Note 11 - Stock-based Compensation

9 Months Ended

May 31, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

11. STOCK-BASED COMPENSATION

Stock Options

A summary of stock option activities under the Northern Technologies International Corporation 2024 Stock Incentive Plan (2024 Plan), the Northern Technologies International Corporation Amended and Restated 2019 Stock Incentive Plan and the Northern Technologies International Corporation Amended and Restated 2007 Stock Incentive Plan during the nine months ended May 31, 2024 and 2025 is as follows:

	Number of Options Outstanding			Weighted Average Exercise Price
Outstanding as of August 31, 2023		1,557,131		$	11.08
Granted		269,845			13.25
Exercised		(21,301	)		9.04
Cancelled		—			—
Outstanding as of May 31, 2024		1,805,675			11.43
Exercisable as of May 31, 2024		1,350,643		$	10.88

	Number of Options Outstanding		Weighted Average Exercise Price
Outstanding as of August 31, 2024		1,752,665	$	11.47
Granted		245,190		13.26
Exercised		—		—
Cancelled		—		—
Outstanding as of May 31, 2025		1,997,855		11.69
Exercisable as of May 31, 2025		1,550,993	$	11.32

The weighted average per share fair value of options granted during the nine months ended May 31, 2025 and 2024 was $4.95 and $4.88, respectively. The weighted average remaining contractual life of the options outstanding as of May 31, 2025 and 2024 was 5.77 years and 6.11 years, respectively.

The Company recognized stock option compensation expense of $304,510 and $907,330 and $343,148 and $1,038,022 during the three and nine months ended May 31, 2025 and 2024, respectively. As of May 31, 2025, there was $1,314,487 of unrecognized stock option compensation expense. The amount is expected to be recognized over a period of 2.25 years.

Restricted Stock Units

Restricted stock units were granted under the 2024 Plan on September 1, 2024 to certain non-employee directors during the nine months ended May 31, 2025 and vest in full on the one-year anniversary of the date of grant. There were no restricted stock units granted or outstanding during the prior fiscal year period. A summary of restricted stock unit activity for the nine months ended May 31, 2025 is as follows:

	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding as of August 31, 2024		—	$	—
Granted		11,313		13.14
Vested/Settled		—		—
Outstanding as of May 31, 2025		11,313	$	13.14

Restricted stock units are valued using the closing stock price on the grant date. The Company recognizes the grant date fair value of the restricted stock units over the vesting term, or one year. For the three and nine months ended May 31, 2025, the Company recognized $37,366 and $110,880 in stock-based compensation expense, respectively. As of May 31, 2025, there is an unrecognized stock-based compensation expense of $37,772, which is expected to be recognized over 0.25 years.