Note 3 - Discontinued Operations

9 Months Ended

Aug. 31, 2023

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

3) Discontinued Operations

On June 7, 2023, the Company announced that it would be discontinuing the operations of its Tools segment in order to focus its efforts and resources on the business segments that have historically been more successful and that are expected to present greater opportunities for meaningful long-term stockholder returns.  A large portion of this segment's assets were disposed of in the 3rd quarter of fiscal 2023. The primary asset of this business, the real estate, is listed for sale. The company is working to finish liquidation over the next two fiscal quarters.

The cessation of operations and liquidation of the Tools segment represents a strategic shift as a unique business unit of the Company  In accordance with Accounting Standard Code Topic 360, the Company has reclassified Tools as discontinued operations for all periods presented.

The components of discontinued operations in the accompanying Condensed Consolidated Balance Sheets are as follows:

	August 31, 2023		November 30, 2022
Accounts receivables	$	28,659	$	255,508
Inventory		193,351		1,004,844
Other current assets		167,650		10,331
Current assets of discontinued operations	$	389,660	$	1,270,683

	August 31, 2023		November 30, 2022
Property, plant, and equipment, net	$	1,057,497	$	1,233,692
Other assets		129,288		155,534
Other assets of discontinued operations	$	1,186,785	$	1,389,226

	August 31, 2023		November 30, 2022
Accounts payable	$	3,703	$	120,503
Salaries, wages, and commissions		40,620		81,026
Current portion of long-term debt		161,726		2,870
Other current liabilities		54,905		71,511
Current liabilities of discontinued operations	$	260,954	$	275,910

	August 31, 2023		November 30, 2022
Long-term portion of operating lease liabilities	$	-	$	1,590
Long-term portion of finance lease liabilities		105,030		126,720
Long-term debt, excluding current portion		-		160,858
Long-term liabilities of discontinued operations	$	105,030	$	289,168

Income from discontinued operations, before income taxes in the accompanying Condensed Consolidated Statements of Operations, is comprised of the following:

	Tools
	Three Months Ended
	August 31, 2023			August 31, 2022
Revenue from external customers	$	439,000		$	664,000
Gross Profit		(209,000	)		81,000
Income (loss) from operations		(390,000	)		(69,000	)
Income (loss) before tax		(399,000	)		(84,000	)
Capital expenditures		-			53,000
Depreciation & Amortization	$	46,000		$	39,000

	Tools
	Nine Months Ended
	August 31, 2023			August 31, 2022
Revenue from external customers	$	2,031,000		$	1,998,000
Gross Profit		100,000			271,000
Income (loss) from operations		(399,000	)		(195,000	)
Income (loss) before tax		(438,000	)		(234,000	)
Capital expenditures		16,000			64,000
Depreciation & Amortization	$	127,000		$	104,000

Recently Issued Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

Measurement of Credit Losses on Financial Instruments

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