15.

COMMITMENTS AND CONTINGENCIES

August 31, 2018,

the Compensation Committee of the Board of Directors of the Company approved the material terms of an annual bonus plan for the Company’s executive officers as well as certain officers and employees for the fiscal year ending

August 31, 2019.

For fiscal

2019

as in past years, the total amount available under the bonus plan for all plan participants, including executive officers, is dependent upon the Company’s earnings before interest, taxes and other income, as adjusted to take into account amounts to be paid under the bonus plan and certain other adjustments (Adjusted EBITOI). Each plan participant’s percentage of the overall bonus pool is based upon the number of plan participants, the individual’s annual base salary and the individual’s position and level of responsibility within the company. In the case of each of the Company’s executive officer participants,

75%

of the amount of their individual bonus payout will be determined based upon the Company’s actual EBITOI for fiscal

2019

compared to a pre-established target EBITOI for fiscal

2019

and

25%

of the payout will be determined based upon such executive officer’s achievement of certain pre-established individual performance objectives. The payment of bonuses under the plan are discretionary and

may

be paid to executive officer participants in both cash and shares of NTIC common stock, the exact amount and percentages will be determined by the Company’s Board of Directors, upon recommendation of the Compensation Committee, after the completion of the Company’s consolidated financial statements for fiscal

2019.

August 26, 2017,

August 31, 2018.

Accrued bonuses as of

August 31, 2018

and

2017

were

$2,153,000

and

$1,015,000,

respectively.

Three joint ventures (consisting of the Company’s joint ventures in South Korea, Thailand and India) accounted for

74.1%

of the Company’s trade joint venture receivables as of

August 31, 2018,

and

three

joint ventures (consisting of the Company’s joint ventures in South Korea, India and Thailand) accounted for

60.7%

of the Company’s trade joint venture receivables as of

August 31, 2017.

March 23, 2015,

NTIC and NTI Asean LLC, a majority-owned subsidiary of NTIC, filed a lawsuit in Tianjin

Intermediate People’s Court against

two

individuals, Tao Meng and Xu Hui, related to breaches of duties and contractual commitments owed to NTI Asean under certain agreements related to NTIC’s former joint venture in China, Tianjin Zerust Anti-Corrosion Technologies Ltd. The lawsuit alleges, among other things, that Mr. Tao Meng and Xu Hui have engaged in self-dealing, usurped business opportunities, and received economic benefits that were required to go to Tianjin Zerust. At this point it is too early in the lawsuit to reasonably estimate the amount of any recovery to NTI Asean.

From time to time, the Company is subject to various other claims and legal actions in the ordinary course of its business. The Company records a liability in its consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, where the Company has assessed that a loss is probable and an amount could be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when

amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is

not

probable or the amount is

not

estimable, or both, if there is a reasonable possibility that material loss

may

be have been incurred. In the opinion of management, as of

August 31, 2018,

the amount of liability, if any, with respect to these matters, individually or in the aggregate, will

not

materially affect the Company’s consolidated results of operations, financial position or cash flows.

The Company has leases for office and warehouse space in the United States of America, China, India, Germany and Brazil with monthly rents ranging from

$576

$9,729,

which expire at various dates through

August 31, 2022.

Future minimum rents due under these leases are as follows for each of the next

five

years ended

August 31:

Fiscal 2019	$	131,840
Fiscal 2020		66,762
Fiscal 2021		12,404
Fiscal 2022		3,454
	$	214,460