|SECURITIES
AND
EXCHANGE COMMISSIONWashington,
D.C. 20549


FORM 10-QSB


Quarterly Report
Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------

|For the Quarterly Period Ended:November 30, 2001 |  | Commission File Number1-11038
|------------------------------------------------ |  | -----------------------------

|NORTHERN
TECHNOLOGIES INTERNATIONAL CORPORATION(Exact name of
registrant as specified in its charter)
|-----------------------------------------------------------------------------------------------------

|Delaware(State of Incorporation) |  | 41-0857886
(I.R.S. Employer Identification Number)
|-------------------------------- |  | --------------------------------------------------

|6680 N. Highway 49,
Lino Lakes, MN 55014 (Address of principal executive offices)


(651) 784-1250
(Registrants telephone number)



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

| | YES            X |  | NO | 
| | ---------------- |  | -- | 
| |                  |  |    | 

|Indicate the number of
shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
|-----------------------------------------------------------------------------------------------------------------------------

|Class |  | Outstanding
as of December 31, 2001
|----- |  | -----------------------------------
|      |  |                                    

|Common Stock, $.02 par value |  | 3,669,551
|---------------------------- |  | ---------

| |  | This
document consists of 11 pages. No exhibits are being filed.
| |  | ------------------------------------------------------------------

|PART I  FINANCIAL INFORMATION


ITEM 1  FINANCIAL STATEMENTS


NORTHERN
TECHNOLOGIES INTERNATIONAL CORPORATIONAND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS
(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                       | November 30,2001 | August 31,2001
|---------------------------------------------------------------------- | ---------------- | --------------
|ASSETS                                                                 |                  |               
|                                                                       |                  |               
|CURRENT ASSETS:                                                        |                  |               
|Cash and cash equivalents                                              |                  | $   3,135,811 
|Receivables:                                                           |                 
|Trade excluding international corporate joint ventures, less allowance |                 
|for doubtful accounts of $25,000 and $30,000, respectively             |                  | 920,727       
|Trade international corporate joint ventures                           |                  | 196,066       
|Technical and other services international corporate joint ventures    |                  | 569,160       
|Income taxes                                                           |                  |              
|Inventories                                                            |                  | 929,942       
|Prepaid expenses and other                                             |                  | 220,804       
|Advance to related party                                               |                  | 200,000       
|Deferred income taxes                                                  |                  | 80,000        
|                                                                       |                  |               
|Total current assets                                                   |                  | 6,252,510     
|                                                                       |                 
|PROPERTY AND EQUIPMENT, net                                            |                  | 1,030,832     
|                                                                       |                 
|OTHER ASSETS:                                                          |                 
|Investments in international corporate joint ventures                  |                  | 4,011,779     
|Investment in European holding company                                 |                  | 28,424        
|Deferred income taxes                                                  |                  | 380,000       
|Other                                                                  |                  | 909,603       
|                                                                       |                  |               
|                                                                       |                  | 5,329,806     
|                                                                       |                  |               
|                                                                       |                  | $ 12,613,148  
|                                                                       |                  |               
|LIABILITIES AND STOCKHOLDERS EQUITY                                   |                 
|                                                                       |                 
|CURRENT LIABILITIES:                                                   |                 
|Accounts payable                                                       |                  | $      129,309
|Income taxes payable                                                   |                  | 29,930        
|Accrued liabilities:                                                   |                 
|Payroll and related benefits                                           |                  | 51,903        
|Other                                                                  |                  | 221,517       
|                                                                       |                  |               
|Total current liabilities                                              |                  | 432,659       
|                                                                       |                 
|DEFERRED GROSS PROFIT                                                  |                  | 25,000        
|                                                                       |                 
|STOCKHOLDERS EQUITY:                                                  |                 
|Preferred stock, no par value, authorized 10,000 shares, none issued   |                 
|Common stock, $.02 par value per share; authorized 10,000,000 shares;  |                 
|issued and outstanding 3,669,551 and 3,689,551, respectively           |                  | 73,391        
|Additional paid-in capital                                             |                  | 4,278,682     
|Retained earnings                                                      |                  | 8,627,828     
|Accumulated other comprehensive loss (See Note 7)                      |                  | (824,412      
|                                                                       |                  |               
|Total stockholders equity                                             |                  | 12,155,489    
|                                                                       |                  |               
|                                                                       |                  | $ 12,613,148  
|                                                                       |                  |               

|See notes to financial
statements.




2
|----------------------------------------

|NORTHERN
TECHNOLOGIES INTERNATIONAL CORPORATIONAND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)THREE MONTHS ENDED NOVEMBER 30,
2001 AND 2000
|------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                       | 2001 | 2000            
|---------------------------------------------------------------------- | ---- | ----------------
|                                                                       |      |                 
|SALES ORIGINATING IN NORTH AMERICA                                     |      | $ 2,099,189     
|                                                                       |     
|COST OF GOODS SOLD                                                     |      | 910,722         
|                                                                       |      |                 
|                                                                       |     
|GROSS PROFIT                                                           |      | 1,188,467       
|                                                                       |     
|OPERATING EXPENSES:                                                    |     
|Selling                                                                |      | 269,276         
|General and administrative                                             |      | 552,961         
|Research, engineering, and technical support                           |      | 190,096         
|                                                                       |      |                 
|                                                                       |      | 1,012,333       
|                                                                       |      |                 
|                                                                       |     
|OPERATING INCOME                                                       |      | 176,134         
|                                                                       |     
|INTERNATIONAL CORPORATE JOINT VENTURES AND                             |     
|EUROPEAN HOLDING COMPANY:                                              |     
|Equity in income of international corporate joint ventures and         |     
|European holding company                                               |      | 185,051         
|Fees for technical support and other service provided to               |     
|international corporate joint ventures                                 |      | 569,360         
|Expenses incurred in support of international corporate joint ventures |      | (295,858        
|                                                                       |      |                 
|                                                                       |      | 458,553         
|                                                                       |     
|INTEREST INCOME                                                        |      | 22,875          
|                                                                       |      |                 
|                                                                       |     
|INCOME BEFORE INCOME TAXES                                             |      | 657,562         
|                                                                       |     
|INCOME TAXES                                                           |      | 170,000         
|                                                                       |      |                 
|                                                                       |     
|NET INCOME                                                             |      | $    487,562    
|                                                                       |      |                 
|                                                                       |     
|NET INCOME PER SHARE:                                                  |     
|Basic                                                                  |      | $            .13
|                                                                       |      |                 
|Diluted                                                                |      | $            .13
|                                                                       |      |                 
|                                                                       |     
|WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:                            |     
|Basic                                                                  |      | 3,670,870       
|                                                                       |      |                 
|Diluted                                                                |      | 3,670,870       
|                                                                       |      |                 

|See notes to financial
statements.



3
|---------------------------------------

|NORTHERN
TECHNOLOGIES INTERNATIONAL CORPORATIONAND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) THREE MONTHS ENDED NOVEMBER 30, 2001
AND 2000
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                      | 2001 | 2000        
|--------------------------------------------------------------------- | ---- | ------------
|                                                                      |     
|CASH FLOWS FROM OPERATING ACTIVITIES:                                 |      |             
|Net income                                                            |      | $    487,562
|Adjustments to reconcile net income to net cash (used in) provided by |     
|operating activities:                                                 |     
|Depreciation                                                          |      | 52,354      
|Equity in income of international corporate joint ventures and        |     
|European holding company                                              |      | (185,051    
|Dividends received from international corporate joint ventures        |      |            
|Change in current assets and liabilities:                             |     
|Receivables:                                                          |     
|Trade                                                                 |      | (56,408     
|International corporate joint ventures                                |      | (2,557      
|Technical fee                                                         |      | 60,656      
|Income tax receivable                                                 |      | 86,533      
|Inventories                                                           |      | (16,031     
|Prepaid expenses and other                                            |      | (368,183    
|Accounts payable                                                      |      | (110,800    
|Income taxes payable                                                  |      | 29,930      
|Accrued liabilities                                                   |      | (4,253      
|                                                                      |      |             
|Total adjustments                                                     |      | (513,810    
|                                                                      |      |             
|Net cash (used in) provided by operating activities                   |      | (26,248     
|                                                                      |     
|CASH FLOWS FROM INVESTING ACTIVITIES:                                 |     
|Investment in international corporate joint ventures                  |      |            
|Additions to property                                                 |      | (16,048     
|Partial return of original investment in European holding company     |      | 181,324     
|Increase in other assets                                              |      | (141,500    
|                                                                      |      |             
|Net cash provided by (used in) investing activities                   |      | 23,776      
|                                                                      |     
|CASH FLOWS FROM FINANCING ACTIVITIES:                                 |     
|Repurchase of common stock                                            |      | (100,000    
|Issuance of common stock                                              |      |            
|                                                                      |      |             
|Net cash used in financing activities                                 |      | (100,000    
|                                                                      |      |             
|                                                                      |     
|NET DECREASE IN CASH AND CASH EQUIVALENTS                             |      | (102,472    
|                                                                      |     
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      |      | 3,238,283   
|                                                                      |      |             
|                                                                      |     
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                            |      | $ 3,135,811 
|                                                                      |      |             

|See notes to financial
statements.



4
|---------------------------------------

|NORTHERN
TECHNOLOGIES INTERNATIONAL CORPORATIONAND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (Unaudited)THREE MONTHS ENDED NOVEMBER 30, 2001
AND 2000
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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, to present
fairly the consolidated financial position of Northern Technologies International
Corporation and Subsidiaries as of November 30, 2001 and the results of their operations
and their cash flows for the three months ended November 30, 2001 and 2000, in conformity
with generally accepted accounting principles.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | These
financial statements should be read in conjunction with the financial statements and
related notes as of and for the year ended August 31, 2001 contained in the Companys
filing on Form 10-KSB dated November 29, 2001 and with Managements Discussion and
Analysis of Financial Condition and Results of Operations appearing on pages 7 through 9
of this quarterly report.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. |  | RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
|-- |  | -----------------------------------------

| | In
July 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets (the Statements).
The Company does not currently have any goodwill or intangible assets
relating to business acquisitions.  Therefore, the adoption of the Statements does
not impact the Companys financial statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
August 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement Obligations.
SFAS No. 143 requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred. When the liability is
initially recorded, the entity capitalizes a cost by increasing the carrying amount of
the related long-lived asset. Over time, the liability is accreted to its fair value
each period, and the capitalized cost is depreciated over the useful life of the related
asset. Upon settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. SFAS No. 143 is effective for
fiscal years beginning after June 15, 2002. The Company expects to adopt SFAS No. 143 in
fiscal year 2003. The Company has not yet determined the impact of SFAS No. 143 on its
financial position and results of operations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In September 2001, the FASB
also issued SFAS No. 144, Accounting for the Impairment or Disposal of
Long-lived Assets. SFAS No. 144 replaces SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposal Of.
The FASB issued SFAS No. 144 to establish a single accounting model, based on
the framework established in SFAS No. 121, as SFAS No. 121 did not
address the accounting for a segment of a business accounted for as a
discontinued operation under Accounting Principle Board Opinion No. 30,
Reporting the Results of OperationsReporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequent Occurring
Events and Transactions. SFAS No. 144 also resolves significant
implementation issues related to SFAS No. 121. The provisions of SFAS
No. 144 are effective for financial statements issued for fiscal years
beginning after December 15, 2001 and, generally, are to be applied
prospectively. The Company expects to adopt SFAS No. 144 in fiscal year
2003. The Company has not yet determined the impact of SFAS No. 144 on its
financial postion and results of operations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5
|-

|
|

|3. |  | INVENTORIES
|-- |  | -----------

| | Inventories
consist of the following:
| | -------------------------------------

| | November 30,2001     | August 31,2001
| | -------------------- | --------------
| |                      |               
| | Production materials |               
| | Work in process      |               
| | Finished goods       |               
| |                      |               
| |                      |               
| |                      |               

|4. |  | PROPERTY
AND EQUIPMENT
|-- |  | ----------------------

| | Property
and equipment consist of the following:
| | ------------------------------------------------

| | November 30,2001              | August 31,2001
| | ----------------------------- | --------------
| |                               |               
| | Land                          |               
| | Buildings and improvements    |               
| | Machinery and equipment       |               
| |                               |               
| |                               |               
| | Less accumulated depreciation |               
| |                               |               
| |                               |               
| |                               |               

|5. |  | STOCKHOLDERS EQUITY
|-- |  | --------------------

| | During
the three months ended November 30, 2001, the Company purchased and retired 20,000 shares
of common stock for $100,000.
| | ------------------------------------------------------------------------------------------------------------------------------

|6. |  | COMPREHENSIVE
INCOME
|-- |  | --------------------

| | The
Companys total comprehensive incomes were as follows:
| | ----------------------------------------------------------

| | Three Months EndedNovember 30                                     
| | ------------------------------------------------------------------
|
| |                                                                   
| | Net income                                                        
| | Other comprehensive loss  foreign currency translation adjustment
| |                                                                   
| | Total comprehensive income                                        
| |                                                                   

|7. |  | INCOME
PER SHARE
|-- |  | ----------------

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

|6
|-

|ITEM 2  MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION


RESULTS OF OPERATIONS


General  The Company conducts all
foreign transactions based on the U.S. dollar, except for its investments in foreign
joint ventures and foreign company. The exchange rate differential relating to
investments in foreign joint ventures and foreign company is accounted for under the
requirements of SFAS No. 52.


Sales Originating in North America 
Net sales originating in North America decreased by $406,518 or 16% during the first
quarter of fiscal 2002 as compared to the first quarter of fiscal 2001. These changes in
sales are due to a decrease in demand for materials-science-based industrial packaging
products. The decrease was due to the slow down in the industrial sector that the Company
serves.


Cost of Goods Sold  Cost of goods
sold decreased as a percentage of sales to 43% in the first quarter of fiscal 2002 from
52% in the first quarter of fiscal 2001. The variation in the cost of sales percentage is
attributable to the decrease in the market price for certain raw materials.


Operating Expenses  As a percentage
of net sales, total operating expenses were 48% in the first quarter of fiscal 2002 and
44% in the first quarter of fiscal 2001.


Operating expense classification
percentages of sales were as follows:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Three Months EndedNovember 30               
| | --------------------------------------------
|
| |                                             
| | Selling                                     
| | General and administrative                  
| | Research, engineering, and technical support

|Selling expenses decreased
$165,370 during the three months ended November 30, 2001 as compared to the same
period in fiscal 2001 due primarily to decreases in sales driven expenses,
mainly travel. Selling expense as a percentage of net sales decrease as there
was an increased emphasis placed on decreasing travel expenditures in the
period.


General and administrative
expenses increased $40,615 during the first quarter of fiscal 2002 as
compared to the same period in fiscal 2001 due primarily to increases in general
insurance, legal and consulting expenses, and additional employees. General and
administrative expenses as a percentage of net sales increased for the
three months ended November 30, 2001, as compared to the same periods in
2001, due to the decrease in sales in the first quarter of fiscal 2002
compared to the same period in fiscal 2001, coupled with relatively fixed
general and administrative expenses during the same period.


Research, engineering, and
technical support expenses increased $33,248 during the first quarter of
fiscal 2002 as compared to the same period in fiscal 2001 due
primarily to a increase in independent consulting services for product
development and salary expense associated with an additional employee in the
area. Research, engineering, and technical support expenses as a percentage of
net sales increased for the three months ended November 30, 2001 compared to the
same periods in fiscal 2001 due to the decreases in sales in fiscal 2002
coupled with an increase in fiscal 2002 research, engineering, and
technical support expenses.


7
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|International Corporate
Joint Ventures and European Holding Company Net earnings from
international corporate joint ventures and European holding company were
$458,553 for the three months ended November 30, 2001, compared to $508,071 for
the three months ended November 30, 2000. The net decrease for the three months
ended November 30, 2001 compared to the same periods in fiscal 2001 is due
primarily to lower expenses incurred by certain of the Companys
international corporate joint ventures and an increase in expenses incurred in
support of international corporate joint ventures.


Income Taxes 
Income tax expense for the three months ended November 30, 2001 and 2000 was
calculated based on managements estimate of the Companys annual
effective income tax rate. The Companys effective income tax rate for
fiscal 2001 and 2000 is lower than the statutory rate primarily due to the
Companys equity in income of international corporate joint ventures and
European holding company being recognized based on after-tax earnings of these
entities. To the extent joint ventures undistributed earnings are
distributed to the Company, it does not result in any material additional income
tax liability after the application of foreign tax credits.


LIQUIDITY AND CAPITAL RESOURCES


At November 30, 2001, the
Companys working capital was $5,819,851, including $3,135,811 in cash and
cash equivalents, compared to working capital of $5,579,475 including $3,238,283
in cash and cash equivalents as of August 31, 2001.


Net cash provided from
operations has been sufficient to meet liquidity requirements, capital
expenditures, research and development cost, and expansion of operations of the
Companys international joint ventures. Cash flows (used in) provided by
operations for the three months ended November 30, 2001 and 2000 was ($26,248)
and $51,823, respectively. The net cash used in operations for the three months
ended November 30, 2001 resulted principally from net income and depreciation,
offset by equity income of international corporate joint ventures and European
holding company, and increases in prepaid expenses and other. The net cash provided by
in operations for the three months ended November 30, 2000 was principally
from net income and dividends received from international corporate joint
ventures offset by equity in income of international corporate joint ventures
and European holding company and decreases in current liabilities.


Net cash provided by
investing activities for the three months ended November 30, 2001 was $23,776,
which resulted from a partial return of the Companys original investment
in European holding company partially offset by an increase in other assets and
additions to property and equipment. Net cash used in investing activities for
the three months ended November 30, 2000 was $274,011, which resulted from
investments in international corporate joint ventures and additions to property.


Net cash used in financing
activities for the three months ended November 30, 2001 was $100,000, which
resulted from the repurchase of common stock. Net cash used in financing
activities for the three months ended November 30, 2000 was $52,826, which
resulted from the repurchase of common stock of $72,825 offset by proceeds from
the exercise of stock options of $19,999.


The Company expects to meet
future liquidity requirements with its existing cash and cash equivalents and
from cash flows of future operating earnings and distributions of earnings and
technical assistance fees from the international corporate joint venture
investments.


The Company has no
long-term debt and no material capital lease commitments at November 30, 2001;
however, the Companys subsidiary has entered into a 15-year lease
agreement for 16,826 square feet of office, manufacturing, laboratory, and
warehouse space requiring monthly payments of $16,434, which can be adjusted
annually according to the annual consumer price index through November 2014.


8
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The Company has no
postretirement benefit plan and does not anticipate establishing any
postretirement benefit program.


Euro Currency Issue


On January 1, 1999, twelve
of the fifteen member countries of the European Union established fixed
conversion rates between their respective existing currencies and the Euro and
elected to adopt the Euro as their common legal currency on that date (the
Euro Conversion). Following the Euro Conversion, however, the
previously existing currencies of the participating countries will remain legal
tender in the participating countries through January 2002. During the
transition period, public and private parties have been paying for goods and
services using both the Euro and the previously existing currencies. The
participating countries were issued new Euro-denominated bills and coins for use
in cash transactions. No later than July 1, 2002, the participating countries
will withdraw all bills and coins denominated in the previously existing
currencies making Euro Conversion complete. The Euro Conversion has not impacted
on the overall business operations of the Company or its international corporate
joint ventures.


Recently Issued Accounting
Pronouncements


In July 2001, the Financial
Accounting Standards Board (FASB) issued SFAS No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets (the
Statements). The Company does not currently have any goodwill or intangible assets
relating to business acquisitions.  Therefore, the adoption of the Statements does
not impact the Companys financial statements.


In August 2001, the FASB
issued SFAS No. 143, Accounting for Asset Retirement Obligations. SFAS
No. 143 requires entities to record the fair value of a liability for an
asset retirement obligation in the period in which it is incurred. When the
liability is initially recorded, the entity capitalizes a cost by increasing the
carrying amount of the related long-lived asset. Over time, the liability is
accreted to its fair value each period, and the capitalized cost is
depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss upon settlement. SFAS No. 143 is effective for fiscal
years beginning after June 15, 2002. The Company expects to adopt SFAS
No. 143 in fiscal year 2003. The Company has not yet determined the impact
of SFAS No. 143 on its financial position and results of operations.


In September 2001, the FASB
also issued SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. SFAS No. 144 replaces SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposal Of.
The FASB issued SFAS No. 144 to establish a single accounting model, based on
the framework established in SFAS No. 121, as SFAS No. 121 did not
address the accounting for a segment of a business accounted for as a
discontinued operation under Accounting Principle Board Opinion No. 30,
Reporting the Results of OperationsReporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequent Occurring
Events and Transactions. SFAS No. 144 also resolves significant
implementation issues related to SFAS No. 121. The provisions of SFAS
No. 144 are effective for financial statements issued for fiscal years
beginning after December 15, 2001 and, generally, are to be applied
prospectively. The Company expects to adopt SFAS No. 144 in fiscal year
2003. The Company has not yet determined the impact of SFAS No. 144 on its
financial postion and results of operations.


9
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART II  OTHER INFORMATION


ITEM 1  LEGAL PROCEEDINGS


None


ITEM 2  CHANGES IN SECURITIES


None


ITEM 3  DEFAULTS UPON SENIOR
SECURITIES


None


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


None


ITEM 5  OTHER INFORMATION


None


ITEM 6  EXHIBITS AND REPORTS ON
FORM 8-K


None



10
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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
| |  | -----------------------------------------------

|January
11, 2002 |  | /s/ Matthew C. Wolsfeld, CPAMatthew C. Wolsfeld, CPAChief Financial Officer
|---------------- |  | ---------------------------------------------------------------------------

|11
|--