan State University, provides his expertise and technical support to NTIC. NTIC anticipates that it will spend between $4,900,000 and $5,100,000 in fiscal 2026 on research and development activities.
Notably, the bill provides that, by 2032, all packaging must be recyclable or compostable. Additionally, as of November 19, 2024, Colorado, Connecticut, Delaware, Hawaii, Maine, New Jersey, New York, Oregon, Rhode Island Vermont and Washington had each enacted some form of ban on plastic bags.
Notably, the bill provides that, by 2032, all packaging must be recyclable or compostable. Additionally, as of November 20, 2025, Colorado, Connecticut, Delaware, Hawaii, Maine, New Jersey, New York, Oregon, Rhode Island, Vermont and Washington had each enacted some form of ban on plastic bags.
The following table sets forth a list of NTIC’s operating joint ventures as of November 19, 2024, the country in which the joint venture is organized, and NTIC’s ownership percentage in each joint venture: Joint Venture Name Country NTIC Percent (%) Ownership ACOBAL SAS France 50% CHONG WAH-NTIA SDN. BHD.
The following table sets forth a list of NTIC’s operating joint ventures as of November 20, 2025, the country in which the joint venture is organized, and NTIC’s ownership percentage in each joint venture: Joint Venture Name Country NTIC Percent (%) Ownership ACOBAL SAS France 50% CHONG WAH-NTIA SDN. BHD.
Brazil 85% Zerust Singapore Pte Ltd Singapore (2) 60% Zerust Vietnam Co. Ltd Vietnam (3) 60% Zerust Taiwan Co., Ltd Taiwan (3) 60% ZERUST-EXCOR MEXICO, S. de R.L. de C.V. Mexico 100% (1) Natur Tec Lanka (Pvt) Ltd. is 100% owned by Natur-Tec India Private Limited and, therefore, indirectly owned by NTIC.
Brazil 85% Zerust Singapore Pte Ltd Singapore (2) 60% Zerust Vietnam Co. Ltd Vietnam (3) 60% Zerust Taiwan Co., Ltd Taiwan (3) 60% Zerust Integrity Solutions Trading LLC UAE 100% ZERUST-EXCOR MEXICO, S. de R.L. de C.V. Mexico 100% ____________________ (1) Natur Tec Lanka (Pvt) Ltd. is 100% owned by Natur-Tec India Private Limited and, therefore, indirectly owned by NTIC.
Market drivers such as volatile petroleum prices, reduced dependence on foreign oil, reduced carbon footprints, requirements by multinational brands for sustainable packaging solutions that meet Circular Economy and environmentally responsible end-of-life disposal mandates, and concerns about plastic residue in the environment have led to heightened interest in using sustainable, bio-based and renewable plant-biomass resources for the manufacture of plastics and industrial products.
Market drivers such as reduced carbon footprints, requirements by multinational brands for sustainable packaging solutions that meet Circular Economy and environmentally responsible end-of-life disposal mandates, and concerns about plastic residue in the environment have led to heightened interest in using sustainable, bio-based and renewable plant-biomass resources for the manufacture of plastics and industrial products.
NTIC receives fees for providing technical support, marketing assistance, and other services to its joint ventures based primarily on the net sales of the individual joint ventures in accordance with the terms of the joint venture arrangements. Such services include consulting, legal, insurance, technical, and marketing services. 6 In China, NTIC sells its products and services through NTIC China.
NTIC receives fees for providing technical support, marketing assistance, and other services to its joint ventures based primarily on the net sales of the individual joint ventures in accordance with the terms of the joint venture arrangements. Such services include consulting, legal, insurance, technical, and marketing services.
For exceptionally harsh environments, customers may choose to use a combination of NTIC’s liquids and coatings with ZERUST® plastic and/or paper products to achieve robust corrosion protection during manufacturing, shipping, and warehousing stages. 3 Rust Removers and Cleaners .
Products are formulated for most metal types and protection levels. For exceptionally harsh environments, customers may choose to use a combination of NTIC’s liquids and coatings with ZERUST® plastic and/or paper products to achieve robust corrosion protection during manufacturing, shipping, and warehousing stages. 3 Rust Removers and Cleaners .
NTIC’s ZERUST® rust and corrosion inhibiting products include plastic and paper packaging, liquids, coatings, rust removers, cleaners, and diffusers as well as engineered solutions designed specifically for the oil and gas industry. NTIC also offers worldwide, on-site, technical consulting for rust and corrosion prevention issues.
NTIC’s ZERUST® rust and corrosion inhibiting products include plastic and paper packaging, liquids, coatings, rust removers, cleaners, and diffusers as well as engineered solutions designed specifically for the industries it serves. NTIC also offers worldwide, on-site, technical consulting for rust and corrosion prevention issues.
In the United States, NTIC markets its ZERUST® rust and corrosion inhibiting products and services, including its products designed for the oil and gas industry, principally to industrial users in the automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets by a direct sales force and through a network of independent distributors, manufacturer’s sales representatives, and strategic partners.
In the United States, NTIC markets its ZERUST® rust and corrosion inhibiting products and services, including its products designed for the oil and gas industry, principally to industrial users in the automotive, general industrial, mechanical, mining, agricultural, and oil and gas markets by a direct sales force and through a network of independent distributors, manufacturer’s sales representatives, and strategic partners.
With respect to NTIC’s Natur-Tec® resin compounds and finished products, NTIC competes with several established companies that have been producing and selling similar products for a significantly longer time period and have significantly more sales, more extensive and effective distribution networks, and better brand recognition than NTIC.
With respect to NTIC’s Natur-Tec® resin compounds and finished products, NTIC competes with several established companies that have been producing and selling similar products for a longer time period and have significantly more sales, more extensive and effective distribution networks, and better brand recognition than NTIC. Most of these companies also have substantially more financial and other resources than NTIC.
(NTIC China), its wholly-owned subsidiary in India, HNTI Limited (Zerust India), its majority-owned joint venture holding company for NTIC’s joint venture investments in the Association of Southeast Asian Nations (ASEAN) region, NTI Asean LLC (NTI Asean), and certain other majority-owned and wholly-owned subsidiaries, and joint venture arrangements in North America, Europe, and Asia.
(NTIC China), its wholly owned subsidiary in India, HNTI Limited (Zerust India), its majority-owned joint venture holding company for NTIC’s joint venture investments in the Association of Southeast Asian Nations (ASEAN) region, NTI Asean LLC (NTI Asean), its majority-owned subsidiary in Brazil, Zerust Prevenção de Corrosão S.A (Zerust Brazil), and certain majority-owned and wholly owned subsidiaries, and joint venture arrangements in North America, Europe, and Asia.
Patrick Lynch, an employee of NTIC since 1995, has been President since July 2005 and Chief Executive Officer since January 2006 and has served as a director of NTIC since February 2004. Mr. Lynch served as President of North American Operations of NTIC from May 2004 to July 2005. Prior to May 2004, Mr.
Wolsfeld 51 Chief Financial Officer and Corporate Secretary G. Patrick Lynch, an employee of NTIC since 1995, has been President since July 2005 and Chief Executive Officer since January 2006 and has served as a director of NTIC since February 2004. Mr. Lynch served as President of North American Operations of NTIC from May 2004 to July 2005.
NTIC has been selling its proprietary ZERUST® products and services to the automotive, electronics, electrical, mechanical, military, and retail consumer markets for over 50 years and, more recently, has also expanded into the oil and gas industry.
NTIC has been selling its proprietary ZERUST® products and services to the automotive, general industrial, mechanical, mining, agricultural, and retail consumer markets for over 50 years and, more recently, has also expanded into the oil and gas industry.
As of August 31, 2024, NTIC’s wholly-owned subsidiary in India, HNTI Limited, had 58 full-time employees, NTIC’s wholly owned subsidiary in China had 35 full-time employees, its majority-owned subsidiary in Brazil had 20 full-time employees, its majority-owned subsidiary in India, Natur Tec India, had 40 full-time employees, its majority-owned subsidiary in Singapore, Zerust Singapore, had 1 full-time employee, its majority-owned subsidiary in Taiwan, Zerust Taiwan, had 9 full-time employees, its majority-owned subsidiary in Vietnam, Zerust Vietnam, had 6 full-time employees its wholly owned subsidiary in Mexico had no full-time employees, and its holding company, NTI Asean, had no full-time employees.
As of August 31, 2025, NTIC’s wholly owned subsidiary in India, HNTI Limited, had 58 full-time employees, NTIC’s wholly owned subsidiary in China had 35 full-time employees, its majority-owned subsidiary in Brazil had 20 full-time employees, its majority-owned subsidiary in India, Natur-Tec India, had 40 full-time employees, its majority-owned subsidiary in Singapore, Zerust Singapore, had 1 full-time employee, its majority-owned subsidiary in Taiwan, Zerust Taiwan, had 9 full-time employees, its majority-owned subsidiary in Vietnam, Zerust Vietnam, had 6 full-time employees, its wholly owned subsidiary in UAE, Zerust Integrity Solutions Trading LLC, had 6 full-time employees, its wholly owned subsidiary in Germany, NTI Europe had 3 full-time employees, its wholly owned subsidiary in Mexico had no full-time employees, and its holding company, NTI Asean, had no full-time employees.
NTIC’s part-time employees receive compensation for paid holidays as well. NTIC offers employees the opportunity to work remotely, requiring Tuesday in-person attendance for office staff employees and permitting remote work in the discretion of individual employees the remaining days of the week. Values and Ethics In connection with NTIC’s core values, NTIC acts in accordance with its Code of Ethics.
NTIC offers employees the opportunity to work remotely, requiring Tuesday in-person attendance for office staff employees and permitting remote work in the discretion of individual employees the remaining days of the week. 11 Values and Ethics In connection with NTIC’s core values, NTIC acts in accordance with its Code of Ethics.
Natur-Tec® bio-based injection molding resin compounds are made with at least 90% bio-based/renewable resource-based materials, per the ASTM D6866 standard, and are meant to enhance sustainability by replacing petroleum-based plastics.
Natur-Tec® bio-based injection molding resin compounds are made with at least 90% bio-based/renewable resource-based materials, per the ASTM D6866 standard, and are meant to enhance sustainability by replacing petroleum-based plastics. Natur-Tec® bio-based injection molding resin compounds exhibit the same properties as conventional plastic materials. Finished Products .
While NTIC believes these trends show increased acceptance of corrosion solutions for the oil and gas industry, NTIC anticipates that its sales of ZERUST® products and services into the oil and gas industry will continue to remain subject to significant volatility, specifically due to economic factors, such as potential crude oil price changes and global supply/demand churn.
While NTIC believes consistent sales to large customers, stabilized sales within the U.S. and expanding customer relationships show increased acceptance of corrosion solutions for the oil and gas industry, NTIC anticipates that its sales of ZERUST® products and services into the oil and gas industry will continue to remain subject to significant volatility, specifically due to economic factors, such as potential crude oil price changes and global supply/demand churn.
Dalal 55 Vice President and Director – Global Market Development – Natur-Tec® Gautam Ramdas 51 Vice President and Director – Global Market Development – Oil & Gas Brian Haglund 40 Vice President of Operations – North America Vineet R.
Dalal 56 Vice President and Director – Global Market Development – Natur-Tec® Gautam Ramdas 52 Vice President and Director – Global Market Development – Oil & Gas Brian Haglund 41 Vice President of Operations – North America Vineet R.
Additional Information Additional information about our human capital and people, including our HSE Policy, Human Rights Policy, Code of Ethics, is included on the Commitment to Environmental, Social and Governance (ESG) page of the Investor Relations portion of our corporate website.
Additional Information Additional information about our human capital and people, including our HSE&S Policy, Human Rights Policy, Equal Opportunity, Non-Discrimination, and Anti-Harassment Policy, Code of Ethics, and Vendor Code of Conduct, is included on the Commitment to Environmental, Social, and Governance (ESG) page of the Investor Relations portion of our corporate website.
Sales relating to this backlog are expected to be realized during first quarter of fiscal 2025. These are orders that are held by NTIC pending release instructions from the customers to be used for just-in-time production. Customers generally place orders on an “as needed” basis and expect delivery within a relatively short period of time. Governmental Regulation The U.S.
These are orders that are held by NTIC pending release instructions from the customers to be used for just-in-time production. Customers generally place orders on an “as needed” basis and expect delivery within a relatively short period of time. 9 Governmental Regulation The U.S.
NTIC defines lost time incidents as work-related incidents where a worker sustains an injury that results in time away from work. NTIC had only one lost time incident in each 2024 and 2023. Diversity and Inclusion Diversity and inclusion are embedded in NTIC’s values and integrated into its strategies.
NTIC defines lost time incidents as work-related incidents where a worker sustains an injury that results in time away from work. NTIC had only one lost time incident in each of fiscal 2025 and 2024. Equal Opportunity, Inclusion and Workplace Culture Equal opportunity is embedded in NTIC’s values and integrated into its strategies.
Furthermore, these products were also independently tested and approved for use in organic waste diversion systems by Cedar Grove, one of the largest compost operators in the United States. Sales, Marketing, and Distribution ZERUST ® Corrosion Prevention Solutions .
These products were also independently tested and approved for use in organic waste diversion systems by the Compost Manufacturers Alliance (CMA) in the United States. Sales, Marketing, and Distribution ZERUST ® Corrosion Prevention Solutions .
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” of this report. 2 Products NTIC derives revenues directly and/or indirectly through its subsidiaries and joint ventures from two reportable business segments based on products sold, customer base, and distribution center: ZERUST® corrosion prevention solutions and Natur-Tec® resin compounds and finished products.
Products NTIC derives revenues directly and/or indirectly through its subsidiaries and joint ventures from two reportable business segments based on products sold, customer base, and distribution center: ZERUST® corrosion prevention solutions and Natur-Tec® resin compounds and finished products. ZERUST ® Corrosion Prevention Solutions .
Human Capital Management Headcount and Employee Demographics As of August 31, 2024, NTIC had a total of 95 employees, with 93 full-time employees and 2 part-time employees, located in North America, consisting of 27 in sales and marketing, 28 in research and development and lab, 21 in administration, and 19 in production.
Human Capital Management Headcount and Employee Demographics As of August 31, 2025, NTIC had a total of 94 employees, with 91 full-time employees and 3 part-time employees, located in North America, consisting of 28 in sales and marketing, 24 in research and development and lab, 22 in administration, and 20 in production.
ZERUST® Flange Savers® are available in various sizes to accommodate different pipe diameters, pressure ratings, and international standards for pipeline valves and flanges. 4 ZERUST® ReCAST-SSB solutions protect the Soil Side Bottoms (SSB) of aboveground storage tanks through a variety of unique and highly effective delivery systems designed by the Zerust Oil & Gas team to deliver proprietary Zerion FVS corrosion inhibitor to spaces under tank bottoms that are susceptible to significant corrosion.
ZERUST® ReCAST-SSB solutions protect the Soil Side Bottoms (SSB) of aboveground storage tanks through a variety of unique and highly effective delivery systems designed by the Zerust Oil & Gas team to deliver proprietary Zerion FVS corrosion inhibitor to spaces under tank bottoms that are susceptible to significant corrosion.
As of August 31, 2024, of our North American workforce, 41% are female, 32% are racially or ethnically diverse and 6% are veterans. Of our global management team, 40% are female and 23% are racially or ethnically diverse. Of our eight Board members, nearly 40% are female and nearly 40% are racially or ethnically diverse.
As of August 31, 2025, of our North American workforce, 41% are female, 31% are racially or ethnically diverse and 5% are veterans. Of our global management team, 38% are female and 26% are racially or ethnically diverse. Of our eight Board members, three members are female, and three members are racially or ethnically diverse.
However, with respect to its Natur-Tec® resin compounds and finished products, there are a limited number of domestic and international suppliers of the base resins used to manufacture the resin compounds and finished products, which occasionally contributes to supply issues. During fiscal 2024, for example, NTIC experienced some delays in obtaining these base resins due primarily to international shipping issues.
However, with respect to its Natur-Tec® resin compounds and finished products, there are a limited number of domestic and international suppliers of the base resins used to manufacture the resin compounds and finished products, which occasionally contributes to supply issues.
NTIC’s consolidated net sales in fiscal 2024 included $9,229,279 in sales made to customers in the oil and gas industry, an increase of 18.3% from such sales in fiscal 2023. In fiscal 2024, sales of ZERUST® corrosion prevention solutions to large customers in the oil and gas industry continued to become more consistent, with these customers continuing to re-order products.
NTIC’s consolidated net sales in fiscal 2025 included $7,317,704 in sales made to customers in the oil and gas industry, a decrease of 20.7% from such sales in fiscal 2024. Despite this decrease, sales of ZERUST® corrosion prevention solutions to large customers in the oil and gas industry continued to become more consistent, with these customers continuing to re-order products.
Although NTIC believes it can obtain these raw materials and parts from other suppliers, an unexpected loss of supply over a short period of time, including as a result of future worldwide disruptions in supply, may not allow NTIC time to replace these sources in the ordinary course of business. 9 Backlog NTIC had an estimated order backlog of $5,837,430 as of August 31, 2024, compared to $5,337,717 as of August 31, 2023, which was generally across all business units.
Although NTIC believes it can obtain these raw materials and parts from other suppliers, an unexpected loss of supply over a short period of time, including as a result of future worldwide disruptions in supply, may not allow NTIC time to replace these sources in the ordinary course of business.
Prior to placing an order, NTIC’s technical service consultants work directly with the end users of NTIC’s ZERUST® products to analyze their specific corrosion prevention needs and develop systems to meet their performance requirements. Internationally, NTIC has entered into a series of joint ventures with foreign partners (either directly or through a holding company).
Prior to placing an order, NTIC’s technical service consultants work directly with the end users of NTIC’s ZERUST® products to analyze their specific corrosion prevention needs and develop systems to meet their performance requirements.
The sale of ZERUST® corrosion prevention solutions to customers in the oil and gas industry typically involves long sales cycles, often including multi-year trial periods with each customer and a slow integration process thereafter. Natur-Tec® bio-based and compostable plastics are manufactured using NTIC’s patented and/or proprietary technologies and are intended to replace conventional petroleum-based plastics.
The sale of ZERUST® corrosion prevention solutions to customers in the oil and gas industry typically involves long sales cycles, often including multi-year trial periods with each customer and a slow integration process thereafter.
NTIC provides compensation and benefits that are competitive and comply with applicable laws, and NTIC commits to a fair and living wage. NTIC’s employees have immediate eligibility to participate in NTIC’s 401(k) employee savings plan. Employees are immediately vested upon contributing to the 401(k) employee savings plan. NTIC matches 401(k) contributions made by employes and may also make profit-sharing contributions.
NTIC’s employees have immediate eligibility to participate in NTIC’s 401(k) employee savings plan. Employees are immediately vested upon contributing to the 401(k) employee savings plan. NTIC matches 401(k) contributions made by employes and may also make profit-sharing contributions. NTIC believes these profit-sharing contributions are a meaningful way of sharing NTIC’s success with its employees.
ZERUST ® Corrosion Prevention Solutions . In fiscal 2024, 74.2% of NTIC’s consolidated net sales were derived from developing, manufacturing and marketing ZERUST® rust and corrosion inhibiting products and services. NTIC’s consolidated net sales in fiscal 2024 included $63,092,575 in sales of ZERUST® rust and corrosion inhibiting products and services, an increase of 2.2% from such sales in fiscal 2023.
In fiscal 2025, 74.2% of NTIC’s consolidated net sales were derived from developing, manufacturing and marketing ZERUST® rust and corrosion inhibiting products and services. NTIC’s consolidated net sales in fiscal 2025 included $62,488,397 in sales of ZERUST® rust and corrosion inhibiting products and services, a decrease of 1.0% from such sales in fiscal 2024.
NTIC advises you, however, to consult any further disclosures NTIC makes on related subjects in its annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K that NTIC files with or furnishes to the SEC. 12 INFORMATION ABOUT OUR EXECUTIVE OFFICERS The two individuals named below have been designated by NTIC’s Board of Directors as “executive officers” of NTIC.
NTIC advises you, however, to consult any further disclosures NTIC makes on related subjects in its annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K that NTIC files with or furnishes to the SEC.
NTIC’s Natur-Tec® resin compounds can be shipped to manufacturing facilities around the world, where they then can be converted into finished products, such as film, coated paper or food serviceware. NTIC’s Natur-Tec® finished products are manufactured using NTIC’s Natur-Tec® resin compounds by select sub-contractors. Competition ZERUST ® Corrosion Prevention Solutions .
NTIC’s Natur-Tec® resin compounds and finished products are produced at facilities in India, China, Vietnam, and the United States. NTIC’s Natur-Tec® resin compounds can be shipped to manufacturing facilities around the world, where they then can be converted into finished products, such as film, coated paper or food serviceware.
While NTIC is unaware of any third parties with which NTIC competes on a worldwide basis with respect to its corrosion prevention solutions, NTIC does compete with several third parties on a regional basis. NTIC evaluates competing rust and corrosion inhibiting products on an ongoing basis.
NTIC’s Natur-Tec® finished products are manufactured using NTIC’s Natur-Tec® resin compounds by select sub-contractors. Competition ZERUST ® Corrosion Prevention Solutions . While NTIC is unaware of any competitors with which NTIC competes on a worldwide basis with respect to its corrosion prevention solutions, NTIC does have regional competitors. NTIC evaluates competing rust and corrosion inhibiting products on an ongoing basis.
Compensation and Benefits NTIC’s compensation program is designed to attract and retain talented employees in the industry by offering competitive compensation and benefits. NTIC has established fair and competitive pay levels that are based on local markets and job descriptions and are not based on gender, age, ethnicity, nationality or other personal characteristics or beliefs.
NTIC has established fair and competitive pay levels that are based on local markets and job descriptions and are not based on gender, age, ethnicity, nationality or other personal characteristics or beliefs. NTIC provides compensation and benefits that are competitive and comply with applicable laws, and NTIC commits to a fair and living wage.
Because of price competition, NTIC’s margins on its Natur-Tec® resin compounds and finished products are lower than its margins on its ZERUST® corrosion prevention solutions.
NTIC competes on the basis of performance, brand awareness, distribution network, product availability, product offering, improved shelf life, place of manufacture, and price. Because of price competition, NTIC’s margins on its Natur-Tec® resin compounds and finished products are lower than its margins on its ZERUST® corrosion prevention solutions.
Additionally, NTIC has an employee stock purchase plan, which allows employees to purchase NTIC stock at a 10% discount to fair market value. NTIC believes that this gives employees an interest in providing for the continued success of the business, encourages regular and scheduled investing, and is a means of supplementing individual savings programs.
NTIC believes that this gives employees an interest in providing for the continued success of the business, encourages regular and scheduled investing, and is a means of supplementing individual savings programs. As part of its compensation package, NTIC provides employees with access to a medical plan with an employee-funded health savings account option.
Internationally, NTIC sells its ZERUST® corrosion prevention solutions through its wholly-owned subsidiary in China, NTIC (Shanghai) Co., Ltd.
In North America, NTIC sells its ZERUST® corrosion prevention solutions through a network of independent distributors and agents supported by a direct sales force. Internationally, NTIC sells its ZERUST® corrosion prevention solutions through its wholly owned subsidiary in China, NTIC (Shanghai) Co., Ltd.
NTIC’s consolidated net sales in fiscal 2024 included $21,966,942 in sales of Natur-Tec® resins and finished products, an increase of 20.9% compared to sales in fiscal 2023.
NTIC’s consolidated net sales in fiscal 2025 included $21,746,077 in sales of Natur-Tec® resins and finished products, a slight decrease of 1.0% compared to sales in fiscal 2024.
This product line also includes items such as ZERUST® gun cases, car covers, and tool-drawer liners, which are targeted at retail consumers. Liquids and Coatings . NTIC’s corrosion prevention solutions include a line of metal surface treatment liquids and coatings, which are oil, water, or bio-solvent based, and are marketed under brand names including Axxatec™, Axxanol™, and Z-Maxx™.
NTIC’s corrosion prevention solutions include a line of metal surface treatment liquids and coatings, which are oil, water, or bio-solvent based, and are marketed under brand names including Axxatec™, Axxanol™, and Z-Maxx™. These liquids and coatings provide powerful protection in aggressively corrosive environments, such as salt air, high humidity, and/or high temperatures.
Dental, vision, life, and long and short-term disability insurance plans are also available to NTIC’s employees. 11 NTIC prides itself on offering employment arrangements that include competitive time off policies and flexibility. NTIC’s full-time employees are eligible for paid holidays and vacation time based on the length of their service, ranging from 15 to 25 days.
The medical plan has no co-pay, and employees are not required to contribute toward premium costs. Dental, vision, life, and long and short-term disability insurance plans are also available to NTIC’s employees. NTIC prides itself on offering employment arrangements that include competitive time off policies and flexibility.
NTIC believes these profit-sharing contributions are a meaningful way of sharing NTIC’s success with its employees. To further the goal of sharing NTIC’s success with its employees and incentivizing strong employee performance, NTIC may award cash bonuses to its employees.
To further the goal of sharing NTIC’s success with its employees and incentivizing strong employee performance, NTIC may award cash bonuses to its employees. Additionally, NTIC has an employee stock purchase plan, which allows employees to purchase NTIC stock at a 10% discount to fair market value.
Financial Statements and Supplementary Data ” and “ Part II. Item 7.
Financial Statements and Supplementary Data ” and “ Part II. Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” of this report.
Their ages and the offices held, as of November 8, 2024, are as follows: Name Age Position with NTIC G. Patrick Lynch 57 President and Chief Executive Officer Matthew C. Wolsfeld 50 Chief Financial Officer and Corporate Secretary G.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS The two individuals named below have been designated by NTIC’s Board of Directors as “executive officers” of NTIC. Their ages and the offices held, as of November 20, 2025, are as follows: Name Age Position with NTIC G. Patrick Lynch 58 President and Chief Executive Officer Matthew C.
NTIC anticipates that its sales of ZERUST® products and services into the oil and gas industry may be subject to additional volatility due to uncertainty caused by certain environmental policies and priorities of the current administration. Demand for ZERUST® oil and gas products around the world depends primarily on market acceptance and the reach of NTIC’s distribution network.
Demand for ZERUST® oil and gas products around the world depends primarily on market acceptance and the reach of NTIC’s distribution network.
Accordingly, NTIC expects the U.S. market for bio-plastic solutions to grow substantially during the next several years. Internationally, NTIC uses Natur-Tec India, Natur Tec Lanka, NTIC China and a network of international distributors to market its Natur-Tec® resin compounds and finished products.
Internationally, NTIC uses Natur-Tec India, Natur Tec Lanka, NTIC China and a network of international distributors to market its Natur-Tec® resin compounds and finished products. The government of China announced a three-phase plan to ban or restrict the production, sale and use of certain disposable plastic products beginning in 2020.
The government of India announced a phased ban on the manufacture and sale of single-use plastics beginning in July 2022. The first phase bans earbuds and plastic sticks used in balloons and ice cream. The second phase bans plastic cigarette packets and plastic bags less than 100 microns thick. Notably, compostable plastics are exempt from this ban.
The government of India announced a phased ban on the manufacture and sale of single-use plastics beginning in July 2022. Notably, compostable plastics are exempt from these bans. Accordingly, NTIC expects the market in China and India for bio-plastic packaging solutions to continue to grow for the foreseeable future.
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NTIC’s technical service consultants work directly with the end users of NTIC’s ZERUST® rust and corrosion inhibiting products to analyze their specific needs and develop systems to meet their performance requirements. In North America, NTIC sells its ZERUST® corrosion prevention solutions through a network of independent distributors and agents supported by a direct sales force.
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In November 2025, Zerust Brazil secured a three-year offshore oil and gas production asset preservation contract with a leading global engineering, procurement, and construction company to provide advanced corrosion protection solutions for floating production storage and offloading units.
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These liquids and coatings provide powerful protection in aggressively corrosive environments, such as salt air, high humidity, and/or high temperatures. Products are formulated for most metal types and protection levels.
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The project under this agreement is expected to ramp during fiscal 2026 and run through calendar 2028 with an estimated total value of approximately R$70 million (US$13 million). This includes approximately R$40 million (US$7.4 million) in materials and approximately R$30 million (US$5.6 million) in engineering and field services.
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Sales within the U.S. also stabilized somewhat, and key customer relationships were expanded.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn an effort to increase climate change disclosure, on March 6, 2024, the SEC adopted climate disclosure rules that require new climate-related disclosure in SEC filings, as described below. Adverse publicity or climate-related litigation that may result from such enhanced disclosure or stockholder perception could have a negative impact on our business.
Biggest changeAdverse publicity or climate-related litigation that may result from such enhanced disclosure or stockholder perception could have a negative impact on our business. Severe weather could have a material adverse effect on NTIC ’ s business. NTIC’s business has been and in the future could be materially and adversely affected by severe weather.
Such risks include the financial instability among customers in these regions, political instability, fraud or corruption, and other non-economic factors, and irregular trade flows that need to be managed successfully with the help of the local governments. In addition, commercial laws in some developing countries can be vague, inconsistently administered, and retroactively applied.
Such risks include financial instability among customers in these regions, political instability, fraud or corruption, and other non-economic factors, and irregular trade flows that need to be managed successfully with the help of the local governments. In addition, commercial laws in some developing countries can be vague, inconsistently administered, and retroactively applied.
Accordingly, if sales of these products and services were to decline, NTIC’s operating results would be adversely affected. ● If NTIC is unable to continue to enhance its existing products and develop and market new products that respond to customer needs and achieve market acceptance, NTIC may experience a decrease in demand for its products, and its business could suffer. ● No assurance can be provided that NTIC’s investments in additional research and development and marketing efforts and resources into the application of its corrosion prevention solutions into the oil and gas industry and the continued launch of its Natur-Tec® resin compounds and finished products will be successful. ● NTIC’s strategy of expanding its corrosion prevention solutions into the oil and gas industry and continuing the expansion of its Natur-Tec® bioplastics resin compounds and finished products is risky and may not prove to be successful, which could harm NTIC’s operating results and financial condition. ● NTIC’s dependence on manufacturing and logistical services provided by contractors could give rise to product defect or warranty liability. ● The commercial success of NTIC’s Natur-Tec® resin compounds and finished products depends on the widespread market acceptance of products manufactured with bio-based and biodegradable resins. ● NTIC relies on its joint ventures, distributors, manufacturer’s sales representatives, and other agents to market and sell its products. ● NTIC may be subject to product liability claims or other claims arising out of the activities of its joint ventures, which could adversely affect NTIC and its business, and the sale of ZERUST® rust and corrosion inhibiting products into the oil and gas industry is risky in light of the hazards typically associated with such operations and the significant amount of potential liability involved. ● The sale of ZERUST® rust and corrosion inhibiting products into the oil and gas industry is somewhat seasonal and dependent upon oil prices. ● The expansion of NTIC’s corrosion prevention solutions into the oil and gas industry and the continued launch of NTIC’s Natur-Tec® resin compounds and finished products may require additional capital in the future, which may not be available or may be available only on unfavorable terms.
Accordingly, if sales of these products and services were to decline, NTIC’s operating results would be adversely affected. ● If NTIC is unable to continue to enhance its existing products and develop and market new products that respond to customer needs and achieve market acceptance, NTIC may experience a decrease in demand for its products, and its business could suffer. ● No assurance can be provided that NTIC’s investments in additional research and development and marketing efforts and resources into the application of its corrosion prevention solutions into the oil and gas industry and the continued launch of its Natur-Tec® resin compounds and finished products will be successful. ● NTIC’s strategy of expanding its corrosion prevention solutions into the oil and gas industry and continuing the expansion of its Natur-Tec® bioplastics resin compounds and finished products is risky and may not prove to be successful, which could harm NTIC’s operating results and financial condition. ● NTIC’s dependence on manufacturing and logistical services provided by contractors could give rise to product defects or warranty liability. ● The commercial success of NTIC’s Natur-Tec® resin compounds and finished products depends on the widespread market acceptance of products manufactured with bio-based and biodegradable resins. ● NTIC relies on its joint ventures, distributors, manufacturer’s sales representatives, and other agents to market and sell its products. ● NTIC may be subject to product liability claims or other claims arising out of the activities of its joint ventures, which could adversely affect NTIC and its business, and the sale of ZERUST® rust and corrosion inhibiting products into the oil and gas industry is risky in light of the hazards typically associated with such operations and the significant amount of potential liability involved. ● The sale of ZERUST® rust and corrosion inhibiting products into the oil and gas industry is somewhat seasonal and dependent upon oil prices. ● The expansion of NTIC’s corrosion prevention solutions into the oil and gas industry and the continued launch of NTIC’s Natur-Tec® resin compounds and finished products may require additional capital in the future, which may not be available or may be available only on unfavorable terms.
NTIC’s business is subject to a number of other miscellaneous risks that may adversely affect NTIC’s operating results, and financial condition, such as natural or man-made disasters, an unexpected business loss of supply due to a force majeure event or global pandemics that may result in shortages of raw materials, higher commodity costs, an increase in insurance premiums, and other adverse effects on NTIC’s business; the continued threat of terrorist acts and war that may result in heightened security and higher costs for import and export shipments of components or finished goods; and the ability of NTIC’s management to adapt to unplanned events. 35
NTIC’s business is subject to a number of other miscellaneous risks that may adversely affect NTIC’s operating results, and financial condition, such as natural or man-made disasters, an unexpected business loss of supply due to a force majeure event or global pandemics that may result in shortages of raw materials, higher commodity costs, an increase in insurance premiums, and other adverse effects on NTIC’s business; the continued threat of terrorist acts and war that may result in heightened security and higher costs for import and export shipments of components or finished goods; and the ability of NTIC’s management to adapt to unplanned events.
NTIC’s strategy of expanding its corrosion prevention solutions into the oil and gas industry and continuing the expansion of its Natur-Tec® bioplastics resin compounds and finished products, either directly or indirectly through joint ventures and independent distributors and agents, is risky and subject to all of the risks inherent in the establishment of a new business enterprise, including: ● the absence of a significant operating history; ● the lack of commercialized products; ● the lack of market acceptance of new products; ● expected substantial and continual losses for such businesses for the foreseeable future; ● the lack of manufacturing experience and limited marketing experience; ● an expected reliance on third parties for the manufacture and commercialization of some of the products; ● a competitive environment characterized by numerous, well-established and well-capitalized competitors; ● insufficient capital and other resources; ● reliance on key personnel and the need to hire and train local support in a timely manner in order to support customer needs; and ● NTIC’s dependence on manufacturing and logistical services provided by contractors could give rise to product defect or warranty liability.
NTIC’s strategy of expanding its corrosion prevention solutions into the oil and gas industry and continuing the expansion of its Natur-Tec® bioplastics resin compounds and finished products, either directly or indirectly through joint ventures and independent distributors and agents, is risky and subject to all of the risks inherent in the establishment of a new business enterprise, including: ● the absence of a significant operating history; ● the lack of commercialized products; ● the lack of market acceptance of new products; ● expected substantial and continual losses for such businesses for the foreseeable future; ● the lack of manufacturing experience and limited marketing experience; ● an expected reliance on third parties for the manufacture and commercialization of some of the products; ● a competitive environment characterized by numerous, well-established and well-capitalized competitors; ● insufficient capital and other resources; ● reliance on key personnel and the need to hire and train local support in a timely manner in order to support customer needs; and ● NTIC’s dependence on manufacturing and logistical services provided by contractors could give rise to product defects or warranty liability.
The rapid growth in demand for bioplastics products globally has increased the demand and the price for plastic resins, and limited suppliers of such plastic resins may experience shortages caused by demand outpacing their production capabilities, which could result in NTIC’s inability to produce its Natur-Tec® products promptly or in the volumes demanded.
The rapid growth in demand for bioplastics products globally has increased the demand and the volatility of the price for plastic resins, and limited suppliers of such plastic resins may experience shortages caused by demand outpacing their production capabilities, which could result in NTIC’s inability to produce its Natur-Tec® products promptly or in the volumes demanded.
Although NTIC China’s operations have not been significantly impacted by regulations related to electric power shortages to date, such regulations may in the future decrease or shut down production or increase product costs, which could adversely affect NTIC’s business, results of operations, and financial condition.
Although NTIC China’s operations have not been significantly impacted by regulations related to electric power shortages to date, updates to such regulations may in the future decrease or shut down production or increase product costs, which could adversely affect NTIC’s business, results of operations, and financial condition.
Repercussions of severe weather conditions may include: 33 ● curtailment of services or reduced demand for products; ● weather-related damage to facilities and equipment, resulting in suspension of operations; ● inability to deliver equipment, personnel and products to job sites in accordance with contract schedules or increased transportation or other operating costs; and ● loss of productivity.
Repercussions of severe weather conditions may include: ● curtailment of services or reduced demand for products; ● weather-related damage to facilities and equipment, resulting in suspension of operations; ● inability to deliver equipment, personnel and products to job sites in accordance with contract schedules or increased transportation or other operating costs; and ● loss of productivity.
Additionally, while legislation has helped increase demand for bioplastics, a lack of enforcement and higher costs associated with bioplastics have adversely impacted the demand anticipated to stem from such legislation. The traditional plastics market sector is well-established with entrenched competitors with whom NTIC competes.
Additionally, while legislation has helped increase demand for bioplastics, a lack of enforcement and higher costs associated with bioplastics have adversely impacted the demand anticipated to stem from such legislation. 27 The traditional plastics market sector is well-established with entrenched competitors with whom NTIC competes.
This concentration of ownership may have the effect of delaying, preventing, or deterring a change in control of NTIC, could deprive NTIC’s stockholders of an opportunity to receive a premium for their common stock as part of a sale or merger of NTIC, and may negatively affect the market price of NTIC’s common stock.
This concentration of ownership may have the effect of delaying, preventing, or deterring a change in control of NTIC, which could deprive NTIC’s stockholders of an opportunity to receive a premium for their common stock as part of a sale or merger of NTIC, and may negatively affect the market price of NTIC’s common stock.
NTIC is unable to predict the prospects for a global economic recovery, but the longer the duration of such adverse and uncertain economic conditions, the greater the risks NTIC faces in operating its business. NTIC has limited staffing and will continue to be dependent upon key employees.
NTIC is unable to predict the prospects for a global economic recovery, but the longer the duration of such adverse and uncertain economic conditions, the greater the risks NTIC faces in operating its business. 19 NTIC has limited staffing and will continue to be dependent upon key employees.
Although NTIC’s arrangements with its contract manufacturers and contractors may contain provisions for warranty expense reimbursement, NTIC may remain responsible to its customers for warranty service in the event of product defects and could experience an unanticipated product defect or warranty liability. In addition, product defects could harm NTIC’s reputation amongst its customers.
Although NTIC’s arrangements with its contract manufacturers and contractors may contain provisions for warranty expense reimbursement, NTIC may remain responsible to its customers for warranty service in the event of product defects and could experience an unanticipated product defects or warranty liability. In addition, product defects could harm NTIC’s reputation amongst its customers.
However, there is no guarantee that NTIC’s employees, joint ventures, distributors, independent representatives, or other agents have not or will not engage in conduct undetected by NTIC’s processes and for which NTIC might be held responsible under the FCPA or other anticorruption laws. 25 If NTIC’s employees, joint ventures, distributors, third-party sales representatives, or other agents are found to have engaged in such practices, NTIC could suffer severe penalties, including criminal and civil penalties, disgorgement, and other remedial measures, including further changes or enhancements to its procedures, policies, and controls and potential personnel changes and disciplinary actions.
However, there is no guarantee that NTIC’s employees, joint ventures, distributors, independent representatives, or other agents have not or will not engage in conduct undetected by NTIC’s processes and for which NTIC might be held responsible under the FCPA or other anticorruption laws. 24 If NTIC’s employees, joint ventures, distributors, third-party sales representatives, or other agents are found to have engaged in such practices, NTIC could suffer severe penalties, including criminal and civil penalties, disgorgement, and other remedial measures, including further changes or enhancements to its procedures, policies, and controls and potential personnel changes and disciplinary actions.
Additionally, projects NTIC completes for oil and gas industry customers typically involve short turnaround times, and failure to meet these expectations could damage NTIC’s ability to successfully promote its corrosion prevention solutions into the oil and gas industry. 27 NTIC ’ s strategy of expanding its corrosion prevention solutions into the oil and gas industry and continuing the expansion of its Natur-Tec ® bioplastics resin compounds and finished products is risky and may not prove to be successful, which could harm NTIC ’ s operating results and financial condition.
Additionally, projects NTIC completes for oil and gas industry customers typically involve short turnaround times, and failure to meet these expectations could damage NTIC’s ability to successfully promote its corrosion prevention solutions into the oil and gas industry. 26 NTIC ’ s strategy of expanding its corrosion prevention solutions into the oil and gas industry and continuing the expansion of its Natur-Tec ® bioplastics resin compounds and finished products is risky and may not prove to be successful, which could harm NTIC ’ s operating results and financial condition.
These constraints could delay NTIC’s operations and materially increase NTIC’s operating and capital costs. NTIC may grow its business through additional joint ventures, subsidiaries, alliances, and acquisitions, which could be risky and harm its business.
These constraints could delay NTIC’s operations and materially increase NTIC’s operating and capital costs. 33 NTIC may grow its business through additional joint ventures, subsidiaries, alliances, and acquisitions, which could be risky and harm its business.
While NTIC took steps to minimize the impact of these increased costs by working closely with its suppliers and customers, these issues may persist in fiscal 2025, and there can be no assurances that unforeseen events impacting the supply chain will not have a material adverse effect on NTIC in the future.
While NTIC took steps to minimize the impact of these increased costs by working closely with its suppliers and customers, these issues may persist in fiscal 2026, and there can be no assurances that unforeseen events impacting the supply chain will not have a material adverse effect on NTIC in the future.
In particular, NTIC has experienced more intense competition with respect to many of its traditional ZERUST® rust and corrosion inhibiting products and services, which has led to decreased pricing and smaller margins for NTIC. 26 NTIC ’ s ZERUST ® rust and corrosion inhibiting products and services generate a significant portion of NTIC ’ s net sales and the net sales of NTIC ’ s joint ventures.
In particular, NTIC has experienced more intense competition with respect to many of its traditional ZERUST® rust and corrosion inhibiting products and services, which has led to decreased pricing and smaller margins for NTIC. 25 NTIC ’ s ZERUST ® rust and corrosion inhibiting products and services generate a significant portion of NTIC ’ s net sales and the net sales of NTIC ’ s joint ventures.
These laws, rules and regulations may be subject to change by the incoming Trump administration, which has announced intentions to alter environmental and other regulations, although it is not possible at this time to determine whether such actions will be taken and the impact they may have on NTIC.
These laws, rules and regulations may be subject to change by the incoming Trump administration, which has announced intentions to alter environmental and other regulations, although it is not possible at this time to determine whether such actions will be taken and the impacts they may have on NTIC.
In addition, any equity financings may be dilutive to NTIC ’ s stockholders. The expansion of NTIC’s corrosion prevention solutions into the oil and gas industry and the continued expansion of NTIC’s Natur-Tec® resin compounds and finished products will continue to require resources during fiscal 2025 and beyond.
In addition, any equity financings may be dilutive to NTIC ’ s stockholders. The expansion of NTIC’s corrosion prevention solutions into the oil and gas industry and the continued expansion of NTIC’s Natur-Tec® resin compounds and finished products will continue to require resources during fiscal 2026 and beyond.
Increased shipping costs and delays adversely affected NTIC’s consolidated results of operations during fiscal 2024, and we anticipate that these factors will continue to impact us during fiscal 2025. Similar delays and elevated costs in the future could have a material adverse effect on NTIC’s consolidated results of operations.
Increased shipping costs and delays adversely affected NTIC’s consolidated results of operations during fiscal 2025, and we anticipate that these factors will continue to impact us during fiscal 2026. Similar delays and elevated costs in the future could have a material adverse effect on NTIC’s consolidated results of operations.
Any changes or potential changes in trade policies in the United States and the potential corresponding actions by other countries in which NTIC does business could adversely and materially affect NTIC’s business, results of operations, and financial condition.
These or other changes or potential changes in trade policies in the United States and the potential corresponding actions by other countries in which NTIC does business could adversely and materially affect NTIC’s business, results of operations, and financial condition.
Supply chain disruptions in fiscal 2024 related primarily to international shipping issues, as described below, which at times resulted in longer lead times, temporary raw material outages and higher shipping expenses.
Supply chain disruptions in fiscal 2025 related primarily to international shipping issues, as described below, which at times resulted in longer lead times, temporary raw material outages and higher shipping expenses.
During fiscal 2024, the automobile sector represented approximately 40-45% of ZERUST® industrial net sales in North America and 55-60% of net sales of NTIC’s joint ventures.
During fiscal 2025, the automobile sector represented approximately 40-45% of ZERUST® industrial net sales in North America and 55-60% of net sales of NTIC’s joint ventures.
The global automotive industry is experiencing a period of significant technological change, including the development and use of electric vehicles, which do not contain as many metal components that require NTIC’s ZERUST® products and solutions.
The global automotive industry is experiencing a period of significant technological change, including the development and use of electric vehicles, which, compared to non-electric vehicles, do not contain as many metal components that require NTIC’s ZERUST® products and solutions.
During fiscal 2024, 74.2% of NTIC’s consolidated net sales were derived from sales of ZERUST® rust and corrosion inhibiting products and services.
During fiscal 2025, 74.2% of NTIC’s consolidated net sales were derived from sales of ZERUST® rust and corrosion inhibiting products and services.
As of November 19, 2024, Inter Alia Holding Company, or Inter Alia, beneficially owned approximately 12.7% of NTIC’s outstanding common stock. Inter Alia is an entity partially owned by G. Patrick Lynch, NTIC’s President and Chief Executive Officer and director, as well as two other members of the Lynch family. Mr.
As of November 20, 2025, Inter Alia Holding Company, or Inter Alia, beneficially owned approximately 12.7% of NTIC’s outstanding common stock. Inter Alia is an entity partially owned by G. Patrick Lynch, NTIC’s President and Chief Executive Officer and director, as well as two other members of the Lynch family. Mr.
In light of freight issues in fiscal 2024, certain raw materials used in the manufacture of NTIC’s Natur-Tec® products were at times unavailable or were available only at higher costs, which adversely affected gross margins on NTIC’s Natur-Tec® products.
In light of higher demand and freight costs in fiscal 2025, certain raw materials used in the manufacture of NTIC’s Natur-Tec® products were at times unavailable or were available only at higher costs, which adversely affected gross margins on NTIC’s Natur-Tec® products.
Despite these efforts and other measures taken at the federal, state and local levels, including policies related to the collection of organics, it is currently difficult to assess or predict with any assurance the potential size, timing, and viability of market opportunities for NTIC’s Natur-Tec® resin compounds and finished products.
Despite these efforts and other measures taken domestically and internationally, including policies related to the collection of organics, it is currently difficult to assess or predict with any assurance the potential size, timing, and viability of market opportunities for NTIC’s Natur-Tec® resin compounds and finished products.
Although the length, impact and outcome of this conflict between Israel and Hamas are highly unpredictable, it could lead to significant market and other disruptions, including disruptions to the oil and gas industry, significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability and other material and adverse effects on macroeconomic conditions.
Although the length, impact and outcome of these conflicts remain highly unpredictable, it could lead to significant market and other disruptions, including disruptions to the oil and gas industry, significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability and other material and adverse effects on macroeconomic conditions.
Risks Related to NTIC ’ s International Operations and the Foreign Markets in which NTIC Operates ● NTIC’s international business, which is conducted primarily through its subsidiaries and joint ventures, requires management attention and financial resources and exposes NTIC to difficulties and risks presented by international economic, political, legal, accounting, and business factors. ● If sales of NTIC’s products and services by its joint venture in Germany were to decline significantly or if NTIC’s relationships with this joint venture were to deteriorate significantly, NTIC’s operating results likely would be adversely affected. ● NTIC’s acquisition of the remaining 50% ownership interest of HNTI Limited and any future similar acquisitions involve risk. ● The ongoing wars between Russia and Ukraine and Israel and Hamas may adversely affect NTIC’s business and results of operations. ● The operations of NTIC China may be adversely affected by China’s evolving economic, political, and social conditions, as well as increasing tensions between the United States and China. ● Intellectual property rights are difficult to enforce in China, which could harm NTIC’s business, results of operations, or financial condition. ● Uncertainties with respect to the Chinese legal system may adversely affect the operations of NTIC China. ● Failure to comply with the U.S.
Risks Related to NTIC ’ s International Operations and the Foreign Markets in which NTIC Operates ● NTIC’s international business, which is conducted primarily through its subsidiaries and joint ventures, requires management attention and financial resources and exposes NTIC to difficulties and risks presented by international economic, political, legal, accounting, and business factors. ● If sales of NTIC’s products and services by its joint venture in Germany were to decline significantly or if NTIC’s relationships with this joint venture were to deteriorate significantly, NTIC’s operating results likely would be adversely affected. ● The ongoing war between Russia and Ukraine and the conflicts in the Middle East may adversely affect NTIC’s business and results of operations. ● The operations of NTIC China may be adversely affected by China’s evolving economic, political, and social conditions, as well as increasing tensions between the United States and China. ● Intellectual property rights are difficult to enforce in China, which could harm NTIC’s business, results of operations, or financial condition. ● Uncertainties with respect to the Chinese legal system may adversely affect the operations of NTIC China. 15 ● Failure to comply with the U.S.
While the Port of Baltimore opened to maritime traffic on June 10, 2024, the bridge is not expected to be rebuilt until late 2028 and further work to clear out wreckage and continue maintenance of the port may continue to cause delays in the Port of Baltimore and other East Coast ports where activities are rerouted.
While the Port of Baltimore opened to maritime traffic on June 10, 2024, the bridge is not expected to be rebuilt until late 2028 and further work to clear out wreckage and continue maintenance of the port may continue to cause delays in the Port of Baltimore.
In addition, NTIC’s management information systems are vulnerable to damage or interruption from natural or man-made disasters, including terrorist attacks, attacks by computer viruses or hackers, power loss to computer systems, Internet outages, and telecommunications or data network failure.
In addition, NTIC’s management information systems are vulnerable to damage or interruption from natural or man-made disasters, including terrorist attacks, attacks by computer viruses or hackers, power loss to computer systems, Internet outages, and telecommunications or data network failure. Any such interruption could adversely affect NTIC’s business and operating results.
These laws, regulations, and interpretations could impose restrictions on NTIC’s and NTIC China’s ownership or operations or NTIC’s interests in China and could adversely affect NTIC’s business, results of operations, and financial condition. 24 Local regulations in China related to the electric power shortage that began in 2021 may adversely affect NTIC China’s operations or the operations of our suppliers with facilities in China.
These laws, regulations, and interpretations could impose restrictions on NTIC’s and NTIC China’s ownership or operations or NTIC’s interests in China and could adversely affect NTIC’s business, results of operations, and financial condition. 23 Local regulations in China relating to the 2021 electric power shortage have been ongoing and may adversely affect NTIC China’s operations or the operations of our suppliers with facilities in China.
While there was a slowdown in electric vehicle production in fiscal 2024, NTIC continues to seek additional applications of its ZERUST® products and solutions related to electric vehicles and batteries, which will likely continue to have an increasing presence in the automotive market.
Although the slowdown in electric vehicle production continued in fiscal 2025, NTIC continues to seek additional applications of its ZERUST® products and solutions related to electric vehicles and batteries, which will likely continue to have an increasing presence in the automotive market.
However, increased demand for electric vehicles, which do not contain as many components requiring these products and solutions, will still adversely affect NTIC’s net sales and other operating results and business. 20 Risks Related to NTIC ’ s Joint Ventures NTIC ’ s liquidity and financial position rely on the receipt of fees for services provided to its joint ventures and dividend distributions from its joint ventures.
However, increased demand for electric vehicles will still adversely affect NTIC’s net sales and other operating results and business. 20 Risks Related to NTIC ’ s Joint Ventures NTIC ’ s liquidity and financial position rely on the receipt of fees for services provided to its joint ventures and dividend distributions from its joint ventures.
Given the nature of NTIC’s business and its global operations, political, economic, and other conditions in foreign countries and regions, including geopolitical risks, such as the ongoing wars between Russia and Ukraine and Israel and Hamas, may adversely affect NTIC’s business and results of operations.
Given the nature of NTIC’s business and its global operations, political, economic, and other conditions in foreign countries and regions, including geopolitical risks, such as the Russia-Ukraine war and ongoing conflicts in the Middle East, may adversely affect NTIC’s business and results of operations.
As of November 19, 2024, NTIC had 9,470,507 shares of common stock outstanding, 24.3% of which were beneficially owned by directors, executive officers, principal stockholders, and their respective affiliates.
As of November 20, 2025, NTIC had 9,480,689 shares of common stock outstanding, 24.3% of which were beneficially owned by directors, executive officers, principal stockholders, and their respective affiliates.
NTIC’s ability to grow through joint ventures, alliances, and acquisitions will depend, in part, on the availability of suitable opportunities at an acceptable cost, NTIC’s ability to compete effectively for these opportunities, and the availability of capital to complete such transactions. NTIC relies on its management information systems for inventory management, distribution, and other functions.
NTIC’s ability to grow through joint ventures, alliances, and acquisitions will depend, in part, on the availability of suitable opportunities at an acceptable cost, NTIC’s ability to compete effectively for these opportunities, and the availability of capital to complete such transactions.
During fiscal 2024, the daily trading volume ranged from 634 shares to 1,006,875 shares. Any NTIC stockholder wishing to sell his, her, or its stock may cause a significant fluctuation in the trading price of NTIC’s common stock.
During fiscal 2025, the daily trading volume ranged from 4,342 shares to 905,541 shares. Any NTIC stockholder wishing to sell his, her, or its stock may cause a significant fluctuation in the trading price of NTIC’s common stock.
Seasonality of Installations: In the past, NTIC has experienced some seasonality with respect to the sale of its ZERUST® rust and corrosion inhibiting products into the oil and gas industry, with sales during parts of the second and third fiscal quarters being adversely affected by winter in the United States.
Seasonality of Installations: NTIC has experienced some seasonality with respect to the sale of its ZERUST® rust and corrosion inhibiting products into the oil and gas industry, with sales during parts of the second and third fiscal quarters being adversely affected by winter in the United States. 28 Fluctuations of Crude Oil Prices: The sale of NTIC’s ZERUST® rust and corrosion inhibiting products into the oil and gas industry, particularly in the United States, has historically been hampered by low/unstable global crude oil prices.
The loss or interruption of services of any of NTIC’s key personnel, including in particular its technical personnel, the inability to identify, attract, or retain qualified personnel in the future, delays in hiring qualified personnel, or any employee slowdowns, strikes, or similar actions could make it difficult for NTIC to manage its business and meet key objectives, which could harm NTIC’s business, operating results, and financial condition. 19 Although we have not experienced any material labor shortage to date, we have observed an overall tightening and increasingly competitive labor market in recent years.
The loss or interruption of services of any of NTIC’s key personnel, including in particular its technical personnel, the inability to identify, attract, or retain qualified personnel in the future, delays in hiring qualified personnel, or any employee slowdowns, strikes, or similar actions could make it difficult for NTIC to manage its business and meet key objectives, which could harm NTIC’s business, operating results, and financial condition.
NTIC’s liquidity and financial position in part rely on NTIC’s receipt of fees for services that NTIC provides to its joint ventures and dividend distributions from its joint ventures. During fiscal 2024, NTIC recognized $5,251,782 in fees and $2,997,164 in dividend distributions from its joint ventures.
NTIC’s liquidity and financial position in part rely on NTIC’s receipt of fees for services that NTIC provides to its joint ventures and dividend distributions from its joint ventures. During fiscal 2025, NTIC recognized $5,006,151 in fees and $1,566,947 in dividend distributions from its joint ventures.
While the persistent inflation experienced in fiscal 2022 stabilized in fiscal 2023 and fiscal 2024, relatively high levels of inflation continued to impact the overall demand for NTIC’s products, labor, and the margins NTIC and its joint ventures are able to realize on the sale of products, all of which have had and could continue to have a negative impact on NTIC’s business, financial position, results of operations and cash flows.
In the European Union, high energy prices adversely affected our joint venture sales in fiscal 2025 and persistent high levels of inflation in the United States continued to impact the overall demand for NTIC’s products, labor, and the margins NTIC and its joint ventures are able to realize on the sale of products, all of which have had and could continue to have a negative impact on NTIC’s business, financial position, results of operations and cash flows.
NTIC does not control its joint ventures, distributors, manufacturer’s sales representatives, and other agents, and they may not be successful in implementing NTIC’s marketing plans.
NTIC’s joint ventures, distributors, manufacturer’s sales representatives, and other agents might terminate their relationship with NTIC or devote insufficient sales efforts to NTIC’s products. NTIC does not control its joint ventures, distributors, manufacturer’s sales representatives, and other agents, and they may not be successful in implementing NTIC’s marketing plans.
Additionally, NTIC believes the ongoing wars between Russia and Ukraine and Israel and Hamas may create uncertainty among its existing and prospective customers, which may cause them to halt oil and gas projects or elect to decrease capital improvement budgets, either of which could harm NTIC’s ability to sell its products into the oil and gas industry. 29 Global Events: The sale of Zerust Oil & Gas solutions to Oil & Gas sector clients is impacted by geopolitical tensions and other events in key oil producing regions like the Middle East.
Additionally, NTIC believes the ongoing Russia-Ukraine war and ongoing conflicts in the Middle East, including the Israel-Hamas war, may create uncertainty among its existing and prospective customers, which may cause them to halt oil and gas projects or elect to decrease capital improvement budgets, either of which could harm NTIC’s ability to sell its products into the oil and gas industry.
In addition to its direct sales force, NTIC relies on its joint ventures, distributors, manufacturer’s sales representatives, and other agents to market and sell its products in the United States and internationally. NTIC’s joint ventures, distributors, manufacturer’s sales representatives, and other agents might terminate their relationship with NTIC or devote insufficient sales efforts to NTIC’s products.
NTIC relies on its joint ventures, distributors, manufacturer ’ s sales representatives, and other agents to market and sell its products. In addition to its direct sales force, NTIC relies on its joint ventures, distributors, manufacturer’s sales representatives, and other agents to market and sell its products in the United States and internationally.
During fiscal 2024, a confluence of factors caused disruptions to international shipping, increasing costs and delaying shipments. Attacks on ships entering the Red Sea en route to the Suez Canal, an important waterway for vessels moving between Asia and the United States, by Houthi rebels in Yemen has forced ships to take longer routes.
Geopolitically, continued attacks on ships entering the Red Sea en route to the Suez Canal, an important waterway for vessels moving between Asia and the United States, by Houthi rebels in Yemen forced ships to take longer routes around Africa’s southern coast, increasing shipping time and delaying shipments.
Additionally, on July 26, 2023, the SEC issued final rules related to cyber security risk management and related disclosures. NTIC and its Audit Committee continue to monitor and analyze the impact these rules may have on NTIC’s regulatory burden and cost of compliance related to cyber security threats. NTIC ’ s quarterly results are typically unpredictable and subject to variation.
NTIC and its Audit Committee continue to monitor and analyze the impact these rules may have on NTIC’s regulatory burden and cost of compliance related to cyber security threats. 34 NTIC ’ s quarterly results are typically unpredictable and subject to variation. NTIC’s quarterly operating results vary from quarter to quarter for a variety of reasons.
Any weakness in the global economy, particularly the United States, Europe, India and China, and in the automotive industry have negatively impacted and may continue to negatively impact NTIC’s business, operating results, and financial condition. NTIC ’ s business in the past has been and, in the future, may be negatively impacted by inflation.
In addition, high interest rates continued to impact the automotive industry and indirectly adversely impacted NTIC. Any weakness in the global economy, particularly the United States, Europe, India and China, and in the automotive industry have negatively impacted and may continue to negatively impact NTIC’s business, operating results, and financial condition.
Additionally, the war between Russia and Ukraine and the resulting sanctions by U.S. and European governments have resulted in and may continue to result in commodity price fluctuations, which have decreased our margins and the margins of our joint ventures and resulted in decreased joint venture profitability, which will likely continue during fiscal 2024.
Additionally, the Russia-Ukraine war and geopolitical tensions in the Middle East have resulted in and may continue to result in commodity price fluctuations, which have decreased our margins and the margins of our joint ventures and resulted in decreased joint venture profitability, which will likely continue through fiscal 2026.
These reporting requirements significantly delayed pipeline casing protection work in the second and third quarters of fiscal 2024 pending completion of the compliance work, adversely impacting demand for certain products and NTIC’s operating results.
These reporting requirements, combined with the current political climate in the United States and competing priorities, significantly delayed pipeline casing protection work during fiscal 2025, pending completion of the compliance work, adversely impacting demand for certain products and NTIC’s operating results.
It is not possible at this time to predict or determine the ultimate consequences of this conflict. To the extent the ongoing war between Israel and Hamas adversely affects NTIC’s business, it may also have the effect of heightening many other risks disclosed herein, any of which could materially and adversely affect NTIC’s business and results of operations.
To the extent the ongoing conflicts in the Middle East, including the Israel-Hamas war, adversely affects NTIC’s business, it may also have the effect of heightening many other risks disclosed herein, any of which could materially and adversely affect NTIC’s business and results of operations.
During fiscal 2024, the sale price of NTIC’s common stock ranged from a low of $10.08 per share to a high of $19.63 per share, and the daily trading volume ranged from 634 shares to 1,006,875 shares. It is likely that the price and trading volume of NTIC’s common stock will continue to fluctuate in the future.
During fiscal 2025, the sale price of NTIC’s common stock ranged from a low of $6.75 per share to a high of $15.09 per share, and the daily trading volume ranged from 4,342 shares to 905,541 shares. It is likely that the price and trading volume of NTIC’s common stock will continue to fluctuate in the future.
NTIC relies on its management information systems to effectively manage accounting and financial functions; manage order entry, order fulfillment, and inventory replenishment processes; and to maintain its research and development data.
The efficient operation of NTIC’s business is dependent on its management information systems, including its recently implemented new ERP system. NTIC relies on its management information systems to effectively manage accounting and financial functions; manage order entry, order fulfillment, and inventory replenishment processes; and to maintain its research and development data.
The price of crude oil remained moderate and relatively stable in fiscal 2024, partially due to decreased inflationary pressures and ample global supplies. NTIC believes low global crude oil prices constrain capital improvement budgets of its existing and prospective customers and may result in personnel turnover at its oil and gas customers or prospects.
NTIC believes low global crude oil prices constrain capital improvement budgets of its existing and prospective customers and may result in personnel turnover at its oil and gas customers or prospects.
For example, many U.S. states and municipalities have taken action or are considering laws to ban certain single-use plastics, often focusing efforts on single-use plastic bags and plastic straws. However, existing federal rules and regulations favorable to the market for biodegradable plastics may be subject to change under the incoming Trump administration.
For example, many U.S. states and municipalities have taken action or are considering laws to ban certain single-use plastics, often focusing efforts on single-use plastic bags and plastic straws. However, the Trump administration has reversed many policies related to the market for biodegradable plastics, which may adversely affect demand for NTIC’s Natur-Tec® products.
If these information systems fail to adequately perform these functions or if NTIC experiences an interruption in their operation, NTIC ’ s business and operating results could be adversely affected. The efficient operation of NTIC’s business is dependent on its management information systems.
NTIC relies on its management information systems , including its recently implemented Enterprise Resource Planning ( “ ERP ” ) system, for inventory management, distribution, and other functions. If these information systems fail to adequately perform these functions or if NTIC experiences an interruption in their operation, NTIC ’ s business and operating results could be adversely affected.
NTIC’s quarterly operating results vary from quarter to quarter for a variety of reasons. For example, NTIC’s quarterly sales to joint ventures can be affected by individual orders to joint ventures.
For example, NTIC’s quarterly sales to joint ventures can be affected by individual orders to joint ventures.
In March 2024, a cargo ship crashed into the Francis Scott Key Bridge in the Port of Baltimore, the largest U.S. port by volume for deliveries of automotive vehicles and components, which lead to the suspension of activity in the Port of Baltimore, causing shipping vessels to be rerouted, causing congestion and delays in other ports.
A March 2024 cargo ship crash into the Francis Scott Key Bridge in the Port of Baltimore, the largest U.S. port by volume for deliveries of automotive vehicles and components, caused a temporary suspension in activities.
For reasons of quality assurance, cost effectiveness, or availability, NTIC procures certain raw materials and components from sole or limited source suppliers. Among the limited source suppliers NTIC does business with are the manufacturers of plastic resins used in Natur-Tec® products.
For reasons of quality assurance, cost effectiveness, or availability, NTIC procures certain raw materials and components from sole or limited source suppliers.
Risks Related to Governmental Regulation, Laws, and Compliance NTIC ’ s business, properties, and products are subject to governmental regulation and taxes, compliance with which may require NTIC to incur expenses or modify its products or operations, and which may expose NTIC to penalties for non-compliance.
Any equity or debt financing, if available at all, may be on terms that are not favorable to NTIC, and any equity financings could result in dilution to NTIC’s stockholders. 29 Risks Related to Governmental Regulation, Laws, and Compliance NTIC ’ s business, properties, and products are subject to governmental regulation and taxes, compliance with which may require NTIC to incur expenses or modify its products or operations, and which may expose NTIC to penalties for non-compliance.
Foreign Corrupt Practices Act could subject NTIC to penalties and legal expenses. ● Fluctuations in foreign currency exchange rates could result in declines in NTIC’s earnings and changes in NTIC’s foreign currency translation adjustments. ● Economic uncertainty in developing markets could adversely affect NTIC’s revenue and earnings. 15 Risks Related to NTIC ’ s Products ● NTIC faces intense competition in almost all of its product lines, including from competitors that have substantially greater resources than NTIC does.
Foreign Corrupt Practices Act could subject NTIC to penalties and legal expenses. ● Fluctuations in foreign currency exchange rates could result in declines in NTIC’s earnings and changes in NTIC’s foreign currency translation adjustments. ● Economic uncertainty in developing markets could adversely affect NTIC’s revenue and earnings.
NTIC’s dependence on third-party suppliers involves several risks, including limited control over pricing, availability, quality, and delivery schedules, as well as manufacturing yields and costs. Suppliers of such raw materials and components may decide, or be required, for reasons beyond NTIC’s control, to cease supplying such raw materials and components to NTIC or to raise their prices.
Suppliers of such raw materials and components may decide, or be required, for reasons beyond NTIC’s control, to cease supplying such raw materials and components to NTIC or to raise their prices.
Governmental regulation also may adversely affect the demand for some of NTIC’s products and its operating results. For example, the PHMSA added several new rules with specified deadlines in calendar year 2024. As a result, pipeline owners and operators and several service contractors in the pipeline inspection sector were required to complete preliminary reporting requirements to meet these deadlines.
Governmental regulation also may adversely affect the demand for some of NTIC’s products and its operating results. For example, the Pipeline and Hazardous Materials Safety Administration (PHMSA) added several new rules with specified deadlines in calendar year 2024, with technical revisions made to go into effect in July 2025.
Any of these effects of Brexit, and other similar referenda that NTIC cannot anticipate, could adversely affect its business, operations, and financial results. Out of NTIC ’ s joint ventures, NTIC ’ s joint venture in Germany is the most significant in terms of assets and income to NTIC.
Out of NTIC ’ s joint ventures, NTIC ’ s joint venture in Germany is the most significant in terms of assets and income to NTIC.
Federal Reserve lowered interest rates by 0.50 percentage points in September 2024, it is not known whether additional action will be taken to lower interest rates and if this decrease, and any other decreases, will have an impact on inflation.
In prior years, sustained levels of high inflation caused the U.S. Federal Reserve and other central banks to increase interest rates. Although the U.S. Federal Reserve has recently lowered interest rates, it is not known whether additional action will be taken to further lower interest rates and if these decreases will have an impact on inflation.
In addition, changes in demand could result from increased competition with local Chinese manufacturers who have cost advantages or who may be preferred suppliers for Chinese end users.
In addition, changes in demand could result from increased competition with local Chinese manufacturers who have cost advantages or who may be preferred suppliers for Chinese end users. In fiscal 2025, there was a continued reduction of export to the U.S. and Europe from China as the Chinese government focused on domestic consumption to maintain gross domestic product growth.
Internationally, the government of India announced a phased ban on the manufacture and sale of single-use plastics beginning in July 2022. Similarly, in January 2021, China implemented a ban on single-use plastic utensils, bags and certain other single-use plastic items.
Similarly, in January 2021, China implemented a ban on single-use plastic utensils, bags and certain other single-use plastic items. In addition, the European Union continues to push for a ban on single-use plastics, as evidenced by the passing of the Single-Use Plastics Directive in 2021.
Whether prices for bioplastics become more competitive with prices for petroleum-based plastics will depend, in part, on continued advances in biodegradable technology.
Whether prices for bioplastics become more competitive with prices for petroleum-based plastics will depend, in part, on continued advances in biodegradable technology. In addition, the growth of the market will create some pressure on price for applications today considered commodities, including in particular NTIC’s current Natur-Tec® finished products.
NTIC also has made assumptions about the realization of deferred tax assets. Changes in these assumptions or jurisdictional regulations could result in a valuation allowance for these assets. Final determination of tax audits or tax disputes may be different from what is currently reflected by NTIC’s income tax provisions and accruals.
These audits can involve complex issues, which may require an extended period of time to resolve. NTIC also has made assumptions about the realization of deferred tax assets. Changes in these assumptions or jurisdictional regulations could result in a valuation allowance for these assets.
Increases in inflation may have a negative impact on NTIC’s business.
NTIC ’ s business in the past has been and, in the future, may be negatively impacted by inflation. Increases in inflation may have a negative impact on NTIC’s business.
The mix of pre-tax income or loss among the tax jurisdictions in which NTIC operates, which have varying tax rates, could impact NTIC’s effective tax rate. NTIC is subject to income taxes as well as non-income based taxes in both the United States and various foreign jurisdictions.
Fluctuations in NTIC ’ s effective tax rate could have a significant impact on NTIC ’ s financial position, results of operations, or cash flows. The mix of pre-tax income or loss among the tax jurisdictions in which NTIC operates, which have varying tax rates, could impact NTIC’s effective tax rate.
In response to some of these actions, certain countries imposed retaliatory actions against the U.S. NTIC and its subsidiaries and joint ventures engage in sales outside of the United States and is, therefore, negatively impacted by such actions.
An oversupply of inexpensive goods from China has raised concerns of dumping, which may cause the further imposition of tariffs or other trade regulations by the U.S. NTIC, its subsidiaries and joint ventures engage in sales outside of the United States and is, therefore, negatively impacted by such actions.
EXCOR’s profitability has decreased over the past few years as compared to prior years, which has adversely affected NTIC’s financial results. 22 NTIC ’ s acquisition of the remaining 50% ownership interest of HNTI and any future similar acquisitions involve risk. Effective as of September 1, 2021, NTIC acquired the remaining 50% ownership interest in its Indian joint venture, HNTI.
EXCOR’s profitability has decreased over the past few years as compared to prior years, which has adversely affected NTIC’s financial results. 22 The ongoing war between Russia and Ukraine and the conflicts in the Middle East may adversely affect NTIC ’ s business and results of operations.
Finally, changes to international trade agreements could result in additional tariffs, duties, or other charges on raw materials or components we import into the U.S. 18 NTIC relies on others for its production and any interruptions of these arrangements could disrupt NTIC ’ s ability to fill its customers ’ orders.
To reduce exposure to these and other tariffs, NTIC may be required to consider alternative sourcing or manufacturing, in-house production, or regionalized manufacturing, which may require significant ramp-up time and expense or which may not be available on feasible terms at all. 18 NTIC relies on others for its production, and any interruptions of these arrangements could disrupt NTIC ’ s ability to fill its customers ’ orders.
Removed
In fiscal 2024, several events softened demand within the automotive industry which indirectly adversely impacted NTIC, including the United Auto Workers strike, automotive plant closures, a slowdown in the production of electric vehicles, the high price of vehicles, high interest rates and an overall sluggish automotive market.
Added
Risks Related to NTIC ’ s Products ● NTIC faces intense competition in almost all of its product lines, including from competitors that have substantially greater resources than NTIC does.
Removed
Sustained levels of high inflation caused the U.S. Federal Reserve and other central banks to increase interest rates. Although the U.S.
Added
In fiscal 2025, demand remained soft within the automotive industry, which indirectly adversely impacted NTIC, due in part to a decrease in exports of automotive products resulting from tariffs between the U.S. and both Mexico and Canada. These tariffs have increased the price of vehicles and increased the risk of automotive plant closure, which may further indirectly adversely impact NTIC.
Removed
In addition, the sustained drought in Panama reduced capacity in the Panama Canal, further impacting the global supply chain.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk mitigation strategies are developed and implemented based on the specific nature of each cybersecurity risk. These strategies include, among others, the application of cybersecurity policies and procedures, implementation of administrative, technical, and physical controls, and employee training, education, and awareness initiatives.
Biggest changeThese strategies include, among others, the application of cybersecurity policies and procedures, implementation of administrative, technical, and physical controls, and employee training, education, and awareness initiatives. 35 Role of Management Management has implemented risk management structures, policies, and procedures and is responsible for NTIC’s day-to-day cybersecurity risk management.
The following security measures give some insight as to what has been implemented: ● Multifactor Authentication ● Phishing Simulations ● User Permissions Auditing and Tightening ● Proactive blocking of high-risk email ● Active monitoring of user sign-in ● On-premises Endpoint reduction ● Endpoint detection and response ● Licensing, Network, and hardware compliance management 36 Use of Consultants and Advisors NTIC engages various third-party cybersecurity service providers to assess and enhance its cybersecurity practices and assist with protection and monitoring of its systems and information, including with respect to protection of its e-mail, system access, network monitoring, endpoint protection, vulnerability assessments and penetration testing.
The following security measures give some insight as to what has been implemented: ● Multifactor authentication ● Phishing simulations ● User permissions auditing and tightening ● Proactive blocking of high-risk email ● Active monitoring of user sign-in ● On-premises endpoint reduction ● Endpoint detection and response ● Licensing, network, and hardware compliance management Use of Consultants and Advisors NTIC engages various third-party cybersecurity service providers to assess and enhance its cybersecurity practices and assist with protection and monitoring of its systems and information, including with respect to protection of its e-mail, system access, network monitoring, endpoint protection, vulnerability assessments, and penetration testing.
Risk Factors ” section of this Form 10-K for further detail about the cybersecurity risks NTIC faces. Maintaining a robust information security system is an ongoing priority for NTIC, and NTIC plans to continue to identify and evaluate new, emerging risks to data protection and cybersecurity both within NTIC and through its engagement of third-party service providers.
Risk Factors ” section of this Form 10-K for further detail about the cybersecurity risks NTIC faces. Maintaining a robust information security system is an ongoing priority for NTIC, and NTIC plans to continue to identify and evaluate new, emerging risks to data protection and cybersecurity both within NTIC and through its engagement of third-party service providers. 36
Management continually re-assesses NTIC’s cybersecurity risk environment based on changing circumstances and new information identified by monitoring, scanning and testing its systems as well as utilizing third party resources for testing. Risk Management and Strategy NTIC’s processes for assessing, identifying, and managing cybersecurity threats have been integrated into the overall risk management processes.
Management continually re-assesses NTIC’s cybersecurity risk environment based on changing circumstances and new information identified by monitoring, scanning and testing its systems, as well as utilizing third party resources for testing. Risk Management and Strategy NTIC’s processes for assessing, identifying, and managing cybersecurity threats have been integrated into its overall risk management processes.
Although none of the members of the Audit Committee has any work experience, degree, or certifications related to information security or cybersecurity, the Audit Committee works closely with members of management and NTIC has engaged third-party service providers to further enhance its cybersecurity efforts.
Although none of the members of the Audit Committee has any work experience, degree, or certifications related to information security or cybersecurity, the Audit Committee works closely with members of management and NTIC has engaged third-party service providers to further enhance its cybersecurity efforts and the oversight thereof by the Audit Committee.
NTIC has processes in place for assessing, identifying, and managing material risks from cybersecurity threats, and NTIC regularly assesses its performance and identifies areas for improvement. In recent years, NTIC has implemented measures to safeguard its entire cyber network.
NTIC has processes in place for assessing, identifying, and managing material risks from cybersecurity threats, and NTIC regularly assesses its performance and identifies areas for improvement. NTIC also has implemented measures to safeguard its entire cyber network.
As of the date of this filing, NTIC has not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on NTIC’s business strategy, results of operations or financial condition.
NTIC maintains cyber liability insurance; however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of NTIC’s systems.As of the date of this filing, NTIC has not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on NTIC’s business strategy, results of operations or financial condition.
Our Information Technology Director, who brings a solid foundation in cybersecurity from prior managerial roles and specialized training, is responsible for our day-to-day assessment and management of cybersecurity risks and has helped NTIC leverage best practices consisting of real time monitoring, anti-virus and ongoing patch management for all systems. Maintenance keeps code to industry standards and aligned with best practices.
NTIC’s Information Technology Director, who possesses a strong foundation in cybersecurity through prior managerial experience and specialized training, oversees the daily assessment and management of cybersecurity risks. NTIC employs best practices, including real-time monitoring, anti-virus protection, and ongoing patch management across all systems. System maintenance is performed in accordance with industry standards and aligned with recognized best practices.
Security, and threats to security, are constantly evolving. The implemented measures are flexible enough that they can be modified dynamically to respond to changes in the security landscape.
Because cybersecurity threats continue to evolve, NTIC’s implemented measures are designed to be flexible and adaptable to respond to changes in the security landscape.
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Role of Management Management has implemented risk management structures, policies and procedures and is responsible for NTIC’S day-to-day cybersecurity risk management.
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Risk mitigation strategies are developed and implemented based on the specific nature of each cybersecurity risk.
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NTIC maintains cyber liability insurance; however, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may result from an interruption or breach of NTIC’s systems.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeNTIC continues to renovate this building, which will be used primarily for warehousing space and light industrial production. NTIC owns this real estate and these buildings. NTIC also owns real estate and a building in Beachwood, Ohio, which it uses for office, manufacturing, laboratory, and warehouse space.
Biggest changeIn addition to these properties, NTIC owns real estate and a building in Beachwood, Ohio, which it uses for office, manufacturing, laboratory, and warehouse space, and has contract warehousing agreements in California and Indiana to hold and release stock products to customers.
Item 2. PROPERTIES NTIC’s principal executive offices, production facilities, and domestic research and development operations are located at 4201 Woodland Road, Circle Pines, Minnesota 55014. NTIC also purchased the property immediately adjacent to this property, located at 4203 Woodland Road, which includes a 26,000 square foot industrial building, for $1,200,000 in February 2023.
Item 2. PROPERTIES NTIC’s principal executive offices, production facilities, and domestic research and development operations are located in a building owned by NTIC located at 4201 Woodland Road, Circle Pines, Minnesota 55014.
In July 2021, NTIC China entered into a purchase agreement to acquire an approximately 21,000 square feet industrial building and the right to use certain real estate in the Qingpu District of Shanghai, China, which has been used as China’s new corporate headquarters since February 2022.
Internationally, NTIC China owns an approximately 21,000 square feet industrial building in the Qingpu District of Shanghai, China, which is used as NTIC China’s corporate headquarters and NTIC’s subsidiaries in Brazil, India and Mexico, all lease office, warehouse, and laboratory space.
NTIC also leases office, warehouse, and laboratory space in Chennai, India. 37 NTIC’s management considers its current properties suitable and adequate for its current and foreseeable needs.
NTIC’s management considers its current properties and the new expansions noted above to be suitable and adequate for its current and foreseeable needs.
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Additionally, NTIC has contract warehousing agreements in California and Indiana to hold and release stock products to customers. Internationally, NTIC’s subsidiaries in Brazil, India, Mexico, and China all lease office, warehouse, and laboratory space.
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NTIC also owns the property immediately adjacent to this property, located at 4203 Woodland Road, which includes a 26,000 square foot industrial building, which is used primarily for warehousing space and light industrial production.
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Both NTIC’s subsidiaries Natur-Tec India and Brazil are in the process of purchasing and renovating new local corporate headquarters to accommodate new manufacturing capacity and anticipated business growth. These projects are expected to be completed in fiscal 2026 or fiscal 2027.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information NTIC’s common stock is listed for trading on the Nasdaq Global Market of The Nasdaq Stock Market under the symbol “NTIC.” Dividends During fiscal 2024, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to holders of record of the Company’s common stock as of the following record dates: Declaration Date Amount Record Date Payable Date October 18, 2023 $0.07 November 1, 2023 November 15, 2023 January 17, 2024 $0.07 January 31, 2024 February 14, 2024 April 17, 2024 $0.07 May 1, 2024 May 15, 2024 July 17, 2024 $0.07 July 31, 2024 August 14, 2024 On October 16, 2024, NTIC’s Board of Directors declared a cash dividend of $0.07 per share of NTIC’s common stock, payable on November 13, 2024 to stockholders of record on October 30, 2024.
Biggest changeMARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information NTIC’s common stock trades on the Nasdaq Global Market of The Nasdaq Stock Market under the symbol “NTIC.” Dividends During fiscal 2025, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to holders of record of NTIC’s common stock as of the following record dates: Declaration Date Amount Record Date Payable Date October 16, 2024 $0.07 October 30, 2024 November 13, 2024 January 15, 2025 $0.07 January 29, 2025 February 12, 2025 April 16, 2025 $0.01 April 30, 2025 May 14, 2025 July 16, 2025 $0.01 July 30, 2025 August 13, 2025 On April 10, 2025, NTIC announced that it had determined to temporarily adjust its quarterly dividend to $0.01 per share effective with its fiscal 2025 third quarter dividend in light of the global environment.
This does not include shares held in “street name” or beneficially owned. Recent Sales of Unregistered Equity Securities NTIC did not sell any shares of its common stock or any other equity securities of NTIC that were not registered under the Securities Act of 1933, as amended, during the fourth quarter of fiscal 2024.
This does not include shares held in “street name” or beneficially owned. Recent Sales of Unregistered Equity Securities NTIC did not sell any shares of its common stock or any other equity securities of NTIC that were not registered under the Securities Act of 1933, as amended, during the fourth quarter of fiscal 2025.
Issuer Purchases of Equity Securities NTIC did not purchase any shares of its common stock or other equity securities of NTIC during the fourth quarter of fiscal 2024. As of August 31, 2024, up to $2,640,548 in shares of NTIC common stock remained available for repurchase under NTIC’s stock repurchase program.
Issuer Purchases of Equity Securities NTIC did not purchase any shares of its common stock or other equity securities of NTIC during the fourth quarter of fiscal 2025. As of August 31, 2025, up to $2,640,548 in shares of NTIC common stock remained available for repurchase under NTIC’s stock repurchase program.
The declaration of future dividends is not guaranteed and will be determined by NTIC’s Board of Directors in light of conditions then existing, including NTIC’s earnings, financial condition, cash requirements, restrictions in financing agreements, business conditions, and other factors. Number of Record Holders As of August 31, 2024, there were 156 record holders of NTIC’s common stock.
The declaration of future dividends is not guaranteed and will be determined by NTIC’s Board of Directors in light of conditions then existing, including NTIC’s earnings, financial condition, cash requirements, restrictions in financing agreements, business conditions, and other factors. Number of Record Holders As of August 31, 2025, there were 152 record holders of NTIC’s common stock.
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Subsequent to the end of fiscal 2025, on October 15, 2025, NTIC’s Board of Directors declared a cash dividend of $0.01 per share of NTIC’s common stock, payable on November 12, 2025 to stockholders of record on October 29, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFinancial Overview NTIC’s management, including its chief executive officer, who is NTIC’s chief operating decision maker, reports and manages NTIC’s operations in two reportable business segments based on products sold, customer base, and distribution center: ZERUST® products and services and Natur-Tec® products. 41 Highlights of NTIC’s financial results for fiscal 2024 include the following, with increases or decreases in each case as compared to fiscal 2023: ● NTIC’s consolidated net sales increased 6.5% primarily due to increased sales and demand for Natur-Tec® and, to a lesser extent, ZERUST® products. 74.2% of NTIC’s consolidated net sales were derived from sales of ZERUST® products and services, which increased 2.2%, and 25.8% of NTIC’s consolidated net sales were derived from sales of Natur-Tec® products, which increased 20.9%. ● Cost of goods sold as a percentage of net sales decreased to 60.3% from 65.2% primarily as a result of lower raw material prices overall and savings associated with the insourcing of various finished goods production. ● NTIC’s contribution from total joint venture operations decreased 18.6% to $9,475,078 compared to $11,641,904 during fiscal 2023 primarily due to a one-time gain on the liquidation of a previously written-off investment in NTIC’s former joint venture in China, Tianjin Zerust of $1,986,027 in fiscal 2023.
Biggest changeHighlights of NTIC’s financial results for fiscal 2025 include the following, with increases or decreases in each case as compared to fiscal 2024: ● NTIC’s consolidated net sales decreased 1.0% primarily due to decreased sales and demand for ZERUST® and Natur-Tec® products. 74.2% of NTIC’s consolidated net sales were derived from sales of ZERUST® products and services, which decreased 1.0%. 25.8% of NTIC’s consolidated net sales were derived from sales of Natur-Tec® products, which decreased 1.0%. ● Cost of goods sold as a percentage of net sales increased to 62.4% from 60.3% primarily due to slightly higher raw material prices and discounts on selling prices. ● NTIC’s total joint venture operations decreased 9.8% to $8,545,207 compared to $9,475,078 during fiscal 2024 primarily due to decreases in equity in income from joint ventures and fees for services provided to joint ventures, which were driven primarily by decreased sales at most joint ventures.
NTIC also expects to use some of its capital resources to acquire remaining ownership interests of joint ventures not owned by NTIC as they become available or appropriate and for the formation of one or more new subsidiaries to assume the operations of a joint venture.
NTIC also expects to use some of its capital resources to acquire the remaining ownership interests of joint ventures not owned by NTIC as they become available or appropriate and for the formation of one or more new subsidiaries to assume the operations of a joint venture.
The term “Fixed Charge Coverage Ratio” means the ratio, computed for the NTIC on a consolidated basis, of net income plus income tax expense, plus amortization expense, plus depreciation expense, plus interest expense, and plus dividends received from joint ventures, minus unfinanced capital expenditures and equity in income from joint ventures, all computed for the twelve month period then ending, to scheduled principal payments made, plus scheduled finance lease payments made, plus interest expense paid, plus income tax expense paid, and plus cash distributions and dividends paid, all computed for the same twelve month period then ending.
The term “Fixed Charge Coverage Ratio” means the ratio, computed for NTIC on a consolidated basis, of net income plus income tax expense, plus amortization expense, plus depreciation expense, plus interest expense, and plus dividends received from joint ventures, minus unfinanced capital expenditures and equity in income from joint ventures, all computed for the twelve month period then ending, to scheduled principal payments made, plus scheduled finance lease payments made, plus interest expense paid, plus income tax expense paid, and plus cash distributions and dividends paid, all computed for the same twelve month period then ending.
Under NTIC’s agreements with its joint ventures in which the fees for services are described, amounts are earned when product is shipped from joint venture facilities, at which point a sale is deemed to have occurred and results in obligation of the joint venture to pay the royalty and recognition of the fee by NTIC. 42 Selling Expenses .
Under NTIC’s agreements with its joint ventures in which the fees for services are described, amounts are earned when product is shipped from joint venture facilities, at which point a sale is deemed to have occurred and results in obligation of the joint venture to pay the royalty and recognition of the fee by NTIC. Selling Expenses .
Research and development expenses include costs associated with the design, development, market analysis, lab testing, and field trials and enhancements of NTIC’s products and services. NTIC expenses all costs related to product research and development as incurred. Research and development expenses reflect the net amount after being reduced by reimbursements related to certain research and development contracts.
Research and development expenses include costs associated with the design, development, market analysis, lab testing, and field trials and enhancements of NTIC’s products and services. NTIC expenses costs related to product research and development as incurred. Research and development expenses reflect the net amount after being reduced by reimbursements related to certain research and development contracts.
In fiscal 2025, NTIC expects to continue to invest through its use of working capital in Zerust India, NTIC China, NTI Europe, its joint ventures, research and development, marketing efforts, resources for the application of its corrosion prevention technology in the oil and gas industry, and its Natur-Tec® bio-plastics business, although the amounts of these various investments are not known at this time.
In fiscal 2026, NTIC expects to continue to invest through its use of working capital in Zerust India, NTIC China, NTI Europe, its joint ventures, research and development, marketing efforts, resources for the application of its corrosion prevention technology in the oil and gas industry, and its Natur-Tec® bio-plastics business, although the amounts of these various investments are not known at this time.
The expenses incurred in support of its joint ventures are direct expenses that NTIC incurs related to its joint ventures and include such items as employee compensation and benefit expenses, travel expense, insurance, consulting expense, legal expense, and lab supplies and testing expense. See Note 13 to NTIC’s consolidated financial statements for other related party transaction disclosures.
The expenses incurred in support of its joint ventures are direct expenses that NTIC incurs related to its joint ventures and include such items as employee compensation and benefit expenses, travel expense, insurance, consulting expense, legal expense, and lab supplies and testing expense. See Note 14 to NTIC’s consolidated financial statements for other related party transaction disclosures.
NTIC ’ s Subsidiaries and Joint Venture Network NTIC has ownership interests in 11 operating subsidiaries in North America, South America, Europe, and Asia, which are listed in “ Part I. Item 1. Business ” of this annual report on Form 10-K. The results of these subsidiaries are fully consolidated in NTIC’s consolidated financial statements.
NTIC ’ s Subsidiaries and Joint Venture Network NTIC has ownership interests in 12 operating subsidiaries in North America, South America, Europe, and Asia, which are listed in “ Part I. Item 1. Business ” of this annual report on Form 10-K. The results of these subsidiaries are fully consolidated in NTIC’s consolidated financial statements.
In instances where NTIC owns less than 100% of a subsidiary, the share of that subsidiary’s income attributable to non-controlling shareholders is excluded from NTIC’s net income and reported separately in NTIC’s financial statements. Results of Operations Fiscal Year 2024 Compared to Fiscal Year 2023 The following table sets forth NTIC’s results of operations for fiscal 2024 and fiscal 2023.
In instances where NTIC owns less than 100% of a subsidiary, the share of that subsidiary’s income attributable to non-controlling shareholders is excluded from NTIC’s net income and reported separately in NTIC’s financial statements. Results of Operations Fiscal Year 2025 Compared to Fiscal Year 2024 The following table sets forth NTIC’s results of operations for fiscal 2025 and fiscal 2024.
Some of these joint venture transactions may materially impact NTIC’s results of operations for a particular reporting period. NTIC traditionally has used the cash generated from its operations, distributions of earnings from joint ventures and fees for services provided to its joint ventures to fund NTIC’s new technology investments and capital contributions to new and existing subsidiaries and joint ventures.
Some of these joint venture transitions may materially impact NTIC’s results of operations for a particular reporting period. NTIC traditionally has used the cash generated from its operations, distributions of earnings from joint ventures and fees for services provided to its joint ventures to fund NTIC’s new technology investments and capital contributions to new and existing subsidiaries and joint ventures.
NTIC participates, either directly or indirectly, in 16 active joint venture arrangements in North America, Europe, and Asia. Each of these joint ventures generally manufactures and markets finished products in the geographic territory to which it is assigned.
NTIC participates, either directly or indirectly, in 15 active joint venture arrangements in North America, Europe, and Asia. Each of these joint ventures generally manufactures and markets finished products in the geographic territory to which it is assigned.
This section references Note 2 to NTIC’s consolidated financial statements, which summarizes the effect of recently issued accounting pronouncements on NTIC’s results of operations and financial condition. Business Overview NTIC develops and markets proprietary, environmentally beneficial products and services in over 65 countries either directly or via a network of subsidiaries, joint ventures, independent distributors, and agents.
This section references Notes 2 and 3 to NTIC’s consolidated financial statements, which summarizes the effect of recently issued accounting pronouncements on NTIC’s results of operations and financial condition. Business Overview NTIC develops and markets proprietary, environmentally beneficial products and services in over 65 countries either directly or via a network of subsidiaries, joint ventures, independent distributors, and agents.
In North America, NTIC sells its ZERUST® corrosion prevention solutions through a network of independent distributors and agents supported by a direct sales force. 40 Internationally, NTIC sells its ZERUST® corrosion prevention solutions through its wholly-owned subsidiary in China, NTIC (Shanghai) Co., Ltd.
In North America, NTIC sells its ZERUST® corrosion prevention solutions through a network of independent distributors and agents supported by a direct sales force. 39 Internationally, NTIC sells its ZERUST® corrosion prevention solutions through its wholly owned subsidiary in China, NTIC (Shanghai) Co., Ltd.
Uses of Cash and Cash Flow Net cash provided by operating activities during fiscal 2024 was $5,883,193, which resulted principally from NTIC’s net income, dividends received from joint ventures, dividends receivable from joint venture, depreciation and amortization expense, stock-based compensation and changes in working capital, partially offset by equity in income from joint ventures, deferred income tax and an increase in trade receivables and inventories.
Net cash provided by operating activities during fiscal 2024 was $5,883,193, which resulted principally from NTIC’s net income, dividends received from joint ventures, dividends receivable from joint venture, depreciation and amortization expense, stock-based compensation and changes in working capital, partially offset by equity in income from joint ventures, deferred income tax and an increase in trade receivables and inventories.
This section provides a brief summary of NTIC’s financial results and financial condition for fiscal 2024 compared to 2023. ● Sales and Expense Components . This section provides a brief description of the significant line items in NTIC’s consolidated statements of operations. ● Results of Operations .
This section provides a brief summary of NTIC’s financial results and financial condition for fiscal 2025 compared to fiscal 2024. ● Sales and Expense Components . This section provides a brief description of the significant line items in NTIC’s consolidated statements of operations. ● Results of Operations .
Other Comprehensive Income – Foreign Currency Translations Adjustment . The changes in the foreign currency translations adjustment were due to the fluctuation of the U.S. dollar compared to the Euro and other foreign currencies during fiscal 2024 compared to fiscal 2023.
Other Comprehensive Income – Foreign Currency Translations Adjustment . The changes in the foreign currency translations adjustment were due to the fluctuation of the U.S. dollar compared to the Euro and other foreign currencies during fiscal 2025 compared to fiscal 2024.
The consolidated financial statements included in this report include the accounts of Northern Technologies International Corporation, its wholly-owned subsidiaries, Northern Technologies Holding Company, LLC, NTIC (Shanghai) Co., Ltd., NTIC Europe GmbH ZERUST-EXCOR MEXICO, S. de R.L. de C.V., and HNTI Limited, NTIC’s majority-owned subsidiary in Brazil, Zerust Prevenção de Corrosão S.A., NTIC’s majority-owned holding company, NTI Asean LLC, and NTIC’s majority-owned subsidiary in India, Natur-Tec India Private Limited, Natur-Tec Lanka, Zerust Singapore Pte Ltd (Zerust Singapore), Zerust Vietnam Co.
The consolidated financial statements included in this report include the accounts of Northern Technologies International Corporation, its wholly owned subsidiaries, Northern Technologies Holding Company, LLC, NTIC (Shanghai) Co., Ltd., NTIC Europe GmbH ZERUST-EXCOR MEXICO, S. de R.L. de C.V., and HNTI Limited, NTIC’s majority-owned subsidiary in Brazil, Zerust Prevenção de Corrosão S.A., NTIC’s majority-owned holding company, NTI Asean LLC, and NTIC’s majority-owned subsidiary in India, Natur-Tec India Private Limited, Natur-Tec Lanka, Zerust Integrity Solutions Trading LLC (ZIS UAE), Zerust Singapore Pte Ltd (Zerust Singapore), Zerust Vietnam Co.
With respect to NTIC’s Natur-Tec® business, NTIC markets its Natur-Tec® resin compounds and finished products in North America primarily through a network of regional and national distributors as well as independent agents. NTIC continues to see significant opportunities for finished bioplastic products and, therefore, continues to strengthen and expand its North American distribution network for finished Natur-Tec® bioplastic products.
In North America, NTIC markets its Natur-Tec® resin compounds and finished products primarily through a network of regional and national distributors as well as independent agents. NTIC continues to see significant opportunities for finished bioplastic products and, therefore, continues to strengthen and expand its North American distribution network for finished Natur-Tec® bioplastic products.
Since NTIC’s investments in its joint ventures are accounted for using the equity method, any changes in foreign currency exchange rates would be reflected as a foreign currency translation adjustment and would not change NTIC’s equity in income from joint ventures reflected in its consolidated statements of operations. NTIC does not hedge against its foreign currency exchange rate risk.
Since NTIC’s investments in its joint ventures are accounted for using the equity method, any changes in foreign currency exchange rates would be reflected as a foreign currency translation adjustment and would not change the equity in income from joint ventures reflected in NTIC’s consolidated statements of operations.
NTIC’s ZERUST® rust and corrosion inhibiting products include plastic and paper packaging, liquids, coatings, rust removers, cleaners, and diffusers as well as engineered solutions designed specifically for the oil and gas industry. NTIC also offers worldwide, on-site, technical consulting for rust and corrosion prevention issues.
NTIC’s ZERUST® rust and corrosion inhibiting products include plastic and paper packaging, liquids, coatings, rust removers, cleaners, and diffusers as well as engineered solutions designed specifically for the industries it serves. NTIC also offers worldwide, on-site, technical consulting for rust and corrosion prevention issues.
NTIC’s primary business is corrosion prevention marketed mainly under the ZERUST® brand. NTIC has been selling its proprietary ZERUST® products and services to the automotive, electronics, electrical, mechanical, military, and retail consumer markets for over 50 years and, more recently, has also expanded into the oil and gas industry.
NTIC’s primary business is corrosion prevention marketed mainly under the ZERUST® brand. NTIC has been selling its proprietary ZERUST® products and services to the automotive, general industrial, mechanical, mining, agricultural, and retail consumer markets for over 50 years and, more recently, has also expanded into the oil and gas industry.
Capital Expenditures and Commitments NTIC spent $3,298,067 on capital expenditures during fiscal 2024, which related primarily to facility improvements to the warehouse facility NTIC purchased during fiscal 2023 and the installation of a new Enterprise Resource Planning (ERP) software system and associated equipment.
Capital Expenditures and Commitments NTIC spent $3,950,323 on capital expenditures during fiscal 2025, which related primarily to facility improvements to the warehouse facility NTIC purchased during fiscal 2023 and the installation of a new Enterprise Resource Planning (ERP) software system and associated equipment.
(NTIC China), its wholly-owned subsidiary in India, HNTI Limited (Zerust India), its majority-owned joint venture holding company for NTIC’s joint venture investments in the Association of Southeast Asian Nations (ASEAN) region, NTI Asean LLC (NTI Asean), and certain majority-owned and wholly-owned subsidiaries, and joint venture arrangements in North America, Europe, and Asia.
(NTIC China), its wholly owned subsidiary in India, HNTI Limited (Zerust India), its majority-owned joint venture holding company for NTIC’s joint venture investments in the Association of Southeast Asian Nations (ASEAN) region, NTI Asean LLC (NTI Asean), its majority-owned subsidiary in Brazil, Zerust Prevenção de Corrosão S.A (Zerust Brazil), and certain majority-owned and wholly owned subsidiaries, and joint venture arrangements in North America, Europe, and Asia.
That cost is measured based on the fair value of the equity or liability instruments issued. NTIC measures the cost of employee services received in exchange for stock options or 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.
NTIC measures the cost of employee services received in exchange for stock options or 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.
Overall, demand for ZERUST® products and services depends heavily on the overall health of the markets in which NTIC sells its products, including the automotive, construction, agriculture, and mining markets in particular. ZERUST® oil and gas net sales increased 18.3% during fiscal 2024 compared to fiscal 2023 primarily due to increased demand.
Overall, demand for ZERUST® products and services depends heavily on the overall health of the markets in which NTIC sells its products, including the automotive, construction, agriculture, and mining markets in particular. ZERUST® oil and gas net sales decreased 20.7% during fiscal 2025 compared to fiscal 2024 primarily due to decreased demand.
There is no assurance that any financing transaction will be available on terms acceptable to NTIC or at all or that any financing transaction will not be dilutive to NTIC’s current stockholders. 46 Credit Agreement with JPMorgan Chase Bank, N.A. On January 6, 2023, NTIC entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A.
There is no assurance that any financing transaction will be available on terms acceptable to NTIC or at all or that any financing transaction will not be dilutive to NTIC’s current stockholders. 46 Credit Agreement with JPMorgan Chase Bank, N.A. NTIC is party to a Credit Agreement (as amended, the Credit Agreement) with JPMorgan Chase Bank, N.A.
Both term loans have an annual interest rate of 3.25% with interest due monthly. Both term loans are secured by an office building owned by NTIC China and the loan agreements contain certain financial and other covenants. NTIC was in compliance with the covenants as of August 31, 2024.
Both term loans are secured by an office building owned by NTIC China and the loan agreements contain certain financial and other covenants. NTIC was in compliance with the covenants as of August 31, 2025.
As a result, U.S. income and foreign withholding taxes have not been recognized on the cumulative undistributed earnings of $23,465,685 and $20,493,861 as of August 31, 2024 and August 31, 2023, respectively.
As a result, U.S. income and foreign withholding taxes have not been recognized on the cumulative undistributed earnings of $27,667,432 and $23,645,685 as of August 31, 2025 and August 31, 2024, respectively.
Related Party Transactions Since NTIC’s joint ventures are considered related parties, NTIC recorded sales to its joint ventures as a separate line item on the face of NTIC’s consolidated statements of operations and recorded fees for services provided to its joint ventures as separate line items on the face of NTIC’s consolidated statements of operations.
Quantitative and Qualitative Disclosures About Market Risk ” of this annual report on Form 10-K. 49 Related Party Transactions Since NTIC’s joint ventures are considered related parties, NTIC recorded sales to its joint ventures as a separate line item on the face of NTIC’s consolidated statements of operations and recorded fees for services provided to its joint ventures as separate line items on the face of NTIC’s consolidated statements of operations.
Outstanding receivables for services provided to joint ventures as of August 31, 2024 decreased $61,578 compared to August 31, 2023, and the average days to pay decreased an average of 5 days to an average of 86 days from an average of 91 days as of August 31, 2023.
Outstanding receivables for services provided to joint ventures as of August 31, 2025 decreased $157,464 compared to August 31, 2024, and the average days to pay decreased an average of 7 days to an average of 79 days from an average of 86 days as of August 31, 2024.
With respect to such research and development contracts, NTIC accrues proceeds received under the contracts and offsets research and development expenses incurred in equal installments over the timelines associated with completion of the contracts’ specific objectives and milestones. Interest Income . Interest income consists of interest earned on investments, which typically consist of investment-grade, interest-bearing securities and money market accounts.
With respect to such research and development contracts, NTIC accrues proceeds received under the contracts and offsets research and development expenses incurred in equal installments over the timelines associated with completion of the contracts’ specific objectives and milestones. Interest Income .
In the event NTIC determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, NTIC makes an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
In the event NTIC determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, NTIC makes an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. 52 Recent Accounting Pronouncements See Notes 2 and 3 to NTIC’s consolidated financial statements for a discussion of recent accounting pronouncements. 53
For the portion of products that NTIC manufactures, NTIC’s cost of goods sold for those products consists primarily of direct labor, allocated manufacturing overhead, raw materials, and components.
Most of NTIC’s products are manufactured by third parties, and its cost of goods sold for those products consists primarily of the price invoiced by its third-party vendors. For the portion of products that NTIC manufactures, NTIC’s cost of goods sold for those products consists primarily of direct labor, allocated manufacturing overhead, raw materials, and components.
Outstanding trade receivables, excluding joint ventures balances, increased by an average of 3 days to an average of 83 days from balances outstanding from these customers as of August 31, 2024 from an average of 80 days as of August 31, 2023.
Outstanding trade receivables increased by an average of 2 days to an average of 80 days from balances outstanding from these customers as of August 31, 2025 from an average of 82 days as of August 31, 2024.
Selling expenses as a percentage of net sales increased to 19.3% for fiscal 2024 compared to 19.1% in fiscal 2023 primarily due to increased selling expenses, as noted above, and partially offset by increased net sales. General and Administrative Expenses .
As a percentage of net sales, selling expenses increased to 21.2% for fiscal 2025 compared to 19.3% in fiscal 2024 primarily due to increased selling expenses and decreased net sales. General and Administrative Expenses .
As a percentage of net sales, general and administrative expenses increased to 16.7% for fiscal 2024 from 16.5% for fiscal 2023 primarily due to increased general and administrative expenses, as noted above, and partially offset by increased net sales. Research and Development Expenses .
As a percentage of net sales, general and administrative expenses increased to 17.6% for fiscal 2025 from 16.7% for fiscal 2024 primarily due to increased general and administrative expenses and decreased net sales. Research and Development Expenses .
Income Before Income Tax Expense . NTIC had income before income tax expense of $7,647,181 for fiscal 2024 compared to income before income tax expense of $5,587,331 for fiscal 2023. Income Tax Expense .
Income Before Income Tax Expense . NTIC had income before income tax expense of $3,031,395 for fiscal 2025 compared to income before income tax expense of $7,647,181 for fiscal 2024. Income Tax Expense .
NTIC considers the earnings of certain foreign joint ventures to be indefinitely invested outside the United States on the basis of estimates that NTIC’s future domestic cash generation will be sufficient to meet future domestic cash needs.
Management expects NTIC’s effective tax rate to normalize in future periods when additional profits are recognized in NTIC’s North American operations. NTIC considers the earnings of certain foreign joint ventures to be indefinitely invested outside the United States on the basis of estimates that NTIC’s future domestic cash generation will be sufficient to meet future domestic cash needs.
NTIC sells its ZERUST® products and services and its Natur-Tec® products either directly, through its subsidiaries, or via a network of joint ventures, independent distributors, and agents. Net sales, excluding joint ventures represents net sales by NTIC either directly to end users or to distributors worldwide, but not sales to NTIC’s joint ventures and not sales by NTIC’s joint ventures.
NTIC derives net sales from the sale of its ZERUST® products and services and its Natur-Tec® products. NTIC sells its ZERUST® products and services and its Natur-Tec® products either directly, through its subsidiaries, or via a network of joint ventures, independent distributors, and agents.
Net cash used in investing activities during fiscal 2024 was $3,418,228, which was primarily the result of purchases of property and equipment and, to a lesser extent, investments in patents. Net cash used in investing activities during fiscal 2023 was $3,343,124, which was primarily the result of purchases of property and equipment and, to a lesser extent, investments in patents.
Net cash used in investing activities during fiscal 2025 was $3,390,323, which was primarily the result of purchases of property and equipment and investment in intangibles for software costs, and, to a lesser extent, investments in patents.
Unless terminated earlier, the Credit Facility, together with all accrued unpaid interest and other amounts owing thereunder, if any, will be payable in full on the maturity date. On January 5, 2024, NTIC and JPM renewed the Credit Agreement to extend the maturity date of the Credit Facility from January 6, 2024 to January 6, 2025.
The principal amount under the Credit Facility, together with all accrued unpaid interest and other amounts owing thereunder, if any, will be payable in full on the January 5, 2026 maturity date unless the Credit Facility is extended or renewed or terminated earlier.
NTIC’s typical contractual terms for trade receivables, excluding joint ventures, are traditionally 30 days and 90 days for trade receivables from its joint ventures. Before extending unsecured credit to customers, excluding NTIC’s joint ventures, NTIC reviews customers’ credit histories and will establish an allowance for uncollectible accounts based upon factors surrounding the credit risk of specific customers and other information.
Before extending unsecured credit to customers, excluding NTIC’s joint ventures, NTIC reviews customers’ credit histories and will establish an allowance for uncollectible accounts based upon factors surrounding the credit risk of specific customers and other information. Accounts receivable over 30 days are considered past due for most customers. NTIC does not accrue interest on past due accounts receivable.
This program has no expiration date but may be terminated by NTIC’s Board of Directors at any time. As of August 31, 2024, up to $2,640,548 in shares of NTIC common stock remained available for repurchase under NTIC’s stock repurchase program. No repurchases occurred during fiscal 2024 or fiscal 2023.
As of August 31, 2025, up to $2,640,548 in shares of NTIC common stock remained available for repurchase under NTIC’s stock repurchase program. No repurchases occurred during fiscal 2025 or fiscal 2024.
(“JPM”), which provides NTIC with a senior secured revolving line of credit (the “Credit Facility”) of up to $10.0 million, and replaced NTIC’s prior loan agreement. The Credit Facility includes a $5.0 million sublimit for standby letters of credit. Borrowings of $4,291,608 were outstanding under the Credit Facility as of August 31, 2024.
(JPM), which provides NTIC with a senior secured revolving line of credit (the Credit Facility) of up to $10.0 million. The Credit Facility includes a $5.0 million sublimit for standby letters of credit. Borrowings of $9,329,021 were outstanding under the Credit Facility as of August 31, 2025.
Net sales at NTIC’s joint ventures, which are not consolidated with NTIC’s net sales, decreased 4.7% to $95,940,014 compared to $100,682,316 during fiscal 2023. ● NTIC’s total operating expenses increased 5.9% to $35,392,957 compared to $33,425,089 during fiscal 2023.
Net sales at NTIC’s joint ventures, which are not consolidated with NTIC’s net sales, decreased 4.9% to $91,236,272 compared to $95,940,014 during fiscal 2024. ● NTIC’s total operating expenses increased 6.4% to $37,651,465 compared to $35,392,957 during fiscal 2024.
Interest Expense . Interest expense results primarily from interest associated with any borrowings under NTIC’s line of credit with JPMorgan Chase Bank, N.A. and NTIC China’s terms loans with China Construction Bank Corporation. Income Tax Expense .
Interest income consists of interest earned on investments, which typically consist of investment-grade, interest-bearing securities and money market accounts. 42 Interest Expense . Interest expense results primarily from interest associated with any borrowings under NTIC’s line of credit with JPMorgan Chase Bank, N.A. and NTIC China’s terms loans with China Construction Bank Corporation. Other Income .
NTIC’s general and administrative expenses increased 7.7% in fiscal 2024 compared to fiscal 2023 primarily due to increased professional services and travel and personnel expenses during fiscal 2024 compared to fiscal 2023.
NTIC’s general and administrative expenses increased 4.3% in fiscal 2025 compared to fiscal 2024 primarily due to increased professional services and travel and personnel expenses, which relate in part to increased information technology infrastructure, during fiscal 2025 compared to fiscal 2024.
Accounts receivable are deemed uncollectible based on NTIC exhausting reasonable efforts to collect. NTIC’s typical contractual terms for receivables for services provided to its joint ventures are 90 days.
If accounts receivables in excess of the provided allowance are determined uncollectible, they are charged to selling expense in the period that the determination is made. Accounts receivable are deemed uncollectible based on NTIC exhausting reasonable efforts to collect. NTIC’s typical contractual terms for receivables for services provided to its joint ventures are 90 days.
Liquidity and Capital Resources Sources of Cash and Working Capital NTIC’s working capital, defined as current assets less current liabilities, was $23,682,276 as of August 31, 2024, including $4,952,184 in cash and cash equivalents, $4,291,608 outstanding under NTIC’s line of credit and $2,820,835 outstanding under NTIC China’s term loans, compared to $22,950,184 as of August 31, 2023, including $5,406,173 in cash and cash equivalents, $3,600,000 outstanding under NTIC’s line of credit and $2,757,176 outstanding under NTIC China’s term loans.
Liquidity and Capital Resources Sources of Cash and Working Capital NTIC’s working capital, defined as current assets less current liabilities, was $20,438,722 as of August 31, 2025, including $7,250,523 in cash and cash equivalents, $9,329,021 outstanding under NTIC’s line of credit, $2,804,695 outstanding under NTIC China’s term loans and $522,545 outstanding under Natur-Tec India’s term loan, compared to $23,682,276 as of August 31, 2024, including $4,952,184 in cash and cash equivalents, $4,291,608 outstanding under NTIC’s line of credit and $2,820,835 outstanding under NTIC China’s term loans.
NTIC experienced an increase in trade receivables and an increase in inventory as of August 31, 2024 compared to August 31, 2023. Trade receivables, excluding joint ventures, as of August 31, 2024 increased $3,152,937 compared to August 31, 2023, primarily related to a correlating increase in sales and timing differences.
NTIC experienced a decrease in trade receivables and an increase in inventory as of August 31, 2025 compared to August 31, 2024. Trade receivables as of August 31, 2025 decreased $743,849 compared to August 31, 2024, primarily related to timing differences of sales and collections.
This increase was primarily a result of increased demand in North America for ZERUST® oil and gas products, partially offset by a slight decrease in demand for ZERUST® industrial products.
This decrease was primarily due to decreased demand for ZERUST® oil and gas products and was partially offset by increased demand for ZERUST® industrial products.
The term “Adjusted SOFR Rate” means the term secured overnight financing rate for either one, three or six months (depending on the interest period selected by NTIC) plus 0.10% per annum. With respect to any borrowings using an Adjusted SOFR Rate, there is an applicable margin of 2.15% applied per annum.
The term “CB Floating Rate” means the greater of the Prime Rate in the United States or 2.50%. The term “Adjusted SOFR Rate” means the term secured overnight financing rate for either one, three or six months (depending on the interest period selected by NTIC) plus 0.10% per annum.
There is no applicable margin with respect to borrowings using a CB Floating Rate. To secure the Credit Agreement, the Company assigned to JPM a continuing security interest in all of its right, title and interested in collateral made up for the assets of the Company.
To secure the Credit Agreement, NTIC assigned to JPM a continuing security interest in all of its right, title and interest in collateral made up of the assets of NTIC.
The following table sets forth NTIC’s net sales of ZERUST® products for fiscal 2024 and fiscal 2023: Fiscal 2024 Fiscal 2023 $ Change % Change ZERUST® industrial net sales $ 53,863,296 $ 53,926,378 $ (63,082 ) (0.1 )% ZERUST® oil & gas net sales 9,229,279 7,801,986 1,427,293 18.3 % Total ZERUST® net sales $ 63,092,575 $ 61,728,364 $ 1,364,211 2.2 % ZERUST® industrial net sales decreased during fiscal 2024 compared to fiscal 2023 primarily due to decreased demand for North American ZERUST® industrial products.
The following table sets forth NTIC’s net sales of ZERUST® products for fiscal 2025 and fiscal 2024: Fiscal 2025 Fiscal 2024 $ Change % Change ZERUST® industrial net sales $ 55,170,693 $ 53,863,296 $ 1,307,397 2.4 % ZERUST® oil & gas net sales 7,317,704 9,229,279 (1,911,575 ) (20.7 )% Total ZERUST® net sales $ 62,488,397 $ 63,092,575 $ (604,178 ) (1.0 )% ZERUST® industrial net sales increased 2.4% during fiscal 2025 compared to fiscal 2024 primarily due to increased demand for North American ZERUST® industrial products.
NTIC believes there is some seasonality in its business. NTIC’s net sales in the second fiscal quarter were adversely affected by the long Chinese New Year, the North American holiday season, and overall less corrosion taking place at lower winter temperatures worldwide.
NTIC’s net sales in the second fiscal quarter are typically adversely affected by the long Chinese New Year, the North American holiday season, and overall less corrosion taking place at lower winter temperatures worldwide. Market Risk For information regarding NTIC’s exposure to market risk, see “ Part I. Item 7A.
Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition.
Goodwill is tested for impairment annually (at August 31), or more frequently when events or changes in circumstances indicate that the asset might be impaired. Examples of such events or circumstances include, but are not limited to, a significant adverse change in legal or business climate, an adverse regulatory action or unanticipated competition.
Income tax expense was $1,325,797 during fiscal 2024 compared to $1,349,600 during fiscal 2023 for an effective tax rate of 17.3% and 24.2% during fiscal 2024 and 2023, respectively.
Income tax expense was $2,045,002 during fiscal 2025 compared to $1,325,797 during fiscal 2024 for an effective tax rate of 67.5% and 17.3% during fiscal 2025 and 2024, respectively. The change primarily reflects increased income tax expense at NTIC’s foreign subsidiaries.
NTIC’s consolidated net sales increased 6.5% to $85,059,517 during fiscal 2024 compared to $79,902,952 during fiscal 2023. This increase was primarily due to increased sales and demand for Natur-Tec® and, to a lesser extent, ZERUST® products.
NTIC’s consolidated net sales decreased 1.0% to $84,234,474 during fiscal 2025 compared to $85,059,517 during fiscal 2024. This decrease was primarily due to decreased sales and demand for ZERUST® and Natur-Tec® products.
Net sales of NTIC’s joint ventures are not included in NTIC’s product sales and are not included in NTIC’s consolidated financial statements. Of the total fee income for services provided to joint ventures, fees of $828,932 were attributable to EXCOR during fiscal 2024 compared to $816,089 attributable to EXCOR during fiscal 2023. Selling Expenses .
Of the total fee income for services provided to joint ventures, fees of $846,281 were attributable to EXCOR during fiscal 2025 compared to $828,932 attributable to EXCOR during fiscal 2024. 44 Selling Expenses .
Net cash provided by operating activities during fiscal 2023 was $5,541,219, which resulted principally from NTIC’s net income, dividends received from joint ventures, depreciation and amortization expense, stock-based compensation and a decrease in inventory, partially offset by deferred income tax and equity in income from joint ventures and an increase in accounts receivable and a decrease in accounts payable. 47 NTIC’s cash flows from operations are impacted by significant changes in certain components of NTIC’s working capital, including inventory turnover and changes in receivables and payables.
Uses of Cash and Cash Flow Net cash provided by operating activities during fiscal 2025 was $2,442,955, which resulted principally from NTIC’s net income, dividends received from joint ventures, depreciation and amortization expense, stock-based compensation and changes in working capital, deferred income tax, partially offset by equity in income from joint ventures and changes in working capital.
This increase was primarily due to increased personnel expenses, including new hires, benefits and travel. ● NTIC incurred net income attributable to NTIC of $5,409,082, or $0.55 per diluted common share, compared to $2,912,276, or $0.30 per diluted common share, for fiscal 2024.
This increase was primarily due to strategic investments in ZERUST® oil and gas marketing and sales efforts, including personnel expenses and the corresponding benefits, as well as increased travel and professional fees. ● NTIC earned net income attributable to NTIC of $17,619, or $0.00 per diluted common share, for fiscal 2025 compared to $5,409,082, or $0.55 per diluted common share, for fiscal 2024.
The following table sets forth NTIC’s net sales by product segment for fiscal 2024 and fiscal 2023: Fiscal 2024 Fiscal 2023 $ Change % Change Total ZERUST® sales $ 63,092,575 $ 61,728,364 $ 1,364,211 2.2 % Total Natur-Tec® sales 21,966,942 18,174,588 3,792,354 20.9 % Total net sales $ 85,059,517 $ 79,902,952 $ 5,156,565 6.5 % During fiscal 2024, 74.2% of NTIC’s consolidated net sales were derived from sales of ZERUST® products and services, which increased 2.2% to $63,092,575 compared to $61,728,364 during fiscal 2023.
The following table sets forth NTIC’s net sales by product segment for fiscal 2025 and fiscal 2024: Fiscal 2025 Fiscal 2024 $ Change % Change Total ZERUST® sales $ 62,488,397 $ 63,092,575 $ (604,178 ) (1.0 )% Total Natur-Tec® sales 21,746,077 21,966,942 (220,865 ) (1.0 )% Total net sales $ 84,234,474 $ 85,059,517 $ (825,043 ) (1.0 )% 43 During fiscal 2025, 74.2% of NTIC’s consolidated net sales were derived from sales of ZERUST® products and services, which decreased 1.0% to $62,488,397 compared to $63,092,575 during fiscal 2024.
NTIC’s equity in income from joint ventures fluctuates based on net sales and profitability of the joint ventures during the respective periods. Of the total equity in income from joint ventures, NTIC had equity in income from joint ventures of $2,299,274 attributable to EXCOR during fiscal 2024 compared to $2,852,229 in fiscal 2023.
Of the total equity in income from joint ventures, NTIC had equity in income from joint ventures of $1,664,532 attributable to EXCOR during fiscal 2025 compared to $2,299,274 in fiscal 2024. This decrease was due to a decrease in net sales by EXCOR during fiscal 2025 compared to fiscal 2024.
NTIC considers internal and external factors when assessing the use of its available working capital, specifically when determining inventory levels and credit terms of customers. Key internal factors include existing inventory levels, stock reorder points, customer forecasts and customer requested payment terms. Key external factors include the availability of primary raw materials and sub-contractor production lead times.
Key internal factors include existing inventory levels, stock reorder points, customer forecasts and customer requested payment terms. Key external factors include the availability of primary raw materials and sub-contractor production lead times. NTIC’s typical contractual terms for trade receivables, excluding joint ventures, are traditionally 30 days and 90 days for trade receivables from its joint ventures.
Fees for Services Provided to Joint Ventures . NTIC recognized fee income for services provided to joint ventures of $5,251,782 during fiscal 2024 compared to $5,189,185 during fiscal 2023, representing an increase of 1.2%.
NTIC had equity in income of all other joint ventures of $1,874,524 during fiscal 2025. Fees for Services Provided to Joint Ventures . NTIC recognized fee income for services provided to joint ventures of $5,006,151 during fiscal 2025 compared to $5,251,782 during fiscal 2024, representing a decrease of 4.7%.
Net sales at the joint ventures decreased 4.7% to $95,940,014 during fiscal 2024 compared to $100,682,316 during fiscal 2023. This decrease was primarily a result of decreased demand during fiscal 2024 at NTIC’s joint venture in Germany primarily due to softer demand within the region, as described above.
Net sales at the joint ventures decreased 4.9% to $91,236,272 during fiscal 2025 compared to $95,940,014 during fiscal 2024. This decrease was primarily due to decreased demand at NTIC’s joint venture in Germany. Net sales of NTIC’s joint ventures are not included in NTIC’s product sales and are not included in NTIC’s consolidated financial statements.
NTIC considers EXCOR to be individually significant to NTIC’s consolidated assets and income as of August 31, 2024 and 2023. Therefore, NTIC provides certain additional information regarding this entity in the notes to NTIC’s consolidated financial statements and in this section of this report.
NTIC considers EXCOR to be individually significant to NTIC’s consolidated assets and income as of August 31, 2025 and 2024.
Cash Dividends During fiscal 2024, NTIC’s Board of Directors declared cash dividends on the following dates in the following amounts to holders of record of NTIC common stock as of the following record dates: Declaration Date Amount Record Date Payable Date October 18, 2023 $0.07 November 1, 2023 November 15, 2023 January 17, 2024 $0.07 January 31, 2024 February 14, 2024 April 17, 2024 $0.07 May 1, 2024 May 15, 2024 July 17, 2024 $0.07 July 31, 2024 August 14, 2024 The declaration of future dividends is not guaranteed and will be determined by NTIC’s Board of Directors in light of conditions then existing, including NTIC’s earnings, financial condition, cash requirements, restrictions in financing agreements, business conditions, and other factors.
The declaration of future dividends is not guaranteed and will be determined by NTIC’s Board of Directors in light of conditions then existing, including NTIC’s earnings, financial condition, cash requirements, restrictions in financing agreements, business conditions, and other factors.
NTIC expects to spend an aggregate of approximately $1,600,000 to $2,100,000 on capital expenditures during fiscal 2025, which it expects will relate primarily to the purchase of new equipment and facility improvements. Inflation and Seasonality Inflation in the United States and abroad historically has had minimal effect on NTIC and did not adversely affect NTIC’s gross margins during fiscal 2024.
NTIC expects to spend an aggregate of approximately $3,000,000 to $4,500,000 on capital expenditures during fiscal 2026, which it expects will relate primarily to construction of new buildings and warehouses in India and Brazil, as well as the purchase of new equipment and facility improvements in the United States.
Upon the occurrence and during the continuance of any event of default, JPM may accelerate the payment of the obligations thereunder and exercise various other customary default remedies. As of August 31, 2024, NTIC was in compliance with all debt covenants under the Credit Agreement.
Upon the occurrence and during the continuance of any event of default, JPM may accelerate the payment of the obligations thereunder and exercise various other customary default remedies. Other Credit Arrangements On each of April 22, 2025 and May 29, 2025, NTIC’s wholly owned subsidiary in China, NTIC China, entered into a loan agreement with China Construction Bank Corporation.
Fiscal 2024 % of Net Sales Fiscal 2023 % of Net Sales $ Change % Change Net sales $ 85,059,517 N/A $ 79,902,952 N/A $ 5,156,565 6.5 % Cost of goods sold 51,273,155 60.3 % 52,099,121 65.2 % (825,965 ) (1.6 )% Equity in income from joint ventures 4,223,296 N/A 6,452,719 N/A (2,229,423 ) (34.6 )% Fees for services provided to joint ventures 5,251,782 N/A 5,189,185 N/A 62,597 1.2 % Selling expenses 16,413,672 19.3 % 15,290,897 19.1 % 1,122,775 7.3 % General and administrative expenses 14,176,494 16.7 % 13,166,270 16.5 % 1,010,224 7.7 % Research and development expenses 4,802,791 5.6 % 4,967,922 6.2 % (165,131 ) (3.3 )% 43 Net Sales .
Fiscal 2025 % of Net Sales Fiscal 2024 % of Net Sales $ Change % Change Net sales $ 84,234,474 N/A $ 85,059,517 N/A $ (825,043 ) (1.0 )% Cost of goods sold 52,557,919 62.4 % 51,273,155 60.3 % 1,284,764 2.5 % Equity in income from joint ventures 3,539,056 N/A 4,223,296 N/A (684,240 ) (16.2 )% Fees for services provided to joint ventures 5,006,151 N/A 5,251,782 N/A (245,631 ) (4.7 )% Selling expenses 17,820,196 21.2 % 16,413,672 19.3 % 1,406,524 8.6 % General and administrative expenses 14,792,988 17.6 % 14,176,494 16.7 % 616,494 4.3 % Research and development expenses 5,038,281 6.0 % 4,802,791 5.6 % 235,490 4.9 % Net Sales .
This trend is further supported by government policies promoting sustainable practices and by advances in biodegradable technology, which make these materials more accessible and cost-effective. Cost of Goods Sold . Cost of goods sold decreased 1.6% in fiscal 2024 compared to fiscal 2023 primarily as a result of lower raw material prices overall and the effect of cost containment measures.
As consumers and industries seek to reduce plastic waste, biodegradable plastics offer a viable solution, particularly in sectors like packaging, agriculture, and consumer goods. This trend is further supported by government policies promoting sustainable practices and by advances in biodegradable technology, which make these materials more accessible and cost-effective. Cost of Goods Sold .
All other terms of the Credit Facility and the Credit Agreement remain the same. It is anticipated that the Credit Facility will be renewed each year for one additional year for the immediate foreseeable future.
It is anticipated that the Credit Facility will be renewed each year for one additional year for the immediate foreseeable future. Borrowings under the Credit Agreement bear interest at a floating rate, at the option of NTIC, equal to either the CB Floating Rate or the Adjusted SOFR Rate.
NTIC’s equity in income from joint ventures decreased 34.6% to $4,223,296 during fiscal 2024 compared to $6,452,719 during fiscal 2023 primarily due to a $1,986,027 one-time gain on the liquidation of a previously written-off investment in NTIC’s former joint venture in China, Tianjin Zerust in fiscal 2023, as well as a decrease in net income at NTIC’s joint venture in Germany.
NTIC’s equity in income from joint ventures decreased 16.2% to $3,539,056 during fiscal 2025 compared to $4,223,296 during fiscal 2024 primarily due to a decrease in net income at NTIC’s joint venture in Germany, EXCOR. NTIC’s equity in income from joint ventures fluctuates based on net sales and profitability of the joint ventures during the respective periods.
NTIC’s selling expenses increased 7.3% in fiscal 2024 compared to fiscal 2023 primarily due to an increase in personnel expense in fiscal 2024 compared to fiscal 2023.
NTIC’s selling expenses increased 8.6% in fiscal 2025 compared to fiscal 2024 primarily due to increased personnel expense in fiscal 2025 as a result of an expansion in the ZERUST® oil and gas sales team.
Since NTIC’s investments in its joint ventures are accounted for using the equity method, any changes in foreign currency exchange rates would be reflected as a foreign currency translation adjustment and would not change the equity in income from joint ventures reflected in NTIC’s consolidated statements of operations. 52 Stock-Based Compensation NTIC recognizes compensation cost relating to share-based payment transactions, including grants of employee stock options and transactions under NTIC’s employee stock purchase plan, in its consolidated financial statements.
Stock-Based Compensation NTIC recognizes compensation cost relating to share-based payment transactions, including grants of employee stock options and transactions under NTIC’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.
Net cash provided by financing activities for fiscal 2023 was $2,053,798, which resulted from borrowings under the term loan and proceeds from the exercise of stock options and NTIC’s employee stock purchase plan, partially offset by repayments on the line of credit, dividends paid on NTIC common stock and dividends received by non-controlling interest. 48 Stock Repurchase Program On January 15, 2015, NTIC’s Board of Directors authorized the repurchase of up to $3,000,000 in shares of NTIC common stock through open market purchases or unsolicited or solicited privately negotiated transactions.
Net cash used in investing activities during fiscal 2024 was $3,418,228, which was primarily the result of purchases of property and equipment, investment in intangibles for software costs and investments in patents. 48 Net cash used in financing activities for fiscal 2025 was $3,861,638, which resulted from borrowing on the line of credit, proceeds from long-term debt and NTIC’s employee stock purchase plan, partially offset by repayments on the line of credit, dividends paid on NTIC common stock and dividends received by non-controlling interest.
Cost of goods sold as a percentage of net sales decreased to 60.3% during fiscal 2024 compared to 65.2% during fiscal 2023 due primarily to the lower raw material prices and the insourcing of various finished goods production.
Cost of goods sold as a percentage of net sales increased to 62.4% during fiscal 2025 compared to 60.3% during fiscal 2024 primarily due to the factors noted above. Equity in Income from Joint Ventures .
Goodwill Impairment Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in acquisitions after amounts have been allocated to intangible assets. Goodwill is tested for impairment annually (at August 31), or more frequently when events or changes in circumstances indicate that the asset might be impaired.
NTIC elects to account for these fees on a cash basis for certain joint ventures when uncertainty exists surrounding the collections of such fees. 51 Goodwill Impairment Goodwill represents the excess purchase price over the fair value of tangible net assets acquired in acquisitions after amounts have been allocated to intangible assets.
Other Credit Arrangements On each of April 10, 2023 and May 30, 2023, the Company’s wholly owned subsidiary in China, NTIC China, entered into a loan agreement with China Construction Bank Corporation. Each term loan provided NTIC China with a RMB 10,000,000 (USD $1.45 million). The term loans mature in April 2025 and June 2025, respectively, unless extended.
Each term loan provided NTIC China with a RMB 10,000,000 (USD $1.39 million). The term loans mature in April 2026 and May 2026, respectively, unless extended. It is anticipated that each term loan will be extended for an additional one-year period.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWith respect to interest rate risk, any outstanding advances under NTIC’s Credit Facility with JPM bear interest at a floating rate, at the option of NTIC, equal to either the CB Floating Rate or the Adjusted SOFR Rate, as defined above. Borrowings of $4,291,608 were outstanding under the Credit Facility as of August 31, 2024.
Biggest changeThe primary commodity price exposures are with a variety of plastic resins. With respect to interest rate risk, borrowings under the Credit Agreement bear interest at a floating rate, at the option of NTIC, equal to either the CB Floating Rate or the Adjusted SOFR Rate.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK NTIC is exposed to some market risk stemming from changes in foreign currency exchange rates, commodity prices and interest rates.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK NTIC is exposed to some market risk stemming from changes in foreign currency exchange rates, tariffs, commodity prices and interest rates.
Both term loans undertaken by NTIC China with China Construction Bank Corporation have an annual interest rate of 3.25% with interest due monthly. The current outstanding balance as of August 31, 2024 for both term loans is a total of USD $2,820,835. 53
The two term loans undertaken by NTIC China with China Construction Bank Corporation have annual interest rates of 2.75% and 2.96%, respectively, with interest due monthly. The outstanding balance as of August 31, 2025 for both term loans is a total of USD $2,804,695.
Removed
Some raw materials used in NTIC’s products are exposed to commodity price changes. The primary commodity price exposures are with a variety of plastic resins.
Added
The tariff environment is complex and evolving. NTIC’s business incurred in fiscal 2025, and expects to continue to incur in fiscal 2026, additional costs as it relates to tariffs.
Added
NTIC has taken and will continue to take action to mitigate inflationary pressures caused by tariffs through a combination of targeted price increases, supplier diversification and other strategic sourcing adjustments, cost reductions, and manufacturing optimization.
Added
With respect to NTIC China, specifically, the majority of NTIC China’s production and sales are for local consumption; and therefore, NTIC believes NTIC China’s exposure to tariffs, included those imposed by the United States is limited. Some raw materials used in NTIC’s products are exposed to commodity price changes.
Added
The term “CB Floating Rate” means the greater of the Prime Rate in the United States or 2.50%. The term “Adjusted SOFR Rate” means the term secured overnight financing rate for either one, three or six months (depending on the interest period selected by NTIC) plus 0.10% per annum.
Added
With respect to any borrowings using an Adjusted SOFR Rate, there is an applicable margin of 2.35% applied per annum. There is no applicable margin with respect to borrowings using a CB Floating Rate. The weighted average interest rate was 6.61% for fiscal year 2025. Borrowings of $9,329,021 were outstanding under the Credit Facility as of August 31, 2025.
Added
In addition, the foreign currency term loan entered into by Natur-Tec India with IDFC FIRST Bank Limited bears interest at a fixed rate of 6.45% per annum. The outstanding balance as of August 31, 2025 for this term loan is USD $522,545. 54

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