10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

Commission file number 000-5131

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.)

P.O. Box 288 

5556 Highway 9

Armstrong, Iowa 50514

(Address of principal executive offices, including 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

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes  ☒ No

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, 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. ☐

Indicated by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing sale price on May 31, 2022 as reported on the Nasdaq Stock Market LLC ($2.59 per share), was approximately $5,459,194.

As of February 6, 2023, there were 5,027,276 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement for the registrant’s 2023 Annual Meeting of Stockholders to be filed within 120 days of November 30, 2022 are incorporated by reference into Part III of this Annual Report on Form 10-K.

Art’s-Way Manufacturing Co., Inc.

Index to Annual Report on Form 10-K

	Page
Part I
Item 1. BUSINESS	2
Item 1A. RISK FACTORS	6
Item 1B. UNRESOLVED STAFF COMMENTS	6
Item 2. PROPERTIES	6
Item 3. LEGAL PROCEEDINGS	6
Item 4. MINE SAFETY DISCLOSURES	6
Part II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	7
Item 6. SELECTED FINANCIAL DATA	7
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	7
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	13
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	35
Item 9A. CONTROLS AND PROCEDURES	35
Item 9B. OTHER INFORMATION	35
Part III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	36
Item 11. EXECUTIVE COMPENSATION	36
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	36
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	36
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES	36
Part IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	37

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K (this “report”) may contain forward-looking statements that reflect future events, future business, industry and other conditions, our future performance, and our plans and expectations for future operations and actions. In some cases forward-looking statements may be identified 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. Forward-looking statements in this report generally relate to: our expectations regarding the impact of COVID-19 on our business condition and results of operations; our expectations regarding our warranty costs and order backlog; our beliefs regarding the sufficiency of working capital and cash flows; our expectations regarding our continued ability to renew or obtain financing on reasonable terms when necessary as well as our continued positive relationship with our creditors and lenders; the impact of recently issued accounting pronouncements; our intentions and beliefs relating to our costs, product developments and business strategies; our expectations concerning our continued expansion into international markets; our expectations with respect to government spending and programs that may directly or indirectly be used to purchase our products; our beliefs concerning our ability to attract and maintain an adequate workforce in a competitive labor market; our expected operating and financial results; our beliefs concerning the effects of, and costs of compliance with government regulations; our expectations concerning our primary capital and cash flow needs; our beliefs regarding competitive factors and our competitive strengths; our expectations regarding our capabilities and demand for our products; our predictions regarding the impact of seasonality; our beliefs regarding the impact of the farming industry on our business; our beliefs regarding our internal controls over financial reporting; and our intentions for paying dividends. Many of these forward-looking statements are located in this report under “Item 1. BUSINESS” and “Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,” but they may appear in other sections as well.

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, the ongoing COVID-19 pandemic; the impact of changes in credit markets on our ability to continue to obtain financing on reasonable terms; our ability to repay current debt, continue to meet debt obligations and comply with financial covenants; obstacles related to liquidation of product lines; the effect of inflation, interest rate fluctuations and general economic conditions, including consumer and governmental spending, on the demand for our products and the cost of our supplies and materials; fluctuations in seasonal demand and our production cycle; the ability of our suppliers to meet our demands for raw materials and component parts; our original equipment manufacturer customers’ decisions regarding supply chain structure, inventory levels, and overall business conditions; fluctuations in the price of raw materials, especially steel; our ability to predict and meet the demands of each market in which our segments operate; a decrease in demand for our products in international markets; the existence and outcome of product liability claims and other ordinary course litigation; changes in environmental, health and safety regulations and employment laws; our ability to fill open positions within the Company and retain our key employees; the cost of complying with laws, regulations, and standards relating to corporate governance and public disclosure, and the demand such compliance places on management’s time; and other factors described in this report and from time to time in our other reports filed with the Securities and Exchange Commission. We do not intend to update the forward-looking statements contained in this report other than as required by law. We caution investors not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. This report and the documents that we reference in this report and have filed as exhibits should be read 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.

1

PART I

Item 1. BUSINESS.

General

Art’s-Way Manufacturing Co., Inc., a Delaware corporation (“we,” “us,” “our,” and the “Company”), began operations as a farm equipment manufacturer in 1956. Since that time, we have become a worldwide manufacturer of agricultural equipment, specialized modular science buildings and steel cutting tools. Our principal manufacturing plant is located in Armstrong, Iowa.

We have organized our 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. Our Agricultural Products segment manufactures and distributes farm equipment under the Art’s-Way name. Our Modular Buildings segment manufactures modular buildings for various uses, commonly animal containment and research laboratories, through our wholly-owned subsidiary, Art’s-Way Scientific, Inc., an Iowa corporation. Our Tools segment manufactures standard single point brazed carbide tipped tools as well as PCD (polycrystalline diamond) and CBN (cubic boron nitride) inserts and OEM tools through our wholly-owned subsidiary, Ohio Metal Working Products/Art’s-Way, Inc., an Ohio corporation. For detailed financial information relating to segment reporting, see Note 16 “Segment Information” to our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.

Corporate information about Art’s-Way can be found on our website, http://www.artsway-mfg.com/ while information on our agriculture products can be found on http://www.artsway.com/. We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Exchange Act requires us to file periodic reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”). The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s website at http://www.sec.gov.

Business of Our Segments

Agricultural Products

Our Agricultural Products segment, which accounted for 73.6% of our net revenue in the 2022 fiscal year and 67.4% of our net revenue in the 2021 fiscal year, is located primarily in Armstrong, Iowa. This segment manufactures a variety of specialized farm machinery under our own label, including portable and stationary animal feed processing equipment and related attachments used to mill and mix feed grains into custom animal feed rations; a line of forage equipment consisting of forage boxes, bale processors, running gear, and dump boxes; a line of manure spreaders; sugar beet harvesting equipment; and a line of dirt work equipment. We sell our labeled products through independent farm equipment dealers throughout the United States, Australia, Canada, Japan and the United Kingdom. We also provide after-market service parts that are available to keep our branded equipment operating to the satisfaction of the end user of our products.

Modular Buildings

Our Modular Buildings segment, which accounted for 16.7% of our net revenue in the 2022 fiscal year and 22.7% of our net revenue in the 2021 fiscal year, is located in Monona, Iowa. This segment produces, sells and leases modular buildings, which are custom-designed to meet the specific research needs of our customers. The buildings we commonly produce range from basic swine buildings to complex containment research laboratories. We plan to continue our focus on providing research facilities for academic research institutions, government research and diagnostic centers, public health institutions and private research and pharmaceutical companies, as those are our primary market sectors. We provide services from start to finish by designing, manufacturing, delivering and installing these facilities to meet customers’ critical requirements. In addition to selling these facilities, we also offer a lease option to customers in need of temporary facilities.

Tools

Our Tools segment, which is located in Canton, Ohio, accounted for 9.7% of our net revenue in the 2022 fiscal year and 9.9% of our net revenue in the 2021 fiscal year. This segment produces and sells standard single point brazed carbide tipped tools as well as PCD (polycrystalline diamond) and CBN (cubic boron nitride) inserts and tools and OEM specialty tools. The tools are used by manufacturers in various industries to cut and shape various parts, pipes, and fittings. The marketing of the tools is primarily through independent distributors supplying manufacturers with industrial tools and supplies. We plan to continue our focus on providing cutting tools to industries such as automotive, aerospace, oil and gas piping, and appliances.

2

Our Principal Agricultural Products

Arthur Luscombe built the first PTO powered grinder mixer on his farm near Dolliver, Iowa. The product’s ability to tackle even the most demanding workload made it an overwhelming success – and secured Luscombe’s reputation as a farmer, entrepreneur and independent thinker who did things his way. Over the years our Agricultural Products segment has grown through developing several new products and with acquisitions. We take pride in our manure spreaders, forage equipment, bale processors, dirt work equipment, sugar beet harvesting equipment and feed mills. We provide limited OEM work to some of the industry’s leading manufacturers.

Feed mills. There’s no one better than Art’s Way when it comes to processing feed. Stationary mills for livestock feeding or breweries, portable units for small operations and large grinder mixers for the modern feeding operation have our customers’ backs day in and day out. Hammer mills provide faster processing and easily changing micron size or roller mills offer more consistency. We offer the most complete lineup of equipment in feed processing.

Manure spreaders. The X Series spreaders have a unique vertical beater placement combined with guillotine slop gate controls to create the best spread pattern in the industry. Flared sides and densilite flooring provide easy loading and material movement. Backed by our limited lifetime warranty on the apron chain, customers can depend on this rugged machine. The upgraded rate control option powered by Raven is the only unit in the industry to have completely automatic spreading capabilities with apron speed and slop gate control.

Forage. The 2100 series are user-friendly forage boxes in different lengths and unload configurations. It is the only box in its class to offer 100% in-cab controls. Tube side stakes and corrugated sides give users confidence when side-by-side with competitor models. The 9016-HD High Dump cart boasts the largest capacity in the industry at 40,000 pounds.

Bale processors. Spread large round or square bales in the same machine attached to a skid steer, telehandler, or tractor with the patented TOP-SPREAD loader mounted spreader. The compact size fits into barns and alleyways and is easy to maneuver. On a construction site, cover roadsides or fresh seeding quickly from the seat of a skid steer.

Dirt work equipment. Level out and shape fields with the single blade or folding land planes featuring our patented floating hitch design. Reduce erosion by eliminating water pockets, furrows, and implement scars in the field. Shape yards or work sites with standard or rear steer graders that follow closely behind the tractor for leveling in smaller spaces.

Sugar beet harvesting equipment. We are proud to offer the best sugar beet cleaning in the industry during muddy harvest conditions with our patented grab roll bed. Our 12-row harvester has been improved with an automatic leveling system add-on for consistent digging across the field. The defoliator cleanly removes the leaves off the beets prior to digging them up for harvest. The leaves are incorporated back into the soil to provide nutrients for next year’s crop.

Product Distribution and Markets

We distribute goods for our Agricultural Products segment primarily through a network of approximately 1,000 U.S. and Canadian independent dealers, as well as overseas dealers in Australia, Japan and the United Kingdom, whose customers require specialized agricultural machinery. We have sales representation in 48 states and seven Canadian provinces. Our dealers sell our products to various agricultural and commercial customers. We also maintain a local sales force in our Armstrong, Iowa facility to provide oversight services for our distribution network, communicate with end users, and recruit and train dealers on the uses of our products. Our local service parts staff is available to help customers and dealers with their service parts needs. Our Modular Buildings segment typically sells products customized to the end-user’s requirements directly to the end-user. Our Tools segment distributes products through manufacturers’ representatives, direct sales, and OEM sales channels.

We currently export products to nine foreign countries. We have been shipping grinder mixers abroad since 2006 and have exported portable rollermills as well. We continue to strengthen these relationships and intend to develop new international markets. Our international sales accounted for 4.5% of consolidated sales during the 2022 fiscal year compared to 2.6% in the 2021 fiscal year.

3

Backlog. Our backlogs of orders vary on a daily basis. As of February 6, 2023, our Tools segment had approximately $556,000 of backlog compared to $578,000 from the same date in 2022. We continue to see heightened demand in this segment from our OEM and oil and gas industry customers. Our Modular Buildings segment had approximately of $4,985,000 of backlog as of February 6, 2023, compared to $1,243,000 on that date in 2022. The Modular Buildings segment had a slow first six months to start fiscal 2022 and our 2022 results were carried by agricultural building revenue. Our 2023 backlog numbers and research building quoting activity would lead us to believe we will see improved results in fiscal 2023. Our Agricultural Products segment had a net backlog of approximately $9,549,000 as of February 6, 2023 compared to $10,513,000 on February 6, 2022. The strong demand in our Agricultural Products is continuing for the third straight fiscal year. We positioned ourselves in fiscal 2022 to more efficiently manufacture our products through the purchasing of robotic weld cells and a high definition plasma cutter. We anticipate we will continue to see improved results as the strong agriculture demand continues. We expect that our order backlogs will continue to fluctuate as orders are received, filled, or canceled, and, due to dealer discount arrangements we may enter into from time to time, these figures are not necessarily indicative of future revenue.

Recent Product Developments

In 2022, we made product improvements to improve manufacturability and to meet our customer’s evolving needs. Most notably, we worked on designs to capture market share of smaller manure spreaders and added truck mount features to our existing manure spreader sizes. We also worked on redesign of commercial forage boxes, improved the functionality of our high dump and enhanced the design on our defoliators.

Our Tools and Modular Buildings segments complete projects based on customer specifications and did not engage in specific product development during the 2022 fiscal year.

Competition

Each of our segments have competitive strengths described below. In addition to individual competitive strengths, the barrier to entry for competitors in our industries is high.

Agricultural Products

Our Agricultural Products segment competes in a highly competitive agricultural equipment industry. We compete with larger manufacturers and suppliers that have broader product offerings and significant resources at their disposal; however, we believe that our competitive strengths allow us to compete effectively in our market.

Management believes that grain and livestock producers, as well as those who provide services to grain and livestock operations, are the primary purchasers of agricultural equipment. Many factors influence a buyer’s choice for agricultural equipment. Any one or all factors may be determinative, but they include brand loyalty, the relationship with dealers, product quality and performance, product innovation, product availability, parts and warranty programs, price, and customer service.

While our larger competitors may have resources greater than ours, we believe we compete effectively in the farm equipment industry by serving smaller markets in specific product areas rather than directly competing with larger competitors across an extensive range of products. Our Agricultural Products segment caters to niche markets in the agricultural industry. We do not have a direct competitor that has the same product offerings that we do. Instead, each of our product lines competes with similar products of many other manufacturers. Some of our product lines face greater competition than others, but we believe that our products are competitively priced with greater diversity than most competitor product lines. Other companies produce feed processing equipment, sugar beet harvesting and defoliating equipment, grinders, and other products similar to ours; therefore, we focus on providing the best product available at a reasonable price. Overall, we believe our products are competitively priced with above average quality and performance, in a market where price, product performance, and quality are principal elements.

In addition, in order to capitalize on brand recognition for our Agricultural Products segment, we have numerous product lines produced under our own label. We also provide aftermarket service parts which are available to keep our branded and OEM-produced equipment operating to the satisfaction of the customer. We sell products to customers in the United States and nine foreign countries through a network of approximately 1,000 independent dealers in the United States and Canada, as well as overseas dealers in Australia, Japan and the United Kingdom.

4

We believe that our competitive pricing, product quality and performance, network of worldwide and domestic distributors, and strong market share for many of our products allow us to compete effectively in the agricultural products market.

Modular Buildings

We expect continued competition from our Modular Buildings segment’s existing competitors, which include conventional design/build firms, as well as competition from new entrants into the modular building market. To some extent, we believe barriers to entry in the modular building industry limit the competition we face in the industry. Barriers to entry in the market consist primarily of access to capital, access to a qualified labor pool, and the bidding process that accompanies many jobs in the health and education markets. Despite these barriers, manufacturers who have a skilled work force and adequate production facilities could adapt their manufacturing facilities to produce modular structures.

We believe the competitive strength of our Modular Buildings segment is our ability to design and produce high-tech modular buildings more quickly than conventional design/build firms. Conventional design/build construction may take two to five years, while our modular laboratories can be delivered in as little as six months. As one of the few companies in the industry to supply turnkey modular buildings and laboratories, we believe we provide high-quality buildings at reasonable prices that meet our customers’ time, flexibility, and security expectations.

Tools

Competition in our Tools segment from offshore products that have gained market share over the last 20 years. Our greatest threat continues to be emerging technologies that replace the need for brazed tools. These competitive threats are countered by our ability to offer the widest range of standard carbide tipped brazed tool inventories to be found in North America. These inventories are strategically located in four warehouses across the United States, enabling our customers to receive product quickly with minimal shipping costs. Our ability to produce special, engineered, value-added products in volume with short lead times sets us apart from our competitors. This is most evident in certain segments of the pipe processing industry, where we have been able to establish and maintain market share despite efforts from companies significantly larger than ourselves.

Raw Materials, Principal Suppliers, and Customers

Raw materials for our various segments are acquired from domestic and foreign sources and normally are readily available. We saw lead times increase on raw materials in 2021 as labor shortages from the COVID-19 pandemic left many of our suppliers understaffed. Lead times remained heightened in 2022 as the labor market continued to stay tight. We do rely on foreign suppliers and foreign markets for materials and components for some of our products. However, these suppliers are not principal suppliers and there are alternative sources for these materials.

We previously had an OEM supplier agreement with Case New Holland (“CNH”) for our Agricultural Products segment. Under the OEM agreement, we agreed to supply CNH’s requirements for certain feed processing and service parts, primarily blowers, under CNH’s label. This agreement expired on October 27, 2022. The Company has not entered into a new supplier agreement with CNH to date but continues to transact with CNH.

We do not typically rely on sales to one customer or a small group of customers. During the 2022 fiscal year, one customer accounted for just more than 11% consolidated net revenues.

Intellectual Property

We maintain manufacturing rights on several products, which cover unique aspects of design. We also have trademarks covering product identification. We believe our trademarks and licenses help us to retain existing business and secure new relationships with customers. The duration of these rights ranges from 5 to 10 years, with options for renewal. We currently have no pending applications for intellectual property rights.

We pay royalties for our use of certain manufacturing rights. Under our previous OEM supplier agreement with CNH, CNH sold us the license to manufacture, sell, and distribute certain plow products designed by CNH and their replacement and component parts. In fiscal 2022, we were liable to pay semi-annual royalty payments based on the invoiced price of each licensed product and service part we sell. We also have a licensing and royalty agreement with Spreader, LLC to produce a loader mounted spreader in exchange for royalty payments until December 2027.

5

Government Relationships and Regulations; Environmental Compliance

Our Modular Buildings segment must design, manufacture, and install its modular buildings in accordance with state building codes, and we have been able to achieve the code standards in all instances. In addition, we are subject to various federal, state, and local laws and regulations pertaining to environmental protection and the discharge of materials into the environment. We do not expect that the cost of complying with these regulations will have a material impact on our consolidated results of operations, financial position, or cash flows.

Employees

As of November 30, 2022, we employed 97 employees in our Agricultural Products segment including one on a part-time basis, 26 employees in our Tools segment, one of whom was employed on a part-time basis and 26 full-time employees in our Modular Buildings segment. The majority of the employees in our Tools segment are represented by a union and covered by a collective bargaining agreement which expires on June 30, 2024. These numbers do not necessarily represent peak employment during the 2022 fiscal year.

Item 1A. RISK FACTORS.

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

Item 1B. UNRESOLVED STAFF COMMENTS.

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

Item 2. PROPERTIES.

Our executive offices, as well as the primary production and warehousing facilities for our Agricultural Products segment, are located in Armstrong, Iowa. These facilities were constructed after 1965 and remain in fair condition. The facilities in Armstrong contain approximately 249,000 square feet of usable space. We have engaged in several building improvement projects during the last several years including most recently updating our office spaces and employee break room in 2021. In addition, we own approximately 30 acres of land west of Armstrong, on which the factory and inventory storage space is situated for our Agricultural Products segment.

We completed construction in November 2007 of our facility in Monona, Iowa, which houses the manufacturing for our Modular Buildings segment. The facility was custom-designed to meet our production needs. It has approximately 50,000 square feet of useable space and accommodates a sprinkler system and crane.

In connection with the acquisition of certain assets of Ohio Metal Working Products Company in September 2013, we also purchased the land and building used for manufacturing of the products sold by Ohio Metal Working Products Company, located in Canton, Ohio. The building contains approximately 39,000 square feet of usable space and is in good condition. The purchased land is approximately 4.50 acres and is used by our Tools segment.

All of our owned real property is subject to mortgages granted to Bank Midwest as security for our long-term debt and our line of credit. See “Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Liquidity and Capital Resources” for more information.

Item 3. LEGAL PROCEEDINGS.

From time to time in the ordinary course of business, we may be named as a defendant in legal proceedings incidental to the business, including without limitation, workers’ compensation claims, tort claims, or contractual disputes. We are not currently involved in any material legal proceedings, directly or indirectly, and we are not aware of any claims pending or threatened against us or any of the directors that could result in the commencement of material legal proceedings.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable.

6

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.’

Market Information

Our common stock trades on the Nasdaq Stock Market LLC under the symbol “ARTW.”

Stockholders

We have two classes of stock, undesignated preferred stock and $0.01 par value common stock. No shares of preferred stock have been issued or are outstanding. As of February 6, 2023, we had 77 common stock stockholders of record, which number does not include stockholders who hold our common stock in street name.

Dividends

We did not pay a dividend during the 2022 or 2021 fiscal years. We expect that the payment of and the amount of any future dividends will depend on our financial condition at that time.

Unregistered Sales of Equity Securities

None.

Purchases of Equity Securities by the Company

There were no purchases of common stock by the Company made in the fourth quarter of fiscal 2022.

Equity Compensation Plans

For information on our equity compensation plans, refer to Item 12, “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.”

Item 6. SELECTED FINANCIAL DATA.

Not applicable.

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. ’

The following discussion, which focuses on our results of operations, contains forward-looking information and statements. Actual events or results may differ materially from those indicated or anticipated, as discussed in the section entitled “Forward Looking Statements.” The following discussion of our financial condition and results of operations should also be read in conjunction with our financial statements and notes to financial statements contained in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.

Financial Condition

We recorded our second straight year of profitability in fiscal 2022 and saw significant success in our Agricultural Products segment. Our consolidated revenues increased 14% year on year and over 24% from fiscal 2020. As we transition into fiscal 2023, we are showing increased demand in all three operating segments.

Our consolidated balance sheet indicates a stable financial position as of November 30, 2022. We finished the year with approximately $98,000 of consolidated net income and saw our working capital increase by approximately $379,000. Our inventory increased significantly in fiscal 2022 as we better positioned ourselves to meet customer demand. We utilized customer deposits and funding from a common stock purchase agreement to meet the increased demands of fiscal 2022.

We expect to have access to capital as needed throughout fiscal 2023 through the sale of inventory and from the use of our line of credit. On November 30, 2022 we had $1,075,500 available on our line of credit and $2,260,402 of excess collateral towards our borrowing base. Our working capital remained strong at approximately $4,866,000 in fiscal 2022 with a current ratio of 1.53. Our banking relationship remains positive and we expect it to only strengthen as our financial results continue to improve. We do not foresee liquidity issues within the next twelve months.

7

Critical Accounting Policies

Our significant accounting policies are described in Note 1 “Summary of Significant Accounting Policies” to our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report. Critical accounting policies are those that we believe are both important to the portrayal of our financial condition and results of operations and require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

We believe that the following represents the most critical accounting policies and estimates used in the preparation of our consolidated financial statements.

Inventories

Inventories are stated at the lower of cost or net realizable value, and cost is determined using the standard costing method. Management monitors the carrying value of inventories using inventory control and review processes that include, but are not limited to, sales forecast review, inventory status reports, and inventory reduction programs. We record inventory write downs to net realizable value based on expected usage information for raw materials and historical selling trends for finished goods. If the assumptions made by management do not occur, we may need to record additional write downs.

Revenue Recognition

In accordance with ASC 606, revenue is measured based on consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract.

Our revenues primarily result from contracts with customers. The major sources of revenue for the Agricultural Products and Tools segments are farm equipment, service parts related to farm equipment and steel cutting tools and inserts. The Agricultural Products and Tools segments generally execute short-term contracts that contain a single performance obligation – the delivery of product to the common carrier. We recognize revenue for the production and sale of farm equipment, service parts and cutting tools upon shipment of the goods. Shipment of the goods is the point in time when risk of ownership and title pass to the customer. The Tools segment has an OEM agreement with one customer for which sales are recognized FOB destination – when the goods hit the customer’s dock. All sales are made to authorized dealers whose application for dealer status has been approved and who have been informed of general sales policies. Any changes in our terms are documented in the most recently published price lists. Pricing is fixed and determinable according to our published equipment and parts price lists. Title to all equipment and parts sold pass to the customer upon delivery to the carrier and is not subject to a customer acceptance provision. Proof of the passing of title is documented by the signing of the delivery receipt by a representative of the carrier. Post shipment obligations are limited to any claim with respect to the condition of the equipment or parts. The Agricultural Products and Tools segments each typically require payment in full 30 days after the ship date. To take advantage of program discounts, some customers pay deposits up front. Any deposits received are considered unearned revenue and increase contract liabilities.

In certain circumstances, upon the customer’s written request, we may recognize revenue when production is complete, and the goods are ready for shipment. At the customer’s request, we will bill the customer upon completing all performance obligations, but before shipment. The customer dictates that we ship the goods per its direction from our manufacturing facility, as is customary with this type of agreement, in order to minimize shipping costs. The written agreement with the customer specifies that the goods will be delivered on a schedule to be determined by the customer, with a final specified delivery date, and that we will segregate the goods from our inventory, such that they are not available to fill other orders. This agreement also specifies that the customer is required to purchase all goods manufactured under this agreement. Title of the goods will pass to the customer when the goods are complete and ready for shipment, per the customer agreement. At the transfer of title, all risks of ownership have passed to the customer, and the customer agrees to maintain insurance on the manufactured items that have not yet been shipped. We have operated using bill and hold agreements with certain customers for many years, with consistent satisfactory results for both the customers and us. The credit terms on this agreement are consistent with the credit terms on all other sales. All risks of loss are shouldered by the customer, and there are no exceptions to the customer’s commitment to accept and pay for these manufactured goods. Revenues recognized when goods were ready for shipment in fiscal 2022 were approximately $1,010,000 compared to $711,000 in fiscal 2021.

8

The Modular Buildings segment is in the construction industry with its major source of revenue arising from modular building sales. Sales of modular buildings are generally recognized using input methods to measure progress towards the satisfaction of a performance obligation using the percentage of completion method. Revenue and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Contract costs consist of direct costs on contracts, including labor, materials, and amounts payable to subcontractors and those indirect costs related to contract performance, such as equipment costs, insurance and employee benefits. Contract cost is recorded as incurred, and revisions in contract revenues and cost estimates are reflected in the accounting period when known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Contract losses are recognized when current estimates of total contract revenue and contract cost indicate a loss. Estimated contract costs include any and all costs appropriately allocable to the contract. The provision for these contract losses will be the excess of estimated contract costs over estimated contract revenues. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract change orders, penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. We use significant judgements in determining estimated contract costs and completion percentages throughout the life of the project. Stock modular building sales also occur and are recognized at a point in time when the performance obligation is fulfilled through substantial completion. Substantial completion is achieved through customer acceptance of the completed building. The Modular Buildings segment executes contracts with customers that can be short- or long-term in nature. These contracts can have multiple performance obligations and revenue from these can be recognized over time or at a point in time depending on the nature of the contracts. Payment terms for the Modular Buildings segment vary by contract, but typically utilize money down and progress payments throughout the life of the contract. The payment terms of the Modular Buildings segment have the most impact on our contract receivables, contract assets and contract liabilities. Project invoicing from the Modular Buildings segment increases contract receivables and has an effect on contract liabilities through billings in excess of costs, estimated gross profit and customer deposits. The balance of contract assets is typically made up of the balance of costs and estimated gross profit in excess of billings. Costs and profit in excess of amounts billed are classified as current assets and billings in excess of cost and profit are classified as current liabilities.

The Agricultural Products segment offers variable consideration in the form of discounts depending on participation in yearly early order programs. This variable consideration is allocated to the transaction price of all products in a sales arrangement and is not contingent on future outcomes. The Agricultural Products segment does not offer rebates or credits. The Tools segment offers quantity discounts that are allocated to the transaction price of each product once the quantity break is achieved. The Tools segment does not offer rebates or credits. The Modular Buildings segment does not offer discounts, rebates or credits.

Our returns policy allows for new and saleable parts to be returned, subject to inspection and a restocking charge, which is included in net sales. Whole goods are not returnable. Shipping costs charged to customers are included in net sales. Freight costs incurred are included in cost of goods sold. Customer deposits consist of advance payments from customers, in the form of cash, for revenue to be recognized in the following year.

For information on product warranty as it applies to ASC 606, refer to Note 8 “Product Warranty” contained in our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.

Results of Operations

Fiscal Year Ended November 30, 2022 Compared to Fiscal Year Ended November 30, 2021

Our consolidated net sales totaled $28,400,000 for the 2022 fiscal year, which represents a 13.8% increase from our consolidated net sales of $24,965,000 for the 2021 fiscal year. The increase in revenue is due to increased demand in the Agricultural Products and Tools segments. Our consolidated gross profit as a percentage of net sales decreased to 25.7% in the 2022 fiscal year compared to 26.4% of net sales in the 2021 fiscal year. Our consolidated operating expenses increased by 14.8%, from $6,073,000 in the 2021 fiscal year to $6,974,000 in the 2022 fiscal year. Because the majority of our corporate general and administrative expenses are borne by our Agricultural Products segment, that segment represented $5,239,000 of our total consolidated operating expenses, while our Modular Buildings segment represented $1,095,000 and our Tools segment represented $640,000.

Our consolidated operating income for the 2022 fiscal year was $333,000 compared to operating income of $523,000 for the 2021 fiscal year. Our Agricultural Products segment had operating income of $1,205,000, our Modular Buildings segment had operating loss of $600,000 and our Tools segment had an operating loss of $272,000.

9

Consolidated net income for the 2022 fiscal year was $98,000 compared to net income of $213,000 in the 2021 fiscal year.

Our effective tax rate for the 2022 and 2021 fiscal years was 16.4% and 20.3%, respectively.

Agricultural Products. Our Agricultural Products segment’s net sales for the 2022 fiscal year were $20,912,000 compared to $16,826,000 during the 2021 fiscal year, an increase of $4,086,000, or 24.3%. We continued to see strong commodity prices in fiscal 2022 which led to increased sales in grinder mixers, manure spreaders and our beet harvesting equipment for the second straight fiscal year. Our procurement team was able to navigate the difficult supply chain environment in fiscal 2022 and our production crew delivered on the increased demand.

Gross profit percentage for the 2022 fiscal year was 30.8% compared to 30.7% for the 2021 fiscal year. While the price of steel began to drop near the end of fiscal 2022, we saw component prices and manufacturing overhead increase in fiscal 2022. We utilized price increases to stay ahead of these rising costs in fiscal 2022 and maintain margins consistent with fiscal 2021. We also purchased three robotic weld cells and a high-definition plasma cutter in fiscal 2022 that we expect will increase manufacturing efficiencies, increase output and improve the quality of our products. We are focused on additional capital expenditures in fiscal 2023 to improve our operations as cash flow allows.

Our Agricultural Products segment’s operating expenses for the 2022 fiscal year were $5,239,000 compared to $4,571,000 for the 2021 fiscal year, an increase of $668,000, or 14.6%. Our selling expense accounted for approximately $70,000 of this increase as we added some key personnel to our sales team including a new director of sales, an inside salesman and an equipment support technician. We expect these roles to allow us to expand our dealer network and provide better customer support moving forward. Our general and administrative expenses increased approximately $525,000 from fiscal 2021. The increase was due to the addition of a quality technician, additional recruitment expense from the recruitment of our director of sales, additional computer contract expense as we began the transition to a cloud-based ERP system and salary increases to combat inflation for our employees. Our engineering expenses increased approximately $73,000 from fiscal 2021 due to increased salaries and benefit costs. Total income from operations for our Agricultural Products segment during the 2022 fiscal year was $1,205,000 compared to $599,000 for the 2021 fiscal year, an improvement of $606,000. While the increase in revenue largely drove the increase in operating income for fiscal 2022, our efforts to improve the business over the last few years put us in position to take advantage of better economic conditions. We focused heavily on improving our image in the agricultural industry through rebranding and customer satisfaction initiatives. We put added emphasis on quality and functionality of our products to meet our rugged customers’ demands. We’ve analyzed and diminished manufacturing inefficiencies that have bottlenecked our operations to allow for continued growth in the future.

Modular Buildings. Our Modular Buildings segment’s net sales for the 2022 fiscal year were $4,734,000 compared to $5,678,000 for the 2021 fiscal year, a decrease of $944,000, or 16.6%. The decrease in sales was due to a slow start to fiscal 2022 where we saw contract delays on active research project bids we expected to procure. Gross profit for the 2022 fiscal year was 10.5% compared to 17.7% during the 2021 fiscal year. The decrease in gross profit was due to rising construction material costs for projects under fixed price contracts. In addition, we incurred additional labor expense as we maintained higher staffing levels through the first six months of fiscal 2022 under the expectation that large research contracts would be underway in early fiscal 2022. Contract delays led to overstaffing and we were faced with a difficult decision to retain employees in a tough job market knowing demand in the modular building market would increase. Operating expenses for the 2022 fiscal year were $1,095,000 compared to $928,000 for the 2021 fiscal year, an increase of $167,000, or 18.0%. Our selling expense accounted for approximately $64,000 of this increase. With agricultural buildings being our primary source of revenue in fiscal 2022, we saw increased commissions in fiscal 2022 from these sales. We also had increased trade show participation in fiscal 2022. Our general and administrative expenses increased approximately $100,000 due to increased administrative wages as we added an additional project manager to help manage our project workload. Total loss from operations from our Modular Buildings segment during the 2022 fiscal year was $600,000 compared to operating income of $74,000 in the 2021 fiscal year.

Tools. Our Tools segment’s net sales for the 2022 fiscal year were $2,754,000 compared to $2,461,000 for the 2021 fiscal year, an increase of $293,000, or 11.9%. The increase in sales is due to price increases to partially cover rising material and manufacturing overhead costs coupled with increased demand in fiscal 2022. Gross profit for the 2022 fiscal year was 13.4% compared to 17.2% for the 2021 fiscal year. The decrease in gross profit was due to rising material input costs that outpaced our price increases along with manufacturing inefficiencies resulting from the competitive labor market and related shortages. Operating expenses were $640,000 for the 2022 fiscal year compared to $574,000 for the 2021 fiscal year, an increase of $66,000, or 11.5%. Our selling expenses accounted for approximately $19,000 of the increase primarily from an increase in commission expense and sales salaries. Our administrative expense was up $47,000 primarily from an increase in administrative wages and attendance related bonuses. Total loss from operations from our Tools segment during the 2022 fiscal year was $272,000 compared to operating loss of $150,000 in the 2021 fiscal year.

10

Trends and Uncertainties

We are subject to a number of trends and uncertainties that may affect our short-term or long-term liquidity, sales revenues, and operations. Similar to other farm equipment manufacturers, we are affected by items unique to the farm industry, including fluctuations in farm income resulting from the change in commodity prices, crop damage caused by weather and insects, government farm programs, interest rate fluctuations, and other unpredictable variables. Other uncertainties include our OEM customers and the decisions they make regarding their current supply chain structure, inventory levels, and overall business conditions. Management believes that our business is dependent on the farming industry for the bulk of our sales revenues. As such, our business tends to reap the benefits of increases in farm net income, as farmers tend to purchase equipment in lucrative times and forgo purchases in less profitable years. Direct government payments have been increasing in the past two years and costs of agricultural production are increasing; therefore, we anticipate that further increases in the value of production will benefit our business, while any future decreases in the value of production will decrease farm net income and may negatively affect our financial results.

As with other farm equipment manufacturers, we depend on our network of dealers to influence customers’ decisions, and dealer influence is often more persuasive than a manufacturer’s reputation or the price of the product.

Seasonality

Sales of our agricultural products are seasonal; however, we have tried to decrease the impact of this seasonality through the development of beet harvesting machinery, as the peak periods for these products occur at different times.

We believe that our tool sales are not seasonal. Our modular building sales are somewhat seasonal, and we believe that this is due to the budgeting and funding cycles of the universities that commonly purchase our modular buildings. We believe that this cycle can be offset by building backlogs of inventory, by increasing sales to other public and private sectors and by creating repeatable business opportunities.

Liquidity and Capital Resources

Our main source of funds during the 2022 fiscal year was cash generated by operating activities. Deposits from our early program and use of trade payables funded our operations in fiscal 2022. We used these funds to increase inventory levels for the second straight year to meet increasing demand and to stay ahead of supply chain delays. We used approximately $2,445,000 in fiscal 2022 for purchases of property (including finance lease assets), plant and equipment, primarily facility upgrades and manufacturing equipment to improve efficiency. We also used proceeds from an investor under a common stock purchase agreement to help with cash flow needs in fiscal 2022. We expect to use cash in fiscal 2023 to acquire additional equipment to improve our shop output and efficiency. These additions will be key to improving quality, increasing manufacturing output to fulfill customer demand and ultimately, we expect it to allow us to be more competitive in our industry. We expect our primary capital needs for fiscal 2023 to be for inventory purchases and the retirement of debt.

We received approximately $369,000 from Iowa Economic Development’s Manufacturing 4.0 program in Q3 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 have a Bank Midwest credit facility consisting of a $5,000,000 revolving line of credit, pursuant to which we had borrowed $3,924,500, with $1,075,500 remaining, as of November 30, 2022, and two term loans, which had outstanding principal balances of $2,165,554 and $344,932 as of November 30, 2022. The revolving line of credit is being used for working capital purposes. We also have three Economic Injury Disaster Loans provided by the U.S. Small Business Administration with an aggregate principal balance of $491,433 as of November 30, 2022.

Our loans require us to comply with various covenants, including maintaining certain financial ratios and obtaining prior written consent from Bank Midwest for any investment in, acquisition of, or guaranty relating to another business or entity. We were out of compliance with our debt to worth ratio covenant in place under the Bank Midwest loans as of November 30, 2022. Bank Midwest has issued a waiver forgiving the noncompliance as of November 30, 2022, and in turn waived the event of default.

11

For additional information about our financing activities, please refer to Note 9 “Loan and Credit Agreements” to our financial statements in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report.

The following table represents our working capital and current ratio as of the end of the past two fiscal years:

	November 30, 2022		November 30, 2021
Current Assets	$	14,133,429	$	12,174,245
Current Liabilities		9,267,289		7,686,817
Working Capital	$	4,866,140	$	4,487,428
Current Ratio		1.53		1.58

We believe that our current cash and financing arrangements will provide sufficient cash to finance operations for the next 12 months. We expect to continue to rely on cash from financing activities to supplement our cash flows from operations in order to meet our liquidity and capital expenditure needs in the near future. We expect to continue to be able to procure financing upon reasonable terms.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

12

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Art's-Way Manufacturing Co., Inc.

Armstrong, Iowa

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Art’s-Way Manufacturing Co., Inc. and Subsidiaries (the Company) as of November 30, 2022 and 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of November 30, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

13

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter, or on the accounts or disclosures to which it relates.

Valuation of Inventories

As discussed in Note 3 to the Company’s consolidated financial statements, the gross inventories balance was $12,354,599, and the balance net of reserves was $10,611,552 as of November 30, 2022. The Company values its inventories at the lower of cost or net realizable value, with cost being determined using the standard costing method. The Company adjusts the value of inventory for slow-moving and obsolete inventory based on expected usage information for raw materials and historical selling trends for finished goods. As disclosed by management, if these factors are less favorable than those projected, additional inventory adjustments may be required.

The principal considerations for our determination that performing procedures relating to valuation of inventories is a critical audit matter are the significant assumptions and complex judgments by management when determining the future salability of the inventory and its net realizable value. These assumptions and judgments include the assessment of the net realizable value by inventory category considering retention periods, future usage, and market demand for products, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s methods, calculations, and assumptions.

The primary procedures we performed to address this critical audit matter included:

• Gaining an understanding of management’s process, controls, and methodology to develop the estimates.

• Evaluating the reasonableness of assumptions used by management in forming the forecasted inventory usage and future salability, including examining historical accuracy of the Company’s prior estimates by considering subsequent sales and write-off activity.

• Testing the completeness, accuracy, and relevance of the underlying data used in management’s estimate.

• Testing the mathematical accuracy and computation related to the application of the methodology to specific inventory items and categories.

/s/ Eide Bailly LLP

We have served as the Company’s auditor since 2006.

Fargo, North Dakota

February 16, 2023

14

ART’S-WAY MANUFACTURING CO., INC.

Consolidated Balance Sheets

	November 30, 2022			November 30, 2021
Assets
Current assets:
Cash	$	5,055		$	2,658
Accounts receivable-customers, net of allowance for doubtful accounts of $34,699 and $38,188 in 2022 and 2021, respectively		2,722,298			2,663,030
Inventories, net		10,611,552			9,210,103
Cost and profit in excess of billings		450,906			177,284
Other current assets		343,618			121,170
Total current assets		14,133,429			12,174,245
Property, plant, and equipment, net		6,178,917			5,237,328
Assets held for lease, net		400,325			521,555
Deferred income taxes		2,605,395			2,621,886
Other assets		630,248			299,034
Total assets	$	23,948,314		$	20,854,048
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,630,966		$	1,737,091
Customer deposits		828,565			278,509
Billings in excess of cost and profit		328,041			280,761
Income taxes payable		3,500			5,500
Accrued expenses		1,283,204			1,162,373
Line of credit		3,924,500			4,074,530
Current portion of finance lease liabilities		170,835			48,591
Current portion of long-term debt		97,678			99,462
Total current liabilities		9,267,289			7,686,817
Long-term liabilities
Long-term portion of operating lease liabilities		24,016			34,931
Long-term portion of finance lease liabilities		602,131			142,386
Long-term debt, excluding current portion		2,904,241			2,635,467
Total liabilities		12,797,677			10,499,601
Commitments and Contingencies (Notes 8, 9 and 15)
Stockholders’ equity:
Undesignated preferred stock - $0.01 par value. Authorized 500,000 shares in 2022 and 2021; issued and outstanding 0 shares in 2022 and 2021.		-			-
Common stock – $0.01 par value. Authorized 9,500,000 shares in 2022 and 2021; issued 5,013,671 in 2022 and 4,583,504 in 2021		50,137			45,835
Additional paid-in capital		4,547,172			3,760,649
Retained earnings		6,754,284			6,656,487
Treasury stock, at cost (64,574 in 2022 and 44,532 in 2021 shares)		(200,956	)		(108,524	)
Total stockholders’ equity		11,150,637			10,354,447
Total liabilities and stockholders’ equity	$	23,948,314		$	20,854,048

See accompanying Report of Independent Registered Public Accounting Firm and notes to consolidated financial statements.

15

ART’S-WAY MANUFACTURING CO., INC.

Consolidated Statements of Operations

	Years Ended
	November 30, 2022			November 30, 2021
Sales	$	28,399,637		$	24,965,086
Cost of goods sold		21,092,905			18,368,596
Gross profit		7,306,732			6,596,490
Expenses:
Engineering		580,537			505,085
Selling		2,168,151			2,014,149
General and administrative		4,225,364			3,553,848
Total expenses		6,974,052			6,073,082
Income from operations		332,680			523,408
Other income (expense):
Interest expense		(453,872	)		(313,485	)
Other		238,192			56,967
Total other income (expense)		(215,680	)		(256,518	)
Income before income taxes		117,000			266,890
Income tax expense		19,203			54,259
Net Income		97,797			212,631
Net Income per share
Basic Net Income per share	$	0.02		$	0.05
Diluted Net Income per share	$	0.02		$	0.05
Weighted average outstanding shares used to compute basic net income per share		4,707,384			4,515,229
Weighted average outstanding shares used to compute diluted net income per share		4,707,384			4,515,229

See accompanying Report of Independent Registered Public Accounting Firm and notes to consolidated financial statements.

16

ART’S-WAY MANUFACTURING CO., INC.

Consolidated Statements of Stockholders' Equity

Years Ended November 30, 2022 and 2021

	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		113,500		1,135		264,406				9,435		(30,470	)		235,071
Net Income								212,631							212,631
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		110,167		1,102		286,619				20,042		(92,432	)		195,289
Common stock purchase agreement		320,000		3,200		499,904									503,104
Net Income								97,797							97,797
Balance, November 30, 2022		5,013,671		50,137		4,547,172		6,754,284		64,574		(200,956	)		11,150,637

See accompanying Report of Independent Registered Public Accounting Firm and notes to consolidated financial statements.

17

ART’S-WAY MANUFACTURING CO., INC.

Consolidated Statements of Cash Flows

	Twelve Months Ended
	November 30, 2022			November 30, 2021
Cash flows from operations:
Net income	$	97,797		$	212,631
Adjustments to reconcile net income to net cash used in operating activities:
Stock based compensation		287,721			265,541
Decrease in obsolete inventory reserves		(214,413	)		(638,633	)
Gain on disposal of property, plant, and equipment		(154,112	)		(17,935	)
Depreciation and amortization expense		807,163			613,409
Accrued interest on deferred debt payments		16,917			16,982
Decrease in allowance for doubtful accounts		(3,489	)		(12,987	)
Deferred income taxes		16,491			45,800
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		(55,779	)		(259,439	)
Inventories		(1,187,036	)		(809,070	)
Net investment in sales-type leases		-			28,352
Other assets		2,064			(59,887	)
Increase (decrease) in:
Accounts payable		893,875			(218,313	)
Contracts in progress, net		(226,342	)		(116,723	)
Customer deposits		550,056			80,284
Income taxes payable		(2,000	)		4,400
Accrued expenses		122,808			(120,266	)
Net cash provided by (used in) operating activities		951,721			(985,854	)
Cash flows from investing activities:
Purchases of property, plant, and equipment		(1,747,351	)		(620,284	)
Net proceeds from sale of assets		403,504			20,807
Net cash used in investing activities		(1,343,847	)		(599,477	)
Cash flows from financing activities:
Net change in line of credit		(150,030	)		1,715,000
Principal payments on finance lease obligations		(116,193	)		(9,046	)
Proceeds from term debt		350,000			-
Repayment of term debt		(99,926	)		(90,179	)
Proceeds from common stock purchase agreement		545,529			-
Cost of equity issuance		(42,425	)		-
Repurchases of common stock		(92,432	)		(30,470	)
Net cash provided by financing activities		394,523			1,585,305
Net increase (decrease) in cash		2,397			(26	)
Cash at beginning of period		2,658			2,684
Cash at end of period	$	5,055		$	2,658
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	421,241		$	270,616
Income taxes		2,365			1,675
Supplemental disclosures of non-cash investing and financing activities:
Right-of-use (ROU) assets acquired (included in other assets)	$	698,153		$	219,937
Less: Cash proceeds received under Manufuacturing 4.0 grant applied to ROU Assets - Note 13		(224,513	)		-
Total (ROU) assets acquired (included in other assets)	$	473,640		$	219,937
Amortization of operating lease ROU assets (included in other assets)	$	12,862		$	-
Supplemental disclosures of non-cash financing activities:
Market value of commitment shares issued under purchase agreement	$	160,000		$	-

See accompanying Report of Independent Registered Public Accounting Firm and notes to consolidated financial statements.

18

Art’s-Way Manufacturing Co., Inc.

Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies

(a) Nature of Business

Art’s-Way Manufacturing Co., Inc. (the “Company”) is primarily engaged in the fabrication and sale of specialized farm machinery in the agricultural sector of the United States. Primary product offerings include portable and stationary animal feed processing equipment; hay and forage equipment; sugar beet harvesting equipment; dirt work equipment and manure spreaders. The Company sells its labeled products through independent farm equipment dealers throughout the United States. The Company also provides after-market service parts that are available to keep its branded and OEM-produced equipment operating to the satisfaction of the end user of the Company’s products.

The Company’s Modular Buildings segment is primarily engaged in the construction of modular laboratories and animal housing facilities through the Company’s wholly-owned subsidiary, Art’s-Way Scientific, Inc. Buildings commonly produced range from basic swine buildings to complex containment research laboratories. This segment also provides services relating to the design, manufacturing, delivering, installation, and renting of the building units that it produces.

The Company’s Tools segment is a domestic manufacturer and distributor of standard single point brazed carbide tipped tools as well as PCD (polycrystalline diamond), CBN (cubic boron nitride) inserts and OEM specialty tools through the Company’s wholly-owned subsidiary, Ohio Metal Working Company/Art’s-Way, Inc.

(b) Principles of Consolidation

The consolidated financial statements include the accounts of Art’s-Way Manufacturing Co., Inc. and its wholly-owned subsidiaries for the 2022 fiscal year, which includes Art’s-Way Scientific, Inc., and Ohio Metal Working Products/Art’s-Way, Inc. All inter-company accounts and transactions are eliminated in consolidation.

(c) Cash Concentration

The Company maintains several different accounts at one bank, and balances in these accounts could periodically exceed the federally insured limits. However, management believes the risk of loss to be low.

(d) Customer Concentration

During the 2022 and 2021 fiscal years, one customer accounted for more than 11% and 8%, respectively, of consolidated revenues.

(e) Accounts Receivable

Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written-off when deemed uncollectible. Recoveries of accounts receivable previously written-off are recorded when received. Accounts receivable are generally considered past due 60 days past invoice date, with the exception of international sales which primarily are sold with 180 day terms backed by export insurance.

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 during the 2022 fiscal year. Floorplan terms allow customers to pay the Company at the earliest of retail date or 180 days. The Company had approximately $1,033,000 in accounts receivable at November 30, 2022 that was part of its floorplan program on extended terms compared to $0 for the year ended November 30, 2021.

19

Trade receivables due from customers are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Trade receivables are stated at the amount billed to the customer. The Company charges interest on overdue customer account balances at a rate of 1.5% per month. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

(f) Inventories

Inventories are stated at the lower of cost or net realizable value, and cost is determined using the standard costing method. Management monitors the carrying value of inventories using inventory control and review processes that include, but are not limited to, sales forecast review, inventory status reports, and inventory reduction programs. The Company records inventory write downs to net realizable value based on expected usage information for raw materials and historical selling trends for finished goods. Additional write downs may be necessary if the assumptions made by management do not occur.

(g) Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Depreciation of plant and equipment is provided using the straight-line method, based on the estimated useful lives of the assets which range from three to 40 years.

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.

For property, plant and equipment used in operations, including lease assets and assets held for lease, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value.

(h) Leases

The Company determines if an arrangement is a lease at inception of a contract. The nature of the Company’s leases at this time is shop machinery and office equipment, mainly copiers, with terms of 12 to 60 months. Operating and finance leases are included in other assets as lease right-of-use (“ROU”) assets on the Consolidated Balance Sheets while current operating lease liabilities are included in accrued expenses. The short-term portion of finance leases along with long-term portions of operating and finance lease liabilities are presented on the face of the Consolidated Balance Sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term while finance lease ROU assets are amortized on a straight-line basis and interest expense is recorded over the lease term.

The Company has copier lease agreements with lease and non-lease components and has elected the practical expedient not to separate lease and non-lease components for this asset class. The Company has also elected not to recognize lease liabilities and ROU assets for leases with an initial term of twelve months or less. The Company recognizes variable costs that depend on usage in profit or loss as they are incurred.

20

The components of operating leases on the Consolidated Balance Sheets at November 30, 2022 and November 30, 2021 were as follows:

	November 30, 2022		November 30, 2021
Operating lease right-of-use assets (other assets)	$	34,931		47,794
Current portion of operating lease liabilities (accrued expenses)	$	10,915		12,863
Long-term portion of operating lease liabilities		24,016		34,931
Total operating lease liabilities	$	34,931		47,794

The Company recorded $20,121 of operating lease expense in the year ended November 30, 2022 compared to $22,445 in the same period of fiscal 2021, including variable costs tied to usage. The Company’s operating leases carry a weighted average lease term of 39 months and have a weighted average discount rate of 5.50%

Future maturities of operating lease liabilities as of November 30, 2022 are as follows:

Year Ending November 30,
2023	12,344
2024	11,325
2025	9,532
2026	4,765
Total lease payments	37,966
Less imputed interest	(3,035	)
Total operating lease liabilities	34,931

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

 

	November 30, 2022		November 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$	540,052	$	190,667
	$	540,052	$	190,667
Current portion of finance lease liabilities	$	170,835	$	48,591
Long-term portion of finance lease liabilities		602,131		142,386
Total finance lease liabilities	$	772,966	$	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 November 30, 2022 are as follows:

Year Ending November 30,
2023	$	199,836
2024		211,219
2025		157,393
2026		155,809
2027		122,823
Total lease payments		847,080
Less imputed interest		(74,114	)
Total finance lease liabilities	$	772,966

The weighted average lease term of the Company’s finance leases are 50 months while the weighted average rate of finance leases is 4.18%. The Company incurred $124,256 of amortization expense from ROU assets related to finance leases in fiscal 2022 compared to $9,356 in fiscal 2021.

21

(i) 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. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

The Company classifies interest and penalties to be paid on an underpayment of taxes as income tax expense. The Company files income tax returns in the U.S. federal jurisdiction and various states and previously in Canada. The Company is no longer subject to Canadian, U.S. federal or state income tax examinations by tax authorities for years ended before November 30, 2019.

(j) Revenue Recognition

The Company’s revenues primarily result from contracts with customers. The major sources of revenue for the Agricultural Products and Tools segments are farm equipment, service parts related to farm equipment and steel cutting tools and inserts. The Agricultural Products and Tools segments generally execute short-term contracts that contain a single performance obligation – the delivery of product to the common carrier. The Company recognizes revenue for the production and sale of farm equipment, service parts and cutting tools upon shipment of the goods. Risk of ownership and title pass to the customer upon shipment of the goods. The Tools segment has an OEM agreement with one customer for which sales are recognized FOB destination – when the goods hit the customer’s dock. All sales are made to authorized dealers whose application for dealer status has been approved and who have been informed of general sales policies. Any changes in the Company’s terms are documented in the most recently published price lists. Pricing is fixed and determinable according to the Company’s published equipment and parts price lists. Title to all equipment and parts sold passes to the customer upon delivery to the carrier and is not subject to a customer acceptance provision. Proof of the passing of title is documented and retained by the Company. Post shipment obligations are limited to any claim with respect to the condition of the equipment or parts. The Agricultural Products and Tools segments each typically require payment in full 30 days after the ship date. To take advantage of program discounts, some customers pay deposits up front. Any deposits received increase contract liabilities.

In certain circumstances, upon the customer’s written request, the Company may recognize revenue when production is complete, and the goods are ready for shipment. At the customer’s request, the Company will bill the customer upon completing all performance obligations, but before shipment. The customer dictates that the Company ship the goods per the customer’s direction from the Company’s manufacturing facility, as is customary with this type of agreement, in order to minimize shipping costs. The written agreement with the customer specifies that the goods will be delivered on a schedule to be determined by the customer, with a final specified delivery date, and that the Company will segregate the goods from its inventory, such that they are not available to fill other orders. This agreement also specifies that the customer is required to purchase all goods manufactured under this agreement. Title of the goods will pass to the customer when the goods are complete and ready for shipment, per the customer agreement. At the transfer of title, all risks of ownership have passed to the customer, and the customer agrees to maintain insurance on the manufactured items that have not yet been shipped. The Company has operated using bill and hold agreements with certain customers for many years, with consistent satisfactory results for both the customer and the Company. The credit terms on these agreements are consistent with the credit terms on all other sales. All risks of loss are shouldered by the customer, and there are no exceptions to the customer’s commitment to accept and pay for these manufactured goods. Revenues recognized at the completion of production in the 2021 and 2020 fiscal years were approximately $1,010,000 and $711,000 respectively.

22

The Modular Buildings segment is in the construction industry with its major source of revenue arising from modular building sales. Sales of modular buildings are generally recognized using input methods to measure progress towards the satisfaction of a performance obligation using the percentage of completion method. Revenue and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Contract costs consist of direct costs on contracts, including labor, materials, amounts payable to subcontractors and those indirect costs related to contract performance, such as equipment costs, insurance and employee benefits. Contract cost is recorded as incurred, and revisions in contract revenues and cost estimates are reflected in the accounting period when known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Contract losses are recognized when current estimates of total contract revenue and contract cost indicate a loss. Estimated contract costs include any and all costs appropriately allocable to the contract. The provision for these contract losses will be the excess of estimated contract costs over estimated contract revenues. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract change orders, penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The Company uses significant judgements in determining estimated contract costs and completion percentages throughout the life of the project. Stock modular building sales also occur and are recognized at a point in time when the performance obligation is fulfilled through substantial completion. Substantial completion is achieved through customer acceptance of the completed building. The Modular Buildings segment executes contracts with customers that can be short- or long-term in nature. These contracts can have multiple performance obligations and revenue from these can be recognized over time or at a point in time depending on the nature of the contracts. Payment terms for the Modular Buildings segment vary by contract, but typically utilize money down and progress payments throughout the life of the contract. The payment terms of the Modular Buildings segment have the most impact on the Company’s contract receivables, contract assets and contract liabilities. Project invoicing from the Modular Buildings segment increases contract receivables and has an effect on contract liabilities through billings in excess of costs, estimated gross profit and customer deposits. The balance of contract assets is typically made up of the balance of costs and estimated gross profit in excess of billings. Costs and profit in excess of amounts billed are classified as current assets and billings in excess of cost and profit are classified as current liabilities.

The Agricultural Products segment offers variable consideration in the form of discounts depending on participation in yearly early order programs. This variable consideration is allocated to the transaction price of all products in a sales arrangement and is not contingent on future outcomes. The Agricultural Products segment does not offer rebates or credits. The Tools segment offers quantity discounts that are allocated to the transaction price of each product once the quantity break is achieved. The Tools segment does not offer rebates or credits. The Modular Buildings segment does not offer discounts, rebates or credits.

The Company’s returns policy allows for new and saleable parts to be returned, subject to inspection and a restocking charge, which is included in net sales. Whole goods are not returnable. Shipping costs charged to customers are included in net sales. Freight costs incurred are included in cost of goods sold. Customer deposits consist of advance payments from customers, in the form of cash, for revenue to be recognized in the following year.

For information on product warranty as it applies to ASC 606, refer to Note 8 “Product Warranty.”

(k) 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.

	Twelve Months Ended November 30, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	17,825,000	$	-	$	-	$	17,825,000
Farm equipment service parts		2,575,000		-		-		2,575,000
Steel cutting tools and inserts		-		-		2,708,000		2,708,000
Modular buildings		-		4,550,000		-		4,550,000
Modular building lease income		-		62,000		-		62,000
Other		512,000		122,000		46,000		680,000
	$	20,912,000	$	4,734,000	$	2,754,000	$	28,400,000

	Twelve Months Ended November 30, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	13,631,000	$	-	$	-	$	13,631,000
Farm equipment service parts		2,799,000		-		-		2,799,000
Steel cutting tools and inserts		-		-		2,440,000		2,440,000
Modular buildings		-		5,381,000		-		5,381,000
Modular building lease income		-		-		-		-
Other		396,000		297,000		21,000		714,000
	$	16,826,000	$	5,678,000	$	2,461,000	$	24,965,000

23

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 in fiscal 2022. 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.

(l) 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 Consolidated Balance Sheets.

	November 30, 2022		November 30, 2021
Receivables	$	2,722,000	$	2,663,000
Assets		451,000		177,000
Liabilities		1,157,000		559,000

The amount of revenue recognized in fiscal year 2022 that was included in a contract liability at November 30, 2021 was approximately $559,000 compared to $474,000 for the prior year. The beginning balance of contract receivables, assets and liabilities at December 1, 2020 was $2,391,000; $56,000 and $474,000, respectively. The change in contract receivables reflected above results from contract billings for all three segments as performance obligations are met. The increase in contract assets on November 30, 2022 is due to construction costs in excess of billings on contracts in the Modular Buildings segment. Contract liabilities include customer deposits and billings in excess of cost and profit on the consolidated balance sheets. Contract liabilities have increased due to customer deposits received on the Agricultural Products segment as part of our fall early order program that offers cash discounts for equipment deposits.

The Company will utilize the practical expedient exception for these contracts and will report only on performance obligations greater than one year. As of November 30, 2022, and November 30, 2021, the Company has no performance obligations with an original expected duration greater than one year.

(m) Research and Development

Research and development costs are expensed when incurred. Such costs approximated $193,000 and $152,000 for the 2022 and 2021 fiscal years, respectively. Research and development costs are included in engineering expenses on the Consolidated Statements of Operations.

(n) Advertising

Advertising costs are expensed when incurred. Such costs approximated $190,000 and $163,000 for the 2022 and 2021 fiscal years, respectively. Advertising costs are included in selling expenses on the Consolidated Statements of Operations.

(o) Net Income Per Share of Common Stock

Basic net income per share has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted net income per share of common stock has been computed on the basis of the weighted average number of shares outstanding plus equivalent shares of common stock 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 per share of common stock.

24

Basic and diluted income per common share have been computed based on the following as of November 30, 2022 and 2021:

	For the Twelve Months Ended
	November 30, 2022		November 30, 2021
Numerator for basic and diluted net income per share:
Net income	$	97,797	$	212,631
Denominator:
For basic net income per share - weighted average common shares outstanding		4,707,384		4,515,229
Effect of dilutive stock options		-		-
For diluted net income per share - weighted average common shares outstanding		4,707,384		4,515,229
Net Income per share - Basic:
Net Income per share	$	0.02	$	0.05
Net Income per share - Diluted:
Net Income per share	$	0.02	$	0.05

(p) Stock Based Compensation

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 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. Restricted stock is valued at market value at the day of grant.

(q) Use of Estimates

Management has made a number of estimates and assumptions related to the reported amount of assets and liabilities, reported amount of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

(r) 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 smaller reporting entities 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 year 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.                  

25

(2) Allowance for Doubtful Accounts

A summary of the Company’s activity in the allowance for doubtful accounts is as follows:

	Twelve Months Ended
	November 30, 2022			November 30, 2021
Balance, beginning	$	38,188		$	51,175
Provision (recovery) charged to expense		(7,722	)		(4,160	)
(Less amounts charged-off)/Recovery		4,233			(8,827	)
Balance, ending	$	34,699		$	38,188

(3) Inventories

Major classes of inventory are:

	November 30, 2022			November 30, 2021
Raw materials	$	8,700,719		$	8,289,386
Work in process		624,781			357,721
Finished goods		3,029,099			3,088,739
Total Gross Inventory	$	12,354,599		$	11,735,846
Less: Reserves		(1,743,047	)		(2,525,743	)
Net Inventory	$	10,611,552		$	9,210,103

(4) Contracts in Progress

Amounts included in the consolidated financial statements related to uncompleted contracts are as follows:

	Cost and Profit in			Billings in Excess of
	Excess of Billings			Costs and Profit
November 30, 2022
Costs	$	848,516		$	731,490
Estimated earnings		293,094			138,568
		1,141,610			870,058
Less: amounts billed		(690,704	)		(1,198,099	)
	$	450,906		$	(328,041	)
November 30, 2021
Costs	$	362,958		$	924,908
Estimated earnings		117,328			301,180
		480,286			1,226,088
Less: amounts billed		(303,002	)		(1,506,849	)
	$	177,284		$	(280,761	)

The amounts billed on long-term contracts are due 30 days from invoice date. All amounts billed are expected to be collected within the next 12 months. Retainage included in accounts receivable was $4,087 and $0 as of November 30, 2022 and 2021, respectively.

26

(5) Property, Plant, and Equipment

Major classes of property, plant, and equipment are:

	November 30, 2022			November 30, 2021
Land	$	220,503		$	220,503
Buildings and improvements		8,235,981			7,460,698
Construction in Progress		357,644			160,353
Manufacturing machinery and equipment		11,721,908			11,286,411
Trucks and automobiles		567,563			510,986
Furniture and fixtures		115,059			115,059
		21,218,658			19,754,010
Less accumulated depreciation		(15,039,741	)		(14,516,682	)
Property, plant and equipment	$	6,178,917		$	5,237,328

Depreciation and amortization expense totaled $807,163 and $613,409 for the 2022 and 2021 fiscal years, respectively. These totals include amortization of right-of-use assets on finance leases as discussed in Note 1 “Summary of Significant Accounting Policies” section (h) “Leases” above.

(6) Assets Held for Lease

Major components of assets held for lease are:

	November 30, 2022		November 30, 2021
Modular Buildings	$	400,325	$	521,555
Total assets held for lease	$	400,325	$	521,555

The Company’s Modular Buildings segment enters into leasing arrangements with customers from time-to-time. The Company had five buildings in assets held for lease for the year ending November 30, 2022 and seven buildings for the year ended November 30, 2021.

Two modular buildings held for lease were sold in fiscal 2022 for $383,904. The company incurred a gain of approximately $150,069 on the sale of the assets.

Rents recognized in sales were related to the leasing of modular buildings as a part of the normal course of business operations of the Modular Buildings segment. There were $61,534 of rents recognized from assets held for lease included in sales on the Consolidated Statements of Operations during the 2022 fiscal year compared to none in the 2021 fiscal year.

The future minimum lease receipts from assets held for lease on November 30, 2022 are as follows:

Year Ending November 30,	Amount
2023	$	67,941
Total		67,941

(7) Accrued Expenses

Major components of accrued expenses are:

	November 30, 2022		November 30, 2021
Salaries, wages, and commissions	$	755,708	$	654,757
Accrued warranty expense		193,301		202,850
Other		334,195		304,766
	$	1,283,204	$	1,162,373

(8) 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 may 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.

27

Changes in the Company’s product warranty liability included in accrued expenses for the 2022 and 2021 fiscal years are as follows:

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Balance, beginning	$	202,850		$	291,454
Settlements / adjustments		(349,889	)		(238,808	)
Warranties issued		340,340			150,204
Balance, ending	$	193,301		$	202,850

(9) Loan and Credit Agreements

Bank Midwest Revolving Lines of Credit and Term Loans

The Company maintains a $5,000,000 revolving line of credit (the “Line of Credit”) and previously maintained a $550,000 revolving line of credit (the “Reserve Line of Credit”) with Bank Midwest. The Reserve Line of Credit expired on November 30, 2022 and was used for additional working capital. On November 30, 2022, the balance of the Line of Credit was $3,924,500 with $1,075,500 remaining 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 November 30, 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 interest rate is 9.25% per annum following continued 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. The unpaid principal amount borrowed on the Reserve Line of Credit accrued 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 Reserve Line of Credit matured on November 30, 2022 and is closed. The Line of Credit is governed by the terms of a Promissory Note, dated March 28, 2022, entered into between the Company and Bank Midwest. The Reserve Line of Credit was governed by the terms of a Promissory Note, dated May 13, 2022, entered into between the Company and Bank Midwest.

The Company carries a $2,600,000 term loan with Bank Midwest due October 1, 2037 (the “Term Loan”), and a $350,000 term loan (the “Roof Term Loan”) due on May 15, 2027. The Term Loan accrued interest at a rate of 5.00% for the first ninety months, which ended on September 28, 2022. Thereafter, the Term Loan accrues 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. The current interest rate is 7.00%. Monthly payments of $19,648 in 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 $62,400 and 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 Term Loan is governed by the terms of a Promissory Note, dated September 28, 2017, 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.

28

The Company also entered into the Roof Term Loan of $350,000 with Bank Midwest on May 17, 2022. The Roof Term Loan’s proceeds were used to fix sections of the Armstrong facility’s roof. The Roof Term Loan requires 59 regular payments of $2,972 and an estimated balloon payment of $269,517 on the maturity date of May 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 9.75% per annum. The Roof Term Loan is governed by the terms of a Promissory Note, dated May 17, 2022, entered into between the Company and Bank Midwest.

In connection with the 2017 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 2017 Line of Credit, as set forth in Commercial Guaranties, each dated September 28, 2017. The 2019 Line of Credit is also secured by these existing security documents.

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.

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 Bank Midwest covenants is measured annually on November 30. The terms of the Bank Midwest loan agreements require the Company to maintain a minimum of $4,000,000 of monthly working capital. Additionally, 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 0.10 tolerance. The Company also must receive bank approval for purchases or sales of equipment over $100,000 annually and maintain reasonable salaries and owner compensation. The Company received the necessary approvals for purchases of equipment over $100,000 for the twelve months ended November 30, 2022. The Company was out of compliance with its debt to worth ratio by fifteen percentage points on the Bank Midwest loans as of November 30, 2022. Bank Midwest issued a waiver forgiving the noncompliance, and in turn waived the event of default. The next measurement date is November 30, 2023 for all covenants except the monthly working capital requirement.

SBA Economic Injury Disaster Loans

In June of 2020, the Company executed the standard loan documents required for securing loans offered by the U.S. Small Business Administration under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. Two loans were executed on June 18, 2020 with principal amounts of $150,000 each, with a third loan being executed on June 24, 2020 with a principal amount of $150,000. Proceeds from these EIDLs are being 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 beginning June 18, 2022 (thirty-six months from the date of the EIDLs) and June 24, 2022 in the amount of $731 per EIDL. On March 11, 2021, the American Rescue Plan Act of 2021 was enacted, which extended the first due date for repayment of EIDLs made in 2020 from 12 months to 24 months from the date of the note. The balance of principal and interest is payable 30 years from the date of the EIDL. 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.

29

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

	November 30, 2022		November 30, 2021
Bank Midwest loan payable in monthly installments of $19,648 including interest at 7.00%, due October 1, 2037		2,165,554		2,260,412
Bank Midwest loan payable in monthly installments of $2,972 including interest at 9.5%, due May 15, 2027		344,932		-
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 18, 2022, due June 18, 2050		163,793		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 18, 2022, due June 18, 2050		163,728		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 24, 2022, due June 24, 2050		163,912		158,181
Total term debt	$	3,001,919	$	2,734,929
Less current portion of term debt		97,678		99,462
Term debt, excluding current portion	$	2,904,241	$	2,635,467

A summary of the minimum maturities of term debt follows for the years ending November 30:

Year	Amount
2023	$	97,678
2024		103,631
2025		111,601
2026		119,594
2027		446,810
2028 and thereafter		2,122,605
	$	3,001,919

(10) Related Party Transactions

During the 2022 and 2021 fiscal years, 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 2022 fiscal year, the Company recognized $23,880 of expense for transactions with related parties, compared to $26,368 in the 2021 fiscal year. As of November 30, 2022, accrued expenses contained a balance of $1,348 owed to a related party compared to $1,407 on November 30, 2021.

(11) Employee Benefit Plans

The Company sponsors a defined contribution 401(k) savings plan which covers substantially all full-time employees who meet eligibility requirements. Participating employees may contribute as salary reductions any amount of their compensation up to the limit prescribed by the Internal Revenue Code. The Company makes a 50% matching contribution to employees up to 3% of eligible compensation. The Company recognized an expense of $116,603 and $77,010 related to this plan during the 2022 and 2021 fiscal years, respectively.

(12) Equity Incentive Plan

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 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. 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.

30

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.

Shares issued under the 2020 Plan for the years ended November 30, 2022 and 2021 are as follows:

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Shares issued to directors (immediate vesting)		25,000			25,000
Shares issued to directors, employees, and consultants (three-year vesting)		94,500			88,500
Unvested shares forfeit upon termination		(9,333	)		-
Total shares issued		110,167			113,500

Book and tax stock-based compensation expense for the years ended November 30, 2022 and 2021 are as follows:

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Stock-based compensation expense		287,721			265,541
Treasury share repurchase expense		(92,432	)		(30,470	)
Stock-based compensation expense net of treasury repurchases		195,289			235,071

	For the Twelve Months Ended
	November 30, 2022		November 30, 2021
Tax deductions from stock-based compensation expense		314,306		246,862

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 years ended November 30, 2022 or 2021.

31

The following is a summary of activity under the plans as of November 30, 2022 and 2021, and changes during the years then ended:

2022 Option Activity

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options O/S at beginning of period		22,000		$	5.93
Granted		-		$	-
Exercised		-		$	-				-
Options Expired or Forfeited		(10,000	)	$	6.15
Options O/S at end of Period		12,000		$	5.75		1.40		-
Options Exer. At end of the Period		12,000		$	5.75		1.40		-

2021 Option Activity

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options O/S at beginning of period		36,000		$	6.40
Granted		-		$	-
Exercised		-		$	-				-
Options Expired or Forfeited		(14,000	)	$	7.14
Options O/S at end of Period		22,000		$	5.93		2.04		-
Options Exer. At end of the Period		22,000		$	5.93		2.04		-

(13) 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 issued 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 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.

32

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 twelve months ended November 30, 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

The Company has $2,454,472 of funding under the common stock purchase agreement that can be utilized as of November 30, 2022.

(14) Income Taxes

Total income tax expense for the 2022 and 2021 fiscal years consists of the following:

	November 30, 2022		November 30, 2021
Current expense	$	2,712	$	8,459
Deferred expense		16,491		45,800
Total income tax expense	$	19,203	$	54,259

The reconciliation of the statutory Federal income tax rate is as follows:

	November 30, 2022			November 30, 2021
Statutory federal income tax rate		21.0	%		21.0	%
Permanent Differences and Other		(4.6	)		(0.7	)
		16.4	%		20.3	%

Tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) on November 30, 2022 and 2021 are presented as approximate amounts below:

	November 30
	2022			2021
Current deferred tax assets (liabilities):
Accrued expenses	$	93,000		$	82,000
Inventory capitalization		167,000			122,000
NOL and tax credit carryforward		1,921,000			1,846,000
Asset reserves		521,000			613,000
Total current deferred tax assets	$	2,702,000		$	2,663,000
Non-current deferred tax assets
Property, plant, and equipment	$	(97,000	)	$	(41,000	)
Total non-current deferred tax assets (liabilities)	$	(97,000	)	$	(41,000	)
Net deferred taxes	$	2,605,000		$	2,622,000

33

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company has net operating losses amounting to approximately $4,496,000 and tax credit carryforward amounting to approximately $109,000 for its U.S. operations that will expire on November 30, 2036, 2037, 2038, 2039 and 2040. The Company has another $4,869,000 of net operating losses that can be carried forward indefinitely. Management believes that the Company will be able to utilize the U.S. net operating losses and credits before their expiration.

(15) 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 November 30, 2022 and November 30, 2021, the carrying amount approximated fair value for cash, accounts receivable, operating and finance leases, accounts payable, notes payable to bank, 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 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.

(16) Litigation and Contingencies

Various legal actions and claims can arise in the normal course of business that may be pending against the Company. In the opinion of management, the Company has recorded adequate provisions, if any, in the accompanying financial statements for any pending legal actions and other claims.

(17) Segment Information

There are three reportable segments: Agricultural Products, Modular Buildings, and Tools. The Agricultural Products segment fabricates and sells farming products as well as replacement parts for these products in the United States and worldwide. The Modular Buildings segment produces modular buildings for animal containment and various laboratory uses. 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.

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

	Twelve Months Ended November 30, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	20,912,000	$	4,734,000		$	2,754,000		$	28,400,000
Income (loss) from operations	$	1,205,000	$	(600,000	)	$	(272,000	)	$	333,000
Income (loss) before tax	$	923,000	$	(482,000	)	$	(324,000	)	$	117,000
Total Assets	$	18,459,000	$	2,829,000		$	2,660,000		$	23,948,000
Capital expenditures (1)	$	1,969,000	$	232,000		$	244,000		$	2,445,000
Depreciation & Amortization	$	468,000	$	193,000		$	146,000		$	807,000

	Twelve Months Ended November 30, 2021
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	16,826,000	$	5,678,000	$	2,461,000		$	24,965,000
Income (loss) from operations	$	599,000	$	74,000	$	(150,000	)	$	523,000
Income (loss) before tax	$	413,000	$	45,000	$	(191,000	)	$	267,000
Total Assets	$	14,950,000	$	3,429,000	$	2,475,000		$	20,854,000
Capital expenditures (2)	$	726,000	$	94,000	$	-		$	820,000
Depreciation & Amortization	$	366,000	$	111,000	$	136,000		$	613,000

(1)	FY 2022 capital expenditures include finance leased assets of $532,000 in the Agricultural Products segment and $166,000 in the Tool segment.
(2)	FY 2021 capital expenditures include finance leased assets of $142,000 in the Agricultural Products segment and $58,000 in the Modular Buildings segment.

(18) Subsequent Events 

Management evaluated all other activity of the Company and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements.

34

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

Item 9A. 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 November 30, 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.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. Internal control over financial reporting is a process designed 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. Under the supervision and with the participation of management, including the persons serving as our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of November 30, 2022.

This report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this report.

Limitations on Controls

Our management, including the persons serving as our principal executive officer and principal financial officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. In addition, the design of any system of controls is based in part on certain assumptions about the likelihood of future events, and controls may become inadequate if conditions change. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes to Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three months ended November 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. OTHER INFORMATION.

None.

35

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required by Item 10 is incorporated by reference to the sections entitled “Questions and Answers about the 2023 Annual Meeting and Voting,” “Election of Directors,” “Delinquent Section 16(a) Reports,” “Corporate Governance,” and “Executive Officers” in our definitive proxy statement relating to our 2023 Annual Meeting of Stockholders.

Item 11. EXECUTIVE COMPENSATION.

The information required by Item 11 is incorporated by reference to the sections entitled “Executive Compensation” and “Director Compensation” in our definitive proxy statement relating to our 2023 Annual Meeting of Stockholders.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information required by Item 12 is incorporated by reference to the sections entitled “Security Ownership of Principal Stockholders,” “Security Ownership of Directors and Management” and “Equity Compensation Plan Information” in our definitive proxy statement relating to our 2023 Annual Meeting of Stockholders.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information required by Item 13 is incorporated by reference to the sections entitled “Corporate Governance” and “Certain Transactions and Business Relationships” in our definitive proxy statement relating to our 2023 Annual Meeting of Stockholders.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by Item 14 is incorporated by reference to the section entitled “Independent Registered Public Accountant Firm” in our definitive proxy statement relating to our 2023 Annual Meeting of Stockholders.

36

PART IV

Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(A) Financial Statements. The following financial statements are included in “Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA” of this report:

Report of Eide Bailly, LLP (PCAOB ID 286) on Consolidated Financial Statements as of November 30, 2022 and 2021

Consolidated Balance Sheets as of November 30, 2022 and 2021

Consolidated Statements of Operations for each of the years ended November 30, 2022 and 2021

Consolidated Statements of Stockholders’ Equity for each of the years ended November 30, 2022 and 2021

Consolidated Statements of Cash Flows for each of the years ended November 30, 2022 and 2021

Notes to Consolidated Financial Statements

(B) Financial Statement Schedules.

Not applicable.

(C) Exhibits.

Exhibit No.		Description
	3.1	Conformed Certificate of Incorporation of Art’s-Way Manufacturing Co., Inc. – incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2020.
	3.2	Conformed Bylaws of Art’s-Way Manufacturing Co., Inc.– incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2020.
	4.1	Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 – incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2019.
	10.1*	Director Compensation Policy – incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2018.
	10.2*	Art’s-Way Manufacturing Co., Inc. 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed May 4, 2020).
	10.3*	Form of Restricted Stock Agreement under 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed May 4, 2020).
	10.4*	Form of Restricted Stock Unit Agreement under 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed May 4, 2020).
	10.5*	Form of Incentive Stock Option Award under 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed May 4, 2020).
	10.6*	Form of Non-Qualified Option Award under 2020 Equity Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K filed May 4, 2020).
	10.7*	Employment Agreement between the Company and Michael Woods, dated February 1, 2020 – incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended February 29, 2020.
	10.8*	Offer Letter between the Company and David King, dated March 5, 2020 – incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed March 11, 2020.

37

10.9*	Employment Agreement between the Company and David A. King, effective March 30, 2020 – incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended February 29, 2020.
10.10	Common Stock Purchase Agreement, dated March 29, 2022, by and between Art’s-Way Manufacturing Co., Inc. and Alumni Capital LP. – incorporated by reference to the Company’s Current Report on Form 8-K filed April 4, 2022.
10.11	Promissory Note, between Bank Midwest and Art’s-Way Manufacturing Co., Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.12	Promissory Note, between Bank Midwest and Art’s-Way Manufacturing Co., Inc., dated February 11, 2021 – incorporated by reference to exhibit 10.2 to the Company's Current Report on Form 10-Q for the quarter ended February 28, 2021.
10.13	Promissory Note, between Bank Midwest and Art’s-Way Manufacturing Co., Inc., dated March 28, 2022 – incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed April 14, 2022.
10.14	Promissory Note, between Bank Midwest and Art’s-Way Manufacturing Co., Inc., dated May 17, 2022 – incorporated by reference to the Company’s Current Report on Form 8-K filed May 23, 2022.
10.15	Promissory Note, between Bank Midwest and Art’s-Way Manufacturing Co., Inc., dated May 17, 2022 – incorporated by reference to the Company’s Current Report on Form 8-K filed May 23, 2022.
10.16	Commercial Guaranty, by Ohio Metal Working Products/Art’s-Way Inc., dated September 28, 2017 - incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed September 29, 2017
10.17	Commercial Guaranty, by Art’s-Way Scientific Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.18	Commercial Security Agreement, between Bank Midwest and Art’s-Way Manufacturing Co., Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.19	Commercial Security Agreement, between Bank Midwest and Ohio Metal Working Products/Art’s-Way Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.20	Commercial Security Agreement, between Bank Midwest and Art’s-Way Scientific Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.21	Open-End Mortgage (3620 Progress Street ND, Canton, OH 44705), by Ohio Metal Working Products/Art’s-Way Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.22	Mortgage (556 Highway 9 and 203 West Oak Street, Armstrong & Monona, Iowa, 50514/55215), by Art’s-Way Manufacturing Co., Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.23	Modification of Mortgage (3620 Progress Street ND, Canton, OH 44705), by Ohio Metal Working Products/Art’s-Way Inc., dated March 30, 2018 – incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2018.
10.24	Assignment of Rents (3620 Progress Street ND, Canton, OH 44705), by Ohio Metal Working Products/Art’s-Way Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.25	Assignment of Rents (556 Highway 9 and 203 West Oak Street, Armstrong & Monona, Iowa, 50514/55215), by Art’s-Way Manufacturing Co., Inc., dated September 28, 2017 – incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K filed September 29, 2017.
10.26	Promissory Note, between the Small Business Administration and Art’s-Way Scientific Inc., dated June 18, 2020 – incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2020.

38

10.27	Promissory Note, between the Small Business Administration and Ohio Metal Working Products/Art’s-Way, dated June 18, 2020 – incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2020
10.28	Promissory Note, between the Small Business Administration and Art’s-Way Manufacturing Co., Inc., dated June 24, 2020 – incorporated by reference to Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2020.
21.1	List of Subsidiaries – filed herewith.
23.1	Consent of independent registered public accounting firm – filed herewith.
24.1	Power of Attorney (included on the “Signatures” page of this Annual Report on Form 10-K).
31.1	Certificate pursuant to 17 CFR 240 13(a)-14(a) – filed herewith.
31.2	Certificate pursuant to 17 CFR 240 13(a)-14(a) – filed herewith.
32.1	Certificate pursuant to 18 U.S.C. Section 1350 – filed herewith.
32.2	Certificate 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) consolidated balance sheets, (ii) consolidated statement of operations, (iii) consolidated statements of cash flows, and (iv) the notes to the condensed consolidated financial statements.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
(*) Indicates a management contract or compensatory plan or arrangement.

Item 16.          FORM 10-K SUMMARY.

Not applicable.

39

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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:	February 16, 2023	/s/ David A. King
		David A. King, President and Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below appoints DAVID A. KING his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said attorney-in-fact and agent, or her substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: February 16, 2023	/s/ David A. King
	David A. King, President and Chief Executive Officer
Date: February 16, 2023	/s/ Michael W. Woods
	Michael W. Woods, Chief Financial Officer
Date: February 16, 2023	/s/ Marc H. McConnell
	Marc H. McConnell, Chairman, Director
Date: February 16, 2023	/s/ Thomas E. Buffamante
	Thomas E. Buffamante, Director
Date: February 16, 2023	/s/ Randall C. Ramsey
	Randall C. Ramsey, Director
Date: February 16, 2023	/s/ Matthew N. Westendorf
	Matthew N. Westendorf, Director
Date: February 16, 2023	/s/ David A. White
	David A. White, Director

40

EX-21.1

Exhibit 21.1

Art’s-Way Manufacturing Co., Inc. and Subsidiaries

As of November 30, 2022

Company	Jurisdiction of Formation
Art’s-Way Scientific, Inc.	Iowa
Ohio Metal Working Products/Art’s Way, Inc.	Ohio

All Art’s-Way Manufacturing Co., Inc. subsidiaries are wholly-owned.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

Art's-Way Manufacturing Co., Inc.

Armstrong, Iowa

We hereby consent to the incorporation by reference in the Registration Statements on Form S­8 (No. 333-169972, No. 333-173914, and No. 333-238469) of Art's-Way Manufacturing Co., Inc. of our report dated February 16, 2023, relating to the consolidated financial statements for the years ended November 30, 2022 and 2021, which appears in Art's-Way Manufacturing Co., Inc.’s Annual Report on Form 10-K for the fiscal year ended November 30, 2022.

/s/ Eide Bailly LLP

Fargo, North Dakota

February 16, 2023

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 annual report on Form 10-K 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:	February 16, 2023	/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 annual report on Form 10-K 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:	February 16, 2023	/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 annual report on Form 10-K of Art’s-Way Manufacturing Co., Inc. (the “Company”) for the fiscal year ended November 30, 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:	February 16, 2023	/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 annual report on Form 10-K of Art’s-Way Manufacturing Co., Inc. (the “Company”) for the fiscal year ended November 30, 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:

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:	February 16, 2023	/s/ Michael W. Woods
		Michael W. Woods
		Chief Financial Officer

XML

Document And Entity Information - USD ($)	12 Months Ended
	Nov. 30, 2022	Feb. 06, 2023	May 31, 2022
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Nov. 30, 2022
Document Transition Report	false
Entity File Number	000-5131
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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
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
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 5,459,194
Entity Common Stock, Shares Outstanding (in shares)		5,027,276
Auditor Name	Eide Bailly LLP
Auditor Firm ID	286
Auditor Location	Fargo, North Dakota
Entity Central Index Key	0000007623
Current Fiscal Year End Date	--11-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Current assets:
Cash	$ 5,055	$ 2,658
Accounts receivable-customers, net of allowance for doubtful accounts of $34,699 and $38,188 in 2022 and 2021, respectively	2,722,298	2,663,030
Inventories, net	10,611,552	9,210,103
Cost and profit in excess of billings	450,906	177,284
Other current assets	343,618	121,170
Total current assets	14,133,429	12,174,245
Property, plant, and equipment, net	6,178,917	5,237,328
Assets held for lease, net	400,325	521,555
Deferred income taxes	2,605,395	2,621,886
Other assets	630,248	299,034
Total assets	23,948,314	20,854,048
Current liabilities:
Accounts payable	2,630,966	1,737,091
Customer deposits	828,565	278,509
Billings in excess of cost and profit	328,041	280,761
Income taxes payable	3,500	5,500
Accrued expenses	1,283,204	1,162,373
Line of credit	3,924,500	4,074,530
Current portion of finance lease liabilities	170,835	48,591
Current portion of long-term debt	97,678	99,462
Total current liabilities	9,267,289	7,686,817
Long-term liabilities
Long-term portion of operating lease liabilities	24,016	34,931
Long-term portion of finance lease liabilities	602,131	142,386
Long-term debt, excluding current portion	2,904,241	2,635,467
Total liabilities	12,797,677	10,499,601
Commitments and Contingencies
Stockholders’ equity:
Undesignated preferred stock - $0.01 par value. Authorized 500,000 shares in 2022 and 2021; issued and outstanding 0 shares in 2022 and 2021.	0	0
Common stock – $0.01 par value. Authorized 9,500,000 shares in 2022 and 2021; issued 5,013,671 in 2022 and 4,583,504 in 2021	50,137	45,835
Additional paid-in capital	4,547,172	3,760,649
Retained earnings	6,754,284	6,656,487
Treasury stock, at cost (64,574 in 2022 and 44,532 in 2021 shares)	(200,956)	(108,524)
Total stockholders’ equity	11,150,637	10,354,447
Total liabilities and stockholders’ equity	$ 23,948,314	$ 20,854,048

XML

Consolidated Balance Sheets (Parentheticals) - USD ($)	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2020
Accounts Receivable, Allowance for Credit Loss, Current		$ 34,699	$ 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, Shares Outstanding, Ending Balance (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)	5,013,671	4,583,504
Treasury Stock, Shares, Total (in shares)	64,574	44,532

XML

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Sales	$ 28,399,637	$ 24,965,086
Cost of goods sold	21,092,905	18,368,596
Gross profit	7,306,732	6,596,490
Expenses:
Engineering	580,537	505,085
Selling	2,168,151	2,014,149
General and administrative	4,225,364	3,553,848
Total expenses	6,974,052	6,073,082
Income from operations	332,680	523,408
Other income (expense):
Interest expense	(453,872)	(313,485)
Other	238,192	56,967
Total other income (expense)	(215,680)	(256,518)
Income before income taxes	117,000	266,890
Income tax expense	19,203	54,259
Net Income	$ 97,797	$ 212,631
Net Income per share
Basic Net Income per share (in dollars per share)	$ 0.02	$ 0.05
Diluted Net Income per share (in dollars per share)	$ 0.02	$ 0.05
Weighted average outstanding shares used to compute basic net income per share (in shares)	4,707,384	4,515,229
Weighted average outstanding shares used to compute diluted net income per share (in shares)	4,707,384	4,515,229

XML

Consolidated Statements of Stockholders' Equity - 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)	113,500			9,435
Stock based compensation	$ 1,135	264,406		$ (30,470)	235,071
Net Income			212,631		212,631
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)	110,167			20,042
Stock based compensation	$ 1,102	286,619		$ (92,432)	195,289
Net Income			97,797		97,797
Common stock purchase agreement (in shares)	320,000
Common stock purchase agreement	$ 3,200	499,904			503,104
Balance (in shares) at Nov. 30, 2022	5,013,671			64,574
Balance at Nov. 30, 2022	$ 50,137	$ 4,547,172	$ 6,754,284	$ (200,956)	$ 11,150,637

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Cash flows from operations:
Net income	$ 97,797	$ 212,631
Adjustments to reconcile net income to net cash used in operating activities:
Stock based compensation	287,721	265,541
Decrease in obsolete inventory reserves	(214,413)	(638,633)
Gain on disposal of property, plant, and equipment	(154,112)	(17,935)
Depreciation and amortization expense	807,163	613,409
Accrued interest on deferred debt payments	16,917	16,982
Decrease in allowance for doubtful accounts	(3,489)	(12,987)
Deferred income taxes	16,491	45,800
Changes in assets and liabilities:
Accounts receivable	(55,779)	(259,439)
Inventories	(1,187,036)	(809,070)
Net investment in sales-type leases	0	28,352
Other assets	2,064	(59,887)
Accounts payable	893,875	(218,313)
Contracts in progress, net	(226,342)	(116,723)
Customer deposits	550,056	80,284
Income taxes payable	(2,000)	4,400
Accrued expenses	122,808	(120,266)
Net cash provided by (used in) operating activities	951,721	(985,854)
Cash flows from investing activities:
Purchases of property, plant, and equipment	(1,747,351)	(620,284)
Net proceeds from sale of assets	403,504	20,807
Net cash used in investing activities	(1,343,847)	(599,477)
Cash flows from financing activities:
Net change in line of credit	(150,030)	1,715,000
Principal payments on finance lease obligations	(116,193)	(9,046)
Proceeds from term debt	350,000	0
Repayment of term debt	(99,926)	(90,179)
Proceeds from common stock purchase agreement	545,529	0
Cost of equity issuance	(42,425)	0
Repurchases of common stock	(92,432)	(30,470)
Net cash provided by financing activities	394,523	1,585,305
Net increase (decrease) in cash	2,397	(26)
Cash at beginning of period	2,658	2,684
Cash at end of period	5,055	2,658
Supplemental disclosures of cash flow information:
Interest	421,241	270,616
Income taxes	2,365	1,675
Supplemental disclosures of non-cash investing and financing activities:
Right-of-use (ROU) assets acquired (included in other assets)	698,153	219,937
Less: Cash proceeds received under Manufuacturing 4.0 grant applied to ROU Assets - Note 13	(224,513)	0
Total (ROU) assets acquired (included in other assets)	473,640	219,937
Amortization of operating lease ROU assets (included in other assets)	12,862	0
Market value of commitment shares issued under purchase agreement	$ 160,000	$ 0

XML

Note 1 - Summary of Significant Accounting Policies

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(1) Summary of Significant Accounting Policies

(a) Nature of Business

Art’s-Way Manufacturing Co., Inc. (the “Company”) is primarily engaged in the fabrication and sale of specialized farm machinery in the agricultural sector of the United States. Primary product offerings include portable and stationary animal feed processing equipment; hay and forage equipment; sugar beet harvesting equipment; dirt work equipment and manure spreaders. The Company sells its labeled products through independent farm equipment dealers throughout the United States. The Company also provides after-market service parts that are available to keep its branded and OEM-produced equipment operating to the satisfaction of the end user of the Company’s products.

The Company’s Modular Buildings segment is primarily engaged in the construction of modular laboratories and animal housing facilities through the Company’s wholly-owned subsidiary, Art’s-Way Scientific, Inc. Buildings commonly produced range from basic swine buildings to complex containment research laboratories. This segment also provides services relating to the design, manufacturing, delivering, installation, and renting of the building units that it produces.

The Company’s Tools segment is a domestic manufacturer and distributor of standard single point brazed carbide tipped tools as well as PCD (polycrystalline diamond), CBN (cubic boron nitride) inserts and OEM specialty tools through the Company’s wholly-owned subsidiary, Ohio Metal Working Company/Art’s-Way, Inc.

(b) Principles of Consolidation

The consolidated financial statements include the accounts of Art’s-Way Manufacturing Co., Inc. and its wholly-owned subsidiaries for the 2022 fiscal year, which includes Art’s-Way Scientific, Inc., and Ohio Metal Working Products/Art’s-Way, Inc. All inter-company accounts and transactions are eliminated in consolidation.

(c) Cash Concentration

The Company maintains several different accounts at one bank, and balances in these accounts could periodically exceed the federally insured limits. However, management believes the risk of loss to be low.

(d) Customer Concentration

During the 2022 and 2021 fiscal years, one customer accounted for more than 11% and 8%, respectively, of consolidated revenues.

(e) Accounts Receivable

Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written-off when deemed uncollectible. Recoveries of accounts receivable previously written-off are recorded when received. Accounts receivable are generally considered past due 60 days past invoice date, with the exception of international sales which primarily are sold with 180 day terms backed by export insurance.

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 during the 2022 fiscal year. Floorplan terms allow customers to pay the Company at the earliest of retail date or 180 days. The Company had approximately $1,033,000 in accounts receivable at November 30, 2022 that was part of its floorplan program on extended terms compared to $0 for the year ended November 30, 2021.

Trade receivables due from customers are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Trade receivables are stated at the amount billed to the customer. The Company charges interest on overdue customer account balances at a rate of 1.5% per month. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

(f) Inventories

Inventories are stated at the lower of cost or net realizable value, and cost is determined using the standard costing method. Management monitors the carrying value of inventories using inventory control and review processes that include, but are not limited to, sales forecast review, inventory status reports, and inventory reduction programs. The Company records inventory write downs to net realizable value based on expected usage information for raw materials and historical selling trends for finished goods. Additional write downs may be necessary if the assumptions made by management do not occur.

(g) Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Depreciation of plant and equipment is provided using the straight-line method, based on the estimated useful lives of the assets which range from three to 40 years.

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.

For property, plant and equipment used in operations, including lease assets and assets held for lease, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value.

(h) Leases

The Company determines if an arrangement is a lease at inception of a contract. The nature of the Company’s leases at this time is shop machinery and office equipment, mainly copiers, with terms of 12 to 60 months. Operating and finance leases are included in other assets as lease right-of-use (“ROU”) assets on the Consolidated Balance Sheets while current operating lease liabilities are included in accrued expenses. The short-term portion of finance leases along with long-term portions of operating and finance lease liabilities are presented on the face of the Consolidated Balance Sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term while finance lease ROU assets are amortized on a straight-line basis and interest expense is recorded over the lease term.

The Company has copier lease agreements with lease and non-lease components and has elected the practical expedient not to separate lease and non-lease components for this asset class. The Company has also elected not to recognize lease liabilities and ROU assets for leases with an initial term of twelve months or less. The Company recognizes variable costs that depend on usage in profit or loss as they are incurred.

The components of operating leases on the Consolidated Balance Sheets at November 30, 2022 and November 30, 2021 were as follows:

	November 30, 2022		November 30, 2021
Operating lease right-of-use assets (other assets)	$	34,931		47,794
Current portion of operating lease liabilities (accrued expenses)	$	10,915		12,863
Long-term portion of operating lease liabilities		24,016		34,931
Total operating lease liabilities	$	34,931		47,794

The Company recorded $20,121 of operating lease expense in the year ended November 30, 2022 compared to $22,445 in the same period of fiscal 2021, including variable costs tied to usage. The Company’s operating leases carry a weighted average lease term of 39 months and have a weighted average discount rate of 5.50%

Future maturities of operating lease liabilities as of November 30, 2022 are as follows:

Year Ending November 30,
2023	12,344
2024	11,325
2025	9,532
2026	4,765
Total lease payments	37,966
Less imputed interest	(3,035	)
Total operating lease liabilities	34,931

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

 

	November 30, 2022		November 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$	540,052	$	190,667
	$	540,052	$	190,667
Current portion of finance lease liabilities	$	170,835	$	48,591
Long-term portion of finance lease liabilities		602,131		142,386
Total finance lease liabilities	$	772,966	$	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 November 30, 2022 are as follows:

Year Ending November 30,
2023	$	199,836
2024		211,219
2025		157,393
2026		155,809
2027		122,823
Total lease payments		847,080
Less imputed interest		(74,114	)
Total finance lease liabilities	$	772,966

The weighted average lease term of the Company’s finance leases are 50 months while the weighted average rate of finance leases is 4.18%. The Company incurred $124,256 of amortization expense from ROU assets related to finance leases in fiscal 2022 compared to $9,356 in fiscal 2021.

(i) 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. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

The Company classifies interest and penalties to be paid on an underpayment of taxes as income tax expense. The Company files income tax returns in the U.S. federal jurisdiction and various states and previously in Canada. The Company is no longer subject to Canadian, U.S. federal or state income tax examinations by tax authorities for years ended before November 30, 2019.

(j) Revenue Recognition

The Company’s revenues primarily result from contracts with customers. The major sources of revenue for the Agricultural Products and Tools segments are farm equipment, service parts related to farm equipment and steel cutting tools and inserts. The Agricultural Products and Tools segments generally execute short-term contracts that contain a single performance obligation – the delivery of product to the common carrier. The Company recognizes revenue for the production and sale of farm equipment, service parts and cutting tools upon shipment of the goods. Risk of ownership and title pass to the customer upon shipment of the goods. The Tools segment has an OEM agreement with one customer for which sales are recognized FOB destination – when the goods hit the customer’s dock. All sales are made to authorized dealers whose application for dealer status has been approved and who have been informed of general sales policies. Any changes in the Company’s terms are documented in the most recently published price lists. Pricing is fixed and determinable according to the Company’s published equipment and parts price lists. Title to all equipment and parts sold passes to the customer upon delivery to the carrier and is not subject to a customer acceptance provision. Proof of the passing of title is documented and retained by the Company. Post shipment obligations are limited to any claim with respect to the condition of the equipment or parts. The Agricultural Products and Tools segments each typically require payment in full 30 days after the ship date. To take advantage of program discounts, some customers pay deposits up front. Any deposits received increase contract liabilities.

In certain circumstances, upon the customer’s written request, the Company may recognize revenue when production is complete, and the goods are ready for shipment. At the customer’s request, the Company will bill the customer upon completing all performance obligations, but before shipment. The customer dictates that the Company ship the goods per the customer’s direction from the Company’s manufacturing facility, as is customary with this type of agreement, in order to minimize shipping costs. The written agreement with the customer specifies that the goods will be delivered on a schedule to be determined by the customer, with a final specified delivery date, and that the Company will segregate the goods from its inventory, such that they are not available to fill other orders. This agreement also specifies that the customer is required to purchase all goods manufactured under this agreement. Title of the goods will pass to the customer when the goods are complete and ready for shipment, per the customer agreement. At the transfer of title, all risks of ownership have passed to the customer, and the customer agrees to maintain insurance on the manufactured items that have not yet been shipped. The Company has operated using bill and hold agreements with certain customers for many years, with consistent satisfactory results for both the customer and the Company. The credit terms on these agreements are consistent with the credit terms on all other sales. All risks of loss are shouldered by the customer, and there are no exceptions to the customer’s commitment to accept and pay for these manufactured goods. Revenues recognized at the completion of production in the 2021 and 2020 fiscal years were approximately $1,010,000 and $711,000 respectively.

The Modular Buildings segment is in the construction industry with its major source of revenue arising from modular building sales. Sales of modular buildings are generally recognized using input methods to measure progress towards the satisfaction of a performance obligation using the percentage of completion method. Revenue and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Contract costs consist of direct costs on contracts, including labor, materials, amounts payable to subcontractors and those indirect costs related to contract performance, such as equipment costs, insurance and employee benefits. Contract cost is recorded as incurred, and revisions in contract revenues and cost estimates are reflected in the accounting period when known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Contract losses are recognized when current estimates of total contract revenue and contract cost indicate a loss. Estimated contract costs include any and all costs appropriately allocable to the contract. The provision for these contract losses will be the excess of estimated contract costs over estimated contract revenues. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract change orders, penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The Company uses significant judgements in determining estimated contract costs and completion percentages throughout the life of the project. Stock modular building sales also occur and are recognized at a point in time when the performance obligation is fulfilled through substantial completion. Substantial completion is achieved through customer acceptance of the completed building. The Modular Buildings segment executes contracts with customers that can be short- or long-term in nature. These contracts can have multiple performance obligations and revenue from these can be recognized over time or at a point in time depending on the nature of the contracts. Payment terms for the Modular Buildings segment vary by contract, but typically utilize money down and progress payments throughout the life of the contract. The payment terms of the Modular Buildings segment have the most impact on the Company’s contract receivables, contract assets and contract liabilities. Project invoicing from the Modular Buildings segment increases contract receivables and has an effect on contract liabilities through billings in excess of costs, estimated gross profit and customer deposits. The balance of contract assets is typically made up of the balance of costs and estimated gross profit in excess of billings. Costs and profit in excess of amounts billed are classified as current assets and billings in excess of cost and profit are classified as current liabilities.

The Agricultural Products segment offers variable consideration in the form of discounts depending on participation in yearly early order programs. This variable consideration is allocated to the transaction price of all products in a sales arrangement and is not contingent on future outcomes. The Agricultural Products segment does not offer rebates or credits. The Tools segment offers quantity discounts that are allocated to the transaction price of each product once the quantity break is achieved. The Tools segment does not offer rebates or credits. The Modular Buildings segment does not offer discounts, rebates or credits.

The Company’s returns policy allows for new and saleable parts to be returned, subject to inspection and a restocking charge, which is included in net sales. Whole goods are not returnable. Shipping costs charged to customers are included in net sales. Freight costs incurred are included in cost of goods sold. Customer deposits consist of advance payments from customers, in the form of cash, for revenue to be recognized in the following year.

For information on product warranty as it applies to ASC 606, refer to Note 8 “Product Warranty.”

(k) 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.

	Twelve Months Ended November 30, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	17,825,000	$	-	$	-	$	17,825,000
Farm equipment service parts		2,575,000		-		-		2,575,000
Steel cutting tools and inserts		-		-		2,708,000		2,708,000
Modular buildings		-		4,550,000		-		4,550,000
Modular building lease income		-		62,000		-		62,000
Other		512,000		122,000		46,000		680,000
	$	20,912,000	$	4,734,000	$	2,754,000	$	28,400,000

	Twelve Months Ended November 30, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	13,631,000	$	-	$	-	$	13,631,000
Farm equipment service parts		2,799,000		-		-		2,799,000
Steel cutting tools and inserts		-		-		2,440,000		2,440,000
Modular buildings		-		5,381,000		-		5,381,000
Modular building lease income		-		-		-		-
Other		396,000		297,000		21,000		714,000
	$	16,826,000	$	5,678,000	$	2,461,000	$	24,965,000

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 in fiscal 2022. 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.

(l) 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 Consolidated Balance Sheets.

	November 30, 2022		November 30, 2021
Receivables	$	2,722,000	$	2,663,000
Assets		451,000		177,000
Liabilities		1,157,000		559,000

The amount of revenue recognized in fiscal year 2022 that was included in a contract liability at November 30, 2021 was approximately $559,000 compared to $474,000 for the prior year. The beginning balance of contract receivables, assets and liabilities at December 1, 2020 was $2,391,000; $56,000 and $474,000, respectively. The change in contract receivables reflected above results from contract billings for all three segments as performance obligations are met. The increase in contract assets on November 30, 2022 is due to construction costs in excess of billings on contracts in the Modular Buildings segment. Contract liabilities include customer deposits and billings in excess of cost and profit on the consolidated balance sheets. Contract liabilities have increased due to customer deposits received on the Agricultural Products segment as part of our fall early order program that offers cash discounts for equipment deposits.

The Company will utilize the practical expedient exception for these contracts and will report only on performance obligations greater than one year. As of November 30, 2022, and November 30, 2021, the Company has no performance obligations with an original expected duration greater than one year.

(m) Research and Development

Research and development costs are expensed when incurred. Such costs approximated $193,000 and $152,000 for the 2022 and 2021 fiscal years, respectively. Research and development costs are included in engineering expenses on the Consolidated Statements of Operations.

(n) Advertising

Advertising costs are expensed when incurred. Such costs approximated $190,000 and $163,000 for the 2022 and 2021 fiscal years, respectively. Advertising costs are included in selling expenses on the Consolidated Statements of Operations.

(o) Net Income Per Share of Common Stock

Basic net income per share has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted net income per share of common stock has been computed on the basis of the weighted average number of shares outstanding plus equivalent shares of common stock 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 per share of common stock.

Basic and diluted income per common share have been computed based on the following as of November 30, 2022 and 2021:

	For the Twelve Months Ended
	November 30, 2022		November 30, 2021
Numerator for basic and diluted net income per share:
Net income	$	97,797	$	212,631
Denominator:
For basic net income per share - weighted average common shares outstanding		4,707,384		4,515,229
Effect of dilutive stock options		-		-
For diluted net income per share - weighted average common shares outstanding		4,707,384		4,515,229
Net Income per share - Basic:
Net Income per share	$	0.02	$	0.05
Net Income per share - Diluted:
Net Income per share	$	0.02	$	0.05

(p) Stock Based Compensation

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 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. Restricted stock is valued at market value at the day of grant.

(q) Use of Estimates

Management has made a number of estimates and assumptions related to the reported amount of assets and liabilities, reported amount of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

(r) 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 smaller reporting entities 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 year 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.                  

XML

Note 2 - Allowance for Doubtful Accounts

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Allowance for Credit Losses [Text Block]

(2) Allowance for Doubtful Accounts

A summary of the Company’s activity in the allowance for doubtful accounts is as follows:

	Twelve Months Ended
	November 30, 2022			November 30, 2021
Balance, beginning	$	38,188		$	51,175
Provision (recovery) charged to expense		(7,722	)		(4,160	)
(Less amounts charged-off)/Recovery		4,233			(8,827	)
Balance, ending	$	34,699		$	38,188

XML

Note 3 - Inventory

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Inventory Disclosure [Text Block]

(3) Inventories

Major classes of inventory are:

	November 30, 2022			November 30, 2021
Raw materials	$	8,700,719		$	8,289,386
Work in process		624,781			357,721
Finished goods		3,029,099			3,088,739
Total Gross Inventory	$	12,354,599		$	11,735,846
Less: Reserves		(1,743,047	)		(2,525,743	)
Net Inventory	$	10,611,552		$	9,210,103

XML

Note 4 - Contracts in Progress

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Long-Term Contracts or Programs Disclosure [Text Block]

(4) Contracts in Progress

Amounts included in the consolidated financial statements related to uncompleted contracts are as follows:

	Cost and Profit in			Billings in Excess of
	Excess of Billings			Costs and Profit
November 30, 2022
Costs	$	848,516		$	731,490
Estimated earnings		293,094			138,568
		1,141,610			870,058
Less: amounts billed		(690,704	)		(1,198,099	)
	$	450,906		$	(328,041	)
November 30, 2021
Costs	$	362,958		$	924,908
Estimated earnings		117,328			301,180
		480,286			1,226,088
Less: amounts billed		(303,002	)		(1,506,849	)
	$	177,284		$	(280,761	)

The amounts billed on long-term contracts are due 30 days from invoice date. All amounts billed are expected to be collected within the next 12 months. Retainage included in accounts receivable was $4,087 and $0 as of November 30, 2022 and 2021, respectively.

XML

Note 5 - Property, Plant, and Equipment

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

(5) Property, Plant, and Equipment

Major classes of property, plant, and equipment are:

	November 30, 2022			November 30, 2021
Land	$	220,503		$	220,503
Buildings and improvements		8,235,981			7,460,698
Construction in Progress		357,644			160,353
Manufacturing machinery and equipment		11,721,908			11,286,411
Trucks and automobiles		567,563			510,986
Furniture and fixtures		115,059			115,059
		21,218,658			19,754,010
Less accumulated depreciation		(15,039,741	)		(14,516,682	)
Property, plant and equipment	$	6,178,917		$	5,237,328

Depreciation and amortization expense totaled $807,163 and $613,409 for the 2022 and 2021 fiscal years, respectively. These totals include amortization of right-of-use assets on finance leases as discussed in Note 1 “Summary of Significant Accounting Policies” section (h) “Leases” above.

XML

Note 6 - Assets Held for Lease

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

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

(6) Assets Held for Lease

Major components of assets held for lease are:

	November 30, 2022		November 30, 2021
Modular Buildings	$	400,325	$	521,555
Total assets held for lease	$	400,325	$	521,555

The Company’s Modular Buildings segment enters into leasing arrangements with customers from time-to-time. The Company had five buildings in assets held for lease for the year ending November 30, 2022 and seven buildings for the year ended November 30, 2021.

Two modular buildings held for lease were sold in fiscal 2022 for $383,904. The company incurred a gain of approximately $150,069 on the sale of the assets.

Rents recognized in sales were related to the leasing of modular buildings as a part of the normal course of business operations of the Modular Buildings segment. There were $61,534 of rents recognized from assets held for lease included in sales on the Consolidated Statements of Operations during the 2022 fiscal year compared to none in the 2021 fiscal year.

The future minimum lease receipts from assets held for lease on November 30, 2022 are as follows:

Year Ending November 30,	Amount
2023	$	67,941
Total		67,941

XML

Note 7 - Accrued Expenses

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

(7) Accrued Expenses

Major components of accrued expenses are:

	November 30, 2022		November 30, 2021
Salaries, wages, and commissions	$	755,708	$	654,757
Accrued warranty expense		193,301		202,850
Other		334,195		304,766
	$	1,283,204	$	1,162,373

XML

Note 8 - Product Warranty

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Product Warranty Disclosure [Text Block]

(8) 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 may 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.

Changes in the Company’s product warranty liability included in accrued expenses for the 2022 and 2021 fiscal years are as follows:

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Balance, beginning	$	202,850		$	291,454
Settlements / adjustments		(349,889	)		(238,808	)
Warranties issued		340,340			150,204
Balance, ending	$	193,301		$	202,850

XML

Note 9 - Loan and Credit Agreements

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

(9) Loan and Credit Agreements

Bank Midwest Revolving Lines of Credit and Term Loans

The Company maintains a $5,000,000 revolving line of credit (the “Line of Credit”) and previously maintained a $550,000 revolving line of credit (the “Reserve Line of Credit”) with Bank Midwest. The Reserve Line of Credit expired on November 30, 2022 and was used for additional working capital. On November 30, 2022, the balance of the Line of Credit was $3,924,500 with $1,075,500 remaining 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 November 30, 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 interest rate is 9.25% per annum following continued 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. The unpaid principal amount borrowed on the Reserve Line of Credit accrued 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 Reserve Line of Credit matured on November 30, 2022 and is closed. The Line of Credit is governed by the terms of a Promissory Note, dated March 28, 2022, entered into between the Company and Bank Midwest. The Reserve Line of Credit was governed by the terms of a Promissory Note, dated May 13, 2022, entered into between the Company and Bank Midwest.

The Company carries a $2,600,000 term loan with Bank Midwest due October 1, 2037 (the “Term Loan”), and a $350,000 term loan (the “Roof Term Loan”) due on May 15, 2027. The Term Loan accrued interest at a rate of 5.00% for the first ninety months, which ended on September 28, 2022. Thereafter, the Term Loan accrues 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. The current interest rate is 7.00%. Monthly payments of $19,648 in 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 $62,400 and 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 Term Loan is governed by the terms of a Promissory Note, dated September 28, 2017, 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.

The Company also entered into the Roof Term Loan of $350,000 with Bank Midwest on May 17, 2022. The Roof Term Loan’s proceeds were used to fix sections of the Armstrong facility’s roof. The Roof Term Loan requires 59 regular payments of $2,972 and an estimated balloon payment of $269,517 on the maturity date of May 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 9.75% per annum. The Roof Term Loan is governed by the terms of a Promissory Note, dated May 17, 2022, entered into between the Company and Bank Midwest.

In connection with the 2017 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 2017 Line of Credit, as set forth in Commercial Guaranties, each dated September 28, 2017. The 2019 Line of Credit is also secured by these existing security documents.

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.

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 Bank Midwest covenants is measured annually on November 30. The terms of the Bank Midwest loan agreements require the Company to maintain a minimum of $4,000,000 of monthly working capital. Additionally, 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 0.10 tolerance. The Company also must receive bank approval for purchases or sales of equipment over $100,000 annually and maintain reasonable salaries and owner compensation. The Company received the necessary approvals for purchases of equipment over $100,000 for the twelve months ended November 30, 2022. The Company was out of compliance with its debt to worth ratio by fifteen percentage points on the Bank Midwest loans as of November 30, 2022. Bank Midwest issued a waiver forgiving the noncompliance, and in turn waived the event of default. The next measurement date is November 30, 2023 for all covenants except the monthly working capital requirement.

SBA Economic Injury Disaster Loans

In June of 2020, the Company executed the standard loan documents required for securing loans offered by the U.S. Small Business Administration under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. Two loans were executed on June 18, 2020 with principal amounts of $150,000 each, with a third loan being executed on June 24, 2020 with a principal amount of $150,000. Proceeds from these EIDLs are being 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 beginning June 18, 2022 (thirty-six months from the date of the EIDLs) and June 24, 2022 in the amount of $731 per EIDL. On March 11, 2021, the American Rescue Plan Act of 2021 was enacted, which extended the first due date for repayment of EIDLs made in 2020 from 12 months to 24 months from the date of the note. The balance of principal and interest is payable 30 years from the date of the EIDL. 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:

	November 30, 2022		November 30, 2021
Bank Midwest loan payable in monthly installments of $19,648 including interest at 7.00%, due October 1, 2037		2,165,554		2,260,412
Bank Midwest loan payable in monthly installments of $2,972 including interest at 9.5%, due May 15, 2027		344,932		-
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 18, 2022, due June 18, 2050		163,793		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 18, 2022, due June 18, 2050		163,728		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 24, 2022, due June 24, 2050		163,912		158,181
Total term debt	$	3,001,919	$	2,734,929
Less current portion of term debt		97,678		99,462
Term debt, excluding current portion	$	2,904,241	$	2,635,467

A summary of the minimum maturities of term debt follows for the years ending November 30:

Year	Amount
2023	$	97,678
2024		103,631
2025		111,601
2026		119,594
2027		446,810
2028 and thereafter		2,122,605
	$	3,001,919

XML

Note 10 - Related Party Transactions

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

(10) Related Party Transactions

During the 2022 and 2021 fiscal years, 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 2022 fiscal year, the Company recognized $23,880 of expense for transactions with related parties, compared to $26,368 in the 2021 fiscal year. As of November 30, 2022, accrued expenses contained a balance of $1,348 owed to a related party compared to $1,407 on November 30, 2021.

XML

Note 11 - Employee Benefit Plans

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Compensation and Employee Benefit Plans [Text Block]

(11) Employee Benefit Plans

The Company sponsors a defined contribution 401(k) savings plan which covers substantially all full-time employees who meet eligibility requirements. Participating employees may contribute as salary reductions any amount of their compensation up to the limit prescribed by the Internal Revenue Code. The Company makes a 50% matching contribution to employees up to 3% of eligible compensation. The Company recognized an expense of $116,603 and $77,010 related to this plan during the 2022 and 2021 fiscal years, respectively.

XML

Note 12 - Equity Incentive Plan

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

(12) Equity Incentive Plan

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 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. 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.

Shares issued under the 2020 Plan for the years ended November 30, 2022 and 2021 are as follows:

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Shares issued to directors (immediate vesting)		25,000			25,000
Shares issued to directors, employees, and consultants (three-year vesting)		94,500			88,500
Unvested shares forfeit upon termination		(9,333	)		-
Total shares issued		110,167			113,500

Book and tax stock-based compensation expense for the years ended November 30, 2022 and 2021 are as follows:

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Stock-based compensation expense		287,721			265,541
Treasury share repurchase expense		(92,432	)		(30,470	)
Stock-based compensation expense net of treasury repurchases		195,289			235,071

	For the Twelve Months Ended
	November 30, 2022		November 30, 2021
Tax deductions from stock-based compensation expense		314,306		246,862

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 years ended November 30, 2022 or 2021.

The following is a summary of activity under the plans as of November 30, 2022 and 2021, and changes during the years then ended:

2022 Option Activity

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options O/S at beginning of period		22,000		$	5.93
Granted		-		$	-
Exercised		-		$	-				-
Options Expired or Forfeited		(10,000	)	$	6.15
Options O/S at end of Period		12,000		$	5.75		1.40		-
Options Exer. At end of the Period		12,000		$	5.75		1.40		-

2021 Option Activity

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options O/S at beginning of period		36,000		$	6.40
Granted		-		$	-
Exercised		-		$	-				-
Options Expired or Forfeited		(14,000	)	$	7.14
Options O/S at end of Period		22,000		$	5.93		2.04		-
Options Exer. At end of the Period		22,000		$	5.93		2.04		-

XML

Note 13 - Common Stock Purchase Agreement

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

(13) 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 issued 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 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 twelve months ended November 30, 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

The Company has $2,454,472 of funding under the common stock purchase agreement that can be utilized as of November 30, 2022.

XML

Note 14 - Income Taxes

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(14) Income Taxes

Total income tax expense for the 2022 and 2021 fiscal years consists of the following:

	November 30, 2022		November 30, 2021
Current expense	$	2,712	$	8,459
Deferred expense		16,491		45,800
Total income tax expense	$	19,203	$	54,259

The reconciliation of the statutory Federal income tax rate is as follows:

	November 30, 2022			November 30, 2021
Statutory federal income tax rate		21.0	%		21.0	%
Permanent Differences and Other		(4.6	)		(0.7	)
		16.4	%		20.3	%

Tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) on November 30, 2022 and 2021 are presented as approximate amounts below:

	November 30
	2022			2021
Current deferred tax assets (liabilities):
Accrued expenses	$	93,000		$	82,000
Inventory capitalization		167,000			122,000
NOL and tax credit carryforward		1,921,000			1,846,000
Asset reserves		521,000			613,000
Total current deferred tax assets	$	2,702,000		$	2,663,000
Non-current deferred tax assets
Property, plant, and equipment	$	(97,000	)	$	(41,000	)
Total non-current deferred tax assets (liabilities)	$	(97,000	)	$	(41,000	)
Net deferred taxes	$	2,605,000		$	2,622,000

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company has net operating losses amounting to approximately $4,496,000 and tax credit carryforward amounting to approximately $109,000 for its U.S. operations that will expire on November 30, 2036, 2037, 2038, 2039 and 2040. The Company has another $4,869,000 of net operating losses that can be carried forward indefinitely. Management believes that the Company will be able to utilize the U.S. net operating losses and credits before their expiration.

XML

Note 15 - Disclosures About the Fair Value of Financial Instruments

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Fair Value Disclosures [Text Block]

(15) 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 November 30, 2022 and November 30, 2021, the carrying amount approximated fair value for cash, accounts receivable, operating and finance leases, accounts payable, notes payable to bank, 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 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.

XML

Note 17 - Segment Information

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

(17) Segment Information

There are three reportable segments: Agricultural Products, Modular Buildings, and Tools. The Agricultural Products segment fabricates and sells farming products as well as replacement parts for these products in the United States and worldwide. The Modular Buildings segment produces modular buildings for animal containment and various laboratory uses. 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.

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

	Twelve Months Ended November 30, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	20,912,000	$	4,734,000		$	2,754,000		$	28,400,000
Income (loss) from operations	$	1,205,000	$	(600,000	)	$	(272,000	)	$	333,000
Income (loss) before tax	$	923,000	$	(482,000	)	$	(324,000	)	$	117,000
Total Assets	$	18,459,000	$	2,829,000		$	2,660,000		$	23,948,000
Capital expenditures (1)	$	1,969,000	$	232,000		$	244,000		$	2,445,000
Depreciation & Amortization	$	468,000	$	193,000		$	146,000		$	807,000

	Twelve Months Ended November 30, 2021
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	16,826,000	$	5,678,000	$	2,461,000		$	24,965,000
Income (loss) from operations	$	599,000	$	74,000	$	(150,000	)	$	523,000
Income (loss) before tax	$	413,000	$	45,000	$	(191,000	)	$	267,000
Total Assets	$	14,950,000	$	3,429,000	$	2,475,000		$	20,854,000
Capital expenditures (2)	$	726,000	$	94,000	$	-		$	820,000
Depreciation & Amortization	$	366,000	$	111,000	$	136,000		$	613,000

(1)	FY 2022 capital expenditures include finance leased assets of $532,000 in the Agricultural Products segment and $166,000 in the Tool segment.
(2)	FY 2021 capital expenditures include finance leased assets of $142,000 in the Agricultural Products segment and $58,000 in the Modular Buildings segment.

XML

Note 18 - Subsequent Events

12 Months Ended

Nov. 30, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

(18) Subsequent Events 

Management evaluated all other activity of the Company and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements.

XML

Significant Accounting Policies (Policies)

12 Months Ended

Nov. 30, 2022

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

(a) Nature of Business

Art’s-Way Manufacturing Co., Inc. (the “Company”) is primarily engaged in the fabrication and sale of specialized farm machinery in the agricultural sector of the United States. Primary product offerings include portable and stationary animal feed processing equipment; hay and forage equipment; sugar beet harvesting equipment; dirt work equipment and manure spreaders. The Company sells its labeled products through independent farm equipment dealers throughout the United States. The Company also provides after-market service parts that are available to keep its branded and OEM-produced equipment operating to the satisfaction of the end user of the Company’s products.The Company’s Modular Buildings segment is primarily engaged in the construction of modular laboratories and animal housing facilities through the Company’s wholly-owned subsidiary, Art’s-Way Scientific, Inc. Buildings commonly produced range from basic swine buildings to complex containment research laboratories. This segment also provides services relating to the design, manufacturing, delivering, installation, and renting of the building units that it produces.The Company’s Tools segment is a domestic manufacturer and distributor of standard single point brazed carbide tipped tools as well as PCD (polycrystalline diamond), CBN (cubic boron nitride) inserts and OEM specialty tools through the Company’s wholly-owned subsidiary, Ohio Metal Working Company/Art’s-Way, Inc.

Consolidation, Policy [Policy Text Block]

(b) Principles of Consolidation

The consolidated financial statements include the accounts of Art’s-Way Manufacturing Co., Inc. and its wholly-owned subsidiaries for the 2022 fiscal year, which includes Art’s-Way Scientific, Inc., and Ohio Metal Working Products/Art’s-Way, Inc. All inter-company accounts and transactions are eliminated in consolidation.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

(c) Cash Concentration

The Company maintains several different accounts at one bank, and balances in these accounts could periodically exceed the federally insured limits. However, management believes the risk of loss to be low.

(d) Customer Concentration

During the 2022 and 2021 fiscal years, one customer accounted for more than 11% and 8%, respectively, of consolidated revenues.

Accounts Receivable [Policy Text Block]

(e) Accounts Receivable

Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written-off when deemed uncollectible. Recoveries of accounts receivable previously written-off are recorded when received. Accounts receivable are generally considered past due 60 days past invoice date, with the exception of international sales which primarily are sold with 180 day terms backed by export insurance.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 during the 2022 fiscal year. Floorplan terms allow customers to pay the Company at the earliest of retail date or 180 days. The Company had approximately $1,033,000 in accounts receivable at November 30, 2022 that was part of its floorplan program on extended terms compared to $0 for the year ended November 30, 2021.Trade receivables due from customers are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from the invoice date. Trade receivables are stated at the amount billed to the customer. The Company charges interest on overdue customer account balances at a rate of 1.5% per month. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices.

Inventory, Policy [Policy Text Block]

(f) Inventories

Inventories are stated at the lower of cost or net realizable value, and cost is determined using the standard costing method. Management monitors the carrying value of inventories using inventory control and review processes that include, but are not limited to, sales forecast review, inventory status reports, and inventory reduction programs. The Company records inventory write downs to net realizable value based on expected usage information for raw materials and historical selling trends for finished goods. Additional write downs may be necessary if the assumptions made by management do not occur.

Property, Plant and Equipment, Policy [Policy Text Block]

(g) Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost. Depreciation of plant and equipment is provided using the straight-line method, based on the estimated useful lives of the assets which range from three to 40 years.Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.For property, plant and equipment used in operations, including lease assets and assets held for lease, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value.

Lessee, Leases [Policy Text Block]

(h) Leases

The Company determines if an arrangement is a lease at inception of a contract. The nature of the Company’s leases at this time is shop machinery and office equipment, mainly copiers, with terms of 12 to 60 months. Operating and finance leases are included in other assets as lease right-of-use (“ROU”) assets on the Consolidated Balance Sheets while current operating lease liabilities are included in accrued expenses. The short-term portion of finance leases along with long-term portions of operating and finance lease liabilities are presented on the face of the Consolidated Balance Sheets.ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term while finance lease ROU assets are amortized on a straight-line basis and interest expense is recorded over the lease term.The Company has copier lease agreements with lease and non-lease components and has elected the practical expedient not to separate lease and non-lease components for this asset class. The Company has also elected not to recognize lease liabilities and ROU assets for leases with an initial term of twelve months or less. The Company recognizes variable costs that depend on usage in profit or loss as they are incurred.The components of operating leases on the Consolidated Balance Sheets at November 30, 2022 and November 30, 2021 were as follows:

	November 30, 2022		November 30, 2021
Operating lease right-of-use assets (other assets)	$	34,931		47,794
Current portion of operating lease liabilities (accrued expenses)	$	10,915		12,863
Long-term portion of operating lease liabilities		24,016		34,931
Total operating lease liabilities	$	34,931		47,794

The Company recorded $20,121 of operating lease expense in the year ended November 30, 2022 compared to $22,445 in the same period of fiscal 2021, including variable costs tied to usage. The Company’s operating leases carry a weighted average lease term of 39 months and have a weighted average discount rate of 5.50%Future maturities of operating lease liabilities as of November 30, 2022 are as follows:

Year Ending November 30,
2023	12,344
2024	11,325
2025	9,532
2026	4,765
Total lease payments	37,966
Less imputed interest	(3,035	)
Total operating lease liabilities	34,931

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

	November 30, 2022		November 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$	540,052	$	190,667
	$	540,052	$	190,667
Current portion of finance lease liabilities	$	170,835	$	48,591
Long-term portion of finance lease liabilities		602,131		142,386
Total finance lease liabilities	$	772,966	$	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 November 30, 2022 are as follows:

Year Ending November 30,
2023	$	199,836
2024		211,219
2025		157,393
2026		155,809
2027		122,823
Total lease payments		847,080
Less imputed interest		(74,114	)
Total finance lease liabilities	$	772,966

The weighted average lease term of the Company’s finance leases are 50 months while the weighted average rate of finance leases is 4.18%. The Company incurred $124,256 of amortization expense from ROU assets related to finance leases in fiscal 2022 compared to $9,356 in fiscal 2021.

Income Tax, Policy [Policy Text Block]

(i) 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. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is entirely dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.The Company classifies interest and penalties to be paid on an underpayment of taxes as income tax expense. The Company files income tax returns in the U.S. federal jurisdiction and various states and previously in Canada. The Company is no longer subject to Canadian, U.S. federal or state income tax examinations by tax authorities for years ended before November 30, 2019.

Revenue from Contract with Customer [Policy Text Block]

(j) Revenue Recognition

The Company’s revenues primarily result from contracts with customers. The major sources of revenue for the Agricultural Products and Tools segments are farm equipment, service parts related to farm equipment and steel cutting tools and inserts. The Agricultural Products and Tools segments generally execute short-term contracts that contain a single performance obligation – the delivery of product to the common carrier. The Company recognizes revenue for the production and sale of farm equipment, service parts and cutting tools upon shipment of the goods. Risk of ownership and title pass to the customer upon shipment of the goods. The Tools segment has an OEM agreement with one customer for which sales are recognized FOB destination – when the goods hit the customer’s dock. All sales are made to authorized dealers whose application for dealer status has been approved and who have been informed of general sales policies. Any changes in the Company’s terms are documented in the most recently published price lists. Pricing is fixed and determinable according to the Company’s published equipment and parts price lists. Title to all equipment and parts sold passes to the customer upon delivery to the carrier and is not subject to a customer acceptance provision. Proof of the passing of title is documented and retained by the Company. Post shipment obligations are limited to any claim with respect to the condition of the equipment or parts. The Agricultural Products and Tools segments each typically require payment in full 30 days after the ship date. To take advantage of program discounts, some customers pay deposits up front. Any deposits received increase contract liabilities.In certain circumstances, upon the customer’s written request, the Company may recognize revenue when production is complete, and the goods are ready for shipment. At the customer’s request, the Company will bill the customer upon completing all performance obligations, but before shipment. The customer dictates that the Company ship the goods per the customer’s direction from the Company’s manufacturing facility, as is customary with this type of agreement, in order to minimize shipping costs. The written agreement with the customer specifies that the goods will be delivered on a schedule to be determined by the customer, with a final specified delivery date, and that the Company will segregate the goods from its inventory, such that they are not available to fill other orders. This agreement also specifies that the customer is required to purchase all goods manufactured under this agreement. Title of the goods will pass to the customer when the goods are complete and ready for shipment, per the customer agreement. At the transfer of title, all risks of ownership have passed to the customer, and the customer agrees to maintain insurance on the manufactured items that have not yet been shipped. The Company has operated using bill and hold agreements with certain customers for many years, with consistent satisfactory results for both the customer and the Company. The credit terms on these agreements are consistent with the credit terms on all other sales. All risks of loss are shouldered by the customer, and there are no exceptions to the customer’s commitment to accept and pay for these manufactured goods. Revenues recognized at the completion of production in the 2021 and 2020 fiscal years were approximately $1,010,000 and $711,000 respectively.The Modular Buildings segment is in the construction industry with its major source of revenue arising from modular building sales. Sales of modular buildings are generally recognized using input methods to measure progress towards the satisfaction of a performance obligation using the percentage of completion method. Revenue and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Contract costs consist of direct costs on contracts, including labor, materials, amounts payable to subcontractors and those indirect costs related to contract performance, such as equipment costs, insurance and employee benefits. Contract cost is recorded as incurred, and revisions in contract revenues and cost estimates are reflected in the accounting period when known. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Contract losses are recognized when current estimates of total contract revenue and contract cost indicate a loss. Estimated contract costs include any and all costs appropriately allocable to the contract. The provision for these contract losses will be the excess of estimated contract costs over estimated contract revenues. Changes in job performance, job conditions and estimated profitability, including those changes arising from contract change orders, penalty provisions and final contract settlements may result in revisions to costs and income and are recognized in the period in which the revisions are determined. The Company uses significant judgements in determining estimated contract costs and completion percentages throughout the life of the project. Stock modular building sales also occur and are recognized at a point in time when the performance obligation is fulfilled through substantial completion. Substantial completion is achieved through customer acceptance of the completed building. The Modular Buildings segment executes contracts with customers that can be short- or long-term in nature. These contracts can have multiple performance obligations and revenue from these can be recognized over time or at a point in time depending on the nature of the contracts. Payment terms for the Modular Buildings segment vary by contract, but typically utilize money down and progress payments throughout the life of the contract. The payment terms of the Modular Buildings segment have the most impact on the Company’s contract receivables, contract assets and contract liabilities. Project invoicing from the Modular Buildings segment increases contract receivables and has an effect on contract liabilities through billings in excess of costs, estimated gross profit and customer deposits. The balance of contract assets is typically made up of the balance of costs and estimated gross profit in excess of billings. Costs and profit in excess of amounts billed are classified as current assets and billings in excess of cost and profit are classified as current liabilities.The Agricultural Products segment offers variable consideration in the form of discounts depending on participation in yearly early order programs. This variable consideration is allocated to the transaction price of all products in a sales arrangement and is not contingent on future outcomes. The Agricultural Products segment does not offer rebates or credits. The Tools segment offers quantity discounts that are allocated to the transaction price of each product once the quantity break is achieved. The Tools segment does not offer rebates or credits. The Modular Buildings segment does not offer discounts, rebates or credits.The Company’s returns policy allows for new and saleable parts to be returned, subject to inspection and a restocking charge, which is included in net sales. Whole goods are not returnable. Shipping costs charged to customers are included in net sales. Freight costs incurred are included in cost of goods sold. Customer deposits consist of advance payments from customers, in the form of cash, for revenue to be recognized in the following year.For information on product warranty as it applies to ASC 606, refer to Note 8 “Product Warranty.”

Disaggregation of Revenue, Policy [Policy Text Block]

(k) 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.

	Twelve Months Ended November 30, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	17,825,000	$	-	$	-	$	17,825,000
Farm equipment service parts		2,575,000		-		-		2,575,000
Steel cutting tools and inserts		-		-		2,708,000		2,708,000
Modular buildings		-		4,550,000		-		4,550,000
Modular building lease income		-		62,000		-		62,000
Other		512,000		122,000		46,000		680,000
	$	20,912,000	$	4,734,000	$	2,754,000	$	28,400,000

	Twelve Months Ended November 30, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	13,631,000	$	-	$	-	$	13,631,000
Farm equipment service parts		2,799,000		-		-		2,799,000
Steel cutting tools and inserts		-		-		2,440,000		2,440,000
Modular buildings		-		5,381,000		-		5,381,000
Modular building lease income		-		-		-		-
Other		396,000		297,000		21,000		714,000
	$	16,826,000	$	5,678,000	$	2,461,000	$	24,965,000

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 in fiscal 2022. 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.

(l) 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 Consolidated Balance Sheets.

	November 30, 2022		November 30, 2021
Receivables	$	2,722,000	$	2,663,000
Assets		451,000		177,000
Liabilities		1,157,000		559,000

The amount of revenue recognized in fiscal year 2022 that was included in a contract liability at November 30, 2021 was approximately $559,000 compared to $474,000 for the prior year. The beginning balance of contract receivables, assets and liabilities at December 1, 2020 was $2,391,000; $56,000 and $474,000, respectively. The change in contract receivables reflected above results from contract billings for all three segments as performance obligations are met. The increase in contract assets on November 30, 2022 is due to construction costs in excess of billings on contracts in the Modular Buildings segment. Contract liabilities include customer deposits and billings in excess of cost and profit on the consolidated balance sheets. Contract liabilities have increased due to customer deposits received on the Agricultural Products segment as part of our fall early order program that offers cash discounts for equipment deposits.The Company will utilize the practical expedient exception for these contracts and will report only on performance obligations greater than one year. As of November 30, 2022, and November 30, 2021, the Company has no performance obligations with an original expected duration greater than one year.

Research and Development Expense, Policy [Policy Text Block]

(m) Research and Development

Research and development costs are expensed when incurred. Such costs approximated $193,000 and $152,000 for the 2022 and 2021 fiscal years, respectively. Research and development costs are included in engineering expenses on the Consolidated Statements of Operations.

Advertising Cost [Policy Text Block]

(n) Advertising

Advertising costs are expensed when incurred. Such costs approximated $190,000 and $163,000 for the 2022 and 2021 fiscal years, respectively. Advertising costs are included in selling expenses on the Consolidated Statements of Operations.

Earnings Per Share, Policy [Policy Text Block]

(o) Net Income Per Share of Common Stock

Basic net income per share has been computed on the basis of the weighted average number of shares of common stock outstanding. Diluted net income per share of common stock has been computed on the basis of the weighted average number of shares outstanding plus equivalent shares of common stock 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 per share of common stock.Basic and diluted income per common share have been computed based on the following as of November 30, 2022 and 2021:

	For the Twelve Months Ended
	November 30, 2022		November 30, 2021
Numerator for basic and diluted net income per share:
Net income	$	97,797	$	212,631
Denominator:
For basic net income per share - weighted average common shares outstanding		4,707,384		4,515,229
Effect of dilutive stock options		-		-
For diluted net income per share - weighted average common shares outstanding		4,707,384		4,515,229
Net Income per share - Basic:
Net Income per share	$	0.02	$	0.05
Net Income per share - Diluted:
Net Income per share	$	0.02	$	0.05

Share-Based Payment Arrangement [Policy Text Block]

(p) Stock Based Compensation

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 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. Restricted stock is valued at market value at the day of grant.

Use of Estimates, Policy [Policy Text Block]

(q) Use of Estimates

Management has made a number of estimates and assumptions related to the reported amount of assets and liabilities, reported amount of revenues and expenses, and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

(r) Recently Issued Accounting Pronouncements

Accounting Pronouncements Not Yet AdoptedMeasurement of Credit Losses on Financial InstrumentsIn 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 smaller reporting entities 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 year 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.                  

XML

Note 1 - Summary of Significant Accounting Policies (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

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

	November 30, 2022		November 30, 2021
Operating lease right-of-use assets (other assets)	$	34,931		47,794
Current portion of operating lease liabilities (accrued expenses)	$	10,915		12,863
Long-term portion of operating lease liabilities		24,016		34,931
Total operating lease liabilities	$	34,931		47,794

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

Year Ending November 30,
2023	12,344
2024	11,325
2025	9,532
2026	4,765
Total lease payments	37,966
Less imputed interest	(3,035	)
Total operating lease liabilities	34,931

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

	November 30, 2022		November 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)	$	540,052	$	190,667
	$	540,052	$	190,667
Current portion of finance lease liabilities	$	170,835	$	48,591
Long-term portion of finance lease liabilities		602,131		142,386
Total finance lease liabilities	$	772,966	$	190,977

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

Year Ending November 30,
2023	$	199,836
2024		211,219
2025		157,393
2026		155,809
2027		122,823
Total lease payments		847,080
Less imputed interest		(74,114	)
Total finance lease liabilities	$	772,966

Disaggregation of Revenue [Table Text Block]

	Twelve Months Ended November 30, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	17,825,000	$	-	$	-	$	17,825,000
Farm equipment service parts		2,575,000		-		-		2,575,000
Steel cutting tools and inserts		-		-		2,708,000		2,708,000
Modular buildings		-		4,550,000		-		4,550,000
Modular building lease income		-		62,000		-		62,000
Other		512,000		122,000		46,000		680,000
	$	20,912,000	$	4,734,000	$	2,754,000	$	28,400,000

	Twelve Months Ended November 30, 2021
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	13,631,000	$	-	$	-	$	13,631,000
Farm equipment service parts		2,799,000		-		-		2,799,000
Steel cutting tools and inserts		-		-		2,440,000		2,440,000
Modular buildings		-		5,381,000		-		5,381,000
Modular building lease income		-		-		-		-
Other		396,000		297,000		21,000		714,000
	$	16,826,000	$	5,678,000	$	2,461,000	$	24,965,000

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

	November 30, 2022		November 30, 2021
Receivables	$	2,722,000	$	2,663,000
Assets		451,000		177,000
Liabilities		1,157,000		559,000

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

	For the Twelve Months Ended
	November 30, 2022		November 30, 2021
Numerator for basic and diluted net income per share:
Net income	$	97,797	$	212,631
Denominator:
For basic net income per share - weighted average common shares outstanding		4,707,384		4,515,229
Effect of dilutive stock options		-		-
For diluted net income per share - weighted average common shares outstanding		4,707,384		4,515,229
Net Income per share - Basic:
Net Income per share	$	0.02	$	0.05
Net Income per share - Diluted:
Net Income per share	$	0.02	$	0.05

XML

Note 2 - Allowance for Doubtful Accounts (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

Financing Receivable, Allowance for Credit Loss [Table Text Block]

	Twelve Months Ended
	November 30, 2022			November 30, 2021
Balance, beginning	$	38,188		$	51,175
Provision (recovery) charged to expense		(7,722	)		(4,160	)
(Less amounts charged-off)/Recovery		4,233			(8,827	)
Balance, ending	$	34,699		$	38,188

XML

Note 3 - Inventory (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	November 30, 2022			November 30, 2021
Raw materials	$	8,700,719		$	8,289,386
Work in process		624,781			357,721
Finished goods		3,029,099			3,088,739
Total Gross Inventory	$	12,354,599		$	11,735,846
Less: Reserves		(1,743,047	)		(2,525,743	)
Net Inventory	$	10,611,552		$	9,210,103

XML

Note 4 - Contracts in Progress (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

Long-Term Contract or Program Disclosure [Table Text Block]

	Cost and Profit in			Billings in Excess of
	Excess of Billings			Costs and Profit
November 30, 2022
Costs	$	848,516		$	731,490
Estimated earnings		293,094			138,568
		1,141,610			870,058
Less: amounts billed		(690,704	)		(1,198,099	)
	$	450,906		$	(328,041	)
November 30, 2021
Costs	$	362,958		$	924,908
Estimated earnings		117,328			301,180
		480,286			1,226,088
Less: amounts billed		(303,002	)		(1,506,849	)
	$	177,284		$	(280,761	)

XML

Note 5 - Property, Plant, and Equipment (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

Property, Plant and Equipment [Table Text Block]

	November 30, 2022			November 30, 2021
Land	$	220,503		$	220,503
Buildings and improvements		8,235,981			7,460,698
Construction in Progress		357,644			160,353
Manufacturing machinery and equipment		11,721,908			11,286,411
Trucks and automobiles		567,563			510,986
Furniture and fixtures		115,059			115,059
		21,218,658			19,754,010
Less accumulated depreciation		(15,039,741	)		(14,516,682	)
Property, plant and equipment	$	6,178,917		$	5,237,328

XML

Note 6 - Assets Held for Lease (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

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

	November 30, 2022		November 30, 2021
Modular Buildings	$	400,325	$	521,555
Total assets held for lease	$	400,325	$	521,555

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

Year Ending November 30,	Amount
2023	$	67,941
Total		67,941

XML

Note 7 - Accrued Expenses (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	November 30, 2022		November 30, 2021
Salaries, wages, and commissions	$	755,708	$	654,757
Accrued warranty expense		193,301		202,850
Other		334,195		304,766
	$	1,283,204	$	1,162,373

XML

Note 8 - Product Warranty (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

Schedule of Product Warranty Liability [Table Text Block]

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Balance, beginning	$	202,850		$	291,454
Settlements / adjustments		(349,889	)		(238,808	)
Warranties issued		340,340			150,204
Balance, ending	$	193,301		$	202,850

XML

Note 9 - Loan and Credit Agreements (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

Schedule of Debt [Table Text Block]

	November 30, 2022		November 30, 2021
Bank Midwest loan payable in monthly installments of $19,648 including interest at 7.00%, due October 1, 2037		2,165,554		2,260,412
Bank Midwest loan payable in monthly installments of $2,972 including interest at 9.5%, due May 15, 2027		344,932		-
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 18, 2022, due June 18, 2050		163,793		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 18, 2022, due June 18, 2050		163,728		158,168
U.S. Small Business Administration loan payable in monthly installments of $731 including interest at 3.75% beginning December 24, 2022, due June 24, 2050		163,912		158,181
Total term debt	$	3,001,919	$	2,734,929
Less current portion of term debt		97,678		99,462
Term debt, excluding current portion	$	2,904,241	$	2,635,467

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

Year	Amount
2023	$	97,678
2024		103,631
2025		111,601
2026		119,594
2027		446,810
2028 and thereafter		2,122,605
	$	3,001,919

XML

Note 12 - Equity Incentive Plan (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

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

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Shares issued to directors (immediate vesting)		25,000			25,000
Shares issued to directors, employees, and consultants (three-year vesting)		94,500			88,500
Unvested shares forfeit upon termination		(9,333	)		-
Total shares issued		110,167			113,500

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

	For the Twelve Months Ended
	November 30, 2022			November 30, 2021
Stock-based compensation expense		287,721			265,541
Treasury share repurchase expense		(92,432	)		(30,470	)
Stock-based compensation expense net of treasury repurchases		195,289			235,071

	For the Twelve Months Ended
	November 30, 2022		November 30, 2021
Tax deductions from stock-based compensation expense		314,306		246,862

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

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options O/S at beginning of period		22,000		$	5.93
Granted		-		$	-
Exercised		-		$	-				-
Options Expired or Forfeited		(10,000	)	$	6.15
Options O/S at end of Period		12,000		$	5.75		1.40		-
Options Exer. At end of the Period		12,000		$	5.75		1.40		-

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options O/S at beginning of period		36,000		$	6.40
Granted		-		$	-
Exercised		-		$	-				-
Options Expired or Forfeited		(14,000	)	$	7.14
Options O/S at end of Period		22,000		$	5.93		2.04		-
Options Exer. At end of the Period		22,000		$	5.93		2.04		-

XML

Note 13 - Common Stock Purchase Agreement (Tables)

12 Months Ended

Nov. 30, 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

XML

Note 14 - Income Taxes (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	November 30, 2022		November 30, 2021
Current expense	$	2,712	$	8,459
Deferred expense		16,491		45,800
Total income tax expense	$	19,203	$	54,259

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	November 30, 2022			November 30, 2021
Statutory federal income tax rate		21.0	%		21.0	%
Permanent Differences and Other		(4.6	)		(0.7	)
		16.4	%		20.3	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	November 30
	2022			2021
Current deferred tax assets (liabilities):
Accrued expenses	$	93,000		$	82,000
Inventory capitalization		167,000			122,000
NOL and tax credit carryforward		1,921,000			1,846,000
Asset reserves		521,000			613,000
Total current deferred tax assets	$	2,702,000		$	2,663,000
Non-current deferred tax assets
Property, plant, and equipment	$	(97,000	)	$	(41,000	)
Total non-current deferred tax assets (liabilities)	$	(97,000	)	$	(41,000	)
Net deferred taxes	$	2,605,000		$	2,622,000

XML

Note 17 - Segment Information (Tables)

12 Months Ended

Nov. 30, 2022

Notes Tables

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

	Twelve Months Ended November 30, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	20,912,000	$	4,734,000		$	2,754,000		$	28,400,000
Income (loss) from operations	$	1,205,000	$	(600,000	)	$	(272,000	)	$	333,000
Income (loss) before tax	$	923,000	$	(482,000	)	$	(324,000	)	$	117,000
Total Assets	$	18,459,000	$	2,829,000		$	2,660,000		$	23,948,000
Capital expenditures (1)	$	1,969,000	$	232,000		$	244,000		$	2,445,000
Depreciation & Amortization	$	468,000	$	193,000		$	146,000		$	807,000

	Twelve Months Ended November 30, 2021
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	16,826,000	$	5,678,000	$	2,461,000		$	24,965,000
Income (loss) from operations	$	599,000	$	74,000	$	(150,000	)	$	523,000
Income (loss) before tax	$	413,000	$	45,000	$	(191,000	)	$	267,000
Total Assets	$	14,950,000	$	3,429,000	$	2,475,000		$	20,854,000
Capital expenditures (2)	$	726,000	$	94,000	$	-		$	820,000
Depreciation & Amortization	$	366,000	$	111,000	$	136,000		$	613,000

XML

Note 1 - Summary of Significant Accounting Policies (Details Textual)	12 Months Ended
	Nov. 30, 2022 USD ($)	Nov. 30, 2021 USD ($)	Nov. 30, 2020 USD ($)
Accounts Receivable, Threshold Period On International Sales (Day)	180 days
Overdue Trade Receivables Interest Rate Percent of Account Balances Per Month	1.50%
Lease, Cost, Total	$ 20,121	$ 22,445
Operating Lease, Weighted Average Remaining Lease Term	39 months
Operating Lease, Weighted Average Discount Rate, Percent	5.50%
Lessee, Finance Lease, Term of Contract	50 months
Lessee, Finance Lease, Discount Rate	4.18%
Finance Lease, Right-of-Use Asset, Amortization	$ 124,256
Contract with Customer, Liability, Revenue Recognized	559,000	474,000
Construction Contractor, Receivable, Excluding Contract Retainage, Total	2,722,000	2,663,000	$ 2,391,000
Contract with Customer, Asset, after Allowance for Credit Loss, Total	451,000	177,000	56,000
Contract with Customer, Liability, Total	$ 1,157,000	559,000	$ 474,000
Number of Operating Segments	3
Research and Development Expense, Total	$ 193,000	152,000
Advertising Expense	190,000	163,000
Product [Member]
Contract with Customer, Liability, Revenue Recognized	$ 1,010,000	$ 0
Minimum [Member]
Property, Plant and Equipment, Useful Life	3 years
Maximum [Member]
Property, Plant and Equipment, Useful Life	40 years
Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Number Of Major Customers	1	1
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | One Customer [Member]
Concentration Risk, Percentage	11.00%	8.00%

XML

Note 1 - Summary of Significant Accounting Policies - Components of Operating Leases (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Long-term portion of operating lease liabilities	$ 24,016	$ 34,931
Total operating lease liabilities	34,931	47,794
Other Assets [Member]
Operating lease right-of-use assets (other assets)	34,931	47,794
Accrued Expenses [Member]
Current portion of operating lease liabilities (accrued expenses)	$ 10,915	$ 12,863

XML

Note 1 - Summary of Significant Accounting Policies - Maturities of Operating Lease Liabilities (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
2023	$ 12,344
2024	11,325
2025	9,532
2026	4,765
Total lease payments	37,966
Less imputed interest	(3,035)
Total operating lease liabilities	$ 34,931	$ 47,794

XML

Note 1 - Summary of Significant Accounting Policies - Components of Finance Leases (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Finance lease right-of-use assets (net of amortization in other assets)		$ 190,667
Current portion of finance lease liabilities	$ 170,835	48,591
Long-term portion of finance lease liabilities	602,131	142,386
Total finance lease liabilities	772,966	$ 190,977
Other Assets [Member]
Finance lease right-of-use assets (net of amortization in other assets)	540,052
Accrued Expenses [Member]
Current portion of finance lease liabilities	$ 170,835

XML

Note 1 - Summary of Significant Accounting Policies - Maturities of Finance Lease Liabilities (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
2023	$ 199,836
2024	211,219
2025	157,393
2026	155,809
2027	122,823
Total lease payments	847,080
Less imputed interest	(74,114)
Total finance lease liabilities	$ 772,966	$ 190,977

XML

Note 1 - Summary of Significant Accounting Policies - Disaggregated Revenue From External Customer (Details) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Revenue	$ 28,400,000	$ 24,965,000
Agricultural Products [Member]
Revenue	20,912,000	16,826,000
Modular Buildings [Member]
Revenue	4,734,000	5,678,000
Tools [Member]
Revenue	2,754,000	2,461,000
Farm Equipment [Member]
Revenue	17,825,000	13,631,000
Farm Equipment [Member] | Agricultural Products [Member]
Revenue	17,825,000	13,631,000
Farm Equipment [Member] | Modular Buildings [Member]
Revenue	0	0
Farm Equipment [Member] | Tools [Member]
Revenue	0	0
Farm Equipment Service Parts [Member]
Revenue	2,575,000	2,799,000
Farm Equipment Service Parts [Member] | Agricultural Products [Member]
Revenue	2,575,000	2,799,000
Farm Equipment Service Parts [Member] | Modular Buildings [Member]
Revenue	0	0
Farm Equipment Service Parts [Member] | Tools [Member]
Revenue	0	0
Steel Cutting Tools and Inserts [Member]
Revenue	2,708,000	2,440,000
Steel Cutting Tools and Inserts [Member] | Agricultural Products [Member]
Revenue	0	0
Steel Cutting Tools and Inserts [Member] | Modular Buildings [Member]
Revenue	0	0
Steel Cutting Tools and Inserts [Member] | Tools [Member]
Revenue	2,708,000	2,440,000
Modular Buildings [Member]
Revenue	4,550,000	5,381,000
Modular Buildings [Member] | Agricultural Products [Member]
Revenue	0	0
Modular Buildings [Member] | Modular Buildings [Member]
Revenue	4,550,000	5,381,000
Modular Buildings [Member] | Tools [Member]
Revenue	0	0
Modular Buildings Lease Income [Member]
Revenue	62,000	0
Modular Buildings Lease Income [Member] | Agricultural Products [Member]
Revenue	0	0
Modular Buildings Lease Income [Member] | Modular Buildings [Member]
Revenue	62,000	0
Modular Buildings Lease Income [Member] | Tools [Member]
Revenue	0	0
Product and Service, Other [Member]
Revenue	680,000	714,000
Product and Service, Other [Member] | Agricultural Products [Member]
Revenue	512,000	396,000
Product and Service, Other [Member] | Modular Buildings [Member]
Revenue	122,000	297,000
Product and Service, Other [Member] | Tools [Member]
Revenue	$ 46,000	$ 21,000

XML

Note 1 - Summary of Significant Accounting Policies - Contract With Customers (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2020
Receivables	$ 2,722,000	$ 2,663,000	$ 2,391,000
Assets	451,000	177,000	56,000
Liabilities	$ 1,157,000	$ 559,000	$ 474,000

XML

Note 1 - Summary of Significant Accounting Policies - Basic and Diluted Earnings Per Common Share (Details) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Net Income	$ 97,797	$ 212,631
For basic net income per share - weighted average common shares outstanding (in shares)	4,707,384	4,515,229
Effect of dilutive stock options (in shares)	0	0
For diluted net income per share - weighted average common shares outstanding (in shares)	4,707,384	4,515,229
Net Income per share (in dollars per share)	$ 0.02	$ 0.05
Net Income per share (in dollars per share)	$ 0.02	$ 0.05

XML

Note 2 - Allowance for Doubtful Accounts - Activity in the Allowance for Doubtful Accounts (Details) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Balance, beginning	$ 38,188	$ 51,175
Provision (recovery) charged to expense	(7,722)	(4,160)
(Less amounts charged-off)/Recovery	4,233	(8,827)
Balance, ending	$ 34,699	$ 38,188

XML

Note 3 - Inventory - Major Classes of Inventory (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Raw materials	$ 8,700,719	$ 8,289,386
Work in process	624,781	357,721
Finished goods	3,029,099	3,088,739
Total Gross Inventory	12,354,599	11,735,846
Less: Reserves	(1,743,047)	(2,525,743)
Net Inventory	$ 10,611,552	$ 9,210,103

XML

Note 4 - Contracts in Progress (Details Textual) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Construction Contractor, Receivable, Retainage, Total	$ 4,087	$ 0

XML

Note 4 - Contracts in Progress - Long-term Contracts (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Costs in Excess of Billings, Cost	$ 848,516	$ 362,958
Billings in Excess of Costs, Costs	731,490	924,908
Costs in Excess of Billings, Estimated Earnings 1	293,094	117,328
Billings in Excess of Costs, Estimated Earnings	138,568	301,180
Costs in Excess of Billings, Costs and Estimated Earnings	1,141,610	480,286
Billings in Excess of Costs, Costs and Estimated Earnings	870,058	1,226,088
Costs in Excess of Billings, Amounts Billed	(690,704)	(303,002)
Billings in Excess of Costs, Amounts Billed	(1,198,099)	(1,506,849)
Cost and Profit in Excess of Billings	450,906	177,284
Billings in Excess of Cost	$ (328,041)	$ (280,761)

XML

Note 5 - Property, Plant, and Equipment (Details Textual) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Depreciation, Depletion and Amortization, Total	$ 807,163	$ 613,409

XML

Note 5 - Property, Plant, and Equipment - Major Classes of Property, Plant, and Equipment (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Property, plant and equipment, gross	$ 21,218,658	$ 19,754,010
Less accumulated depreciation	(15,039,741)	(14,516,682)
Property, plant and equipment	6,178,917	5,237,328
Land [Member]
Property, plant and equipment, gross	220,503	220,503
Building and Building Improvements [Member]
Property, plant and equipment, gross	8,235,981	7,460,698
Construction in Progress [Member]
Property, plant and equipment, gross	357,644	160,353
Machinery and Equipment [Member]
Property, plant and equipment, gross	11,721,908	11,286,411
Vehicles [Member]
Property, plant and equipment, gross	567,563	510,986
Furniture and Fixtures [Member]
Property, plant and equipment, gross	$ 115,059	$ 115,059

XML

Note 6 - Assets Held for Lease (Details Textual)	12 Months Ended
	Nov. 30, 2022 USD ($)	Nov. 30, 2021 USD ($)
Proceeds from Sale of Property, Plant, and Equipment, Total	$ 403,504	$ 20,807
Sales [Member]
Operating Lease, Lease Income, Total	61,534	$ 0
Modular Buildings [Member]
Proceeds from Sale of Property, Plant, and Equipment, Total	383,904
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property	$ 150,069
Modular Buildings [Member] | Leased Buildings [Member]
Property Subject to or Available for Operating Lease, Number of Units		7
Modular Buildings [Member] | Leased Buildings [Member]
Property Subject to or Available for Operating Lease, Number of Units	5

XML

Note 6 - Assets Held for Lease - Summary of Assets Held for Lease (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Assets held for lease	$ 400,325	$ 521,555
Modular Buildings [Member]
Assets held for lease	$ 400,325	$ 521,555

XML

Note 6 - Assets Held for Lease - Future Minimum Lease Receipts (Details)	Nov. 30, 2022 USD ($)
2023	$ 67,941
Total	$ 67,941

XML

Note 7 - Accrued Expenses - Major Components of Accrued Expenses (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Salaries, wages, and commissions	$ 755,708	$ 654,757
Accrued warranty expense	193,301	202,850
Other	334,195	304,766
Accrued Liabilities, Current, Total	$ 1,283,204	$ 1,162,373

XML

Note 8 - Product Warranty (Details Textual)	12 Months Ended
	Nov. 30, 2022
Standard Product Warrant Term	1 year

XML

Note 8 - Product Warranty - Changes in Product Warranty Liability (Details) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Balance, beginning	$ 202,850	$ 291,454
Settlements / adjustments	(349,889)	(238,808)
Warranties issued	340,340	150,204
Balance, ending	$ 193,301	$ 202,850

XML

Note 9 - Loan and Credit Agreements (Details Textual)				12 Months Ended
	Jun. 24, 2020 USD ($)	Jun. 18, 2020 USD ($)	Sep. 28, 2017 USD ($)	Nov. 30, 2022 USD ($)	Nov. 30, 2021 USD ($)	May 17, 2022 USD ($)
Long-Term Debt, Total				$ 3,001,919	$ 2,734,929
Term Loan Due October 2037 [Member]
Long-Term Debt, Total				$ 2,165,554	$ 2,260,412
Debt Instrument, Interest Rate, Stated Percentage				7.00%	7.00%
Debt Instrument, Periodic Payment, Total				$ 19,648	$ 19,648
EIDL Assistance Program, Loan One [Member]
Proceeds from Issuance of Debt		$ 150,000
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	30 years
EIDL Assistance Program, Loan Two [Member]
Debt Instrument, Periodic Payment, Total	$ 731
Proceeds from Issuance of Debt		$ 150,000
Bank Midwest [Member]
Long-Term Line of Credit, Total				3,924,500
Line of Credit Facility, Remaining Borrowing Capacity				$ 1,075,500
Line of Credit, Borrowing Base, Accounts Receivable				75.00%
Line of Credit, Borrowing Base, Inventory				50.00%
Debt Instrument, Covenant, Minimum Working Capital			$ 4,000,000
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
Debt Instrument, Covenant, Annual Purchases or Sales Price of Equipment Before Requiring Bank Approval			$ 100,000
Debt Instrument, Debt to Worth Exceeding Percent				1
Bank Midwest [Member] | Term Loan Due October 2037 [Member]
Long-Term Debt, Total				$ 2,600,000
Debt Instrument, Periodic Payment, Total				$ 19,648
Bank Midwest [Member] | Term Loan Due October 2037 [Member] | United States Department of Agriculture [Member]
Guarantee Requirement, Personally Guarantee, Shareholders Ownership Percentage				20.00%
Bank Midwest [Member] | Reserve Line of Credit [Member]
Long-Term Debt, Total						$ 350,000
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						59
Debt Instrument, Estimated Balloon Payments				$ 269,517
Bank Midwest [Member] | Roof Term Loan [Member] | Maximum [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%
Bank Midwest [Member] | Revolving Credit Facility [Member] | Wall Street Journal Rate [Member]
Debt Instrument, Basis Spread on Variable Rate				1.50%
Line of Credit Facility, Interest Rate During Period				9.25%
Bank Midwest [Member] | Revolving Credit Facility [Member] | Term Loan Due October 2037 [Member]
Long-Term Debt, Total				$ 550,000
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%
Bank Midwest [Member] | Term Loan Due October 2037 [Member]
Debt Instrument, Interest Rate, Stated Percentage				5.00%
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				0.50%
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%

XML

Note 9 - Loan and Credit Agreements - Summary of Term Debt (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Long-Term Debt, Total	$ 3,001,919	$ 2,734,929
Less current portion of term debt	97,678	99,462
Term debt, excluding current portion	2,904,241	2,635,467
Term Loan Due October 2037 [Member]
Long-Term Debt, Total	2,165,554	2,260,412
Bank Midwest Loan 2 [Member]
Long-Term Debt, Total	344,932	0
SBA Loan One [Member]
Long-Term Debt, Total	163,793	158,168
SBA Loan Two [Member]
Long-Term Debt, Total	163,728	158,168
SBA Loan Three [Member]
Long-Term Debt, Total	$ 163,912	$ 158,181

XML

Note 9 - Loan and Credit Agreements - Summary of Term Debt (Details) (Parentheticals) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Term Loan Due October 2037 [Member]
Debt Instrument, Periodic Payment, Total	$ 19,648	$ 19,648
Debt Instrument, Interest Rate, Stated Percentage	7.00%	7.00%
Debt Instrument, Maturity Date	Oct. 01, 2037	Oct. 01, 2037
Bank Midwest Loan 2 [Member]
Debt Instrument, Periodic Payment, Total	$ 2,972	$ 2,972
Debt Instrument, Interest Rate, Stated Percentage	9.50%	9.50%
Debt Instrument, Maturity Date	May 15, 2027	May 15, 2027
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 Range, Start	Dec. 18, 2022	Dec. 18, 2022
Debt Instrument, Maturity Date Range, End	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 Range, Start	Dec. 18, 2022	Dec. 18, 2022
Debt Instrument, Maturity Date Range, End	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 Range, Start	Dec. 24, 2022	Dec. 24, 2022
Debt Instrument, Maturity Date Range, End	Jun. 24, 2050	Jun. 24, 2050

XML

Note 9 - Loan and Credit Agreements - Summary of Minimum Maturities of Term Debt (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
2023	$ 97,678
2024	103,631
2025	111,601
2026	119,594
2027	446,810
2028 and thereafter	2,122,605
Long-Term Debt, Total	$ 3,001,919	$ 2,734,929

XML

Note 10 - Related Party Transactions (Details Textual) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Revenue from Related Parties	$ 0	$ 0
Due from Related Parties, Total	0	0
Related Party Transaction, Expenses from Transactions with Related Party	23,880	26,368
Due to Related Parties, Total	$ 1,348	$ 1,407

XML

Note 11 - Employee Benefit Plans (Details Textual) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Defined Contribution Plan, Employer Matching Contribution, Percent of Match	50.00%
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent	3.00%
Defined Contribution Plan, Cost	$ 116,603	$ 77,010

XML

Note 12 - Equity Incentive Plan (Details Textual) - shares		12 Months Ended
	Feb. 25, 2020	Nov. 30, 2022	Nov. 30, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares)		0
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures, Total (in shares)		0	0
Non-qualified Stock Units to Non-employee Directors Annually or Upon Election [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures, Total (in shares)		1,000
The 2020 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized (in shares)	500,000

XML

Note 12 - Equity Incentive Plan - Summary of Shares Issued (Details) - shares	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Unvested shares forfeit upon termination (in shares)	(9,333)	0
Total shares issued (in shares)	110,167	113,500
Employees, Directors, and Consultants [Member] | Vesting Immediately [Member]
Shares issued to directors (immediate vesting) (in shares)	25,000	25,000
Employees, Directors, and Consultants [Member] | Awards with Three-year Vesting [Member]
Shares issued to directors (immediate vesting) (in shares)	94,500	88,500

XML

Note 12 - Equity Incentive Plan - Summary of Stock-based Compensation Expense (Details) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Stock-based compensation expense	$ 287,721	$ 265,541
Tax deductions from stock-based compensation expense	314,306	246,862
Treasury share repurchase expense	(92,432)	(30,470)
Stock-based compensation expense net of treasury repurchases	$ 195,289	$ 235,071

XML

Note 12 - Equity Incentive Plan - Option Activity (Details) - $ / shares	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021	Nov. 30, 2020
Options O/S, Shares (in shares)	22,000	36,000
Options O/S, Weighted average exercise price (in dollars per share)	$ 5.93	$ 6.40
Granted, Shares (in shares)		0	0
Granted, Weighted average exercise price (in dollars per share)	$ 0	$ 0
Exercised, Shares (in shares)	0	(0)
Exercised, Shares (in shares)	0	0
Exercised, Weighted average exercise price (in dollars per share)	$ 0	$ 0
Options Expired or Forfeited, Shares (in shares)	(10,000)	(14,000)
Options Expired or Forfeited, Weighted Average Exercise Price (in dollars per share)	$ 6.15	$ 7.14
Options O/S, Shares (in shares)	12,000	22,000	36,000
Options O/S at beginning of period, Weighted Average Exercise Price (in dollars per share)	$ 5.75	$ 5.93	$ 6.40
Options Outstanding at the End of the Period, Weighted Average Remaining Contractual Term (Year)	1 year 4 months 24 days	2 years 14 days
Options Exer. At end of the Period, Shares (in shares)	12,000	22,000
Options Exer. At end of the Period, Weighted Average Exercise Price (in dollars per share)	$ 5.75	$ 5.93	$ 6.40
Options Exer. At end of the Period, Weighted Average Remaining Contractual Term (Year)	1 year 4 months 24 days	2 years 14 days
Options Exer. At end of the Period, Weighted Average Remaining Contractual Term (Year)	1 year 4 months 24 days	2 years 14 days

XML

Note 13 - Common Stock Purchase Agreement (Details Textual) - USD ($)							2 Months Ended	12 Months Ended
	Sep. 23, 2022	Aug. 23, 2022	Aug. 15, 2022	Aug. 03, 2022	Jul. 25, 2022	Mar. 29, 2022	Sep. 23, 2022	Nov. 30, 2022	Nov. 30, 2021
Common Stock, Par or Stated Value Per Share						$ 0.01		$ 0.01	$ 0.01
Stock Issued During Period, Value, New Issues								$ 503,104
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 (in shares)	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
Common Stock Purchase Agreement, Funding Remaining to be Utilized								$ 2,454,472
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%

XML

Note 13 - Common Stock Purchase Agreement - Summary of Shares Purchased by Alumni Capital (Details) - USD ($)							2 Months Ended	12 Months Ended
	Sep. 23, 2022	Aug. 23, 2022	Aug. 15, 2022	Aug. 03, 2022	Jul. 25, 2022	Mar. 29, 2022	Sep. 23, 2022	Nov. 30, 2022	Nov. 30, 2021
Proceeds from common stock purchase agreement								$ 545,529	$ 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 (in dollars 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

XML

Note 14 - Income Taxes (Details Textual)	Nov. 30, 2022 USD ($)
Operating Loss Carryforwards	$ 4,496,000
Tax Credit Carryforward, Amount	109,000
Operating Loss Carryforwards Not Subject to Expiration	$ 4,869,000

XML

Note 14 - Income Taxes - Income Tax Expense (Benefit) (Details) - USD ($)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Current expense	$ 2,712	$ 8,459
Deferred expense	16,491	45,800
Total income tax expense	$ 19,203	$ 54,259

XML

Note 14 - Income Taxes - Reconciliation of the Statutory Federal Income Tax Rate (Details)	12 Months Ended
	Nov. 30, 2022	Nov. 30, 2021
Statutory federal income tax rate	21.00%	21.00%
Permanent Differences and Other	(4.60%)	(0.70%)
Effective Income Tax Rate Reconciliation, Percent, Total	16.40%	20.30%

XML

Note 14 - Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)	Nov. 30, 2022	Nov. 30, 2021
Accrued expenses	$ 93,000	$ 82,000
Inventory capitalization	167,000	122,000
NOL and tax credit carryforward	1,921,000	1,846,000
Asset reserves	521,000	613,000
Total current deferred tax assets	2,702,000	2,663,000
Property, plant, and equipment	(97,000)	(41,000)
Total non-current deferred tax assets (liabilities)	(97,000)	(41,000)
Net deferred taxes	$ 2,605,000	$ 2,622,000

XML

Note 17 - Segment Information (Details Textual)	12 Months Ended
	Nov. 30, 2022 USD ($)	Nov. 30, 2021 USD ($)
Number of Reportable Segments	3
Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total		$ 190,667
Agricultural Products [Member] | Operating Segments [Member] | Property, Plant and Equipment [Member]
Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total	$ 532,000	142,000
Tools [Member] | Operating Segments [Member] | Property, Plant and Equipment [Member]
Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total	$ 166,000
Modular Buildings [Member] | Operating Segments [Member] | Property, Plant and Equipment [Member]
Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total		$ 58,000

XML

Note 17 - Segment Information - Segment Reporting Information (Details) - USD ($)	12 Months Ended
	Nov. 30, 2022		Nov. 30, 2021
Revenue from external customers	$ 28,399,637		$ 24,965,086
Income (loss) from operations	332,680		523,408
Total Assets	23,948,314		20,854,048
Capital expenditures (1)	1,747,351		620,284
Depreciation, Depletion and Amortization, Total	807,163		613,409
Operating Segments [Member]
Revenue from external customers	28,400,000		24,965,000
Income (loss) from operations	333,000		523,000
Income (loss) before tax	117,000		267,000
Total Assets	23,948,000		20,854,000
Capital expenditures (1)	2,445,000	[1]	820,000	[2]
Depreciation, Depletion and Amortization, Total	807,000		613,000
Operating Segments [Member] | Agricultural Products [Member]
Revenue from external customers	20,912,000		16,826,000
Income (loss) from operations	1,205,000		599,000
Income (loss) before tax	923,000		413,000
Total Assets	18,459,000		14,950,000
Capital expenditures (1)	1,969,000	[1]	726,000	[2]
Depreciation, Depletion and Amortization, Total	468,000		366,000
Operating Segments [Member] | Modular Buildings [Member]
Revenue from external customers	4,734,000		5,678,000
Income (loss) from operations	(600,000)		74,000
Income (loss) before tax	(482,000)		45,000
Total Assets	2,829,000		3,429,000
Capital expenditures (1)	232,000	[1]	94,000	[2]
Depreciation, Depletion and Amortization, Total	193,000		111,000
Operating Segments [Member] | Tools [Member]
Revenue from external customers	2,754,000		2,461,000
Income (loss) from operations	(272,000)		(150,000)
Income (loss) before tax	(324,000)		(191,000)
Total Assets	2,660,000		2,475,000
Capital expenditures (1)	244,000	[1]	0	[2]
Depreciation, Depletion and Amortization, Total	$ 146,000		$ 136,000

[1] FY 2022 capital expenditures include finance leased assets of $532,000 in the Agricultural Products segment and $166,000 in the Tool segment.

[2] FY 2021 capital expenditures include finance leased assets of $142,000 in the Agricultural Products segment and $58,000 in the Modular Buildings segment.