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Note 7 - Investments in Joint Ventures

3 Months Ended

Nov. 30, 2021

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

7.	INVESTMENTS IN JOINT VENTURES

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

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

		As of November 30, 2021
		Total				EXCOR				All Other
Current assets		$	54,945,793			$	25,127,390			$	29,818,403
Total assets			58,833,491				27,282,965				31,550,526
Current liabilities			14,079,093				4,139,822				9,939,271
Noncurrent liabilities			1,288,670				-				1,288,670
Joint ventures’ equity			43,465,728				23,143,143				20,322,585
Northern Technologies International Corporation’s share of joint ventures’ equity			21,357,911				11,571,573				9,786,338
Northern Technologies International Corporation’s share of joint ventures’ undistributed earnings			19,142,941				11,540,668				7,602,273

		Three Months Ended November 30, 2021
		Total				EXCOR				All Other
Net sales		$	27,022,995			$	11,300,228			$	15,722,767
Gross profit			11,032,959				5,468,986				5,563,973
Net income			2,777,605				1,821,547				956,058
Northern Technologies International Corporation’s share of equity in income from joint ventures			1,374,749				910,773				463,976
Northern Technologies International Corporation's dividends received from joint ventures			5,042,271				4,255,200				787,071

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

		Three Months Ended November 30, 2020
		Total				EXCOR				All Other(1)
Net sales		$	26,777,343			$	9,551,483			$	17,225,860
Gross profit			12,441,761				5,699,007				6,742,754
Net income			3,651,424				2,021,074				1,630,350
Northern Technologies International Corporation’s share of equity in income from joint ventures			1,825,712				1,010,537				815,175
Northern Technologies International Corporation's dividends received from joint ventures			1,125,361				—				1,125,361

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(1)	Includes Zerust India since Zerust India was not a consolidated subsidiary of the Company as of August 31, 2021 or November 30, 2020. See Note 3 entitled “Business Combination.”