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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.  20549

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FORM 10-QSB

|(Mark one)                                                              
|------------------------------------------------------------------------
|x                                                                       
|                                                                        
|For the quarterly period ended                                          
|                                                                        
|February 28, 2005                                                       
|                                                                        
|o                                                                       
|                                                                        
|For the transition period from ________________ to   __________________.
|                                                                        
|Commission file number  1-11038                                         
|                                                                        
|                                                                        
|                                                                        
|NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION                         
|(Name of small business issuer in its charter)                          

|Delaware                                                         |  | 41-0857886                          
|---------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or   organization) |  | (I.R.S. Employer Identification No.)
|                                                                 |  |                                     
|6680   N. Highway 49   Lino Lakes, Minnesota                     |  | 55014                               
|(Address of principal executive offices)                         |  | (Zip Code)                          

(651) 784-1250(Issuers telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the issuer was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

|Yes
x | No
o
|----- | ----

State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date.

|Class                           |  | Outstanding   as of April 20, 2005
|------------------------------- |  | ----------------------------------
|                                |  |                                   
|Common   Stock, $0.02 par value |  | 3,581,992                         

Transitional Small Business Disclosure Format (check one):  YES
o NO
x

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NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

FORM 10-QSB FEBRUARY 28, 2005

TABLE OF CONTENTS

|Description    |  | Page                                                                                                                 
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                      
|PART I.        |  | FINANCIAL INFORMATION                                                                                                
|               |  |                                                                                                                      
|Item 1.        |  | Financial   Statements                                                                                               
|               |  |                                                                                                                      
|               |  | Consolidated   Balance Sheets as of February 28, 2005 and August 31, 2004                                            
|               |  |                                                                                                                      
|               |  | Consolidated   Statements of Operations for the Three and Six Months Ended February 28, 2005   and February 29, 2004 
|               |  |                                                                                                                      
|               |  | Consolidated   Statements of Cash Flows for the Six Months ended February 28, 2005 and   February 29, 2004           
|               |  |                                                                                                                      
|               |  | Notes to   Consolidated Financial Statements                                                                         
|               |  |                                                                                                                      
|Item 2.        |  | Managements   Discussion and Analysis or Plan of Operation                                                          
|               |  |                                                                                                                      
|Item 3.        |  | Controls and   Procedures                                                                                            
|               |  |                                                                                                                      
|PART II.       |  | OTHER INFORMATION                                                                                                    
|               |  |                                                                                                                      
|Item 2.        |  | Unregistered   Sales of Equity Securities, Use of Proceeds and Small Business Issuer   Purchases of Equity Securities
|               |  |                                                                                                                      
|Item 4.        |  | Submission   of Matters to a vote of Security Holders                                                                
|               |  |                                                                                                                      
|Item 5.        |  | Other   Information                                                                                                  
|               |  |                                                                                                                      
|Item 6.        |  | Exhibits                                                                                                             
|               |  |                                                                                                                      
|SIGNATURE PAGE |  | 24                                                                                                                   
|               |  |                                                                                                                      
|EXHIBIT INDEX  |  | 25                                                                                                                   

2



PART I - FINANCIAL INFORMATION

ITEM 1.          FINANCIAL STATEMENTS

NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES- CONSOLIDATED BALANCE SHEETS (Unaudited) as of FEBRUARY 28, 2005 and AUGUST 31, 2004

|                                                                                                                                                   |  | February   28,   2005 |            | August 31,   2004 |           
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ---------- | ----------------- | ----------
|                                                                                                                                                   |  |                       |            |                   |           
|                                                                                                                                                   |  |                       |            |                   | (Restated)
|ASSETS                                                                                                                                             |  |                       |            |                   |           
|CURRENT ASSETS:                                                                                                                                    |  |                       |            |                   |           
|Cash   and cash equivalents                                                                                                                        |  | $                     | 76,580     |                   | $         
|Receivables:                                                                                                                                       |  |                       |            |                   |           
|Trade   excluding corporate joint ventures, less allowance for doubtful accounts of   $10,478 and $11,562 at February 28, 2005 and August 31, 2004 |  |                       | 2,231,046  |                   |           
|Trade   corporate joint ventures                                                                                                                   |  |                       | 430,038    |                   |           
|Technical   and other services, corporate joint ventures                                                                                           |  |                       | 1,138,611  |                   |           
|Income   taxes                                                                                                                                     |  |                       | 287,168    |                   |           
|Inventories                                                                                                                                        |  |                       | 1,482,816  |                   |           
|Prepaid   expenses                                                                                                                                 |  |                       | 197,377    |                   |           
|Deferred   income taxes                                                                                                                            |  |                       | 276,000    |                   |           
|                                                                                                                                                   |  |                       |            |                   |           
|Total   current assets                                                                                                                             |  |                       | 6,119,636  |                   |           
|PROPERTY AND EQUIPMENT, net                                                                                                                        |  |                       | 783,185    |                   |           
|OTHER ASSETS:                                                                                                                                      |  |                       |            |                   |           
|Investments   in corporate joint ventures:                                                                                                         |  |                       |            |                   |           
|Industrial   chemical                                                                                                                              |  |                       | 7,743,639  |                   |           
|Industrial   non-chemical                                                                                                                          |  |                       | 294,476    |                   |           
|Deferred   income taxes                                                                                                                            |  |                       | 354,000    |                   |           
|Notes   receivable and foreign deposit                                                                                                             |  |                       | 1,773,463  |                   |           
|Note   from employee                                                                                                                               |  |                       | 97,424     |                   |           
|Industrial   patents, net                                                                                                                          |  |                       | 663,088    |                   |           
|Goodwill                                                                                                                                           |  |                       | 304,000    |                   |           
|Other                                                                                                                                              |  |                       | 308,106    |                   |           
|                                                                                                                                                   |  |                       |            |                   |           
|                                                                                                                                                   |  |                       | 11,538,196 |                   |           
|                                                                                                                                                   |  |                       |            |                   |           
|                                                                                                                                                   |  | $                     | 18,441,017 |                   | $         
|                                                                                                                                                   |  |                       |            |                   |           
|LIABILITIES   AND STOCKHOLDERS EQUITY                                                                                                             |  |                       |            |                   |           
|CURRENT LIABILITIES:                                                                                                                               |  |                       |            |                   |           
|Bank   overdrafts                                                                                                                                  |  | $                     | 177,019    |                   | $         
|Accounts   payable                                                                                                                                 |  |                       | 1,103,511  |                   |           
|Line   of credit                                                                                                                                   |  |                       | 500,000    |                   |           
|Accrued   liabilities:                                                                                                                             |  |                       |            |                   |           
|Payroll   and related benefits                                                                                                                     |  |                       | 846,331    |                   |           
|Deferred   joint venture royalties                                                                                                                 |  |                       | 276,125    |                   |           
|Other                                                                                                                                              |  |                       | 190,596    |                   |           
|                                                                                                                                                   |  |                       |            |                   |           
|Total   current liabilities                                                                                                                        |  |                       | 3,093,582  |                   |           
|DEFERRED GROSS PROFIT                                                                                                                              |  |                       | 20,000     |                   |           
|MINORITY INTEREST                                                                                                                                  |  |                       | 81,896     |                   |           
|STOCKHOLDERS EQUITY:                                                                                                                              |  |                       |            |                   |           
|Preferred stock, no par   value, authorized 10,000 shares, none issued                                                                             |  |                       |           |                   |           
|Common   stock, $0.02 par value per share; authorized 10,000,000 shares; issued and   outstanding 3,581,992                                        |  |                       | 71,640     |                   |           
|Additional   paid-in capital                                                                                                                       |  |                       | 4,105,584  |                   |           
|Retained   earnings                                                                                                                                |  |                       | 10,168,864 |                   |           
|Accumulated   other comprehensive income                                                                                                           |  |                       | 899,451    |                   |           
|                                                                                                                                                   |  |                       |            |                   |           
|Total   stockholders equity                                                                                                                       |  |                       | 15,245,539 |                   |           
|                                                                                                                                                   |  |                       |            |                   |           
|                                                                                                                                                   |  | $                     | 18,441,017 |                   | $         
|                                                                                                                                                   |  |                       |            |                   |           

See notes to consolidated financial statements.

3



NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES -CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) THREE AND SIX MONTHS ENDED FEBRUARY 28, 2005 AND FEBRUARY 29, 2004

|                                                                                             |  | Three Months Ended  |            | Six Months Ended    |  
|-------------------------------------------------------------------------------------------- |  | ------------------- | ---------- | ------------------- | -
|                                                                                             |  |                     |            |                     |  
|                                                                                             |  | February 28,   2005 |            | February 29,   2004 |  
|                                                                                             |  |                     |            |                     |  
|                                                                                             |  |                     |            |                     |  
|NORTH AMERICAN OPERATIONS:                                                                   |  |                     |            |                     |  
|Sales                                                                                        |  | $                   | 3,478,352  |                     | $
|Cost of goods sold                                                                           |  |                     | 1,988,460  |                     |  
|                                                                                             |  |                     |            |                     |  
|Gross profit                                                                                 |  |                     | 1,489,892  |                     |  
|Operating expenses:                                                                          |  |                     |            |                     |  
|Selling                                                                                      |  |                     | 691,456    |                     |  
|General and   administrative                                                                 |  |                     | 766,799    |                     |  
|Lab and technical   support                                                                  |  |                     | 177,775    |                     |  
|                                                                                             |  |                     |            |                     |  
|                                                                                             |  |                     | 1,636,030  |                     |  
|NORTH AMERICAN OPERATING LOSS                                                                |  |                     | (146,138   | )                   |  
|CORPORATE JOINT VENTURES AND HOLDING COMPANIES:                                              |  |                     |            |                     |  
|Equity in income of   industrial chemical corporate joint ventures and holding companies     |  |                     | 356,372    |                     |  
|Equity in income of   industrial non-chemical corporate joint ventures and holding companies |  |                     | 2,124      |                     |  
|Equity in loss of   business consulting corporate joint ventures                             |  |                     |           |                     |  
|Fees for technical   support and other services provided to corporate joint ventures         |  |                     | 987,018    |                     |  
|Expenses incurred in   support of corporate joint ventures                                   |  |                     | (1,295,901 | )                   |  
|                                                                                             |  |                     |            |                     |  
|INCOME FROM ALL CORPORATE JOINT VENTURES AND HOLDING   COMPANIES                             |  |                     | 49,613     |                     |  
|INTEREST INCOME                                                                              |  |                     | 31,617     |                     |  
|INTEREST EXPENSE                                                                             |  |                     | (3,314     | )                   |  
|MINORITY INTEREST                                                                            |  |                     | 13,538     |                     |  
|                                                                                             |  |                     |            |                     |  
|(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) EXPENSE                                            |  |                     | (54,684    | )                   |  
|INCOME TAX EXPENSE (BENEFIT)                                                                 |  |                     | 107,000    |                     |  
|                                                                                             |  |                     |            |                     |  
|NET (LOSS) INCOME                                                                            |  | $                   | (161,684   | )                   | $
|                                                                                             |  |                     |            |                     |  
|NET INCOME (LOSS) PER COMMON SHARE:                                                          |  |                     |            |                     |  
|Basic                                                                                        |  | $                   | (0.05      | )                   | $
|                                                                                             |  |                     |            |                     |  
|Diluted                                                                                      |  | $                   | (0.05      | )                   | $
|                                                                                             |  |                     |            |                     |  
|WEIGHTED AVERAGE COMMON SHARES ASSUMED OUTSTANDING:                                          |  |                     |            |                     |  
|Basic                                                                                        |  |                     | 3,581,992  |                     |  
|Diluted                                                                                      |  |                     | 3,581,992  |                     |  
|DIVIDENDS PER COMMON SHARE                                                                   |  |                     |           |                     |  
|                                                                                             |  |                     |            |                     |  

See notes to consolidated financial statements.

4



NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND SUBSIDIARIES - CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) SIX MONTHS ENDED FEBRUARY 28, 2005 and FEBRUARY 29, 2004

|                                                                                                |  | February   28,   2005 |            | February 29, 
2004 |  
|----------------------------------------------------------------------------------------------- |  | --------------------- | ---------- | ------------------ | -
|                                                                                                |  |                       |            |                    |  
|                                                                                                |  |                       |            | (Restated)         |  
|CASH FLOWS FROM OPERATING   ACTIVITIES:                                                         |  |                       |            |                    |  
|Net   income                                                                                    |  | $                     | 185,636    |                    | $
|Adjustments   to reconcile net income to net cash (used in) provided by operating   activities: |  |                       |            |                    |  
|Depreciation   expense                                                                          |  |                       | 104,149    |                    |  
|Amortization   expense                                                                          |  |                       | 25,090     |                    |  
|Minority   interest expense (income)                                                            |  |                       | 5,264      |                    |  
|Equity   in (income) loss from corporate joint ventures:                                        |  |                       |            |                    |  
|Industrial   chemical                                                                           |  |                       | (868,552   | )                  |  
|Industrial   non-chemical                                                                       |  |                       | (16,149    | )                  |  
|Business   consulting                                                                           |  |                       |           |                    |  
|Deferred   gross profit                                                                         |  |                       | (10,000    | )                  |  
|Deferred   joint venture royalties                                                              |  |                       | 59,850     |                    |  
|Gain   on sale of equipment                                                                     |  |                       |           |                    |  
|Change   in current assets and liabilities:                                                     |  |                       |            |                    |  
|Receivables:                                                                                    |  |                       |            |                    |  
|Trade   excluding corporate joint ventures                                                      |  |                       | (561,781   | )                  |  
|Trade   corporate joint ventures                                                                |  |                       | 29,175     |                    |  
|Technical   and other services receivables, corporate joint ventures                            |  |                       | 94,952     |                    |  
|Income   taxes                                                                                  |  |                       | 75,004     |                    |  
|Inventories                                                                                     |  |                       | (271,304   | )                  |  
|Prepaid   expenses and other                                                                    |  |                       | (85,154    | )                  |  
|Employee   note receivable                                                                      |  |                       | 9,907      |                    |  
|Accounts   payable                                                                              |  |                       | 46,257     |                    |  
|Accrued   liabilities                                                                           |  |                       | (32,103    | )                  |  
|                                                                                                |  |                       |            |                    |  
|Net   cash used in operating activities                                                         |  |                       | (1,209,759 | )                  |  
|CASH FLOWS FROM INVESTING   ACTIVITIES:                                                         |  |                       |            |                    |  
|Sale   of investments available for sale                                                        |  |                       |           |                    |  
|Proceeds   from the sale of property and equipment                                              |  |                       |           |                    |  
|Investment   in joint ventures:                                                                 |  |                       |            |                    |  
|Industrial   chemical                                                                           |  |                       | (38,531    | )                  |  
|Industrial   non-chemical                                                                       |  |                       |           |                    |  
|Business   consulting                                                                           |  |                       |           |                    |  
|Dividends   received from corporate joint ventures                                              |  |                       | 817,611    |                    |  
|Goodwill                                                                                        |  |                       | (31,000    | )                  |  
|Notes   receivable                                                                              |  |                       | (343,646   | )                  |  
|Additions   to property and equipment                                                           |  |                       | (107,660   | )                  |  
|(Increase)   Decrease in other assets                                                           |  |                       | 796        |                    |  
|Additions   to industrial patents                                                               |  |                       | (99,594    | )                  |  
|                                                                                                |  |                       |            |                    |  
|Net   cash provided by investing activities                                                     |  |                       | 195,021    |                    |  
|CASH FLOWS FROM FINANCING   ACTIVITIES:                                                         |  |                       |            |                    |  
|Dividends   paid                                                                                |  |                       | (250,739   | )                  |  
|Borrowing   on line of credit                                                                   |  |                       | 500,000    |                    |  
|Repurchase   of common stock                                                                    |  |                       |           |                    |  
|Bank   overdraft                                                                                |  |                       | 177,019    |                    |  
|                                                                                                |  |                       |            |                    |  
|Net   cash provided by (used in) financing activities                                           |  |                       | 426,280    |                    |  
|                                                                                                |  |                       |            |                    |  
|NET DECREASE IN CASH AND   CASH EQUIVALENTS                                                     |  |                       | (585,458   | )                  |  
|CASH AND CASH EQUIVALENTS   AT BEGINNING OF PERIOD                                              |  |                       | 662,038    |                    |  
|                                                                                                |  |                       |            |                    |  
|CASH AND CASH EQUIVALENTS   AT END OF PERIOD                                                    |  | $                     | 76,580     |                    | $
|                                                                                                |  |                       |            |                    |  

See notes to consolidated financial statements.

5



NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION AND  SUBSIDIARY -  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.          INTERIM FINANCIAL INFORMATION

In the opinion of management, the accompanying unaudited consolidated financial statements contain all necessary adjustments, which are of a normal recurring nature, and present fairly the consolidated financial position of Northern Technologies International Corporation and its subsidiaries (the Company) as of February 28, 2005 and the results of their operations for the three and six months ended February 28, 2005 and February 29, 2004, and their cash flows for the six months ended February 28, 2005 and February 29, 2004, in conformity with accounting principles generally accepted in the United States of America.

These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Companys annual report on Form 10-KSB for the fiscal year ended August 31, 2004 and with the Managements Discussion and Analysis or Plan of Operation section appearing in this quarterly report.  Operating results for the three and six months ended February 28, 2005 are not necessarily indicative of the results that may be expected for the fiscal year ending August 31, 2005.

Certain fiscal year 2004 amounts have been reclassified to conform to fiscal year 2005 presentations.  These reclassifications had no effect on stockholders equity or net income, as previously reported.

2.          RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Adoption of Accounting Pronouncement  FIN 46R

In January 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.  In December 2003, the FASB issued FIN 46R, Consolidation of Variable Interest Entities, a revision of FIN 46 which addresses consolidation by business enterprises where equity investors do not bear the residual economic risks and rewards.  The provisions of FIN 46R are effective for interests in variable interest entities (VIE) for the Company as of February 28, 2005.

In accordance with FIN 46R, the Company has elected to consolidate React-NTI LLC as the Company holds 75% of the equity and 75% of the voting rights, and has made significant advances to React-NTI LLC.  Previously the Company did not consolidate React-NTI LLC because under the terms of the agreement, there are certain matters requiring unanimous approval of the Company and the minority shareholder.  These rights represent substantive participating rights of the minority shareholder as defined in Emerging Issues Task Force (EITF) No. 96-16, Investors Accounting for an Investee When the Investor has a Majority of the Voting Interest but the Minority Shareholder or Shareholders Have Certain Approval or Veto Rights.  Accordingly, the Company did not control React-NTI LLC and previously accounted for its investment under the equity method rather than by consolidation until the adoption of FIN 46R during the current
quarter.

The Company has evaluated and considered for consolidation under FIN 46R certain 50% owned due to outstanding loans that the Company has with the entity, members of the Companys Board of Directors who are owners of the entity, and officers of the Company who are owners of the entity.  The Company did not consolidate those entities as of February 28, 2005 as these conditions are considered temporary.  The Company will reevaluate all entities as of August 31, 2005 to determine which entities will be consolidated at that time.

6



As encouraged under FIN 46R the prior financial periods included in this filing have been restated.  The following are the summary of the prior period balance sheet and statement of operations that were restated under the adoption of FIN 46R.

|                                     |  | As   Originally   Reported |            |                        |   |                   | As   Currently   Reported |  
|------------------------------------ |  | -------------------------- | ---------- | ---------------------- | - | ----------------- | ------------------------- | -
|                                     |  |                            |            |                        |   |                   |                           |  
|                                     |  | August 31,   2004          |            | FIN 46 R   Adjustments |   | August 31,   2004 |                          
|                                     |  |                            |            |                        |   |                   |                          
|CURRENT ASSETS                       |  | $                          | 5,436,750  |                        | $ | 550,467           |                           | $
|PROPERTY AND EQUIPMENT, net          |  |                            | 733,139    |                        |   | 46,533            |                           |  
|OTHER ASSETS                         |  |                            | 10,526,203 |                        |   | (120,590          | )                         |  
|TOTAL ASSETS                         |  |                            | 16,696,092 |                        |   | 476,410           |                           |  
|CURRENT LIABILITIES                  |  |                            | 1,944,012  |                        |   | 398,547           |                           |  
|DEFERRED GROSS PROFIT                |  |                            | 30,000     |                        |   |                   |                           |  
|MINORITY INTEREST                    |  |                            |           |                        |   | 77,863            |                           |  
|STOCKHOLDERS EQUITY:                |  |                            | 14,722,080 |                        |   |                  |                           |  
|LIABILITIES AND STOCKHOLDERS EQUITY |  | $                          | 16,696,092 |                        | $ | 476,410           |                           | $

|                                                                 |  | Three   Months Ended  |           | Six Months   Ended    |  
|---------------------------------------------------------------- |  | --------------------- | --------- | --------------------- | -
|                                                                 |  |                       |           |                       |  
|                                                                 |  | Originally   Reported |           |                       |  
|                                                                 |  |                       |           |                       |  
|                                                                 |  | February   29,   2004 |           | FIN 46 R   Adjustment |  
|                                                                 |  |                       |           |                       |  
|NORTH AMERICAN OPERATIONS                                        |  |                       |           |                       |  
|Sales                                                            |  | $                     | 2,543,648 |                       | $
|Cost of goods sold                                               |  |                       | 1,209,119 |                       |  
|                                                                 |  |                       |           |                       |  
|Gross profit                                                     |  |                       | 1,334,529 |                       |  
|Operating expenses                                               |  |                       | 1,289,656 |                       |  
|NORTH AMERICAN OPERATING INCOME (LOSS)                           |  |                       | 44,873    |                       |  
|                                                                 |  |                       |           |                       |  
|INCOME FROM ALL CORPORATE JOINT VENTURES AND HOLDING   COMPANIES |  |                       | 77,936    |                       |  
|INTEREST INCOME                                                  |  |                       | 24,266    |                       |  
|MINORITY INTEREST                                                |  |                       |          |                       |  
|INCOME BEFORE INCOME TAX EXPENSE                                 |  |                       | 147,075   |                       |  
|INCOME TAX EXPENSE                                               |  |                       | 65,000    |                       |  
|                                                                 |  |                       |           |                       |  
|NET INCOME                                                       |  | $                     | 82,075    |                       |  
|                                                                 |  |                       |           |                       |  

3.          STOCK-BASED COMPENSATION

In accordance with Accounting Principles Board (APB) Opinion No. 25 and related interpretations, the Company uses the intrinsic value-based method for measuring stock-based compensation cost which measures compensation cost as the excess, if any, of quoted market price of the Companys common stock at the grant date over the amount the employee must pay for the stock.  The Companys general policy is to grant stock options at fair value at the date of grant. The Company did not recognize any expense in the financial statements as they were all issued at fair market value.  Options and warrants issued to non-employees are recorded at fair value, as required by Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, using the Black-Scholes pricing method.

7



In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure.  SFAS No. 148 is an amendment to SFAS No. 123 providing alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation and also provides required additional disclosures about the method of accounting for stock-based employee compensation. The Company adopted the annual disclosure provision of SFAS No. 148 during the year ended August 31, 2003.  The Company chose to not adopt the voluntary change to the fair value based method of accounting for stock-based employee compensation, pursuant to SFAS No. 148.

The Company has adopted the disclosure-only provisions of SFAS No. 148, Accounting for Stock-Based Compensation.  Accordingly, no compensation cost has been recognized with respect to stock options.  Had compensation cost for stock options been determined based on the fair value methodology prescribed by SFAS 123, the Companys net loss and net loss per share would have been reduced to the pro forma amounts indicated below:

|                                  |  | Three   Months Ended  |          | Six Months   Ended    |  
|--------------------------------- |  | --------------------- | -------- | --------------------- | -
|                                  |  |                       |          |                       |  
|                                  |  | February   28,   2005 |          | February   29,   2004 |  
|                                  |  |                       |          |                       |  
|Net income (loss):                |  |                       |          |                       |  
|As reported                       |  | $                     | (161,684 | )                     | $
|Pro forma                         |  | $                     | (161,684 | )                     | $
|Basic net income per common share |  |                       |          |                       |  
|As reported                       |  | $                     | (0.05    | )                     | $
|Pro forma                         |  | $                     | (0.05    | )                     | $
|Diluted net income per share      |  |                       |          |                       |  
|As reported                       |  | $                     | (0.05    | )                     | $
|Pro forma                         |  | $                     | (0.05    | )                     | $
|Stock-based compensation, net:    |  |                       |          |                       |  
|As reported                       |  | $                     | 0        |                       | $
|Pro forma                         |  | $                     | 6,025    |                       | $

As noted above, accounting principles require the Company to show, on a pro forma basis, the Companys net income as if it recorded an expense for stock options at the time of grant.  Other than disclosure in this footnote, the Company does not use these pro forma results for any purpose.

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

|                                |  | February   28,   2005 |         | February   29,   2004 | 
|------------------------------- |  | --------------------- | ------- | --------------------- | 
|                                |  |                       |         |                       | 
|Dividend yield                  |  |                       | 2.00    | %                     | 
|Expected volatility             |  |                       | 43.3    | %                     | 
|Expected life of option         |  |                       | 5 years |                       | 
|Average risk-free interest rate |  |                       | 3.43    | %                     | 

In December 2004, FASB issued SFAS No. 123 (revised 2004), Share-Based Payment, that focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  This statement replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.

8



Beginning with our quarterly period that begins September 1, 2006, we will be required to expense the fair value of employee stock options and similar awards.  As a public company, we are allowed to select from two alternative transition methods, each having different reporting implications.  The impact of SFAS No. 123R has not been determined at this time.

4.          INVENTORIES

Inventories consisted of the following:

|                     |  | February   28,   2005 |           | August 31,   2004 |  
|-------------------- |  | --------------------- | --------- | ----------------- | -
|                     |  |                       |           |                   |  
|Production materials |  | $                     | 278,362   |                   | $
|Finished goods       |  |                       | 1,204,454 |                   |  
|                     |  |                       |           |                   |  
|                     |  | $                     | 1,482,816 |                   | $
|                     |  |                       |           |                   |  

5.          PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

|                              |  | February   28,   2005 |           | August 31,   2004 |  
|----------------------------- |  | --------------------- | --------- | ----------------- | -
|                              |  |                       |           |                   |  
|Land                          |  | $                     | 29,097    |                   | $
|Buildings and improvements    |  |                       | 793,389   |                   |  
|Machinery and equipment       |  |                       | 1,197,920 |                   |  
|                              |  |                       |           |                   |  
|                              |  |                       | 2,020,406 |                   |  
|Less accumulated depreciation |  |                       | 1,237,221 |                   |  
|                              |  |                       |           |                   |  
|                              |  | $                     | 783,185   |                   | $
|                              |  |                       |           |                   |  

6.          INDUSTRIAL PATENTS, NET

Industrial Patents, Net consisted of the following:

|                              |  | February   28,   2005 |         | August 31,   2004 |  
|----------------------------- |  | --------------------- | ------- | ----------------- | -
|                              |  |                       |         |                   |  
|Patents                       |  | $                     | 729,116 |                   | $
|Less accumulated amortization |  |                       | 66,028  |                   |  
|                              |  |                       |         |                   |  
|                              |  | $                     | 663,088 |                   | $
|                              |  |                       |         |                   |  

7.          NOTES RECEIVABLE AND FOREIGN DEPOSITS

Notes receivable and foreign deposits consisted of the following:

|                                                         |  | February   28,   2005 |           | August 31,   2004 |  
|-------------------------------------------------------- |  | --------------------- | --------- | ----------------- | -
|                                                         |  |                       |           |                   |  
|Notes receivable from corporate joint venture   partners |  | $                     | 955,000   |                   | $
|Notes receivable from other sources                      |  |                       | 372,994   |                   | $
|Foreign deposits                                         |  |                       | 445,469   |                   |  
|                                                         |  |                       |           |                   |  
|                                                         |  | $                     | 1,773,463 |                   | $
|                                                         |  |                       |           |                   |  

9



8.          INVESTMENTS IN CORPORATE JOINT VENTURES

Composite financial information from the audited and unaudited financial statements of the Companys joint ventures carried on the equity basis is summarized as follows:

|                                                                                              |  | February   28,   2005 |            | August 31,   2004 |  
|--------------------------------------------------------------------------------------------- |  | --------------------- | ---------- | ----------------- | -
|                                                                                              |  |                       |            |                   |  
|Current assets                                                                                |  | $                     | 26,314,892 |                   | $
|Total assets                                                                                  |  |                       | 31,475,577 |                   |  
|Current liabilities                                                                           |  |                       | 11,750,808 |                   |  
|Noncurrent liabilities                                                                        |  |                       | 2,915,384  |                   |  
|Joint ventures equity                                                                        |  |                       | 16,808,379 |                   |  
|Northern Technologies International Corporations   share of Corporate Joint Ventures equity |  | $                     | 8,038,115  |                   | $

|                                                                                                          |  | February   28,   2005 |            | February   29,   2004 |  
|--------------------------------------------------------------------------------------------------------- |  | --------------------- | ---------- | --------------------- | -
|                                                                                                          |  |                       |            |                       |  
|Sales                                                                                                     |  | $                     | 28,416,263 |                       | $
|Gross profit                                                                                              |  |                       | 13,735,319 |                       |  
|Net income                                                                                                |  |                       | 1,685,108  |                       |  
|Northern Technologies International Corporations   share of equity in income of Corporate Joint Ventures |  | $                     | 884,701    |                       | $

During first six months of fiscal 2005, the Company invested in corporate joint ventures as follows:

In October 2004, the Company invested $38,531 in a new industrial chemical corporate joint venture to develop operations in Canada.  The Company has a 50% ownership interest in the new entity.  The new entity had no operations prior to the Companys investment.  It is anticipated that this is the first installment toward completed capitalization of an estimated $100,000 over the next 24 months; however, there is currently no contractual commitment to the investment.

9.          CORPORATE DEBT

In August 2004, the Company obtained a $500,000 revolving credit facility with National City Bank, which expires on December 31, 2005.  In March 2005, it increased the revolver to $1,000,000.  Outstanding amounts under the revolving credit facility bear interest at an annual rate based on LIBOR plus 2.25%, as of February 28, 2005 the interest rate was 5.76%.  Amounts borrowed under the facility are collateralized by a lien on substantially all of the Companys assets, excluding its corporate joint venture interests and intellectual property rights.  $500,000 was outstanding under this facility as of February 28, 2005.  Significant financial covenants in the credit agreement include minimum fixed charge coverage of 1.0 to 1.0.

10.          STOCKHOLDERS EQUITY

During the six months ended February 28, 2005, the Company did not purchase or retire any shares of common stock.

10



11.          SUPPLEMENTAL CASH FLOW INFORMATION

On November 12, 2004, the Companys Board of Directors declared a cash dividend of $0.07 per share that totaled $250,739 and was paid on December 17, 2004 to shareholders of record on December 3, 2004.

12.          TOTAL COMPREHENSIVE INCOME

The Companys total comprehensive income was as follows:

|                                                                       |  | Three Months Ended    |          | Six Months Ended      |  
|---------------------------------------------------------------------- |  | --------------------- | -------- | --------------------- | -
|                                                                       |  |                       |          |                       |  
|                                                                       |  | February   28,   2005 |          | February   29,   2004 |  
|                                                                       |  |                       |          |                       |  
|Net (loss) income                                                      |  | $                     | (161,684 | )                     | $
|Other comprehensive income  foreign currency   translation adjustment |  |                       | 17,053   |                       |  
|                                                                       |  |                       |          |                       |  
|Total comprehensive (loss) income                                      |  | $                     | (144,631 | )                     | $

13.          NET INCOME (LOSS) PER SHARE

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

14.          STOCKHOLDERS EQUITY

Options to purchase 4,000 shares of common stock with a weighted average exercise price of $6.75 were outstanding as of February 28, 2005, but were excluded from the computation of common share equivalents, because their exercise prices were greater than the average market price of a share of common stock.

The following table summarizes information about stock options outstanding and exercisable at February 28, 2005:

|Option Grant Date |  | Exercise  Prices |      | Remaining   Contractual Life |  | Number of   Options Outstanding (#) |  | Number of   Options Exercisable (#) |       
|----------------- |  | ---------------- | ---- | ---------------------------- |  | ----------------------------------- |  | ----------------------------------- | ------
|                  |  |                  |      |                              |  |                                     |  |                                     |       
|9/1/2000          |  | $                | 6.75 |                              |  | 0.5                                 |  |                                     | 4,000 
|2/9/2001          |  | $                | 5.50 |                              |  | 1.9                                 |  |                                     | 3,000 
|9/1/2001          |  | $                | 5.00 |                              |  | 1.5                                 |  |                                     | 12,000
|2/15/2002         |  | $                | 4.56 |                              |  | 2.0                                 |  |                                     | 40,000
|9/1/2002          |  | $                | 3.34 |                              |  | 2.5                                 |  |                                     | 12,000
|9/1/2003          |  | $                | 5.30 |                              |  | 3.5                                 |  |                                     | 16,000
|9/1/2004          |  | $                | 5.25 |                              |  | 4.5                                 |  |                                     | 16,000
|11/12/04          |  | $                | 6.15 |                              |  | 4.7                                 |  |                                     | 3,000 
|                  |  |                  |      |                              |  |                                     |  |                                     |       
|                  |  |                  |      |                              |  |                                     |  |                                     | 99,000

11



15.          SEGMENT INFORMATION

Sales by geographic location as a percentage of total sales were as follows:

|                                                                                         |  | February   28,   2005 |      | February   29,   2004 | 
|---------------------------------------------------------------------------------------- |  | --------------------- | ---- | --------------------- | 
|                                                                                         |  |                       |      |                       | 
|Inside the U.S.A. to unaffiliated customers                                              |  |                       | 77.7 | %                     | 
|Outside the U.S.A. to:                                                                   |  |                       |      |                       | 
|Corporate Joint   Ventures in which the Company is a shareholder directly and indirectly |  |                       | 10.1 | %                     | 
|Unaffiliated customers                                                                   |  |                       | 12.1 | %                     | 
|                                                                                         |  |                       |      |                       | 
|                                                                                         |  |                       | 100  | %                     | 
|                                                                                         |  |                       |      |                       | 

Two of the Companys customers accounted for approximately 37.8% and 33.2% of the Companys net sales for the six months ended February 28, 2005 and February 29, 2004, respectively, and $517,976 and $438,948 of the Companys receivables at February 28, 2005 and February 29, 2004, respectively.

16.          RELATED PARTY TRANSACTIONS

The Company paid reimbursement for travel and related expenses of $271,996, and $147,667, for the six months ended February 28, 2005 and February 29, 2004, respectively, to a financial and management consulting firm, Inter Alia, which beneficially owns 25.1% of the Companys outstanding common stock, and of which the Companys Chief Executive Officer and Chairman of the Board and the Companys President of North American Operations are shareholders.  The management consulting firm earned commissions of approximately $85,308 and $44,341, for the six months ended February 28, 2005 and February 29, 2004 respectively, on the net proceeds of sales of the Companys products.  In addition, the Company has paid health insurance premiums of $8,980 and $8,580 for the six months ended February 28, 2005 and February 29, 2004 respectively, related to policies that insure the Companys Chief Executive Officer and Chairman of the
Board.

On September 9, 2004 and December 2, 2004, the Company made consulting payments to Dr. Ramani Narayan of $25,000.  These consulting payments are part of an agreement made between the company and Dr. Narayan to pay a total of $100,000 in payments by August 31, 2005.  The consulting services related to research and development associated with various new technologies.

On February 7, 2005, the Company made a consulting payment to Dr. Sunggyu Lee of $50,000.  This consulting payment is part of an agreement made between the company and Dr. Lee to pay a total of $100,000 in payments by August 31, 2005.  The consulting services related to research and development associated with various new technologies.

The Company also pays rent for its Beachwood office and lab location to a related party.  See Note 18.

17.          INCOME TAXES

Reconciliations of the expected income tax at the statutory rate with the provisions for income taxes are as follows:

|                                                                 |  | February   28,   2005 |          | February   29,   2004 |  
|---------------------------------------------------------------- |  | --------------------- | -------- | --------------------- | -
|                                                                 |  |                       |          |                       |  
|Tax computed at statutory rates                                  |  | $                     | 52,000   |                       | $
|Tax effect on equity in income of international   joint ventures |  |                       | (301,000 | )                     |  
|Tax effect on dividends received from corporate   joint ventures |  |                       | 279,000  |                       |  
|Other                                                            |  |                       | (42,000  | )                     |  
|                                                                 |  |                       |          |                       |  
|                                                                 |  | $                     | (12,000  | )                     | $
|                                                                 |  |                       |          |                       |  

12



18.          COMMITMENTS AND CONTINGENCIES

In fiscal 1999, a subsidiary of the Company, NTI Facilities, Inc., acquired a one-third ownership of Omni-Northern Ltd., an Ohio limited liability company, in contemplation of NTI Facilities, Inc. entering into a lease agreement with Omni-Northern Ltd. for approximately 50% of the net rental space in a building owned by Omni-Northern Ltd.  Omni-Northern Ltd. owns and operates a rental property located at 23205 Mercantile Road, Beachwood, Ohio, comprising approximately two acres of land and a building of approximately 34,000 square feet.  The property has an approximate value of $2,205,000, based upon the cash-to-mortgage acquisition price of the property paid in fiscal 2000.  The Company has guaranteed up to $329,082 of the Omni-Northern Ltd.s $1,970,552 mortgage obligation with National City Bank, Cleveland, Ohio.  NTI Facilities, Inc. entered into a 15-year lease agreement with Omni-Northern Ltd. for approximately 17,000 square feet of
office, manufacturing, laboratory and warehouse space, requiring monthly rental payments of $17,500, which are adjusted annually according to the annual consumer price index through November 2014.  By its ownership in Omni-Northern Ltd., NTI Facilities Inc. is entitled to one-third of the operating results of Omni-Northern Ltd.  Omni-Northern has leased the remaining 50% of the net rental space to other third parties.

The Company is involved in various legal actions arising in the normal course of business.  Management is of the opinion that any judgment or settlement resulting from pending or threatened litigation would not have a material adverse effect on the financial position or results of operations of the Company.

The Company entered into a commitment with Stratek Plastics Ltd. to loan them $600,000.  Prior to maturity, principal and any interest shall bear interest computed monthly at the rate of seven and one half percent (7.5%) per annum.  The loan is to be repaid on or before August 31, 2005.  As of February 28, 2005, $500,000 has been advanced for this commitment. The Company made one additional payments of $100,000 in March 2005.

ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Overview

The Company manufactures, markets and sells primarily rust and corrosion protection products and custom packaging systems for avionics, automotive, electronics, electrical, mechanical and military applications, sold under the brand name ZERUST® and Excor®.  The Company also offers direct, on-site technical support on rust and corrosion issues.  In North America, the Company markets its technical service and Zerust® products principally to industrial users by a direct sales force and through a network of distributors and sales representatives.  The Companys technical service representatives work directly with the end users of the Companys products to analyze their specific needs and develop systems to meet their technical requirements.

The Company participates, either directly or indirectly through holding companies, in 29 corporate joint venture arrangements in Asia, Europe and South America.  Each of these joint ventures manufactures, markets and sells finished products generally in the country in which it is located.  The Companys joint venture arrangements allow the Company to market and sell its products internationally through the marketing efforts of its joint venture partners without the Company having to develop its own international sales force.  The Companys joint venture partners are knowledgeable in the applicable environmental, labor, tax and other requisite regulations and laws of the respective foreign countries in which they operate, as well as the local customs and business practices, and have a vested interest in making each joint venture a success.  While most of the Companys joint ventures sell rust and corrosion protection products and
custom packaging systems, some of the joint ventures manufacture, market and sell bio-based additives with both industrial and personal care applications and electronic sensing instruments

13



React-NTI LLC is an industrial chemical corporate joint venture of the Company that focuses on the development, manufacture and marketing of proprietary lines of bio-based additives with both industrial and personal care applications.  Based on cotton, soy, corn and other renewable resources, React-NTI products outperform many synthetically derived competing alternatives.  React-NTIs target market includes NTICs existing industrial customer base, as well as the personal care/cosmetics industry.  As of February 28, 2005 the Company is fully consolidating this 75% owned subsidiary which was previously accounted for using the equity method.

The Company conducts all foreign transactions based on the U.S. dollar, except for its investments in various foreign corporate joint ventures.  The exchange rate differential relating to investments in foreign corporate joint ventures is accounted for under the requirements of SFAS No. 52, Foreign Currency Translation.

The Companys North American net sales increased 13.3% during the six months ended February 28, 2005 as compared to the six months ended February 29, 2004 primarily as a result of the increase in sales of React-NTI to its existing customer in North America.   Sales of React-NTI increased $901,212 to $2,276,133 for the six months ended February 28, 2005 as compared to $1,368,921 for the six months ended February 29, 2004.

The cost of sales as a percentage of net sales increased to 59.5% in the six months ended February 28, 2005 as compared to 56.8% in the six months ended February 29, 2004.  Additionally, general and administrative expenses and lab and technical support expenses as a percentage of the Companys net sales increased in the six months ended February 28, 2005 as compared to the comparable period in 2004.  Selling expense decreased as a percentage of sales in the six months ended February 28, 2005 as compared to the comparable period in 2004.

Total net sales of all of the Companys corporate joint ventures increased 28.9% during the six months ended February 28, 2005 as compared to the six months ended February 29, 2004 primarily as a result of an increase in demand and in the weakness of the United States dollar against foreign currency.  The Company receives fees for technical and other support services to its joint ventures based on the revenues of the individual joint ventures.  The Company recognized increased fee income for such technical and support services in the six months ended February 28, 2005 as compared to the six months ended February 29, 2004 as a result of the increase in total revenues from the joint ventures.  The Company incurs direct expenses related to its corporate joint ventures and holding companies.  Such expenses including consulting, travel, technical and marketing services to existing joint ventures, legal fees incurred in the establishment of new
joint ventures, registration and promotion and legal defense of worldwide trademarks, and legal fees incurred in the filing of patent applications.  The Company incurred increased direct joint venture expenses in the six months ended February 28, 2005 as compared to the six months ended February 29, 2004 primarily as a result of increases in management and coordinator salaries, legal expenses and external consulting services.  The increased expenses related to Company efforts to build up the technical service support for the corporate joint ventures in the Beachwood, Ohio location.

The Companys working capital was $3,026,054 at February 28, 2005, including $76,580 in cash and cash equivalents.  The Company had outstanding debt under the line of credit of $500,000 as of February 28, 2005.

14



Results of Operations

The following table sets forth our year to date results of operations for the six months ended February 28, 2005 and February 29, 2004.

|                                    |  | February   28,   2005 |           | % of   Net Sales |  | February   29,   2004 |   | % of   Net Sales |           | $   Change |  | %
Change |  
|----------------------------------- |  | --------------------- | --------- | ---------------- |  | --------------------- | - | ---------------- | --------- | ---------- |  | -------- | -
|                                    |  |                       |           |                  |  |                       |   |                  |           |            |  |          |  
|Net sales                           |  | $                     | 7,310,568 |                  |  | 100                   | % | $                | 6,451,326 |            |  | 100      | %
|Cost of goods sold                  |  |                       | 4,348,048 |                  |  | 59.5                  | % |                  | 3,662,530 |            |  | 56.8     | %
|Selling expenses                    |  |                       | 1,333,351 |                  |  | 18.2                  | % |                  | 1,383,159 |            |  | 21.4     | %
|General and administrative expenses |  |                       | 1,478,594 |                  |  | 20.2                  | % |                  | 1,207,692 |            |  | 18.7     | %
|Lab and technical support expenses  |  | $                     | 403,607   |                  |  | 5.52                  | % | $                | 330,259   |            |  | 5.1      | %

The following table sets forth our results of operations for the second quarter (three months) ended February 28, 2005 and February 29, 2004.

|                                    |  | February   28,   2005 |           | % of   Net Sales |  | February   29,   2004 |   | % of   Net Sales |           | $   Change |  | %   Change |  
|----------------------------------- |  | --------------------- | --------- | ---------------- |  | --------------------- | - | ---------------- | --------- | ---------- |  | ---------- | -
|                                    |  |                       |           |                  |  |                       |   |                  |           |            |  |            |  
|Net sales                           |  | $                     | 3,478,352 |                  |  | 100                   | % | $                | 3,386,647 |            |  | 100        | %
|Cost of goods sold                  |  |                       | 1,988,460 |                  |  | 57.2                  | % |                  | 1,914,551 |            |  | 56.5       | %
|Selling expenses                    |  |                       | 691,456   |                  |  | 19.9                  | % |                  | 826,043   |            |  | 24.4       | %
|General and administrative expenses |  |                       | 766,799   |                  |  | 22.0                  | % |                  | 601,944   |            |  | 17.8       | %
|Lab and technical support expenses  |  | $                     | 177,775   |                  |  | 5.1                   | % | $                | 125,795   |            |  | 3.7        | %

Net Sales and Cost of Sales.  The Companys net sales originating in the United States increased during the three and six months ended February 28, 2005 compared to February 29, 2004 primarily as a result of an increase in the volume of React-NTI products sold to an existing customer in North America.  Cost of sales increased as a percentage of net sales for the three and six months ended February 28, 2005 compared to February 29, 2004 primarily as a result of the increase in sales of React-NTI products that is sold at small gross profit margins in fiscal year 2005.

Selling Expenses.  The Companys selling expenses decreased for the six months ended February 28, 2005 compared to February 29, 2004 primarily as a result of a combination of decreases in trade show expense of $18,000, travel expenses of $10,000, sales promotion materials of $13,000 and commissions to salespeople and commissions to manufacturers representatives totaling $60,000, offset by increases related to the hiring of new sales people of $44,000 and sales meeting expense $13,000.  Selling expenses decreased for the three months ended February 28, 2005 compared to February 29, 2004 due to the implementation of cost control provisions consistent with those above.  Expenses as a percentage of net sales decreased for the three and six months ended February 28, 2005 compared to February 29, 2004 primarily as a result of the increased in sales of React-NTI related products.   Additionally, the Company has been working to
decrease travel and associated expenses as a cost control measure.

General and Administrative Expenses.  The Companys general and administrative expenses increased for the six months ended February 28, 2005 compared to February 29, 2004 primarily as a result of increases in salaries of $90,000, consulting fees of $56,000, directors fees and expense of $48,000, legal fees of $14,000, travel of $11,000, and information technology of $8,000.  The increases for the three months ended February 28, 2004 as compared to February 29, 2004 are proportional to the increases associated with the six month changes noted above.  As a percentage of net sales, general and administrative expenses increased for the three and six months ended February 28, 2005 compared to February 29, 2004 primarily as a result of the increase in spending as described above.

Lab and Technical Support Expenses.  The Companys lab and technical support expenses increased for the six months ended February 28, 2005 compared to February 29, 2004 primarily as a result of increases in travel of $62,000, amortization of patents $16,000 and lab supplies of $41,000.  These increases are partially offset by decreases in employee benefits and salaries of $25,000.  The Company is spending

15



more on lab and technical support in an effort to support our increased sales network and better serve our existing customers.  The increases for the three months ended February 28, 2004 as compared to February 29, 2004 are proportional to the increases associated with the six month changes noted above.  As a percentage of net sales, lab and technical support expenses increased for the three and six months ended February 28, 2005 compared to February 29, 2004 primarily as a result of the increase in expenses.

International Corporate Joint Ventures and Holding Companies.  The Company continues its business program of establishing corporate joint venture arrangements in international markets directly, or indirectly through holding companies.

The Company and/or an existing corporate joint venture manufactures and supplies proprietary ingredients, which make the finished products functional and enable manufacturing of the finished products to take place in the foreign countries.  The Companys corporate joint ventures then market the finished products in their respective territories, and the Companys corporate joint ventures profits are shared by the respective corporate joint venture shareholders in accordance with their respective ownership percentages of the joint venture entity.

The Company had Equity in income of industrial chemical corporate joint ventures and holding companies of $884,701 and $620,826 for the six months ended February 28, 2005 compared to February 29, 2004, respectively and $358,496 and $341,759 for the three months ended February 28, 2005 compared to February 29, 2004.  The increase in equity in income was due to the significant increase in profitability from the corporate joint ventures as a whole.

The Company receives fees for technical and other support to the Companys corporate joint ventures based on the revenues of the individual corporate joint ventures.  The Company recognized fee income for such support in the amounts of $2,004,271 and $1,595,143 for the six months ended February 28, 2005 and February 29, 2004, respectively and $987,018 and $839,214 for the three months ended February 28, 2005 compared to February 29, 2004.  The increase in fees for technical and other support to its corporate joint ventures was due to the significant increase in revenues from the corporate joint ventures as a whole.

The Company sponsors a worldwide corporate joint venture conference approximately every three to four years in which all of its corporate joint ventures are invited to participate.  The Company defers a portion of its royalty income received from its corporate joint ventures in each accounting period leading up to the next conference, reflecting that the Company has not fully earned the royalty payments received during that period.  The next corporate joint venture conference is scheduled to be held in September 2005.  There was $276,125 of deferred royalty income recorded within other accrued liabilities at February 28, 2004, related to this conference.  The deferred income is expected to be completely recognized as income in fiscal 2005 as expenses are incurred when the conference is held.  Expenses incurred to date for the September 2005 conference total $130,000.  The costs associated with these joint venture conferences are
recognized as incurred, generally in the period in which the conference is held and immediately before.

The Company incurred direct expenses related to its corporate joint ventures and the holding companies of $1,295,901 and $2,499,374 for the three and six months ended February 28, 2005 compared to $1,008,118 and $1,585,677 for the same periods in 2004.  These expenses include: consulting, travel, technical and marketing services to existing joint ventures, legal fees regarding the establishment of new joint ventures, registration and promotion and legal defense of worldwide trademarks and legal fees incurred in the filing of patent applications for new technologies to which the Company acquired certain rights.  Increases for the six months ended February 28, 2005 compared to February 29, 2004 are attributable to increases in management and coordinator salaries of $563,000, Inter Alia commission and expense reimbursement of $130,000, group insurance of $49,000, travel expense of $126,000 and external consulting services of $105,000.  The increases
for the three months ended February 28, 2004 as compared to February 29, 2004 are proportional to the increases associated with the six month changes noted above.  Such increased expenses derived from the Company efforts to build up the technical support for the corporate joint ventures out of the Beachwood, Ohio location.

16



Interest Income.  The Companys interest income increased to $45,648 for the six months ended February 28, 2005 compared to $32,757 for the same period in 2004.

Interest Expense.  The Companys interest expense increased to $3,314 for the six months ended February 28, 2005 compared to $0 for the same period in 2004, because the line of credit was utilized in the second quarter.

Income Before Income Taxes.  Income before income taxes decreased $397,644 to $173,636 for the six months ended February 28, 2005 compared to $571,280 for the same period in 2004.

Income Taxes - Income tax expense for the six months ended February 28, 2005 and February 29, 2004 was calculated based on managements estimate of the Companys annual effective income tax rate.  The Companys annual effective income tax rate for fiscal 2005 is lower than the statutory rate primarily due to the Companys equity in income of corporate joint ventures being recognized based on after-tax earnings of these entities.  To the extent joint ventures undistributed earnings are distributed to the Company, it is not expected to result in any material additional income tax liability after the application of foreign tax credits.

Liquidity and Capital Resources

Sources of Cash and Working Capital.  At February 28, 2005, the Companys working capital was $3,026,054, including $76,580 in cash and cash equivalents, compared to working capital of $3,644,658, including $662,038 in cash and cash equivalents as of August 31, 2004.

In August 2004, the Company obtained a $500,000 revolving credit facility with National City Bank, which expires on December 31, 2005, subsequently the Company has increased the revolving credit facility to $1,000,000.  Outstanding amounts under the revolving credit facility bear interest at an annual rate based on LIBOR plus 2.25%.  Amounts borrowed under the facility are collateralized by a lien on substantially all of the Companys assets, excluding its corporate joint venture interests and intellectual property rights.  $500,000 was outstanding under this facility as of February 28, 2005.  Significant financial covenants in the credit agreement include minimum fixed charge coverage of 1.0 to 1.0.  The Company did utilize up to $850,000 of the revolving credit facility subsequent to February 28, 2005, however, the current balance as of April 20, 2005 is $500,000.

Uses of Cash and Cash Flows.  Cash flows used in operations for the six months ended February 28, 2005 and 2004 were $1,209,759 and $284,311, respectively.  The net cash used in operations for the six months ended February 28, 2005 and 2004 resulted principally from net income being partially offset by the noncash equity income of industrial chemical joint ventures, and uses of cash for increases in operating assets more than offsetting net increases in operating liabilities.

Net cash provided by investing activities for the six months ended February 28, 2005 was $195,021 which resulted from dividends received from corporate joint ventures being offset by investments in corporate joint ventures and additions to property and equipment and industrial patents.  Net cash provided by investing activities for the six months ended February 29, 2004 was $249,157, which resulted from dividends received from corporate joint ventures and the sale of investments partially offset by investments in international joint ventures, additions to patents and additions to property and equipment.

17



Net cash provided by financing activities the six months ended February 28, 2005 was $426,280 which resulted primarily from borrowing on the line of credit and bank overdrafts being partially offset by dividends paid to shareholders.  Net cash used in financing activities for the six months ended February 29, 2004 was $184,262 which resulted primarily from dividends paid to shareholders.

Capital Expenditures and Commitments.  The Company has no material capital lease commitments as of February 28, 2005; however, the Companys subsidiary has entered into a 15-year lease agreement for approximately 16,994 square feet of office, manufacturing, laboratory and warehouse space requiring monthly payments of $17,500 which are adjusted annually according to the annual consumer price index through November 2014.  The Company has no material commitments for capital expenditures.  The Company has no postretirement benefit plan and does not anticipate establishing any postretirement benefit program.

The Company entered into a commitment with Stratek Plastics Ltd. to loan them $600,000.  Prior to maturity, principal and any interest shall bear interest computed monthly at the rate of seven and one half percent (7.5%) per annum.  The loan is to be repaid on or before August 31, 2005.  As of February 28, 2005, $500,000 has been advanced for this commitment. The Company made an additional payment of $100,000 in March 2005.

Off-Balance Sheet Arrangements.  The Company does not have relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance-sheet financial arrangements. As such, the Company is not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such arrangements.

In fiscal 1999, a subsidiary of the Company, NTI Facilities, Inc., acquired a one-third ownership of Omni-Northern Ltd., which owns and operates a rental property located at 23205 Mercantile Road, Beachwood, Ohio.  The property has an approximate value of $2,205,000, based upon the cash-to-mortgage acquisition price of the property paid in fiscal 2000.  The Company has guaranteed up to $329,082 of the Omni-Northern Ltd.s $1,970,552 mortgage obligation with National City Bank, Cleveland, Ohio.  The building is fully leased at present.

Inflation and Seasonality.  Inflation in the U.S. and abroad has historically had little effect on the Company.  The Companys business is not historically seasonal.

Market Risk.  The Company is exposed to some market risk stemming from changes in foreign currency exchange rates, commodity prices and interest rates.  The Company is exposed to foreign currency exchange rate risk arising from its investments in its foreign corporate joint ventures and holding companies since the Companys fees for technical support and other services and dividend distributions from these foreign entities are paid in foreign currencies.  The Companys principal exchange rate exposure is with the Euro, the Japanese yen, Korean won and the English pound against the U.S. dollar.  The Company does not hedge against its foreign currency exchange rate risk.  Since the Companys investments in its corporate joint ventures and holding companies 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 of joint ventures and holding companies reflected in the consolidated statement of income.  Some raw materials used in the Companys products are exposed to commodity price changes.  The primary commodity price exposures are with a variety of plastic resins.  Although the Companys revolving credit facility bears interest at a rate based on LIBOR and thus may subject the Company to some market risk on interest rates, no amounts were outstanding under this facility as of February 28, 2005.

18



Critical Accounting Policies

Sales Originating in North America  Northern Technologies International Corporation and Subsidiaries (the Company) considers sales originating in North America to be all sales shipped/invoiced from the Companys facilities located in Minnesota and Ohio.  There are no sales from the Corporate Joint Ventures included in the amount as the Companys investments in Corporate Joint Ventures are accounted for using the equity method. The Company manufactures, markets and sells primarily rust and corrosion protection products and custom packaging systems for avionics, automotive, electronics, electrical, mechanical and military applications, sold under the brand name ZERUST® and Excor®.

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

Accounts Receivable - The Company reviews customers credit history before extending unsecured credit and establishes 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. The Company does not accrue interest on past due accounts receivable. If accounts receivable in excess of the provided allowance are determined uncollectible, they are charged to expense in the year that determination is made. Accounts receivable have been reduced by an allowance for uncollectible accounts of $10,478 and $11,562 at February 28, 2005 and August 31, 2004, respectively.

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

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

|Buildings and improvements | 5-20 years
|-------------------------- | ----------
|Machinery and equipment    | 3-10 years

Investments in Corporate Joint Ventures - Investments in Corporate Joint Ventures are accounted for using the equity method, except for React-NTI LLC which has been fully consolidated, starting February 28, 2005 due to the adoption of FIN 46R (See Note 2).  Intercompany profits on inventories held by the Corporate Joint Ventures that were purchased from the Company have been eliminated based on the Companys ownership percentage in each corporate joint venture.  Periodically, the Company evaluates the investments for any impairment and assesses the future cash flow projections to determine if there are any going concern issues.  If an investment is determined to be impaired then a reserve would be created to reflect the impairment on the financial results of the Company.

Notes Receivable - The Company makes a determination based upon many financial and operating factors prior to issuing any notes receivable.  Additionally, an interest rate is determined based on the market rate of interest at that point in time.  Notes Receivable are evaluated quarterly to assess their collectability; if it is determined that the Notes Receivable are impaired then a reserve is created at that time.

Recoverability of Long-Lived Assets - The Company reviews its long-lived assets whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable.  The Company determines potential impairment by comparing the carrying value of the assets with expected net cash flows expected to be provided by operating activities of the business or related products.  Should the sum of the expected undiscounted future net cash flows be less than the carrying value, the Company would determine whether an impairment loss should be recognized.  An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the asset.  As of February 28, 2005, the Company did not consider any of its assets impaired.

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Principles of Consolidation - The consolidated financial statements include the accounts of Northern Technologies International Corporation, its wholly owned subsidiary, NTI Facilities, Inc. and React-NTI LLC (See Note 2).  All significant intercompany transactions and balances have been eliminated in consolidation.

Income Taxes - The Company utilizes the liability method of accounting for income taxes as set forth in Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes.  SFAS No. 109 requires an asset and liability approach to financial accounting and reporting for income taxes.  Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

Foreign Currency Translation (Accumulated Other Comprehensive Income (Loss)) - The functional currency of each international corporate joint venture is the applicable local currency.  The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using an average monthly exchange rate.  Translation gains or losses are reported as an element of accumulated other comprehensive income (loss).

Revenue Recognition - In recognizing revenue, the Company applies the provisions of the Securities and Exchange Commission Staff Accounting Bulletin 101, Revenue Recognition.  The Company recognizes revenue from the sale of its products when persuasive evidence of an arrangement exists, the product has been delivered, the fee is fixed and determinable and collection of the resulting receivable is reasonably assured.  A portion of the gross profit on products shipped to the Companys Corporate Joint Ventures is deferred until such products are sold by the Corporate Joint Ventures.

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

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

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

Stock Based Compensation - In accordance with Accounting Principles Board (APB) Opinion No. 25 and related interpretations, the Company uses the intrinsic value-based method for measuring stock-based compensation cost which measures compensation cost as the excess, if any, of quoted market price of the Companys common stock at the grant date over the amount the employee must pay for the stock.  The Companys general policy is to grant stock options at fair value at the date of grant. The Company did not recognize any expense in the financial statements as they were all issued at fair market value.  Options and warrants issued to non-employees are recorded at fair value, as required by Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, using the Black-Scholes pricing method.

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In December 2002, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure.  SFAS No. 148 is an amendment to SFAS No. 123 providing alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation and also provides required additional disclosures about the method of accounting for stock-based employee compensation. The Company adopted the annual disclosure provision of SFAS No. 148 during the year ended August 31, 2003.  The Company chose to not adopt the voluntary change to the fair value based method of accounting for stock-based employee compensation, pursuant to SFAS No. 148.

The Company has adopted the disclosure-only provisions of SFAS No. 148, Accounting for Stock-Based Compensation.  Accordingly, no compensation cost has been recognized with respect to stock options.  Had compensation cost for stock options been determined based on the fair value methodology prescribed by SFAS 123, the Companys net loss and net loss per share would have been reduced to the pro forma amounts.

In December 2004, FASB issued SFAS No. 123 (revised 2004), Share-Based Payment, that focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  This statement replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.

Beginning with our quarterly period that begins September 1, 2006, we will be required to expense the fair value of employee stock options and similar awards.  As a public company, we are allowed to select from two alternative transition methods, each having different reporting implications.  The impact of SFAS No. 123R has not been determined at this time.

Forward-Looking Statements

This Quarterly Report on Form 10-QSB contains not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  In addition, the Company or others on the Companys behalf may make forward-looking statements from time to time in oral presentations, including telephone conferences, in press releases or reports, on the Companys Internet web site or otherwise.  Statements that are not historical are forward-looking and reflect expectations and assumptions.  The Company tries to identify forward-looking statements in this Report and elsewhere by using words such as may, will, should, expects, anticipates, contemplates, estimates, believes, plans, projected, predicts,
potential or continue or the negative of these or similar terms.

Forward-looking statements involve risks and uncertainties.  These uncertainties include factors that affect all businesses as well as matters specific to the Company.  The Company cautions readers not to place undue reliance on any forward-looking statement that speaks only as of the date made and to recognize that forward-looking statements are predictions of future results, which may not occur as anticipated.  Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the risks and uncertainties described below, as well as others that the Company may consider immaterial or does not anticipate at this time.  The following risks and uncertainties are not exclusive and further information concerning the Company and its business, including factors that potentially could materially affect its financial results or condition, may emerge from time to time.  The Company
assumes no obligation to update forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.  The Company advises you, however, to consult any further disclosures it may make on related subjects in its future quarterly reports on Form 10-QSB and current reports on Form 8-K it files with or furnishes to the Securities and Exchange Commission.

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In addition to the influences identified elsewhere in this Report, there are several important factors that could cause the Companys actual results to differ materially from those anticipated by the Company or which are reflected in any forward-looking statements of the Company.  Such factors, which may impact the success of the Companys operations and its ability to achieve its goals, include the following:

| | (1) | The Companys ability to   make investments in existing and future joint ventures to generate a positive   rate of return and demonstrate a pattern of growth consistent with past and   current performance;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                              
| | (2) | The Companys ability to   continue to enter into international markets in a timely fashion;                                                                                                                 
| |     |                                                                                                                                                                                                              
| | (3) | The Companys ability to   maintain gross margins at a level consistent with the technological advantages   of its proprietary products; and                                                                 
| |     |                                                                                                                                                                                                              
| | (4) | The Companys ability to   protect its intellectual property rights.                                                                                                                                         

ITEM 3  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms and that such information is accumulated and communicated to the Companys management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Companys management evaluated, with the participation of its Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of its disclosure controls and procedures as of the end of the period covered in this
Quarterly Report on Form 10-QSB.  Based on that evaluation, the Companys Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and procedures needed certain improvements.  The Company continues to evaluate methods to improve its disclosure controls and procedures and the Company intends to evaluate and remediate all weaknesses in its disclosure controls and procedures, as required by the rules promulgated under the Exchange Act and the Sarbanes-Oxley Act of 2002.  Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures did provide reasonable assurance of effectiveness as of the end of such period. The Company does not believe that these disclosure and internal control weaknesses resulted in any material misstatements in its consolidated financial statements contained in this Form 10-QSB.

Changes in Internal Controls

There was no change in the Companys internal control over financial reporting that occurred during the quarter ended February 28, 2005 that has materially affected, or is reasonably likely to materially affect the Companys internal control over financial reporting.

22



PART II - OTHER INFORMATION

ITEM 2.     UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

| | Recent   Sales of Unregistered Equity Securities                                                                                                             
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                              
| | During   the six months ended February 28, 2005, the Company did not issue any equity   securities that were not registered under the Securities Act of 1933.
| |                                                                                                                                                              
| | Small   Business Issuer Purchases of Equity Securities                                                                                                       
| |                                                                                                                                                              
| | The   Company did not purchase any shares of its common stock or other securities   during the six month period ended February 28, 2005.                     

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

| | The   Annual Meeting of Stockholders of the Company (Annual Meeting) was held on   January 28, 2005.  The election of   directors was voted on and approved by the Companys stockholders at the   Annual Meeting.  There were 3,581,982   shares of common stock entitled to vote at the meeting and a total of   3,245,228 shares or 90.6% were represented at the meeting.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The tabulation of votes is set forth as follows:

|             |  |  |         |  | FOR |           | WITHHELD | 
|------------ |  |  | ------- |  | --- | --------- | -------- | 
|             |  |  |         |  |     |           |          | 
|Kubik        |  |  | Donald  |  |     | 2,675,070 |          | 
|Lee          |  |  | Sunggyu |  |     | 3,220,005 |          | 
|Lynch        |  |  | Philip  |  |     | 2,662,285 |          | 
|Lynch        |  |  | Patrick |  |     | 2,674,795 |          | 
|Meng         |  |  | Tao     |  |     | 2,668,135 |          | 
|Narayan      |  |  | Ramani  |  |     | 3,226,640 |          | 
|Taylor       |  |  | Stephan |  |     | 2,674,770 |          | 
|Yakubovskaya |  |  | Tanya   |  |     | 2,668,135 |          | 
|Chenu        |  |  | Pierre  |  |     | 3,218,217 |          | 
|Mayers       |  |  | Mark    |  |     | 3,231,940 |          | 
|Stone        |  |  | Mark    |  |     | 3,232,440 |          | 

ITEM 5.          OTHER INFORMATION

| | None
| | ----

ITEM 6.          EXHIBITS

The following exhibits are being filed or furnished with this quarterly report on Form 10-QSB:

| | 31.1 | Certification of Chief Executive Officer Pursuant to   Section 302 of the Sarbanes-Oxley Act of 2002                                                 
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                      
| | 31.2 | Certification of Chief Financial Officer Pursuant to   Section 302 of the Sarbanes-Oxley Act of 2002                                                 
| |      |                                                                                                                                                      
| | 32.1 | Certification of Chief Executive Officer Pursuant to   18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the   Sarbanes-Oxley Act of 2002
| |      |                                                                                                                                                      
| | 32.2 | Certification of Chief Financial Officer Pursuant to   18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the   Sarbanes-Oxley Act of 2002

23



SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|                      | NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION                                                       
|--------------------- | ------------------------------------------------------------------------------------------------------
|                      |                                                                                                       
|                      | Message                                                                                               
|                      |                                                                                                       
|Date:  April 20, 2005 | Matthew C. Wolsfeld, CPA                                                                              
|                      | Chief Financial Officer                                                                               
|                      | (Principal Financial and Accounting Officer and Duly   Authorized to Sign on Behalf of the Registrant)

24



NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION

EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-QSB

FOR THE FISCAL QUARTER ENDED FEBRUARY 28, 2005

|Exhibit No. |  | Description                                                                                                                                           |  | Method of Filing
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------
|            |  |                                                                                                                                                       |  |                 
|31.1        |  | Certification of Chief   Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                  |  | Filed   herewith
|            |  |                                                                                                                                                       |  |                 
|31.2        |  | Certification of Chief   Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                  |  | Filed   herewith
|            |  |                                                                                                                                                       |  |                 
|32.1        |  | Certification of Chief   Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to   Section 906 of the Sarbanes-Oxley Act of 2002 |  | Filed   herewith
|            |  |                                                                                                                                                       |  |                 
|32.2        |  | Certification of Chief   Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to   Section 906 of the Sarbanes-Oxley Act of 2002 |  | Filed   herewith

25