10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended August 31, 2022
or
☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from ______ to ______

Commission File No. 000-05131

ART’S-WAY MANUFACTURING CO., INC.

(Exact name of registrant as specified in its charter)

Delaware	42-0920725
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5556 Highway 9

Armstrong, Iowa 50514

(Address of principal executive offices) (Zip Code)

(712) 864-3131

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock $.01 par value	ARTW	The Nasdaq Stock Market LLC

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 ☒  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).         Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.        ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes ☐  No ☒

Number of common shares outstanding as of October 5, 2022: 4,880,097

Art’s-Way Manufacturing Co., Inc.

Index

Page No.

PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets August 31, 2022 and November 30, 2021	1
	Condensed Consolidated Statements of Operations Three-month and Nine-month periods ended August 31, 2022 and August 31, 2021	2
	Condensed Consolidated Statements of Stockholders’ Equity Nine-month periods ended August 31, 2022 and August 31, 2021	3
	Condensed Consolidated Statements of Cash Flows Nine-month periods ended August 31, 2022 and August 31, 2021	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II – OTHER INFORMATION		24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
	SIGNATURES	26

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ART’S-WAY MANUFACTURING CO., INC.

Consolidated Balance Sheets

(Unaudited)

	August 31, 2022			November 30, 2021
Assets
Current assets:
Cash	$	4,144		$	2,658
Accounts receivable-customers, net of allowance for doubtful accounts of $34,504 and $38,188 at August 31, 2022 and November 30, 2021, respectively		3,820,163			2,663,030
Inventories, net		10,499,593			9,210,103
Cost and profit in excess of billings		194,402			177,284
Other current assets		430,314			121,170
Total current assets		14,948,616			12,174,245
Property, plant, and equipment, net		5,945,060			5,237,328
Assets held for lease, net		532,967			521,555
Deferred income taxes		2,622,606			2,621,886
Other assets		671,824			299,034
Total assets	$	24,721,073		$	20,854,048
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,535,099		$	1,737,091
Customer deposits		1,300,973			278,509
Billings in excess of cost and profit		302,676			280,761
Income taxes payable		5,500			5,500
Accrued expenses		1,271,428			1,162,373
Line of credit		4,559,000			4,074,530
Current portion of finance lease liabilities		169,023			48,591
Current portion of long-term debt		114,407			99,462
Total current liabilities		10,258,106			7,686,817
Long-term liabilities
Long-term portion of finance lease liabilities		645,499			142,386
Long-term portion of operating lease liabilities		26,578			34,931
Long-term debt, excluding current portion		2,909,198			2,635,467
Total liabilities		13,839,381			10,499,601
Commitments and Contingencies (Notes 8, 9, 10 and 13)
Stockholders’ equity:
Undesignated preferred stock - $0.01 par value. Authorized 500,000 shares at August 31, 2022 and November 30, 2021; issued and outstanding 0 shares at August 31, 2022 and November 30, 2021		-			-
Common stock – $0.01 par value. Authorized 9,500,000 shares at August 31, 2022 and November 30, 2021; issued 4,944,671 at August 31, 2022 and 4,583,504 in November 30, 2021		49,447			45,835
Additional paid-in capital		4,370,311			3,760,649
Retained earnings		6,662,890			6,656,487
Treasury stock, at cost (64,574 shares at August 31, 2022 and 44,532 shares at November 30, 2021)		(200,956	)		(108,524	)
Total stockholders’ equity		10,881,692			10,354,447
Total liabilities and stockholders’ equity	$	24,721,073		$	20,854,048

See accompanying  notes to consolidated financial statements.

1

ART’S-WAY MANUFACTURING CO., INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended						Nine Months Ended
	August 31, 2022			August 31, 2021			August 31, 2022			August 31, 2021
Sales	$	8,140,253		$	6,591,829		$	21,028,673		$	17,702,628
Cost of goods sold		6,099,772			4,853,408			15,603,127			13,199,471
Gross profit		2,040,481			1,738,421			5,425,546			4,503,157
Expenses:
Engineering		168,098			143,629			446,112			387,147
Selling		476,812			532,232			1,594,740			1,549,164
General and administrative		964,764			902,356			3,069,907			2,626,383
Total expenses		1,609,674			1,578,217			5,110,759			4,562,694
Income (Loss) from operations		430,807			160,204			314,787			(59,537	)
Other income (expense):
Interest expense		(132,721	)		(90,440	)		(306,817	)		(223,911	)
Other		3,213			2,041			207			36,682
Total other income (expense)		(129,508	)		(88,399	)		(306,610	)		(187,229	)
Income (Loss) before income taxes		301,299			71,805			8,177			(246,766	)
Income tax expense (benefit)		63,524			15,349			1,774			(52,074	)
Net Income (Loss)		237,775			56,456			6,403			(194,692	)

See accompanying notes to condensed consolidated financial statements.

2

ART’S-WAY MANUFACTURING CO., INC.

Consolidated Statements of Stockholders' Equity

Nine Months Ended August 31, 2022 and August 31, 2021

(Unaudited)

	Common Stock				Additional					Treasury Stock
	Number of				paid-in		Retained			Number of
	shares		Par value		capital		earnings			shares		Amount			Total
Balance, November 30, 2020		4,470,004	$	44,700	$	3,496,243	$	6,443,856			35,097	$	(78,054	)	$	9,906,745
Stock based compensation		108,500		1,085		202,160		-			9,435		(30,471	)		172,774
Net (loss)		-		-		-		(194,692	)		-		-			(194,692	)
Balance, August 31, 2021		4,578,504		45,785		3,698,403		6,249,164			44,532		(108,525	)		9,884,827
	Common Stock				Additional					Treasury Stock
	Number of				paid-in		Retained			Number of
	shares		Par value		capital		earnings			shares		Amount			Total
Balance, November 30, 2021		4,583,504	$	45,835	$	3,760,649	$	6,656,487			44,532	$	(108,524	)	$	10,354,447
Stock based compensation		106,167		1,062		223,229		-			20,042		(92,432	)		131,859
Common stock purchase agreement		255,000		2,550		386,433										388,983
Net Income		-		-		-		6,403			-		-			6,402
Balance, August 31, 2022		4,944,671		49,447		4,370,311		6,662,890			64,574		(200,956	)		10,881,692

See accompanying notes to condensed consolidated financial statements.

3

ART’S-WAY MANUFACTURING CO., INC.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended
	August 31, 2022			August 31, 2021
Cash flows from operations:
Net income (loss)	$	6,403		$	(194,692	)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Stock based compensation		224,291			203,245
Decrease in obsolete inventory reserves		(210,397	)		(485,073	)
(Gain) Loss on disposal of property, plant, and equipment		3,971			(7,998	)
Depreciation and amortization expense		546,642			453,697
Accrued interest on deferred debt payments		12,774			12,720
Decrease in allowance for doubtful accounts		(3,684	)		(10,593	)
Deferred income taxes		(720	)		(58,843	)
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		(1,153,449	)		(554,351	)
Inventories		(1,079,093	)		(1,041,390	)
Net investment in sales-type leases		-			28,352
Other assets		(82,165	)		(213,955	)
Increase (decrease) in:
Accounts payable		798,008			228,455
Contracts in progress, net		4,797			(58,695	)
Customer deposits		1,022,464			506,107
Income taxes payable		-			3,900
Accrued expenses		107,822			(58,634	)
Net cash provided by (used in) operating activities		197,663			(1,247,748	)
Cash flows from investing activities:
Purchases of property, plant, and equipment		(1,187,793	)		(487,515	)
Net proceeds from sale of assets		9,300			8,000
Net cash used in investing activities		(1,178,493	)		(479,515	)
Cash flows from financing activities:
Net borrowings in line of credit		484,470			1,930,500
Principal payments on finance lease obligations		(74,608	)		-
Proceeds from term debt		350,000			-
Repayment of term debt		(74,098	)		(67,444	)
Proceeds from common stock purchase agreement		431,408			-
Cost of equity issuance		(42,425	)		-
Repurchases of common stock		(92,432	)		(30,471	)
Net cash provided by financing activities		982,316			1,832,585
Net increase in cash		1,486			105,322
Cash at beginning of period		2,658			2,684
Cash at end of period	$	4,144		$	108,006
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	277,488		$	190,764
Income taxes		800			2,869
Supplemental disclosures of non-cash operating activities:
Right-of-use (ROU) assets acquired (included in other assets)	$	698,153		$	-
Less: Cash proceeds received under Manufacturing 4.0 grant applied to ROU Assets - Note 13		(224,513	)		-
Total (ROU) assets acquired (included in other assets)	$	473,640		$	-
Supplemental disclosures of non-cash financing activities:
Market value of commitment shares issued under purchase agreement	$	160,000		$	-

See accompanying  notes to consolidated financial statements.

4

Notes to Unaudited Condensed Consolidated Financial Statements

1) Description of the Company

Unless otherwise specified, as used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Art’s-Way,” and the “Company” refer to Art’s-Way Manufacturing Co., Inc., a Delaware corporation headquartered in Armstrong, Iowa, and its wholly-owned subsidiaries.

The Company began operations as a farm equipment manufacturer in 1956. Since that time, it has become a major worldwide manufacturer of agricultural equipment. Its principal manufacturing plant is located in Armstrong, Iowa.

The Company has organized its business into three operating segments. Management separately evaluates the financial results of each segment because each is a strategic business unit offering different products and requiring different technology and marketing strategies. The Agricultural Products segment manufactures and sells farm equipment and related replacement parts under the Art’s-Way Manufacturing label and private labels. The Modular Buildings segment manufactures and installs modular buildings for animal containment and various laboratory uses, and the Tools segment manufactures steel cutting tools and inserts.

2) Summary of Significant Accounting Policies

Statement Presentation

The foregoing condensed consolidated financial statements of the Company are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and operating results for the interim periods. The financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. The results of operations for the three and nine months ended August 31, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2022.

Estimates

The preparation of 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 and the reported amounts of revenue and expenses during the three months and nine months ended August 31, 2022. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt ASU 2016-13 in fiscal 2024. The Company does not expect the application of the CECL impairment model to have a significant impact on its allowance for uncollectible amounts for accounts receivable.                  

5

3) Disaggregation of Revenue

The following table displays revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

	Three Months Ended August 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	5,610,000	$	-	$	-	$	5,610,000
Farm equipment service parts		594,000		-		-		594,000
Steel cutting tools and inserts		-		-		652,000		652,000
Modular buildings		-		1,095,000		-		1,095,000
Modular building lease income		-		-		-		-
Other		141,000		36,000		12,000		189,000
	$	6,345,000	$	1,131,000	$	664,000	$	8,140,000

	Three Months Ended August 31, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	3,831,000	$	-	$	-	$	3,831,000
Farm equipment service parts		749,000		-		-		749,000
Steel cutting tools and inserts		-		-		613,000		613,000
Modular buildings2		-		1,256,000		-		1,256,000
Modular building lease income		-		-		-		-
Other		80,000		57,000		6,000		143,000
	$	4,660,000	$	1,313,000	$	619,000	$	6,592,000

	Nine Months Ended August 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	13,655,000	$	-	$	-	$	13,655,000
Farm equipment service parts		1,828,000		-		-		1,828,000
Steel cutting tools and inserts		-		-		1,964,000		1,964,000
Modular buildings		-		3,103,000		-		3,103,000
Modular building lease income		-		-		-		-
Other		340,000		105,000		34,000		479,000
	$	15,823,000	$	3,208,000	$	1,998,000	$	21,029,000

	Nine Months Ended August 31, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	9,723,000	$	-	$	-	$	9,723,000
Farm equipment service parts		2,027,000		-		-		2,027,000
Steel cutting tools and inserts		-		-		1,872,000		1,872,000
Modular buildings		-		3,573,000		-		3,573,000
Modular building lease income		-		-		-		-
Other		267,000		225,000		16,000		508,000
	$	12,017,000	$	3,798,000	$	1,888,000	$	17,703,000

6

The Company offered floorplan terms in its Agricultural Products segment during its Fall 2021 early order program to incentivize customers to stock farm equipment on their lots. Floorplan terms allow customers to pay the Company at the earliest of retail date or 180 days. This program has an effect on the timing of the Company’s fiscal 2022 cash flows compared with historical cash flows.

4) Contract Receivables, Contract Assets and Contract Liabilities

The following table provides information about contract receivables, contract assets, and contract liabilities from contracts with customers included on the Condensed Consolidated Balance Sheets.

	August 31, 2022		November 30, 2021
Receivables	$	3,820,000	$	2,663,000
Assets		194,000		177,000
Liabilities		1,604,000		559,000

The amount of revenue recognized in the first nine months of fiscal 2022 that was included in a contract liability on November 30, 2021 was approximately $559,000. $276,000 of revenue was recognized in the first nine months of fiscal 2021 while the contract liability balance on November 30, 2020 was $276,000.

The Company utilizes the practical expedient exception for these contracts and will report only on performance obligations greater than one year. As of August 31, 2022, the Company has no performance obligations with an original expected duration greater than one year.

5) Net Income (Loss) Per Share of Common Stock

Basic net income (loss) per share of common stock has been computed on the basis of the weighted average number of common shares outstanding. Diluted net income (loss) per share has been computed on the basis of the weighted average number of common shares outstanding plus equivalent shares assuming exercise of stock options. Potential shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted net income (loss) per share.

7

Basic and diluted net income (loss) per share have been computed based on the following as of August 31, 2022 and August 31, 2021:

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Numerator for basic and diluted net income (loss) per share:
Net income (loss)	$	237,775	$	56,456
Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,700,422		4,529,026
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,700,422		4,529,026
Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.05	$	0.01
Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.05	$	0.01

	For the Nine Months Ended
	August 31, 2022		August 31, 2021
Numerator for basic and diluted net income (loss) per share:
Net income (loss)	$	6,403	$	(194,692	)
Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,633,621		4,508,986
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,633,621		4,508,986
Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.00	$	(0.04	)
Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.00	$	(0.04	)

8

6) Inventory

Major classes of inventory are:

	August 31, 2022			November 30, 2021
Raw materials	$	9,159,993		$	8,289,386
Work in process		541,792			357,721
Finished goods		2,699,721			3,088,739
Total Gross Inventory	$	12,401,506		$	11,735,846
Less: Reserves		(1,901,913	)		(2,525,743	)
Net Inventory	$	10,499,593		$	9,210,103

7) Accrued Expenses

Major components of accrued expenses are:

	August 31, 2022		November 30, 2021
Salaries, wages, and commissions	$	772,446	$	654,757
Accrued warranty expense		156,827		202,850
Other		342,155		304,766
	$	1,271,428	$	1,162,373

8) Assets Held for Lease

Major components of assets held for lease are:

	August 31, 2022		November 30, 2021
Modular Buildings	$	532,967	$	521,555
Total assets held for lease	$	532,967	$	521,555

There were no rents recognized from assets held for lease included in sales on the Condensed Consolidated Statements of Operations during the three and nine months ended August 31, 2022 and August 31, 2021.

The Company has two of the seven rental buildings under lease agreements as of the date of this report. The Company has approximately $30,000 in rents held in customer deposits for rental buildings not in service as of August 31, 2022.

The future minimum lease receipts from assets held for lease for periods after August 31, 2022 are as follows:

Twelve Months Ending August 31	Amount
2023	$	98,116
2024		12,525
Total	$	110,641

9

On June 14, 2022, the Company received a purchase order in the amount of $383,904 for the purchase of two rental buildings in the Company’s fleet. The Company expects the sale of these units to occur in Q4 of fiscal 2022.

9) Product Warranty

The Company offers warranties of various lengths to its customers depending on the specific product and terms of the customer purchase agreement. The average length of the warranty period is one year from the date of purchase. The Company’s warranties require it to repair or replace defective products during the warranty period at no cost to the customer. Product warranty is included in the price of the product and provides assurance that the product will function in accordance with agreed-upon specifications. It does not represent a separate performance obligation under ASC 606. The Company records a liability for estimated costs that August be incurred under its warranties. The costs are estimated based on historical experience and any specific warranty issues that have been identified. Although historical warranty costs have been within expectations, there can be no assurance that future warranty costs will not exceed historical amounts. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the balance as necessary. The accrued warranty balance is included in accrued expenses as shown in Note 7 “Accrued Expenses.” Changes in the Company’s product warranty liability for the three and nine months ended August 31, 2022 and August 31, 2021 are as follows:

	For the Three Months Ended
	August 31, 2022			August 31, 2021
Balance, beginning	$	89,549		$	267,500
Settlements / adjustments		(69,721	)		(75,204	)
Warranties issued		136,999			53,384
Balance, ending	$	156,827		$	245,680

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Balance, beginning	$	202,850		$	291,453
Settlements / adjustments		(277,734	)		(177,470	)
Warranties issued		231,711			131,697
Balance, ending	$	156,827		$	245,680

The Company carried a larger warranty accrual than historically reported in fiscal 2021 due to a large construction project in the Modular Buildings segment. The warranty period for this project closed on April 9, 2022.

10

10) Loan and Credit Agreements

Bank Midwest Revolving Lines of Credit

The Company maintains a $5,000,000 revolving line of credit (the “Line of Credit”) and a $550,000 revolving line of credit (the “Reserve Line of Credit”), both used for working capital purposes. The Reserve Line of Credit funds will remain undisbursed until all funds on the Line of Credit are used. On August 31, 2022, the combined balance of the Line of Credit and Reserve Line of Credit was $4,559,000with $991,000remaining available, as may be limited by the borrowing base calculation. The Line of Credit borrowing base is an amount equal to 75% of accounts receivable balances (discounted for aged receivables), plus 50% of net inventory, less any outstanding loan balance on the Line of Credit. On August 31, 2022, the Line of Credit was not limited by the borrowing base calculation. Any unpaid principal amount borrowed on the Line of Credit accrues interest at a floating rate per annum equal to 1.50% above the Wall Street Journal rate published in the money rates section of the Wall Street Journal. The interest rate floor is set at 4.25% per annum and the current (as of filing date) interest rate is 7.750% per annum following several increases in fiscal 2022. The Line of Credit was most recently renewed on March 28, 2022. The Line of Credit matures on March 30, 2023 and requires monthly interest-only payments. Any unpaid principal amount borrowed on the Reserve Line of Credit accrues interest at a floating rate per annum equal to 2.0% above the Wall Street Journal rate published in the money rates section of the Wall Street Journal. The interest rate floor is set at 4.00% per annum and the current interest rate is 8.250% per annum. The Reserve Line of Credit matures on November 30, 2022 and any unpaid balance must be repaid at that time. The Line of Credit is governed by the terms of a Promissory Note, dated February 11, 2021, entered into between the Company and Bank Midwest. The Reserve Line of Credit is governed by the terms of a Promissory Note, dated August 17, 2022, entered into between the Company and Bank Midwest.

In connection with the Line of Credit, the Company, Art’s-Way Scientific Inc. and Ohio Metal Working Products/Art’s-Way Inc. each entered into a Commercial Security Agreement with Bank Midwest, dated September 28, 2017, pursuant to which each granted to Bank Midwest a first priority security interest in certain inventory, equipment, accounts, chattel paper, instruments, letters of credit and other assets to secure the obligations of the Company under the Line of Credit. Each of Art’s-Way Scientific Inc. and Ohio Metal Working Products/Art’s-Way Inc. also agreed to guarantee the obligations of the Company pursuant to the Line of Credit, as set forth in Commercial Guaranties, each dated September 28, 2017.

To further secure the Line of Credit, the Company granted Bank Midwest a mortgage on its Canton, Ohio property held by Ohio Metal Working Products/Art’s-Way Inc. The Term Loan is secured by a mortgage on the Company’s Armstrong, Iowa and Monona, Iowa properties. Each mortgage is governed by the terms of a separate Mortgage, dated September 28, 2017, and each property is also subject to a separate Assignment of Rents, dated September 28, 2017.

The Reserve Line of Credit is secured by any and all security documents between the Company and Bank Midwest.

Bank Midwest Term Loans

The Company carries a $2,600,000 term loan due October 1, 2037 (the “Term Loan”), and a $350,000 term loan (the “Roof Term Loan”) due on August 15, 2027. The Term Loan accrues interest at a rate of 5.00% for the first ninety months, which will end on September 28, 2022. Thereafter, the Term Loan will accrue interest at a floating rate per annum equal to 0.75% above the Wall Street Journal rate published in the money rates section of the Wall Street Journal. The interest rate floor is set at 4.15% per annum and the interest rate may only be adjusted by Bank Midwest once every five years. Monthly payments of $17,271in principal and interest are required. The Term Loan is also guaranteed by the United States Department of Agriculture (“USDA”), which required an upfront guarantee fee of $62,400and requires an annual fee of 0.5% of the unpaid balance. As part of the USDA guarantee requirements, shareholders owning more than 20% are required to personally guarantee a portion of the Term Loan, in an amount equal to their stock ownership percentage. The J. Ward McConnell Jr. Living Trust, the estate of the former Vice Chairman of the Board of Directors and a shareholder owning more than 20% of the Company’s outstanding stock, is guaranteeing approximately 38% of the Term Loan, for an annual fee of 2% of the personally guaranteed amount. The initial guarantee fee will be amortized over the life of the Term Loan, and the annual fees and personally guaranteed amounts are expensed monthly. The Company also entered into the Roof Term Loan of $350,000on August 17, 2022. The Roof Term Loan’s proceeds were used to fix sections of the Armstrong facility’s roof. The Roof Term Loan requires 59regular payments of $2,972and an estimated balloon payment of $268,176on the maturity date of August 15, 2027. Any unpaid principal amount borrowed on the Roof Term Loan accrues interest at a floating rate per annum equal to 2.00% above the Wall Street Journal rate published in the money rates section of the Wall Street Journal. The interest rate floor is set at 5.00% per annum and the current interest rate is 8.25% per annum. The Term Loan is governed by the terms of a Promissory Note, dated September 28, 2017, entered into between the Company and Bank Midwest. The Roof Term Loan is governed by the terms of a Promissory Note, dated August 17, 2022, entered into between the Company and Bank Midwest.

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Compliance

If the Company or its subsidiaries (as guarantors pursuant to the Commercial Guaranties) commits an event of default with respect to the promissory notes and fails or is unable to cure that default, Bank Midwest may immediately terminate its obligation, if any, to make additional loans to the Company and may accelerate the Company’s obligations under the promissory notes. Bank Midwest shall also have all other rights and remedies for default provided by the Uniform Commercial Code, as well as any other applicable law and the various loan agreements. In addition, in an event of default, Bank Midwest may foreclose on the mortgaged property.

Compliance with the following Bank Midwest covenants is measured annually on November 30. A maximum debt to worth ratio of 1 to 1 must be maintained, with a minimum of 40% tangible balance sheet equity, with variations subject to mutual agreement. The Company is also required to maintain a minimum debt service coverage ratio of 1.25, with a 0.10tolerance. The Company also must receive bank approval for purchases or sales of individual equipment over $50,000individually and maintain reasonable salaries and owner compensation. The Company was out of compliance with its debt to worth ratio covenant in place under the Bank Midwest loan agreements as of November 30, 2021. Bank Midwest issued a waiver forgiving the noncompliance, and in turn waived the event of default. The next measurement date is November 30, 2022.

The Company also has a minimum working capital requirement of $4,000,000 that is measured monthly. The $4,000,000 working capital level serves as a trigger point for Bank Midwest and the Company to continue discussion of capital raising strategies to support additional capital injection. As of August 31, 2022, the Company was in compliance with its working capital requirement.

SBA Economic Injury Disaster Loans

The Company secured three loans in the amount of $150,000 each in June of 2021 with the U.S. Small Business Administration under its Economic Injury Disaster Loan (“EIDL”) program. Proceeds from the EIDLs were used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue from the date of inception. Installment payments, including principal and interest, are due monthly, thirty months from the date of disbursement, in the amount of $731 per loan. The balance of principal and interest is payable 30 years from the date of disbursement. The EIDLs are secured by a security interest on all of the Company’s assets. Each EIDL is governed by the terms of a separate Promissory Note, dated either June 18, 2020 or June 24, 2020, as applicable, entered into by the Company or the applicable subsidiary.

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A summary of the Company’s term debt is as follows:

	August 31, 2022		November 30, 2021
Bank Midwest loan payable in monthly installments of $17,271 including interest at 5.00%, due October 1, 2037	$	2,189,491	$	2,260,412
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 18, 2021, due June 18, 2050		162,390		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 18, 2021, due June 18, 2050		162,390		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 24, 2021, due June 24, 2050		162,509		158,181
Bank Midwest loan payable in monthly installments of $2,972 including interest at 6.00%, due May 15, 2027		346,825		-
Total term debt	$	3,023,605	$	2,734,929
Less current portion of term debt		114,407		99,462
Term debt, excluding current portion	$	2,909,198	$	2,635,467

A summary of the minimum maturities of term debt follows for the twelve months ending August 31:

Year	Amount
2023	$	114,407
2024		122,185
2025		129,095
2026		135,971
2027		433,873
2028 and thereafter		2,088,074
	$	3,023,605

11) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses.

12) Related Party Transactions

During the three and nine months ended August 31, 2022, and August 31, 2021, the Company did not recognize any revenues from transactions with a related party, and no amounts in accounts receivable balances were due from a related party. From time to time, the Company purchases various supplies from related parties, which are companies in which Marc McConnell, the Chairman of the Company’s Board of Directors, has an ownership interest and also serves as President. J. Ward McConnell Jr.’s estate, the J. Ward McConnell, Jr. Living Trust, is paid a monthly fee to guarantee a portion of the Company’s term debt in accordance with the USDA guarantee obtained on the Company’s term debt. In the three and nine months ended August 31, 2022, the Company recognized $4,209and $19,762of expense for transactions with related parties, respectively, compared to $6,539and $19,200for the three and nine months ended August 31, 2021. As of August 31, 2022, accrued expenses contained a balance of $1,408owed to a related party compared to $1,469on August 31, 2021.

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13) Leases

	August 31, 2022		November 30, 2021
Operating lease right-of-use assets (in other assets)	$	38,209	$	47,794
Current portion of operating lease liabilities (in accrued expenses)	$	11,631	$	12,863
Long-term portion of operating lease liabilities		26,578		34,931
Total operating lease liabilities	$	38,209	$	47,794

The Company recorded $4,333and $14,368of operating lease costs in the three and nine months ended August 31, 2022, respectively, which included variable costs tied to usage, compared to $5,547and $17,536for the three and nine months ended August 31, 2021. The Company’s operating leases carry a weighted average lease term of 42months and have a weighted average discount rate of 4.86%

Future maturities of operating lease liabilities are as follows:

Twelve Months Ending August 31
2023	$	13,201
2024		11,488
2025		9,695
2026		7,149
Total lease payments	$	41,533
Less imputed interest		(3,324	)
Total operating lease liabilities	$	38,209

The components of finance leases on the Consolidated Balance Sheets on August 31, 2022 and November 30, 2021 were as follows:

	August 31, 2022		November 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$	577,023	$	190,667
Current portion of finance lease liabilities (accrued expenses)	$	169,023	$	48,591
Long-term portion of finance lease liabilities		645,499		142,386
Total finance lease liabilities	$	814,522	$	190,977

The Company received $224,513 of grant funds from the Iowa Economic Development’s Manufacturing 4.0 program in Q3 of fiscal 2022. These funds were for 75% reimbursement of three robotic welders that were later financed under a capital lease. These funds have reduced the right-of-use asset account and will reduce amortization over the life of the asset.

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Future maturities of finance lease liabilities as of August 31, 2022 are as follows:

Twelve Months Ending August 31
2023	$	199,836
2024		199,836
2025		179,387
2026		157,258
2027		160,688
Total lease payments		897,005
Less imputed interest		(82,483	)
Total finance lease liabilities	$	814,522

The weighted average lease term of the Company’s finance leases are 52 months while the weighted average rate of finance leases is 4.18%. The Company incurred $40,140 and $87,284 of amortization expense from ROU assets related to finance leases in three- and nine-months ending August 31, 2022, respectively compared to $0 for the same periods in 2021.

14) Equity Incentive Plan and Stock Based Compensation

On February 25, 2020, the Board of Directors of the Company (the “Board”) authorized and approved the Art’s-Way Manufacturing Co., Inc. 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan was approved by the stockholders on April 30, 2020. The 2020 Plan replaced the Art’s-Way Manufacturing Co., Inc. 2011 Equity Incentive Plan (the “2011 Plan”) and prior plans. The 2020 Plan added an additional 500,000 shares to the number of shares reserved for issuance pursuant to equity awards. No further awards will be made under the 2011 Plan or other prior plans. Awards to directors and executive officers under the 2020 Plan are governed by the forms of agreement approved by the Board of Directors. Stock options or other awards granted prior to February 25, 2020 are governed by the applicable prior plan and the forms of agreement adopted thereunder.

The 2020 Plan permits the plan administrator to award nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance awards, and stock appreciation rights to employees (including officers), directors, and consultants. The Board has approved a director compensation policy pursuant to which non-employee directors are automatically granted restricted stock awards of 1,000 shares of fully vested common stock annually or initially upon their election to the Board and another 1,000 shares of fully vested common stock on the last business day of each fiscal quarter.

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Shares issued to directors (immediate vesting)		5,000		5,000
Shares issued to directors, employees, and consultants (three-year vesting)		-		-
Total shares issued		5,000		5,000

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Shares issued to directors (immediate vesting)		20,000			20,000
Shares issued to directors, employees, and consultants (three-year vesting)		94,500			88,500
Unvested shares forfeit upon termination		(8,333	)		-
Total shares issued		106,167			108,500

15

Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the relevant vesting period. The Company estimates the fair value of each stock-based option award on the measurement date using the Black-Scholes option valuation model which incorporates assumptions as to stock price volatility, the expected life of the options, risk-free interest rate, and dividend yield. Expected volatility is based on historical volatility of the Company’s stock and other factors. The Company uses historical option exercise and termination data to estimate the expected term the options are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is calculated using historical dividend amounts and the stock price at the option issuance date. No stock options were granted during the three- and nine-month periods ended August 31, 2022 or in the same respective period of fiscal 2021.

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Stock-based compensation expense		66,826		61,446
Treasury share repurchase expense		-		-
Stock-based compensation expense net of treasury repurchases		66,826		61,446

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Stock-based compensation expense		224,291			203,245
Treasury share repurchase expense		(92,432	)		(30,471	)
Stock-based compensation expense net of treasury repurchases		131,859			172,774

The Company’s repurchased treasury shares are related to the vesting of employee’s stock compensation. Employees are given the option to pay their share of payroll tax or the Company will buy back the shares and pay the tax on their behalf.

15) Common Stock Purchase Agreement

On March 29, 2022, Art’s-Way Manufacturing Co., Inc. (the “Company”) entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Alumni Capital LP, a Delaware limited partnership (“Alumni Capital”), pursuant to which the Company agreed to sell, and Alumni Capital agreed to purchase, upon request of the Company in one or more transactions, a number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) providing aggregate gross proceeds to the Company of up to $3,000,000 (the “Maximum”). The Purchase Agreement expires upon the earlier of the aggregate gross proceeds from the sale of shares meeting the Maximum or June 30, 2023.

Among other limitations, unless otherwise agreed upon by Alumni Capital, each sale of shares will be limited to 50,000 shares and further limited to no more than the number of shares that would result in the beneficial ownership by Alumni Capital and its affiliates, at any single point in time, of more than 9.99% of the then-outstanding shares of Common Stock. Alumni Capital will purchase the shares of Common Stock under the Agreement at a discount ranging from 3-5% of the lowest traded price of the Common Stock in the five business days preceding the Company delivering notice of the required purchase of shares to Alumni Capital.

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In exchange for Alumni Capital entering into the Purchase Agreement, the Company issued 20,000 shares of Common Stock to Alumni Capital upon execution of the Purchase Agreement (the “Initial Commitment Shares”) and will issue another 20,000 shares in connection with the first closing under the Purchase Agreement (with the Initial Commitment Shares, the “Commitment Shares”). Alumni Capital represented to the Company, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)). The Company shares of Common Stock, including the Commitment Shares, are being offered and sold under the Purchase Agreement in reliance upon an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. The securities sold may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The Purchase Agreement provided that the Company will file a registration statement under the Securities Act covering the resale of the shares issued to Alumni Capital. Alumni Capital’s obligation to purchase shares of Common Stock under the Purchase Agreement is conditioned upon, among other things, the registration statement having been declared effective by the Securities and Exchange Commission. The Company filed a registration statement on Form S-3 (the “Registration Statement”) April 27, 2022 which was declared effective on August 9, 2022 by the SEC.

The Company evaluated the embedded options and believe they should not be bifurcated from the agreement and accounted for separately as it is indexed to the Company’s stock and would qualify for equity treatment on the balance sheet.

The Company incurred approximately $203,000 of expense related to equity issuance in the nine months ended August 31, 2022 in the form of 40,000 commitment shares valued at approximately $160,000, attorney fees for the negotiation and execution of the Purchase Agreement and the preparation and filing of the registration statement. These equity issuance costs have reduced proceeds received under the common stock purchase agreement in additional paid in capital.

Below is a summary of shares purchased by Alumni Capital under this agreement as of the filing date of this report:

Date	Shares	Share price net of discount	Proceeds
7/25/2022	50,000	$ 2.07	$ 103,305
8/03/2022	50,000	$ 1.98	$ 98,940
8/15/2022	50,000	$ 2.00	$ 99,910
8/23/2022	65,000	$ 1.99	$ 129,253
9/23/2022	65,000	$ 1.76	$ 114,120
Total	280,000		$ 545,528

16) Disclosures About the Fair Value of Financial Instruments

The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. On August 31, 2022 and November 30, 2021, the carrying amount approximated fair value for cash, accounts receivable, accounts payable, notes payable to bank, finance lease liabilities and other current and long-term liabilities. The carrying amounts of current assets and liabilities approximate fair value because of the short maturity of these instruments. The fair value of the finance lease liabilities also approximate recorded value as that is based on discounting future cash flows at rates implicit in the lease. The rates implicit in the lease do not materially differ from current market rates. The fair value of the Company’s term loans payable also approximates recorded value because the interest rates charged under the loan terms are not substantially different from current interest rates.

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17) Segment Information

The Company has three reportable segments: Agricultural Products, Modular Buildings and Tools. The Agricultural Products segment manufactures and sells farm equipment and related replacement parts under the Art’s-Way Manufacturing label. The Modular Buildings segment manufactures and installs modular buildings for various uses, commonly animal containment and research laboratories. The Tools segment manufactures steel cutting tools and inserts.

The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies. Management evaluates the performance of each segment based on profit or loss from operations before income taxes, exclusive of nonrecurring gains and losses.

Approximate financial information with respect to the reportable segments is as follows.

	Three Months Ended August 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	6,345,000	$	1,131,000		$	664,000		$	8,140,000
Income (loss) from operations		676,000		(176,000	)		(69,000	)		431,000
Income (loss) before tax		566,000		(181,000	)		(84,000	)		301,000
Total Assets		18,328,000		3,608,000			2,785,000			24,721,000
Capital expenditures		506,000		118,000			53,000			677,000
Depreciation & Amortization	$	124,000	$	33,000		$	39,000		$	196,000

	Three Months Ended August 31, 2021
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	4,660,000	$	1,313,000	$	619,000		$	6,592,000
Income (loss) from operations		95,000		89,000		(24,000	)		160,000
Income (loss) before tax		26,000		82,000		(36,000	)		72,000
Total Assets		14,981,000		3,701,000		2,573,000			21,255,000
Capital expenditures		153,000		11,000		5,000			169,000
Depreciation & Amortization	$	85,000	$	27,000	$	33,000		$	145,000

	Nine Months Ended August 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	15,823,000	$	3,208,000		$	1,998,000		$	21,029,000
Income (loss) from operations		994,000		(484,000	)		(195,000	)		315,000
Income (loss) before tax		746,000		(504,000	)		(234,000	)		8,000
Total Assets		18,328,000		3,608,000			2,785,000			24,721,000
Capital expenditures		981,000		143,000			64,000			1,188,000
Depreciation & Amortization	$	342,000	$	101,000		$	104,000		$	547,000

	Nine Months Ended August 31, 2021
	Agricultural Products			Modular Buildings			Tools			Consolidated
Revenue from external customers	$	12,017,000		$	3,798,000		$	1,888,000		$	17,703,000
Income (loss) from operations		85,000			(97,000	)		(48,000	)		(60,000	)
Income (loss) before tax		(48,000	)		(118,000	)		(81,000	)		(247,000	)
Total Assets		14,981,000			3,701,000			2,573,000			21,255,000
Capital expenditures		463,000			20,000			5,000			488,000
Depreciation & Amortization	$	271,000		$	83,000		$	100,000		$	454,000

*The consolidated total in the tables is a sum of segment figures and may not tie to actual figures in the condensed consolidated financial statements due to rounding.

18) Subsequent Events

Management evaluated all other activity of the Company and concluded no other events have occurred that would require recognition in the condensed consolidated financial statements other than the shares sold to Alumni Capital as discussed in Note 15.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q (this “report”) and the audited consolidated financial statements and related notes thereto included in Part II, Item 8, “Financial Statements and Supplementary Data,” as well as Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended November 30, 2021. Some of the statements in this report may be forward-looking statements that reflect our current view on future events, future business, industry and other conditions, our future performance, and our plans and expectations for future operations and actions. In some cases you can identify forward-looking statements by the use of words such as “may,” “should,” “anticipate,” “believe,” “expect,” “plan,” “future,” “intend,” “could,” “estimate,” “predict,” “hope,” “potential,” “continue,” or the negative of these terms or other similar expressions. Many of these forward-looking statements are located in this report under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but they may appear in other sections as well. Forward-looking statements in this report generally relate to: (i) our warranty costs and order backlog; (ii) our beliefs regarding the sufficiency of working capital and cash flows; (iii) our expectation that we will continue to be able to renew or obtain financing on reasonable terms when necessary as well as our continued positive relationship with our creditors and lenders; (iv) the impact of recently issued accounting pronouncements; (v) our intentions and beliefs relating to our costs, business strategies, and future performance; (vi) our beliefs concerning our ability to attract and maintain an adequate workforce in a competitive labor market (vii) our expected financial results; (viii) our expectations concerning our primary capital and cash flow needs; and (ix) our expectations regarding the impact of COVID-19 on our business condition and results of operations.

You should read this report thoroughly with the understanding that our actual results may differ materially from those set forth in the forward-looking statements for many reasons, including events beyond our control and assumptions that prove to be inaccurate or unfounded. We cannot provide any assurance with respect to our future performance or results. Our actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including but not limited to: (i) the impact of changing credit markets on our ability to continue to obtain financing on reasonable terms; (ii) our ability to repay current debt, continue to meet debt obligations and comply with financial covenants; (iii) the effect of inflation as well as general economic conditions, including consumer and governmental spending, on the demand for our products and the cost of our supplies and materials; (iv) the ongoing COVID-19 pandemic; (v) fluctuations in seasonal demand and our production cycle; (vi) the ability of our suppliers to meet our demands for raw materials and component parts; (vii) fluctuations in the price of raw materials, especially steel; (viii) our ability to predict and meet the demands of each market in which our segments operate; and (ix) other factors described from time to time in our Securities and Exchange Commission filings. We do not intend to update the forward-looking statements contained in this report other than as required by law. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits completely and with the understanding that our actual future results may be materially different from what we currently expect. We qualify all of our forward-looking statements by these cautionary statements.

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Critical Accounting Policies

Our critical accounting policies involving the more significant judgments and assumptions used in the preparation of our financial statements as of August 31, 2022 remain unchanged from November 30, 2021. Disclosure of these critical accounting policies is incorporated by reference from Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended November 30, 2021.

Results of Operations

Net Sales and Cost of Sales

Our consolidated corporate sales for the three- and nine-month periods ended August 31, 2022 were $8,140,000 and $21,029,000, respectively, compared to $6,592,000 and $17,703,000 during the same respective periods in fiscal 2021, a $1,548,000, or a 23.5% increase for the three months and a $3,326,000, or 18.8% increase for the nine months. We saw increased sales in both our Agricultural Products and Tools segments for the quarter and year to date as discussed more below. Consolidated gross margin for the three-month period ended August 31, 2022 was 25.1% compared to 26.4% for the same period in fiscal 2021. Consolidated gross margin for the nine-month period ended August 31, 2022 was 25.8% compared to 25.4% for the same period in fiscal 2021.

Our third quarter sales in the Agricultural Products segment were $6,345,000 compared to $4,660,000 during the same period in fiscal 2021, an increase of $1,685,000, or 36.2%. Our year-to-date Agricultural Product sales were $15,823,000 compared to $12,017,000 during the same period in fiscal 2021, an increase of $3,806,000, or 31.7%. We attribute the large increase in revenue to an improved fiscal 2022 agricultural economy that produced five-to-ten-year highs in commodity and livestock prices along with government assistance programs that provided farmers with much needed government assistance during the COVID-19 pandemic. We also saw an increase in orders from offering a floor plan program to allow dealers extended terms in return for stocking inventory. Compared to the nine months ending August 30, 2021, we have sold 20% more grinder mixers, shipped 170% more beet equipment, and had a 30% increase in manure spreader sales. Our backlog moving into Q4 of fiscal 2022 is expected to keep our production line full until our fall 2022 early order program is released to build up our fiscal 2023 backlog. We continue to face supplier delays mainly for hydraulics, cylinders, and other components. We have managed to keep our production line going through our diverse product offering despite these supplier delays and continue to place purchase orders out further into 2023 to avoid part shortages. While the job market has been tough for most employers through COVID-19 we have fared well in hiring and retaining an adequate workforce. Gross margin for our Agricultural Products segment for the three-month period ended August 31, 2022 was 29.7% compared to 27.4% for the same period in fiscal 2021. Gross margin for our Agricultural Products segment for the nine-month period ended August 31, 2022 was 30.6% compared to 29.6% for the same period in fiscal 2021. We took steps to automate production tasks in fiscal 2022 by bringing in three robotic welders. A high-definition plasma cutter is scheduled to be delivered in Q4 of fiscal 2022 that we expect will alleviate production bottlenecks and improve quality. While component prices continue to rise, we have seen steel prices start to level off in Q3 of fiscal 2022. With the help of price increases we believe we can see improved margins beginning in Q4 of fiscal 2022 and Q1 of fiscal 2023.

20

Our third quarter sales in the Modular Buildings segment were $1,131,000 compared to $1,313,000 for the same period in fiscal 2021, a decrease of $182,000, or 13.9%. Sales in our Modular Buildings segment for the nine months ended August 31, 2022 were $3,208,000 compared to $3,798,000 for the same period in fiscal 2021, a decrease of $590,000, or 15.5%. The decrease for the quarter is due to our workforce focusing on readying rental buildings for sale and lease to be deployed in Q4 of fiscal 2022. The decrease for the year is due to contract delays, mainly slowed by funding approvals for large, quoted projects this segment was working to close at the end of fiscal 2021. Two of these large projects are under engineering contracts and could provide approximately $7 million to our fiscal 2023 backlog upon closing. We have experienced record demand and sales for our agricultural buildings in this segment in fiscal 2022. Gross margin for the three- and nine-month periods ended August 31, 2022 was 6.5% and 9.5%, respectively, compared to 25.8% and 14.8% for the same respective periods in fiscal 2021. We have seen margins erode in fiscal 2022 due to rising material costs on contracts which pricing was fixed. Due to competitive job markets, we maintained higher staffing levels despite a slow first six months of backlog with expectations a few large projects would be contracted in Q1 of fiscal 2022.

Our Tools segment had sales of $664,000 and $1,998,000 during the three- and nine-month periods ended August 31, 2022, respectively, compared to $619,000 and $1,888,000 for the same respective periods in fiscal 2021, a 7.3% increase and a 5.8% increase, respectively. The increase for the quarter and year to date is due to price increases to cover rising costs and continued demand for our products. Our backlog remains strong and labor constraints will be the largest challenge for this segment heading into Q4 of 2022. Gross margin was 12.2% for the three- and 13.6% nine-month periods ended August 31, 2022, compared to 20% for the same respective periods in fiscal 2021. Rising material and overhead costs have decreased our gross margin for the quarter and year to date periods. We increased prices near the end of Q3 of fiscal 2022 to help with margin quality moving forward. We put a Haas milling machine in service in Q3 of fiscal 2022 to improve efficiency and increase output.

Expenses

Our third quarter consolidated selling expenses were $477,000 compared to $532,000 for the same period in fiscal 2021. Our year-to-date selling expenses were $1,595,000 in fiscal 2022 compared to $1,549,000 for the same period in fiscal 2021. Selling expenses as a percentage of sales were 5.9% and 7.6% for the three- and nine-month periods ended August 31, 2022, respectively, compared to 8.1% and 8.7% for the same respective periods in fiscal 2021. The decrease in selling expenses as a percentage of sales for the fiscal 2022 periods is due largely to less commissionable sales in our Agricultural Products and Tools segments. We also underwent a rebranding effort in fiscal 2021 that resulted in increased expenses.

Consolidated engineering expenses were $168,000 and $446,000 for the three- and nine-month periods ended August 31, 2022, respectively, compared to $144,000 and $387,000 for the same respective periods in fiscal 2021. The increase in engineering expenses was related to ongoing employee education and new product development. Engineering expenses as a percentage of sales were 2.1% for the three- and nine-month periods ended August 31, 2022, respectively, compared to 2.2% for the same respective periods in fiscal 2021.

Consolidated administrative expenses for the three- and nine-month periods ended August 31, 2022 were $964,000 and $3,070,000, respectively, compared to $902,000 and $2,627,000 for the same respective periods in fiscal 2021. Administrative expenses as a percentage of sales were 11.8% and 14.6% for the three- and nine-month periods ended August 31, 2022, respectively, compared to 13.7% and 14.8% for the same respective periods in fiscal 2021. As a percentage of sales our administrative expenses are down for both reported periods. However, our actual dollars spent are up due recruitment costs of a key new employee and from increased IT costs as we started the planning phase of an ERP upgrade.

21

Net Income (Loss)

Consolidated net income was $238,000 for the three-month period ended August 31, 2022 compared to net loss of $56,000 for the same period in fiscal 2021. Our consolidated net income for the nine months ended August 31, 2022 was $6,000 compared to $(195,000). The strong earnings of our Agricultural Segment are being overshadowed by struggles in our Modular Building and Tools segments. Contract delays in the Modular Building segment led to an overstaffed plant for the first six months of fiscal 2022 while construction costs on projects under contract continued to rise. While we are carrying a record backlog in the Tools segment, we struggled with staffing to produce our products. We are taking steps to reinvest in our business with automation and improved processes to put us in a position to provide greater earnings going forward.

Order Backlog

The consolidated order backlog net of discounts as of October 5, 2022, was $9,078,000 compared to $6,097,000 as of October 5, 2021, an increase of $2,980,000 or 49%. The Agricultural Products segment order backlog was $4,719,000 as of October 5, 2022, compared to $3,681,000 in fiscal 2021 an increase of $1,038,0000 or 28%. We continue to see strong demand in our Agricultural Products segment due to high commodity prices and quality product offering. The backlog for the Modular Buildings segment was $3,705,000 as of October 5, 2022, compared to $2,063,000 in fiscal 2021, an increase of $1,642,000 or 80%. Strong demand for modular ag buildings boosted our backlog in Q4 of fiscal 2022. The backlog for the Tools segment was $653,000 as of October 5, 2022, compared to $353,000 in fiscal 2021, an increase of $300,000 or 85%. Demand for our products remains to be high for all three of our business segments. We are focused on delivering for our customers despite supply chain and labor challenges as we finish out fiscal 2022. Our order backlog is not necessarily indicative of future revenue to be generated from such orders due to the possibility of order cancellations and dealer discount arrangements we may enter into from time to time.

Liquidity and Capital Resources

Our primary source of funds for the nine months ended August 31, 2022 was cash generated by financing activities. We used term debt to finance a roof repair for our Armstrong facility. We also used financing from our line of credit, proceeds from a stock purchase agreement and customer deposits to fund heightened inventory needs to keep up with demand and to invest in capital equipment that improves our operational efficiency. We expect our primary capital needs for the remainder of fiscal 2022 to relate to operating costs, fulfillment of customer deposits, purchases of equipment that improve our operations, and the retirement of debt. The Company has $2,454,472 available to draw from Alumni Capital on our common stock purchase agreement. The $545,528 drawn so far has been used for capital improvements and to help with initial cash needs for our floor plan program.

We have $5,550,000 combined availability on revolving lines of credit with Bank Midwest that, as of August 31, 2022, had an outstanding principal balance of $4,559,000. The $5,000,000 line of credit is scheduled to mature on March 30, 2023 while the additional $550,000 of line availability is scheduled to mature on November 30, 2022. The Company secured the additional line of credit to help address increased inventory needs during our beet season and to help with cash outlay needed for an initial floorplan program.

22

Our 2022 early order program affected cash inflows from accounts receivable as we allowed our customers a floorplan option which allows them to pay us the sooner of retail date or 180 days. As of August 31, 2022, there is approximately $588,000 in our accounts receivable on extended floorplan terms that would have typically been collected by the balance sheet date.

We received approximately $369,000 from Iowa Economic Development’s Manufacturing 4.0 program in Q3 of fiscal 2022. $244,000 of the funds have reduced the right-of-use asset as discussed in Note 13 above. The roughly $144,000 remaining reduced deposits paid in other current assets for a high-definition plasma cutter and crane that is scheduled to be installed in Q4 of fiscal 2022. The funds for this award are provided by the State and Local Fiscal Recovery Fund, part of the American Rescue Plan. The total amount of award available to the Company is $500,000 for which the Iowa Economic Development reimburses the Company for 75% of eligible capital expenditures that increase automation or increase operational efficiency. The Company is required to submit quarterly reports to the Iowa Economic Development through April 30, 2027 under this program and the funds are available for purchases through December 31, 2024.

We believe our current operations and financing arrangements will provide sufficient cash to finance operations and pay debt when due during the next twelve months. We expect to continue to be able to procure financing upon reasonable terms.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company, we are not required to provide disclosure pursuant to this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The persons serving as our principal executive officer and principal financial officer have evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period subject to this report. Based on this evaluation, the persons serving as our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of August 31, 2022. Our management has concluded that the consolidated financial statements included in this report present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

23

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not a party to any material pending legal proceedings.

Item 1A. Risk Factors.

As a smaller reporting company, we are not required to provide disclosure pursuant to this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table presents the information with respect to purchases made by us of our common stock during the third quarter of fiscal 2022:

	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs
June 1 to June 30, 2022		-	$	-		N/A		N/A
July 1 to July 31, 2022		-	$	-		N/A		N/A
August 1 to August 31, 2022		-	$	-		N/A		N/A
Total		-	$	-

⁽¹⁾ Reflects shares withheld pursuant to the terms of restricted stock awards under our 2020 Plan to offset tax withholding obligations that occur upon vesting and release of shares. The value of the shares withheld is the closing price of our common stock on the date the relevant transaction occurs.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.         

24

Item 6. Exhibits.

Exhibit No.	Description
31.1	Certificate of Chief Executive Officer pursuant to 17 CFR 13a-14(a) – filed herewith.
31.2	Certificate of Chief Financial Officer pursuant to 17 CFR 13a-14(a) – filed herewith.
32.1	Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 - filed herewith.
32.2	Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 - filed herewith.
101	The following materials from this report, formatted in iXBRL (Inline Extensible Business Reporting Language) are filed herewith: (i) condensed consolidated balance sheets, (ii) condensed consolidated statement of operations, (iii) condensed consolidated statements of cash flows, and (iv) the notes to the condensed consolidated financial statements.
104	Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

25

SIGNATURES

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

ART’S-WAY MANUFACTURING CO., INC.

Date: October 14, 2022	By: /s/ David A. King
	David A. King
	President and Chief Executive Officer
Date: October 14, 2022	By: /s/ Michael W. Woods
	Michael W. Woods
	Chief Financial Officer

26

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 17 CFR 240.13(a)-14(a)

(SECTION 302 CERTIFICATION)

I, David A. King, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Art’s-Way Manufacturing Co., Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		ART’S-WAY MANUFACTURING CO., INC.
Date:	October 14, 2022	/s/ David A. King
		David A. King
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 17 CFR 240.13(a)-14(a)

(SECTION 302 CERTIFICATION)

I, Michael W. Woods, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Art’s-Way Manufacturing Co., Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		ART’S-WAY MANUFACTURING CO., INC.
Date:	October 14, 2022	/s/ Michael W. Woods
		Michael W. Woods
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Art’s-Way Manufacturing Co., Inc. (the “Company”) for the fiscal quarter ended August 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David A. King, as the President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	October 14, 2022	/s/ David A. King
		David A. King
		President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Art’s-Way Manufacturing Co., Inc. (the “Company”) for the fiscal quarter ended August 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael W. Woods, as the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

3. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

4. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	October 14, 2022	/s/ Michael W. Woods
		Michael W. Woods
		Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Aug. 31, 2022	Oct. 05, 2022
Document Information [Line Items]
Entity Central Index Key	0000007623
Amendment Flag	false
Current Fiscal Year End Date	--11-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Aug. 31, 2022
Document Transition Report	false
Entity File Number	000-05131
Entity Registrant Name	ART’S-WAY MANUFACTURING CO., INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	42-0920725
Entity Address, Address Line One	5556 Highway 9
Entity Address, City or Town	Armstrong
Entity Address, State or Province	IA
Entity Address, Postal Zip Code	50514
City Area Code	712
Local Phone Number	864-3131
Title of 12(b) Security	Common stock $.01 par value
Trading Symbol	ARTW
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,880,097

XML

Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Current assets:
Cash	$ 4,144	$ 2,658
Accounts receivable-customers, net of allowance for doubtful accounts of $34,504 and $38,188 at August 31, 2022 and November 30, 2021, respectively	3,820,163	2,663,030
Inventories, net	10,499,593	9,210,103
Cost and profit in excess of billings	194,402	177,284
Other current assets	430,314	121,170
Total current assets	14,948,616	12,174,245
Property, plant, and equipment, net	5,945,060	5,237,328
Assets held for lease, net	532,967	521,555
Deferred income taxes	2,622,606	2,621,886
Other assets	671,824	299,034
Total assets	24,721,073	20,854,048
Current liabilities:
Accounts payable	2,535,099	1,737,091
Customer deposits	1,300,973	278,509
Billings in excess of cost and profit	302,676	280,761
Income taxes payable	5,500	5,500
Accrued expenses	1,271,428	1,162,373
Line of credit	4,559,000	4,074,530
Current portion of finance lease liabilities	169,023	48,591
Current portion of long-term debt	114,407	99,462
Total current liabilities	10,258,106	7,686,817
Long-term liabilities
Long-term portion of finance lease liabilities	645,499	142,386
Long-term portion of operating lease liabilities	26,578	34,931
Long-term debt, excluding current portion	2,909,198	2,635,467
Total liabilities	13,839,381	10,499,601
Stockholders’ equity:
Undesignated preferred stock - $0.01 par value. Authorized 500,000 shares at August 31, 2022 and November 30, 2021; issued and outstanding 0 shares at August 31, 2022 and November 30, 2021	0	0
Common stock – $0.01 par value. Authorized 9,500,000 shares at August 31, 2022 and November 30, 2021; issued 4,944,671 at August 31, 2022 and 4,583,504 in November 30, 2021	49,447	45,835
Additional paid-in capital	4,370,311	3,760,649
Retained earnings	6,662,890	6,656,487
Treasury stock, at cost (64,574 shares at August 31, 2022 and 44,532 shares at November 30, 2021)	200,956	108,524
Total stockholders’ equity	10,881,692	10,354,447
Total liabilities and stockholders’ equity	$ 24,721,073	$ 20,854,048

XML

Consolidated Balance Sheets (Current Period Unaudited)-parentheticals (Parentheticals) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Accounts Receivable, Allowance for Credit Loss, Current	$ 34,504	$ 38,188
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized (in shares)	500,000	500,000
Preferred Stock, Shares Issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized (in shares)	9,500,000	9,500,000
Common Stock, Shares, Issued (in shares)	4,944,671	4,583,504
Treasury Stock, Shares, Total (in shares)	64,574	44,532

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Sales	$ 8,140,253	$ 6,591,829	$ 21,028,673	$ 17,702,628
Cost of goods sold	6,099,772	4,853,408	15,603,127	13,199,471
Gross profit	2,040,481	1,738,421	5,425,546	4,503,157
Expenses:
Engineering	168,098	143,629	446,112	387,147
Selling	476,812	532,232	1,594,740	1,549,164
General and administrative	964,764	902,356	3,069,907	2,626,383
Total expenses	1,609,674	1,578,217	5,110,759	4,562,694
Income (Loss) from operations	430,807	160,204	314,787	(59,537)
Other income (expense):
Interest expense	(132,721)	(90,440)	(306,817)	(223,911)
Other	3,213	2,041	207	36,682
Total other income (expense)	(129,508)	(88,399)	(306,610)	(187,229)
Income (Loss) before income taxes	301,299	71,805	8,177	(246,766)
Income tax expense (benefit)	63,524	15,349	1,774	(52,074)
Net Income (Loss)	$ 237,775	$ 56,456	$ 6,403	$ (194,692)

XML

Condensed Consolidated Statements of Operations (Unaudited)-parentheticals - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Interest expense	$ (132,721)	$ (90,440)	$ (306,817)	$ (223,911)
Nonoperating Income (Expense), Total	(129,508)	(88,399)	(306,610)	(187,229)
Total other income (expense)	(129,508)	(88,399)	(306,610)	(187,229)
Income (Loss) before income taxes	$ 301,299	$ 71,805	$ 8,177	$ (246,766)

XML

Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Total
Balance (in shares) at Nov. 30, 2020	4,470,004			35,097
Balance at Nov. 30, 2020	$ 44,700	$ 3,496,243	$ 6,443,856	$ (78,054)	$ 9,906,745
Stock based compensation (in shares)	108,500			9,435
Stock based compensation	$ 1,085	202,160	0	$ (30,471)	172,774
Net (loss)			(194,692)		(194,692)
Balance (in shares) at Aug. 31, 2021	4,578,504			44,532
Balance at Aug. 31, 2021	$ 45,785	3,698,403	6,249,164	$ (108,525)	9,884,827
Balance (in shares) at Nov. 30, 2021	4,583,504			44,532
Balance at Nov. 30, 2021	$ 45,835	3,760,649	6,656,487	$ (108,524)	10,354,447
Stock based compensation (in shares)	106,167			20,042
Stock based compensation	$ 1,062	223,229	0	$ (92,432)	131,859
Net (loss)	$ 0	0	6,403	$ 0	6,403
Common stock purchase agreement (in shares)	255,000
Common stock purchase agreement	$ 2,550	386,433			388,983
Balance (in shares) at Aug. 31, 2022	4,944,671			64,574
Balance at Aug. 31, 2022	$ 49,447	$ 4,370,311	$ 6,662,890	$ (200,956)	$ 10,881,692

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021
Cash flows from operations:
Net income (loss)	$ 6,403	$ (194,692)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Stock based compensation	224,291	203,245
Decrease in obsolete inventory reserves	(210,397)	(485,073)
(Gain) Loss on disposal of property, plant, and equipment	3,971	(7,998)
Depreciation and amortization expense	546,642	453,697
Accrued interest on deferred debt payments	12,774	12,720
Decrease in allowance for doubtful accounts	(3,684)	(10,593)
Deferred income taxes	(720)	(58,843)
Changes in assets and liabilities:
Accounts receivable	(1,153,449)	(554,351)
Inventories	(1,079,093)	(1,041,390)
Net investment in sales-type leases		28,352
Other assets	(82,165)	(213,955)
Accounts payable	798,008	228,455
Contracts in progress, net	4,797	(58,695)
Customer deposits	1,022,464	506,107
Income taxes payable	0	3,900
Accrued expenses	107,822	(58,634)
Net cash provided by (used in) operating activities	197,663	(1,247,748)
Cash flows from investing activities:
Purchases of property, plant, and equipment	(1,187,793)	(487,515)
Net proceeds from sale of assets	9,300	8,000
Net cash used in investing activities	(1,178,493)	(479,515)
Cash flows from financing activities:
Net borrowings in line of credit	484,470	1,930,500
Principal payments on finance lease obligations	(74,608)
Proceeds from term debt	350,000
Repayment of term debt	(74,098)	(67,444)
Proceeds from common stock purchase agreement	431,408	0
Cost of equity issuance	(42,425)	0
Repurchases of common stock	(92,432)	(30,471)
Net cash provided by financing activities	982,316	1,832,585
Net increase in cash	1,486	105,322
Cash at beginning of period	2,658	2,684
Cash at end of period	4,144	108,006
Supplemental disclosures of cash flow information:
Interest	277,488	190,764
Income taxes	800	2,869
Supplemental disclosures of non-cash operating activities:
Right-of-use (ROU) assets acquired (included in other assets)	698,153	0
Less: Cash proceeds received under Manufacturing 4.0 grant applied to ROU Assets - Note 13	(224,513)	0
Total (ROU) assets acquired (included in other assets)	473,640	0
Market value of commitment shares issued under purchase agreement	$ 160,000	$ 0

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Note 1 - Description of the Company

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Nature of Operations [Text Block]

1) Description of the Company

Unless otherwise specified, as used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Art’s-Way,” and the “Company” refer to Art’s-Way Manufacturing Co., Inc., a Delaware corporation headquartered in Armstrong, Iowa, and its wholly-owned subsidiaries.

The Company began operations as a farm equipment manufacturer in 1956. Since that time, it has become a major worldwide manufacturer of agricultural equipment. Its principal manufacturing plant is located in Armstrong, Iowa.

The Company has organized its business into three operating segments. Management separately evaluates the financial results of each segment because each is a strategic business unit offering different products and requiring different technology and marketing strategies. The Agricultural Products segment manufactures and sells farm equipment and related replacement parts under the Art’s-Way Manufacturing label and private labels. The Modular Buildings segment manufactures and installs modular buildings for animal containment and various laboratory uses, and the Tools segment manufactures steel cutting tools and inserts.

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Note 2 - Summary of Significant Accounting Policies

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2) Summary of Significant Accounting Policies

Statement Presentation

The foregoing condensed consolidated financial statements of the Company are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and operating results for the interim periods. The financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. The results of operations for the three and nine months ended August 31, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2022.

Estimates

The preparation of 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 and the reported amounts of revenue and expenses during the three months and nine months ended August 31, 2022. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt ASU 2016-13 in fiscal 2024. The Company does not expect the application of the CECL impairment model to have a significant impact on its allowance for uncollectible amounts for accounts receivable.                  

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Note 3 - Disaggregation of Revenue

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

3) Disaggregation of Revenue

The following table displays revenue by reportable segment from external customers, disaggregated by major source. The Company believes disaggregating by these categories depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

	Three Months Ended August 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	5,610,000	$	-	$	-	$	5,610,000
Farm equipment service parts		594,000		-		-		594,000
Steel cutting tools and inserts		-		-		652,000		652,000
Modular buildings		-		1,095,000		-		1,095,000
Modular building lease income		-		-		-		-
Other		141,000		36,000		12,000		189,000
	$	6,345,000	$	1,131,000	$	664,000	$	8,140,000

	Three Months Ended August 31, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	3,831,000	$	-	$	-	$	3,831,000
Farm equipment service parts		749,000		-		-		749,000
Steel cutting tools and inserts		-		-		613,000		613,000
Modular buildings2		-		1,256,000		-		1,256,000
Modular building lease income		-		-		-		-
Other		80,000		57,000		6,000		143,000
	$	4,660,000	$	1,313,000	$	619,000	$	6,592,000

	Nine Months Ended August 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	13,655,000	$	-	$	-	$	13,655,000
Farm equipment service parts		1,828,000		-		-		1,828,000
Steel cutting tools and inserts		-		-		1,964,000		1,964,000
Modular buildings		-		3,103,000		-		3,103,000
Modular building lease income		-		-		-		-
Other		340,000		105,000		34,000		479,000
	$	15,823,000	$	3,208,000	$	1,998,000	$	21,029,000

	Nine Months Ended August 31, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	9,723,000	$	-	$	-	$	9,723,000
Farm equipment service parts		2,027,000		-		-		2,027,000
Steel cutting tools and inserts		-		-		1,872,000		1,872,000
Modular buildings		-		3,573,000		-		3,573,000
Modular building lease income		-		-		-		-
Other		267,000		225,000		16,000		508,000
	$	12,017,000	$	3,798,000	$	1,888,000	$	17,703,000

The Company offered floorplan terms in its Agricultural Products segment during its Fall 2021 early order program to incentivize customers to stock farm equipment on their lots. Floorplan terms allow customers to pay the Company at the earliest of retail date or 180 days. This program has an effect on the timing of the Company’s fiscal 2022 cash flows compared with historical cash flows.

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Note 4 - Contract Receivables, Contract Assets and Contract Liabilities

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Contract Receivable, Contract Assets, and Contract Liabilities [Text Block]

4) Contract Receivables, Contract Assets and Contract Liabilities

The following table provides information about contract receivables, contract assets, and contract liabilities from contracts with customers included on the Condensed Consolidated Balance Sheets.

	August 31, 2022		November 30, 2021
Receivables	$	3,820,000	$	2,663,000
Assets		194,000		177,000
Liabilities		1,604,000		559,000

The amount of revenue recognized in the first nine months of fiscal 2022 that was included in a contract liability on November 30, 2021 was approximately $559,000. $276,000 of revenue was recognized in the first nine months of fiscal 2021 while the contract liability balance on November 30, 2020 was $276,000.

The Company utilizes the practical expedient exception for these contracts and will report only on performance obligations greater than one year. As of August 31, 2022, the Company has no performance obligations with an original expected duration greater than one year.

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Note 5 - Net Income (Loss) Per Share of Common Stock

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

5) Net Income (Loss) Per Share of Common Stock

Basic net income (loss) per share of common stock has been computed on the basis of the weighted average number of common shares outstanding. Diluted net income (loss) per share has been computed on the basis of the weighted average number of common shares outstanding plus equivalent shares assuming exercise of stock options. Potential shares of common stock that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted net income (loss) per share.

Basic and diluted net income (loss) per share have been computed based on the following as of August 31, 2022 and August 31, 2021:

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Numerator for basic and diluted net income (loss) per share:
Net income (loss)	$	237,775	$	56,456
Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,700,422		4,529,026
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,700,422		4,529,026
Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.05	$	0.01
Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.05	$	0.01

	For the Nine Months Ended
	August 31, 2022		August 31, 2021
Numerator for basic and diluted net income (loss) per share:
Net income (loss)	$	6,403	$	(194,692	)
Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,633,621		4,508,986
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,633,621		4,508,986
Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.00	$	(0.04	)
Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.00	$	(0.04	)

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Note 6 - Inventory

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Inventory Disclosure [Text Block]

6) Inventory

Major classes of inventory are:

	August 31, 2022			November 30, 2021
Raw materials	$	9,159,993		$	8,289,386
Work in process		541,792			357,721
Finished goods		2,699,721			3,088,739
Total Gross Inventory	$	12,401,506		$	11,735,846
Less: Reserves		(1,901,913	)		(2,525,743	)
Net Inventory	$	10,499,593		$	9,210,103

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Note 7 - Accrued Expenses

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

7) Accrued Expenses

Major components of accrued expenses are:

	August 31, 2022		November 30, 2021
Salaries, wages, and commissions	$	772,446	$	654,757
Accrued warranty expense		156,827		202,850
Other		342,155		304,766
	$	1,271,428	$	1,162,373

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Note 8 - Assets Held for Lease

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Disclosure of Assets Available for Sale, Not Part of Discontinued Operations [Text Block]

8) Assets Held for Lease

Major components of assets held for lease are:

	August 31, 2022		November 30, 2021
Modular Buildings	$	532,967	$	521,555
Total assets held for lease	$	532,967	$	521,555

There were no rents recognized from assets held for lease included in sales on the Condensed Consolidated Statements of Operations during the three and nine months ended August 31, 2022 and August 31, 2021.

The Company has two of the seven rental buildings under lease agreements as of the date of this report. The Company has approximately $30,000 in rents held in customer deposits for rental buildings not in service as of August 31, 2022.

The future minimum lease receipts from assets held for lease for periods after August 31, 2022 are as follows:

Twelve Months Ending August 31	Amount
2023	$	98,116
2024		12,525
Total	$	110,641

On June 14, 2022, the Company received a purchase order in the amount of $383,904 for the purchase of two rental buildings in the Company’s fleet. The Company expects the sale of these units to occur in Q4 of fiscal 2022.

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Note 9 - Product Warranty

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Product Warranty Disclosure [Text Block]

9) Product Warranty

The Company offers warranties of various lengths to its customers depending on the specific product and terms of the customer purchase agreement. The average length of the warranty period is one year from the date of purchase. The Company’s warranties require it to repair or replace defective products during the warranty period at no cost to the customer. Product warranty is included in the price of the product and provides assurance that the product will function in accordance with agreed-upon specifications. It does not represent a separate performance obligation under ASC 606. The Company records a liability for estimated costs that August be incurred under its warranties. The costs are estimated based on historical experience and any specific warranty issues that have been identified. Although historical warranty costs have been within expectations, there can be no assurance that future warranty costs will not exceed historical amounts. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the balance as necessary. The accrued warranty balance is included in accrued expenses as shown in Note 7 “Accrued Expenses.” Changes in the Company’s product warranty liability for the three and nine months ended August 31, 2022 and August 31, 2021 are as follows:

	For the Three Months Ended
	August 31, 2022			August 31, 2021
Balance, beginning	$	89,549		$	267,500
Settlements / adjustments		(69,721	)		(75,204	)
Warranties issued		136,999			53,384
Balance, ending	$	156,827		$	245,680

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Balance, beginning	$	202,850		$	291,453
Settlements / adjustments		(277,734	)		(177,470	)
Warranties issued		231,711			131,697
Balance, ending	$	156,827		$	245,680

The Company carried a larger warranty accrual than historically reported in fiscal 2021 due to a large construction project in the Modular Buildings segment. The warranty period for this project closed on April 9, 2022.

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Note 10 - Loan and Credit Agreements

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

10) Loan and Credit Agreements

Bank Midwest Revolving Lines of Credit

The Company maintains a $5,000,000 revolving line of credit (the “Line of Credit”) and a $550,000 revolving line of credit (the “Reserve Line of Credit”), both used for working capital purposes. The Reserve Line of Credit funds will remain undisbursed until all funds on the Line of Credit are used. On August 31, 2022, the combined balance of the Line of Credit and Reserve Line of Credit was $4,559,000with $991,000remaining available, as may be limited by the borrowing base calculation. The Line of Credit borrowing base is an amount equal to 75% of accounts receivable balances (discounted for aged receivables), plus 50% of net inventory, less any outstanding loan balance on the Line of Credit. On August 31, 2022, the Line of Credit was not limited by the borrowing base calculation. Any unpaid principal amount borrowed on the Line of Credit accrues interest at a floating rate per annum equal to 1.50% above the Wall Street Journal rate published in the money rates section of the Wall Street Journal. The interest rate floor is set at 4.25% per annum and the current (as of filing date) interest rate is 7.750% per annum following several increases in fiscal 2022. The Line of Credit was most recently renewed on March 28, 2022. The Line of Credit matures on March 30, 2023 and requires monthly interest-only payments. Any unpaid principal amount borrowed on the Reserve Line of Credit accrues interest at a floating rate per annum equal to 2.0% above the Wall Street Journal rate published in the money rates section of the Wall Street Journal. The interest rate floor is set at 4.00% per annum and the current interest rate is 8.250% per annum. The Reserve Line of Credit matures on November 30, 2022 and any unpaid balance must be repaid at that time. The Line of Credit is governed by the terms of a Promissory Note, dated February 11, 2021, entered into between the Company and Bank Midwest. The Reserve Line of Credit is governed by the terms of a Promissory Note, dated August 17, 2022, entered into between the Company and Bank Midwest.

In connection with the Line of Credit, the Company, Art’s-Way Scientific Inc. and Ohio Metal Working Products/Art’s-Way Inc. each entered into a Commercial Security Agreement with Bank Midwest, dated September 28, 2017, pursuant to which each granted to Bank Midwest a first priority security interest in certain inventory, equipment, accounts, chattel paper, instruments, letters of credit and other assets to secure the obligations of the Company under the Line of Credit. Each of Art’s-Way Scientific Inc. and Ohio Metal Working Products/Art’s-Way Inc. also agreed to guarantee the obligations of the Company pursuant to the Line of Credit, as set forth in Commercial Guaranties, each dated September 28, 2017.

To further secure the Line of Credit, the Company granted Bank Midwest a mortgage on its Canton, Ohio property held by Ohio Metal Working Products/Art’s-Way Inc. The Term Loan is secured by a mortgage on the Company’s Armstrong, Iowa and Monona, Iowa properties. Each mortgage is governed by the terms of a separate Mortgage, dated September 28, 2017, and each property is also subject to a separate Assignment of Rents, dated September 28, 2017.

The Reserve Line of Credit is secured by any and all security documents between the Company and Bank Midwest.

Bank Midwest Term Loans

The Company carries a $2,600,000 term loan due October 1, 2037 (the “Term Loan”), and a $350,000 term loan (the “Roof Term Loan”) due on August 15, 2027. The Term Loan accrues interest at a rate of 5.00% for the first ninety months, which will end on September 28, 2022. Thereafter, the Term Loan will accrue interest at a floating rate per annum equal to 0.75% above the Wall Street Journal rate published in the money rates section of the Wall Street Journal. The interest rate floor is set at 4.15% per annum and the interest rate may only be adjusted by Bank Midwest once every five years. Monthly payments of $17,271in principal and interest are required. The Term Loan is also guaranteed by the United States Department of Agriculture (“USDA”), which required an upfront guarantee fee of $62,400and requires an annual fee of 0.5% of the unpaid balance. As part of the USDA guarantee requirements, shareholders owning more than 20% are required to personally guarantee a portion of the Term Loan, in an amount equal to their stock ownership percentage. The J. Ward McConnell Jr. Living Trust, the estate of the former Vice Chairman of the Board of Directors and a shareholder owning more than 20% of the Company’s outstanding stock, is guaranteeing approximately 38% of the Term Loan, for an annual fee of 2% of the personally guaranteed amount. The initial guarantee fee will be amortized over the life of the Term Loan, and the annual fees and personally guaranteed amounts are expensed monthly. The Company also entered into the Roof Term Loan of $350,000on August 17, 2022. The Roof Term Loan’s proceeds were used to fix sections of the Armstrong facility’s roof. The Roof Term Loan requires 59regular payments of $2,972and an estimated balloon payment of $268,176on the maturity date of August 15, 2027. Any unpaid principal amount borrowed on the Roof Term Loan accrues interest at a floating rate per annum equal to 2.00% above the Wall Street Journal rate published in the money rates section of the Wall Street Journal. The interest rate floor is set at 5.00% per annum and the current interest rate is 8.25% per annum. The Term Loan is governed by the terms of a Promissory Note, dated September 28, 2017, entered into between the Company and Bank Midwest. The Roof Term Loan is governed by the terms of a Promissory Note, dated August 17, 2022, entered into between the Company and Bank Midwest.

Compliance

If the Company or its subsidiaries (as guarantors pursuant to the Commercial Guaranties) commits an event of default with respect to the promissory notes and fails or is unable to cure that default, Bank Midwest may immediately terminate its obligation, if any, to make additional loans to the Company and may accelerate the Company’s obligations under the promissory notes. Bank Midwest shall also have all other rights and remedies for default provided by the Uniform Commercial Code, as well as any other applicable law and the various loan agreements. In addition, in an event of default, Bank Midwest may foreclose on the mortgaged property.

Compliance with the following Bank Midwest covenants is measured annually on November 30. A maximum debt to worth ratio of 1 to 1 must be maintained, with a minimum of 40% tangible balance sheet equity, with variations subject to mutual agreement. The Company is also required to maintain a minimum debt service coverage ratio of 1.25, with a 0.10tolerance. The Company also must receive bank approval for purchases or sales of individual equipment over $50,000individually and maintain reasonable salaries and owner compensation. The Company was out of compliance with its debt to worth ratio covenant in place under the Bank Midwest loan agreements as of November 30, 2021. Bank Midwest issued a waiver forgiving the noncompliance, and in turn waived the event of default. The next measurement date is November 30, 2022.

The Company also has a minimum working capital requirement of $4,000,000 that is measured monthly. The $4,000,000 working capital level serves as a trigger point for Bank Midwest and the Company to continue discussion of capital raising strategies to support additional capital injection. As of August 31, 2022, the Company was in compliance with its working capital requirement.

SBA Economic Injury Disaster Loans

The Company secured three loans in the amount of $150,000 each in June of 2021 with the U.S. Small Business Administration under its Economic Injury Disaster Loan (“EIDL”) program. Proceeds from the EIDLs were used for working capital purposes. Interest accrues at the rate of 3.75% per annum and will accrue from the date of inception. Installment payments, including principal and interest, are due monthly, thirty months from the date of disbursement, in the amount of $731 per loan. The balance of principal and interest is payable 30 years from the date of disbursement. The EIDLs are secured by a security interest on all of the Company’s assets. Each EIDL is governed by the terms of a separate Promissory Note, dated either June 18, 2020 or June 24, 2020, as applicable, entered into by the Company or the applicable subsidiary.

A summary of the Company’s term debt is as follows:

	August 31, 2022		November 30, 2021
Bank Midwest loan payable in monthly installments of $17,271 including interest at 5.00%, due October 1, 2037	$	2,189,491	$	2,260,412
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 18, 2021, due June 18, 2050		162,390		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 18, 2021, due June 18, 2050		162,390		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 24, 2021, due June 24, 2050		162,509		158,181
Bank Midwest loan payable in monthly installments of $2,972 including interest at 6.00%, due May 15, 2027		346,825		-
Total term debt	$	3,023,605	$	2,734,929
Less current portion of term debt		114,407		99,462
Term debt, excluding current portion	$	2,909,198	$	2,635,467

A summary of the minimum maturities of term debt follows for the twelve months ending August 31:

Year	Amount
2023	$	114,407
2024		122,185
2025		129,095
2026		135,971
2027		433,873
2028 and thereafter		2,088,074
	$	3,023,605

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Note 11 - Income Taxes

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

11) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses.

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Note 12 - Related Party Transactions

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

12) Related Party Transactions

During the three and nine months ended August 31, 2022, and August 31, 2021, the Company did not recognize any revenues from transactions with a related party, and no amounts in accounts receivable balances were due from a related party. From time to time, the Company purchases various supplies from related parties, which are companies in which Marc McConnell, the Chairman of the Company’s Board of Directors, has an ownership interest and also serves as President. J. Ward McConnell Jr.’s estate, the J. Ward McConnell, Jr. Living Trust, is paid a monthly fee to guarantee a portion of the Company’s term debt in accordance with the USDA guarantee obtained on the Company’s term debt. In the three and nine months ended August 31, 2022, the Company recognized $4,209and $19,762of expense for transactions with related parties, respectively, compared to $6,539and $19,200for the three and nine months ended August 31, 2021. As of August 31, 2022, accrued expenses contained a balance of $1,408owed to a related party compared to $1,469on August 31, 2021.

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Note 13 - Leases

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Leases [Text Block]

13) Leases

	August 31, 2022		November 30, 2021
Operating lease right-of-use assets (in other assets)	$	38,209	$	47,794
Current portion of operating lease liabilities (in accrued expenses)	$	11,631	$	12,863
Long-term portion of operating lease liabilities		26,578		34,931
Total operating lease liabilities	$	38,209	$	47,794

The Company recorded $4,333and $14,368of operating lease costs in the three and nine months ended August 31, 2022, respectively, which included variable costs tied to usage, compared to $5,547and $17,536for the three and nine months ended August 31, 2021. The Company’s operating leases carry a weighted average lease term of 42months and have a weighted average discount rate of 4.86%

Future maturities of operating lease liabilities are as follows:

Twelve Months Ending August 31
2023	$	13,201
2024		11,488
2025		9,695
2026		7,149
Total lease payments	$	41,533
Less imputed interest		(3,324	)
Total operating lease liabilities	$	38,209

The components of finance leases on the Consolidated Balance Sheets on August 31, 2022 and November 30, 2021 were as follows:

	August 31, 2022		November 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$	577,023	$	190,667
Current portion of finance lease liabilities (accrued expenses)	$	169,023	$	48,591
Long-term portion of finance lease liabilities		645,499		142,386
Total finance lease liabilities	$	814,522	$	190,977

The Company received $224,513 of grant funds from the Iowa Economic Development’s Manufacturing 4.0 program in Q3 of fiscal 2022. These funds were for 75% reimbursement of three robotic welders that were later financed under a capital lease. These funds have reduced the right-of-use asset account and will reduce amortization over the life of the asset.

Future maturities of finance lease liabilities as of August 31, 2022 are as follows:

Twelve Months Ending August 31
2023	$	199,836
2024		199,836
2025		179,387
2026		157,258
2027		160,688
Total lease payments		897,005
Less imputed interest		(82,483	)
Total finance lease liabilities	$	814,522

The weighted average lease term of the Company’s finance leases are 52 months while the weighted average rate of finance leases is 4.18%. The Company incurred $40,140 and $87,284 of amortization expense from ROU assets related to finance leases in three- and nine-months ending August 31, 2022, respectively compared to $0 for the same periods in 2021.

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Note 14 - Equity Incentive Plan and Stock Based Compensation

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

14) Equity Incentive Plan and Stock Based Compensation

On February 25, 2020, the Board of Directors of the Company (the “Board”) authorized and approved the Art’s-Way Manufacturing Co., Inc. 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan was approved by the stockholders on April 30, 2020. The 2020 Plan replaced the Art’s-Way Manufacturing Co., Inc. 2011 Equity Incentive Plan (the “2011 Plan”) and prior plans. The 2020 Plan added an additional 500,000 shares to the number of shares reserved for issuance pursuant to equity awards. No further awards will be made under the 2011 Plan or other prior plans. Awards to directors and executive officers under the 2020 Plan are governed by the forms of agreement approved by the Board of Directors. Stock options or other awards granted prior to February 25, 2020 are governed by the applicable prior plan and the forms of agreement adopted thereunder.

The 2020 Plan permits the plan administrator to award nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance awards, and stock appreciation rights to employees (including officers), directors, and consultants. The Board has approved a director compensation policy pursuant to which non-employee directors are automatically granted restricted stock awards of 1,000 shares of fully vested common stock annually or initially upon their election to the Board and another 1,000 shares of fully vested common stock on the last business day of each fiscal quarter.

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Shares issued to directors (immediate vesting)		5,000		5,000
Shares issued to directors, employees, and consultants (three-year vesting)		-		-
Total shares issued		5,000		5,000

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Shares issued to directors (immediate vesting)		20,000			20,000
Shares issued to directors, employees, and consultants (three-year vesting)		94,500			88,500
Unvested shares forfeit upon termination		(8,333	)		-
Total shares issued		106,167			108,500

Stock-based compensation expense reflects the fair value of stock-based awards measured at the grant date and recognized over the relevant vesting period. The Company estimates the fair value of each stock-based option award on the measurement date using the Black-Scholes option valuation model which incorporates assumptions as to stock price volatility, the expected life of the options, risk-free interest rate, and dividend yield. Expected volatility is based on historical volatility of the Company’s stock and other factors. The Company uses historical option exercise and termination data to estimate the expected term the options are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is calculated using historical dividend amounts and the stock price at the option issuance date. No stock options were granted during the three- and nine-month periods ended August 31, 2022 or in the same respective period of fiscal 2021.

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Stock-based compensation expense		66,826		61,446
Treasury share repurchase expense		-		-
Stock-based compensation expense net of treasury repurchases		66,826		61,446

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Stock-based compensation expense		224,291			203,245
Treasury share repurchase expense		(92,432	)		(30,471	)
Stock-based compensation expense net of treasury repurchases		131,859			172,774

The Company’s repurchased treasury shares are related to the vesting of employee’s stock compensation. Employees are given the option to pay their share of payroll tax or the Company will buy back the shares and pay the tax on their behalf.

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Note 15 - Common Stock Purchase Agreement

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

15) Common Stock Purchase Agreement

On March 29, 2022, Art’s-Way Manufacturing Co., Inc. (the “Company”) entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Alumni Capital LP, a Delaware limited partnership (“Alumni Capital”), pursuant to which the Company agreed to sell, and Alumni Capital agreed to purchase, upon request of the Company in one or more transactions, a number of shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”) providing aggregate gross proceeds to the Company of up to $3,000,000 (the “Maximum”). The Purchase Agreement expires upon the earlier of the aggregate gross proceeds from the sale of shares meeting the Maximum or June 30, 2023.

Among other limitations, unless otherwise agreed upon by Alumni Capital, each sale of shares will be limited to 50,000 shares and further limited to no more than the number of shares that would result in the beneficial ownership by Alumni Capital and its affiliates, at any single point in time, of more than 9.99% of the then-outstanding shares of Common Stock. Alumni Capital will purchase the shares of Common Stock under the Agreement at a discount ranging from 3-5% of the lowest traded price of the Common Stock in the five business days preceding the Company delivering notice of the required purchase of shares to Alumni Capital.

In exchange for Alumni Capital entering into the Purchase Agreement, the Company issued 20,000 shares of Common Stock to Alumni Capital upon execution of the Purchase Agreement (the “Initial Commitment Shares”) and will issue another 20,000 shares in connection with the first closing under the Purchase Agreement (with the Initial Commitment Shares, the “Commitment Shares”). Alumni Capital represented to the Company, among other things, that it was an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)). The Company shares of Common Stock, including the Commitment Shares, are being offered and sold under the Purchase Agreement in reliance upon an exemption from the registration requirements of the Securities Act afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder. The securities sold may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The Purchase Agreement provided that the Company will file a registration statement under the Securities Act covering the resale of the shares issued to Alumni Capital. Alumni Capital’s obligation to purchase shares of Common Stock under the Purchase Agreement is conditioned upon, among other things, the registration statement having been declared effective by the Securities and Exchange Commission. The Company filed a registration statement on Form S-3 (the “Registration Statement”) April 27, 2022 which was declared effective on August 9, 2022 by the SEC.

The Company evaluated the embedded options and believe they should not be bifurcated from the agreement and accounted for separately as it is indexed to the Company’s stock and would qualify for equity treatment on the balance sheet.

The Company incurred approximately $203,000 of expense related to equity issuance in the nine months ended August 31, 2022 in the form of 40,000 commitment shares valued at approximately $160,000, attorney fees for the negotiation and execution of the Purchase Agreement and the preparation and filing of the registration statement. These equity issuance costs have reduced proceeds received under the common stock purchase agreement in additional paid in capital.

Below is a summary of shares purchased by Alumni Capital under this agreement as of the filing date of this report:

Date	Shares	Share price net of discount	Proceeds
7/25/2022	50,000	$ 2.07	$ 103,305
8/03/2022	50,000	$ 1.98	$ 98,940
8/15/2022	50,000	$ 2.00	$ 99,910
8/23/2022	65,000	$ 1.99	$ 129,253
9/23/2022	65,000	$ 1.76	$ 114,120
Total	280,000		$ 545,528

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Note 16 - Disclosures About the Fair Value of Financial Instruments

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Fair Value Disclosures [Text Block]

16) Disclosures About the Fair Value of Financial Instruments

The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. On August 31, 2022 and November 30, 2021, the carrying amount approximated fair value for cash, accounts receivable, accounts payable, notes payable to bank, finance lease liabilities and other current and long-term liabilities. The carrying amounts of current assets and liabilities approximate fair value because of the short maturity of these instruments. The fair value of the finance lease liabilities also approximate recorded value as that is based on discounting future cash flows at rates implicit in the lease. The rates implicit in the lease do not materially differ from current market rates. The fair value of the Company’s term loans payable also approximates recorded value because the interest rates charged under the loan terms are not substantially different from current interest rates.

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Note 17 - Segment Information

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

17) Segment Information

The Company has three reportable segments: Agricultural Products, Modular Buildings and Tools. The Agricultural Products segment manufactures and sells farm equipment and related replacement parts under the Art’s-Way Manufacturing label. The Modular Buildings segment manufactures and installs modular buildings for various uses, commonly animal containment and research laboratories. The Tools segment manufactures steel cutting tools and inserts.

The accounting policies applied to determine the segment information are the same as those described in the summary of significant accounting policies. Management evaluates the performance of each segment based on profit or loss from operations before income taxes, exclusive of nonrecurring gains and losses.

Approximate financial information with respect to the reportable segments is as follows.

	Three Months Ended August 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	6,345,000	$	1,131,000		$	664,000		$	8,140,000
Income (loss) from operations		676,000		(176,000	)		(69,000	)		431,000
Income (loss) before tax		566,000		(181,000	)		(84,000	)		301,000
Total Assets		18,328,000		3,608,000			2,785,000			24,721,000
Capital expenditures		506,000		118,000			53,000			677,000
Depreciation & Amortization	$	124,000	$	33,000		$	39,000		$	196,000

	Three Months Ended August 31, 2021
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	4,660,000	$	1,313,000	$	619,000		$	6,592,000
Income (loss) from operations		95,000		89,000		(24,000	)		160,000
Income (loss) before tax		26,000		82,000		(36,000	)		72,000
Total Assets		14,981,000		3,701,000		2,573,000			21,255,000
Capital expenditures		153,000		11,000		5,000			169,000
Depreciation & Amortization	$	85,000	$	27,000	$	33,000		$	145,000

	Nine Months Ended August 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	15,823,000	$	3,208,000		$	1,998,000		$	21,029,000
Income (loss) from operations		994,000		(484,000	)		(195,000	)		315,000
Income (loss) before tax		746,000		(504,000	)		(234,000	)		8,000
Total Assets		18,328,000		3,608,000			2,785,000			24,721,000
Capital expenditures		981,000		143,000			64,000			1,188,000
Depreciation & Amortization	$	342,000	$	101,000		$	104,000		$	547,000

	Nine Months Ended August 31, 2021
	Agricultural Products			Modular Buildings			Tools			Consolidated
Revenue from external customers	$	12,017,000		$	3,798,000		$	1,888,000		$	17,703,000
Income (loss) from operations		85,000			(97,000	)		(48,000	)		(60,000	)
Income (loss) before tax		(48,000	)		(118,000	)		(81,000	)		(247,000	)
Total Assets		14,981,000			3,701,000			2,573,000			21,255,000
Capital expenditures		463,000			20,000			5,000			488,000
Depreciation & Amortization	$	271,000		$	83,000		$	100,000		$	454,000

*The consolidated total in the tables is a sum of segment figures and may not tie to actual figures in the condensed consolidated financial statements due to rounding.

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Note 18 - Subsequent Events

9 Months Ended

Aug. 31, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

18) Subsequent Events

Management evaluated all other activity of the Company and concluded no other events have occurred that would require recognition in the condensed consolidated financial statements other than the shares sold to Alumni Capital as discussed in Note 15.

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Significant Accounting Policies (Policies)	9 Months Ended
	Aug. 31, 2022
Accounting Policies [Abstract]
Basis of Accounting, Policy [Policy Text Block]	Statement Presentation The foregoing condensed consolidated financial statements of the Company are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and operating results for the interim periods. The financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2021. The results of operations for the three and nine months ended August 31, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2022.
Use of Estimates, Policy [Policy Text Block]	Estimates The preparation of 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 and the reported amounts of revenue and expenses during the three months and nine months ended August 31, 2022. Actual results could differ from those estimates.
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Issued Accounting Pronouncements Accounting Pronouncements Not Yet Adopted Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt ASU 2016-13 in fiscal 2024. The Company does not expect the application of the CECL impairment model to have a significant impact on its allowance for uncollectible amounts for accounts receivable.

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Note 3 - Disaggregation of Revenue (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended August 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	5,610,000	$	-	$	-	$	5,610,000
Farm equipment service parts		594,000		-		-		594,000
Steel cutting tools and inserts		-		-		652,000		652,000
Modular buildings		-		1,095,000		-		1,095,000
Modular building lease income		-		-		-		-
Other		141,000		36,000		12,000		189,000
	$	6,345,000	$	1,131,000	$	664,000	$	8,140,000

	Three Months Ended August 31, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	3,831,000	$	-	$	-	$	3,831,000
Farm equipment service parts		749,000		-		-		749,000
Steel cutting tools and inserts		-		-		613,000		613,000
Modular buildings2		-		1,256,000		-		1,256,000
Modular building lease income		-		-		-		-
Other		80,000		57,000		6,000		143,000
	$	4,660,000	$	1,313,000	$	619,000	$	6,592,000

	Nine Months Ended August 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	13,655,000	$	-	$	-	$	13,655,000
Farm equipment service parts		1,828,000		-		-		1,828,000
Steel cutting tools and inserts		-		-		1,964,000		1,964,000
Modular buildings		-		3,103,000		-		3,103,000
Modular building lease income		-		-		-		-
Other		340,000		105,000		34,000		479,000
	$	15,823,000	$	3,208,000	$	1,998,000	$	21,029,000

	Nine Months Ended August 31, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	9,723,000	$	-	$	-	$	9,723,000
Farm equipment service parts		2,027,000		-		-		2,027,000
Steel cutting tools and inserts		-		-		1,872,000		1,872,000
Modular buildings		-		3,573,000		-		3,573,000
Modular building lease income		-		-		-		-
Other		267,000		225,000		16,000		508,000
	$	12,017,000	$	3,798,000	$	1,888,000	$	17,703,000

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Note 4 - Contract Receivables, Contract Assets and Contract Liabilities (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]

	August 31, 2022		November 30, 2021
Receivables	$	3,820,000	$	2,663,000
Assets		194,000		177,000
Liabilities		1,604,000		559,000

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Note 5 - Net Income (Loss) Per Share of Common Stock (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Numerator for basic and diluted net income (loss) per share:
Net income (loss)	$	237,775	$	56,456
Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,700,422		4,529,026
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,700,422		4,529,026
Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.05	$	0.01
Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.05	$	0.01

	For the Nine Months Ended
	August 31, 2022		August 31, 2021
Numerator for basic and diluted net income (loss) per share:
Net income (loss)	$	6,403	$	(194,692	)
Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,633,621		4,508,986
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,633,621		4,508,986
Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.00	$	(0.04	)
Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.00	$	(0.04	)

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Note 6 - Inventory (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	August 31, 2022			November 30, 2021
Raw materials	$	9,159,993		$	8,289,386
Work in process		541,792			357,721
Finished goods		2,699,721			3,088,739
Total Gross Inventory	$	12,401,506		$	11,735,846
Less: Reserves		(1,901,913	)		(2,525,743	)
Net Inventory	$	10,499,593		$	9,210,103

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Note 7 - Accrued Expenses (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	August 31, 2022		November 30, 2021
Salaries, wages, and commissions	$	772,446	$	654,757
Accrued warranty expense		156,827		202,850
Other		342,155		304,766
	$	1,271,428	$	1,162,373

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Note 8 - Assets Held for Lease (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Property, Plant, and Equipment, Lessor Asset under Operating Lease [Table Text Block]

	August 31, 2022		November 30, 2021
Modular Buildings	$	532,967	$	521,555
Total assets held for lease	$	532,967	$	521,555

Property, Plant, and Equipment, Excluding Lessor Asset under Operating Lease , Maturity [Table Text Block]

Twelve Months Ending August 31	Amount
2023	$	98,116
2024		12,525
Total	$	110,641

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Note 9 - Product Warranty (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Schedule of Product Warranty Liability [Table Text Block]

	For the Three Months Ended
	August 31, 2022			August 31, 2021
Balance, beginning	$	89,549		$	267,500
Settlements / adjustments		(69,721	)		(75,204	)
Warranties issued		136,999			53,384
Balance, ending	$	156,827		$	245,680

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Balance, beginning	$	202,850		$	291,453
Settlements / adjustments		(277,734	)		(177,470	)
Warranties issued		231,711			131,697
Balance, ending	$	156,827		$	245,680

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Note 10 - Loan and Credit Agreements (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Schedule of Debt [Table Text Block]

	August 31, 2022		November 30, 2021
Bank Midwest loan payable in monthly installments of $17,271 including interest at 5.00%, due October 1, 2037	$	2,189,491	$	2,260,412
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 18, 2021, due June 18, 2050		162,390		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 18, 2021, due June 18, 2050		162,390		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning June 24, 2021, due June 24, 2050		162,509		158,181
Bank Midwest loan payable in monthly installments of $2,972 including interest at 6.00%, due May 15, 2027		346,825		-
Total term debt	$	3,023,605	$	2,734,929
Less current portion of term debt		114,407		99,462
Term debt, excluding current portion	$	2,909,198	$	2,635,467

Schedule of Maturities of Long-Term Debt [Table Text Block]

Year	Amount
2023	$	114,407
2024		122,185
2025		129,095
2026		135,971
2027		433,873
2028 and thereafter		2,088,074
	$	3,023,605

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Note 13 - Leases (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Lessee, Operating Leases, Assets and Liabilities [Table Text Block]

	August 31, 2022		November 30, 2021
Operating lease right-of-use assets (in other assets)	$	38,209	$	47,794
Current portion of operating lease liabilities (in accrued expenses)	$	11,631	$	12,863
Long-term portion of operating lease liabilities		26,578		34,931
Total operating lease liabilities	$	38,209	$	47,794

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Twelve Months Ending August 31
2023	$	13,201
2024		11,488
2025		9,695
2026		7,149
Total lease payments	$	41,533
Less imputed interest		(3,324	)
Total operating lease liabilities	$	38,209

Lessee, Finance Leases, Assets and Liabilities [Table Text Block]

	August 31, 2022		November 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$	577,023	$	190,667
Current portion of finance lease liabilities (accrued expenses)	$	169,023	$	48,591
Long-term portion of finance lease liabilities		645,499		142,386
Total finance lease liabilities	$	814,522	$	190,977

Finance Lease, Liability, Fiscal Year Maturity [Table Text Block]

Twelve Months Ending August 31
2023	$	199,836
2024		199,836
2025		179,387
2026		157,258
2027		160,688
Total lease payments		897,005
Less imputed interest		(82,483	)
Total finance lease liabilities	$	814,522

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Note 14 - Equity Incentive Plan and Stock Based Compensation (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Share-Based Payment Arrangement, Activity [Table Text Block]

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Shares issued to directors (immediate vesting)		5,000		5,000
Shares issued to directors, employees, and consultants (three-year vesting)		-		-
Total shares issued		5,000		5,000

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Shares issued to directors (immediate vesting)		20,000			20,000
Shares issued to directors, employees, and consultants (three-year vesting)		94,500			88,500
Unvested shares forfeit upon termination		(8,333	)		-
Total shares issued		106,167			108,500

Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

	For the Three Months Ended
	August 31, 2022		August 31, 2021
Stock-based compensation expense		66,826		61,446
Treasury share repurchase expense		-		-
Stock-based compensation expense net of treasury repurchases		66,826		61,446

	For the Nine Months Ended
	August 31, 2022			August 31, 2021
Stock-based compensation expense		224,291			203,245
Treasury share repurchase expense		(92,432	)		(30,471	)
Stock-based compensation expense net of treasury repurchases		131,859			172,774

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Note 15 - Common Stock Purchase Agreement (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Schedule of Stockholders Equity [Table Text Block]

Date	Shares	Share price net of discount	Proceeds
7/25/2022	50,000	$ 2.07	$ 103,305
8/03/2022	50,000	$ 1.98	$ 98,940
8/15/2022	50,000	$ 2.00	$ 99,910
8/23/2022	65,000	$ 1.99	$ 129,253
9/23/2022	65,000	$ 1.76	$ 114,120
Total	280,000		$ 545,528

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Note 17 - Segment Information (Tables)

9 Months Ended

Aug. 31, 2022

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	Three Months Ended August 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	6,345,000	$	1,131,000		$	664,000		$	8,140,000
Income (loss) from operations		676,000		(176,000	)		(69,000	)		431,000
Income (loss) before tax		566,000		(181,000	)		(84,000	)		301,000
Total Assets		18,328,000		3,608,000			2,785,000			24,721,000
Capital expenditures		506,000		118,000			53,000			677,000
Depreciation & Amortization	$	124,000	$	33,000		$	39,000		$	196,000

	Three Months Ended August 31, 2021
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	4,660,000	$	1,313,000	$	619,000		$	6,592,000
Income (loss) from operations		95,000		89,000		(24,000	)		160,000
Income (loss) before tax		26,000		82,000		(36,000	)		72,000
Total Assets		14,981,000		3,701,000		2,573,000			21,255,000
Capital expenditures		153,000		11,000		5,000			169,000
Depreciation & Amortization	$	85,000	$	27,000	$	33,000		$	145,000

	Nine Months Ended August 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	15,823,000	$	3,208,000		$	1,998,000		$	21,029,000
Income (loss) from operations		994,000		(484,000	)		(195,000	)		315,000
Income (loss) before tax		746,000		(504,000	)		(234,000	)		8,000
Total Assets		18,328,000		3,608,000			2,785,000			24,721,000
Capital expenditures		981,000		143,000			64,000			1,188,000
Depreciation & Amortization	$	342,000	$	101,000		$	104,000		$	547,000

	Nine Months Ended August 31, 2021
	Agricultural Products			Modular Buildings			Tools			Consolidated
Revenue from external customers	$	12,017,000		$	3,798,000		$	1,888,000		$	17,703,000
Income (loss) from operations		85,000			(97,000	)		(48,000	)		(60,000	)
Income (loss) before tax		(48,000	)		(118,000	)		(81,000	)		(247,000	)
Total Assets		14,981,000			3,701,000			2,573,000			21,255,000
Capital expenditures		463,000			20,000			5,000			488,000
Depreciation & Amortization	$	271,000		$	83,000		$	100,000		$	454,000

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Note 1 - Description of the Company (Details Textual)	9 Months Ended
	Aug. 31, 2022
Number of Operating Segments	3

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Note 3 - Disaggregation of Revenue - Disaggregated Revenue From External Customer (Details) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Revenue	$ 8,140,000	$ 6,592,000	$ 21,029,000	$ 17,703,000
Farm Equipment [Member]
Revenue	5,610,000	3,831,000	13,655,000	9,723,000
Farm Equipment Service Parts [Member]
Revenue	594,000	749,000	1,828,000	2,027,000
Steel Cutting Tools and Inserts [Member]
Revenue	652,000	613,000	1,964,000	1,872,000
Modular Buildings [Member]
Revenue	1,095,000	1,256,000	3,103,000	3,573,000
Modular Buildings Lease Income [Member]
Revenue	0	0	0	0
Product and Service, Other [Member]
Revenue	189,000	143,000	479,000	508,000
Agricultural Products [Member]
Revenue	6,345,000	4,660,000	15,823,000	12,017,000
Agricultural Products [Member] | Farm Equipment [Member]
Revenue	5,610,000	3,831,000	13,655,000	9,723,000
Agricultural Products [Member] | Farm Equipment Service Parts [Member]
Revenue	594,000	749,000	1,828,000	2,027,000
Agricultural Products [Member] | Steel Cutting Tools and Inserts [Member]
Revenue	0	0	0	0
Agricultural Products [Member] | Modular Buildings [Member]
Revenue	0	0	0	0
Agricultural Products [Member] | Modular Buildings Lease Income [Member]
Revenue	0	0	0	0
Agricultural Products [Member] | Product and Service, Other [Member]
Revenue	141,000	80,000	340,000	267,000
Modular Buildings [Member]
Revenue	1,131,000	1,313,000	3,208,000	3,798,000
Modular Buildings [Member] | Farm Equipment [Member]
Revenue	0	0	0	0
Modular Buildings [Member] | Farm Equipment Service Parts [Member]
Revenue	0	0	0	0
Modular Buildings [Member] | Steel Cutting Tools and Inserts [Member]
Revenue	0	0	0	0
Modular Buildings [Member] | Modular Buildings [Member]
Revenue	1,095,000	1,256,000	3,103,000	3,573,000
Modular Buildings [Member] | Modular Buildings Lease Income [Member]
Revenue	0	0	0	0
Modular Buildings [Member] | Product and Service, Other [Member]
Revenue	36,000	57,000	105,000	225,000
Tools [Member]
Revenue	664,000	619,000	1,998,000	1,888,000
Tools [Member] | Farm Equipment [Member]
Revenue	0	0	0	0
Tools [Member] | Farm Equipment Service Parts [Member]
Revenue	0	0	0	0
Tools [Member] | Steel Cutting Tools and Inserts [Member]
Revenue	652,000	613,000	1,964,000	1,872,000
Tools [Member] | Modular Buildings [Member]
Revenue	0	0	0	0
Tools [Member] | Modular Buildings Lease Income [Member]
Revenue	0	0	0	0
Tools [Member] | Product and Service, Other [Member]
Revenue	$ 12,000	$ 6,000	$ 34,000	$ 16,000

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Note 4 - Contract Receivables, Contract Assets and Contract Liabilities (Details Textual) - USD ($)		9 Months Ended
	Nov. 30, 2020	Aug. 31, 2022	Aug. 31, 2021
Contract with Customer, Liability, Revenue Recognized During Period	$ 276,000	$ 559,000	$ 276,000

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Note 4 - Contract Receivables, Contract Assets and Contract Liabilities - Contract With Customers (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Receivables	$ 3,820,000	$ 2,663,000
Assets	194,000	177,000
Liabilities	$ 1,604,000	$ 559,000

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Note 5 - Net Income (Loss) Per Share of Common Stock - Basic and Diluted Earnings Per Common Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Numerator for basic and diluted net income (loss) per share:
Net income (loss)	$ 237,775	$ 56,456	$ 6,403	$ (194,692)
Denominator:
For basic net income (loss) per share - weighted average common shares outstanding (in shares)	4,700,422	4,529,026	4,633,621	4,508,986
Effect of dilutive stock options (in shares)	0	0	0	0
For diluted net income (loss) per share - weighted average common shares outstanding (in shares)	4,700,422	4,529,026	4,633,621	4,508,986
Net Income (Loss) per share - Basic:
Net Income (Loss) per share (in dollars per share)	$ 0.05	$ 0.01	$ 0.00	$ (0.04)
Net Income (Loss) per share - Diluted:
Net Income (Loss) per share (in dollars per share)	$ 0.05	$ 0.01	$ 0.00	$ (0.04)

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Note 6 - Inventory - Major Classes of Inventory (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Raw materials	$ 9,159,993	$ 8,289,386
Work in process	541,792	357,721
Finished goods	2,699,721	3,088,739
Total Gross Inventory	12,401,506	11,735,846
Less: Reserves	(1,901,913)	(2,525,743)
Net Inventory	$ 10,499,593	$ 9,210,103

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Note 7 - Accrued Expenses - Major Components of Accrued Expenses (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Salaries, wages, and commissions	$ 772,446	$ 654,757
Accrued warranty expense	156,827	202,850
Other	342,155	304,766
Accrued Liabilities, Current, Total	$ 1,271,428	$ 1,162,373

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Note 8 - Assets Held for Lease (Details Textual) - USD ($)		3 Months Ended		9 Months Ended
	Jun. 14, 2022	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Advance Rent		$ 30,000		$ 30,000
Modular Buildings [Member]
Expected Proceeds from Sale of Assets Held for Lease	$ 383,904
Sales [Member]
Operating Lease, Lease Income, Total		$ 0	$ 0	$ 0	$ 0

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Note 8 - Assets Held for Lease - Summary of Assets Held for Lease (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Modular Buildings	$ 532,967	$ 521,555
Modular Buildings [Member]
Modular Buildings	$ 532,967	$ 521,555

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Note 8 - Assets Held for Lease - Future Minimum Lease Receipts (Details)	Aug. 31, 2022 USD ($)
2023	$ 98,116
2024	12,525
Total	$ 110,641

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Note 9 - Product Warranty (Details Textual)	9 Months Ended
	Aug. 31, 2022
Standard Product Warrant Term (Year)	1 year

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Note 9 - Product Warranty - Changes in Product Warranty Liability (Details) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Balance, beginning	$ 89,549	$ 267,500	$ 202,850	$ 291,453
Settlements / adjustments	(69,721)	(75,204)	(277,734)	(177,470)
Warranties issued	136,999	53,384	231,711	131,697
Balance, ending	$ 156,827	$ 245,680	$ 156,827	$ 245,680

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Note 9 - Product Warranty - Changes in Product Warranty Liability-parentheticals (Details) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Settlements / adjustments	$ (69,721)	$ (75,204)	$ (277,734)	$ (177,470)

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Note 10 - Loan and Credit Agreements (Details Textual)					1 Months Ended	9 Months Ended	12 Months Ended
	Mar. 28, 2022 USD ($)	Jan. 12, 2021 USD ($)	Jun. 24, 2020 USD ($)	Sep. 28, 2017	Jun. 30, 2021 USD ($)	Aug. 31, 2022 USD ($) item	Nov. 30, 2021 USD ($)
Long-Term Debt, Total						$ 3,023,605	$ 2,734,929
Term Loan Due October 2037 [Member]
Long-Term Debt, Total						$ 2,189,491	$ 2,260,412
Debt Instrument, Interest Rate, Stated Percentage						5.00%	5.00%
Debt Instrument, Periodic Payment, Total						$ 17,271	$ 17,271
EIDL Assistance Program, Loan Three [Member]
Proceeds from Issuance of Debt					$ 150,000
Economic Injury Distaster Loan Assistance Program [Member]
Debt Instrument, Interest Rate, Stated Percentage			3.75%
Debt Instrument, Term (Year)			30 years
EIDL Assistance Program, Loan Two [Member]
Debt Instrument, Periodic Payment, Total			$ 731
Bank Midwest [Member]
Long-Term Line of Credit, Total						4,559,000
Line of Credit Facility, Remaining Borrowing Capacity						$ 991,000
Line of Credit, Borrowing Base, Accounts Receivable						75.00%
Line of Credit, Borrowing Base, Inventory						50.00%
Debt Instrument, Covenant, Maximum Debt to Worth Ratio				1
Debt Instrument, Covenant, Minimum Tangible Balance Sheet Equity, Percentage				40.00%
Debt Instrument, Covenant, Minimum Debt Service Coverage Ratio				0.0125
Debt Instrument, Covenant, Minimum Debt Service Coverage Ratio, Tolerance				0.0010
Bank Midwest [Member] | Minimum [Member]
Debt Instrument, Covenant, Annual Purchases or Sales Price of Equipment	$ 50,000
Bank Midwest [Member] | Reserve Line of Credit [Member]
Long-Term Debt, Total						$ 350,000
Bank Midwest [Member] | Term Loan Due October 2037 [Member]
Long-Term Debt, Total						$ 2,600,000
Debt Instrument, Interest Rate, Stated Percentage						5.00%
Debt Instrument, Periodic Payment, Total						$ 17,271
Bank Midwest [Member] | Term Loan Due October 2037 [Member] | United States Department of Agriculture [Member]
Upfront Guarantee Fee						$ 62,400
Guarantee Fee, Annual Fee, Percentage						50.00%
Guarantee Requirement, Personally Guarantee, Shareholders Ownership Percentage						20.00%
Bank Midwest [Member] | Term Loan Due October 2037 [Member] | J. Ward McConnell Jr. [Member]
Personally Guaranteed, Percentage of Loan						38.00%
Personally Guaranteed, Fee, Percentage of Guaranteed Amount						2.00%
Bank Midwest [Member] | Term Loan Due October 2037 [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Effective Percentage						4.15%
Bank Midwest [Member] | Term Loan Due October 2037 [Member] | Wall Street Journal Rate [Member]
Debt Instrument, Basis Spread on Variable Rate						0.75%
Bank Midwest [Member] | Roof Term Loan [Member]
Long-Term Debt, Total						$ 350,000
Debt Instrument, Periodic Payment, Total						$ 2,972
Debt Instrument, Number of Periodic Payment | item						59
Debt Instrument, Estimated Balloon Payments						$ 268,176
Bank Midwest [Member] | Roof Term Loan [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Effective Percentage						5.00%
Bank Midwest [Member] | Roof Term Loan [Member] | Wall Street Journal Rate [Member]
Debt Instrument, Basis Spread on Variable Rate						2.00%
Bank Midwest [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity						$ 5,000,000
Line of Credit Facility, Wall Street Journal Rate Floor						4.25%
Line of Credit Facility, Interest Rate During Period						7.75%
Bank Midwest [Member] | Revolving Credit Facility [Member] | Wall Street Journal Rate [Member]
Debt Instrument, Basis Spread on Variable Rate						1.50%
Bank Midwest [Member] | Revolving Credit Facility [Member] | Reserve Line of Credit [Member]
Lone of Credit Facility, Additional Borrowing Capacity						$ 550,000
Line of Credit Facility, Wall Street Journal Rate Floor						4.00%
Line of Credit Facility, Interest Rate During Period						8.25%
Bank Midwest [Member] | Revolving Credit Facility [Member] | Reserve Line of Credit [Member] | Wall Street Journal Rate [Member]
Debt Instrument, Basis Spread on Variable Rate						2.00%
Reserve Line of Credit [Member] | Roof Term Loan [Member]
Debt Instrument, Interest Rate, Stated Percentage						8.25%
Bank Midwest, New Amended Covenant [Member]
Debt Instrument, Covenant, Minimum Working Capital		$ 4,000,000

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Note 10 - Loan and Credit Agreements - Summary of Term Debt (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Long-Term Debt, Total	$ 3,023,605	$ 2,734,929
Less current portion of term debt	114,407	99,462
Term debt, excluding current portion	2,909,198	2,635,467
Term Loan Due October 2037 [Member]
Long-Term Debt, Total	2,189,491	2,260,412
SBA Loan One [Member]
Long-Term Debt, Total	162,390	158,168
SBA Loan Two [Member]
Long-Term Debt, Total	162,390	158,168
SBA Loan Three [Member]
Long-Term Debt, Total	162,509	158,181
Bank Midwest Loan 2 [Member]
Long-Term Debt, Total	$ 346,825	$ 0

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Note 10 - Loan and Credit Agreements - Summary of Term Debt-parentheticals (Details)	9 Months Ended	12 Months Ended
	Aug. 31, 2022	Nov. 30, 2021
SBA Loan One [Member]
Debt instrument, maturity date	Jun. 18, 2050	Jun. 18, 2050

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Note 10 - Loan and Credit Agreements - Summary of Term Debt-parentheticals (Details) (Parentheticals) - USD ($)	9 Months Ended	12 Months Ended
	Aug. 31, 2022	Nov. 30, 2021
Term Loan Due October 2037 [Member]
Debt Instrument, Periodic Payment, Total	$ 17,271	$ 17,271
Debt Instrument, Interest Rate, Stated Percentage	5.00%	5.00%
Debt instrument, maturity date	Oct. 01, 2037	Oct. 01, 2037
SBA Loan One [Member]
Debt Instrument, Periodic Payment, Total	$ 731	$ 731
Debt Instrument, Interest Rate, Stated Percentage	3.75%	3.75%
Debt instrument, maturity date	Jun. 18, 2050	Jun. 18, 2050
SBA Loan Two [Member]
Debt Instrument, Periodic Payment, Total	$ 731	$ 731
Debt Instrument, Interest Rate, Stated Percentage	3.75%	3.75%
Debt instrument, maturity date	Jun. 18, 2050	Jun. 18, 2050
SBA Loan Three [Member]
Debt Instrument, Periodic Payment, Total	$ 731	$ 731
Debt Instrument, Interest Rate, Stated Percentage	3.75%	3.75%
Debt instrument, maturity date	Jun. 24, 2050	Jun. 24, 2050
Bank Midwest Loan 2 [Member]
Debt Instrument, Periodic Payment, Total	$ 2,972
Debt Instrument, Interest Rate, Stated Percentage	6.00%
Debt instrument, maturity date	May 15, 2027

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Note 10 - Loan and Credit Agreements - Summary of Minimum Maturities of Term Debt (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
2023	$ 114,407
2024	122,185
2025	129,095
2026	135,971
2027	433,873
2028 and thereafter	2,088,074
Long-Term Debt, Total	$ 3,023,605	$ 2,734,929

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Note 12 - Related Party Transactions (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Revenue from Related Parties	$ 0		$ 0
Related Party Transaction, Expenses from Transactions with Related Party	4,209	$ 6,539	19,762	$ 19,200
Due to Related Parties, Total	$ 1,408	$ 1,469	$ 1,408	$ 1,469

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Note 13 - Leases (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Lease, Cost, Total	$ 4,333	$ 5,547	$ 14,368	$ 17,536
Operating Lease, Weighted Average Remaining Lease Term (Month)	42 months		42 months
Operating Lease, Weighted Average Discount Rate, Percent	4.86%		4.86%
Lessee, Finance Lease, Term of Contract (Month)	52 months		52 months
Finance Lease, Weighted Average Discount Rate, Percent	4.18%		4.18%
Finance Lease, Right-of-Use Asset, Amortization	$ 40,140		$ 87,284
Iowa Economic Development’s Manufacturing 4.0 Program [Member]
Government Assistance, Amount	$ 224,513

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Note 13 - Leases - Components of Operating Leases (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Operating lease right-of-use assets (in other assets)	$ 38,209	$ 47,794
Current portion of operating lease liabilities (in accrued expenses)	11,631	12,863
Long-term portion of operating lease liabilities	26,578	34,931
Total operating lease liabilities	$ 38,209	$ 47,794

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Note 13 - Leases - Maturities of Operating Lease Liabilities (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
2023, operating lease	$ 13,201
2024, operating lease	11,488
2025, operating lease	9,695
2026, operating lease	7,149
Total lease payments, operating lease	41,533
Less imputed interest, operating lease	(3,324)
Total operating lease liabilities, operating lease	$ 38,209	$ 47,794

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Note 13 - Leases - Components of Finance Leases (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$ 577,023	$ 190,667
Current portion of finance lease liabilities (accrued expenses)	169,023	48,591
Long-term portion of finance lease liabilities	645,499	142,386
Total finance lease liabilities	$ 814,522	$ 190,977

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Note 13 - Leases - Maturities of Finance Lease Liabilities (Details) - USD ($)	Aug. 31, 2022	Nov. 30, 2021
2023, finance lease	$ 199,836
2024, finance lease	199,836
2025, finance lease	179,387
2026, finance lease	157,258
2027, finance lease	160,688
Total lease payments, finance lease	897,005
Less imputed interest, finance lease	(82,483)
Total finance lease liabilities	$ 814,522	$ 190,977

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Note 14 - Equity Incentive Plan and Stock Based Compensation (Details Textual)	Feb. 25, 2020 shares
Non-qualified Stock Units to Non-employee Directors Annually or Upon Election [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Authorized	1,000
Non-qualified Stock Units to Non-employee Directors, Quarterly [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized	1,000
The 2020 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized	500,000

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Note 14 - Equity Incentive Plan and Stock Based Compensation - Summary of Shares Issued (Details) - shares	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Shares issued (in shares)	5,000	5,000	106,167	108,500
Unvested shares forfeit upon termination (in shares)			(8,333)	0
Director [Member] | Vesting Immediately [Member]
Shares issued (in shares)	5,000	5,000	20,000	20,000
Employees, Directors, and Consultants [Member] | Awards with Three-year Vesting [Member]
Shares issued (in shares)	0	0	94,500	88,500

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Note 14 - Equity Incentive Plan and Stock Based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021
Stock-based compensation expense	$ 66,826	$ 61,446	$ 224,291	$ 203,245
Treasury share repurchase expense	0	0	(92,432)	(30,471)
Stock-based compensation expense net of treasury repurchases	$ 66,826	$ 61,446	$ 131,859	$ 172,774

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Note 15 - Common Stock Purchase Agreement (Details Textual) - USD ($)							2 Months Ended	9 Months Ended
	Sep. 23, 2022	Aug. 23, 2022	Aug. 15, 2022	Aug. 03, 2022	Jul. 25, 2022	Mar. 29, 2022	Sep. 23, 2022	Aug. 31, 2022	Nov. 30, 2021
Common Stock, Par or Stated Value Per Share								$ 0.01	$ 0.01
Stock Issued During Period, Value, New Issues								$ 388,983
Alumni Capital [Member]
Common Stock Purchase Agreement, Maximum Gross Proceeds from Issuance or Sale of Equity						$ 3,000,000
Common Stock Purchase Agreement, Maximum Shares Authorized to be Issued						50,000
Common Stock Purchase Agreement, Percentage of Common Shares Outstanding						9.99%
Stock Issued During Period, Shares, New Issues	65,000	65,000	50,000	50,000	50,000	20,000	280,000	40,000
Common Stock Purchase Agreement, Shares to be Issued						20,000
Equity Issuance Cost, Total								$ 203,000
Stock Issued During Period, Value, New Issues								$ 160,000
Alumni Capital [Member] | Minimum [Member]
Common Stock Purchase Agreement, Discount on Shares, Percent						3.00%
Alumni Capital [Member] | Maximum [Member]
Common Stock Purchase Agreement, Discount on Shares, Percent						5.00%

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Note 15 - Common Stock Purchase Agreement - Summary of Shares Purchased by Alumni Capital (Details) - USD ($)							2 Months Ended	9 Months Ended
	Sep. 23, 2022	Aug. 23, 2022	Aug. 15, 2022	Aug. 03, 2022	Jul. 25, 2022	Mar. 29, 2022	Sep. 23, 2022	Aug. 31, 2022	Aug. 31, 2021
Proceeds from common stock purchase agreement								$ 431,408	$ 0
Alumni Capital [Member]
Common stock purchase agreement (in shares)	65,000	65,000	50,000	50,000	50,000	20,000	280,000	40,000
Shares Issued, Price Per Share	$ 1.76	$ 1.99	$ 2.00	$ 1.98	$ 2.07		$ 1.76
Proceeds from common stock purchase agreement	$ 114,120	$ 129,253	$ 99,910	$ 98,940	$ 103,305		$ 545,528

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Note 17 - Segment Information (Details Textual)	9 Months Ended
	Aug. 31, 2022
Number of Reportable Segments	3

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Note 17 - Segment Information - Segment Reporting Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Aug. 31, 2022	Aug. 31, 2021	Aug. 31, 2022	Aug. 31, 2021	Nov. 30, 2021
Revenue from external customers	$ 8,140,253	$ 6,591,829	$ 21,028,673	$ 17,702,628
Income (loss) from operations	430,807	160,204	314,787	(59,537)
Total Assets	24,721,073		24,721,073		$ 20,854,048
Capital expenditures			1,187,793	487,515
Depreciation & Amortization			546,642	453,697
Operating Segments [Member]
Revenue from external customers	8,140,000	6,592,000	21,029,000	17,703,000
Income (loss) from operations	431,000	160,000	315,000	(60,000)
Income (loss) before tax	301,000	72,000	8,000	(247,000)
Total Assets	24,721,000	21,255,000	24,721,000	21,255,000
Capital expenditures	677,000	169,000	1,188,000	488,000
Depreciation & Amortization	196,000	145,000	547,000	454,000
Operating Segments [Member] | Agricultural Products [Member]
Revenue from external customers	6,345,000	4,660,000	15,823,000	12,017,000
Income (loss) from operations	676,000	95,000	994,000	85,000
Income (loss) before tax	566,000	26,000	746,000	(48,000)
Total Assets	18,328,000	14,981,000	18,328,000	14,981,000
Capital expenditures	506,000	153,000	981,000	463,000
Depreciation & Amortization	124,000	85,000	342,000	271,000
Operating Segments [Member] | Modular Buildings [Member]
Revenue from external customers	1,131,000	1,313,000	3,208,000	3,798,000
Income (loss) from operations	(176,000)	89,000	(484,000)	(97,000)
Income (loss) before tax	(181,000)	82,000	(504,000)	(118,000)
Total Assets	3,608,000	3,701,000	3,608,000	3,701,000
Capital expenditures	118,000	11,000	143,000	20,000
Depreciation & Amortization	33,000	27,000	101,000	83,000
Operating Segments [Member] | Tools [Member]
Revenue from external customers	664,000	619,000	1,998,000	1,888,000
Income (loss) from operations	(69,000)	(24,000)	(195,000)	(48,000)
Income (loss) before tax	(84,000)	(36,000)	(234,000)	(81,000)
Total Assets	2,785,000	2,573,000	2,785,000	2,573,000
Capital expenditures	53,000	5,000	64,000	5,000
Depreciation & Amortization	$ 39,000	$ 33,000	$ 104,000	$ 100,000