Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended May 31, 2023

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______

Commission File No. 000-05131

ART’S-WAY MANUFACTURING CO., INC..

(Exact name of registrant as specified in its charter)

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

5556 Highway 9

Armstrong, Iowa 50514

(Address of principal executive offices) (Zip Code)

(712) 208-8467

(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 $0.01 par value	ARTW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

Large accelerated filer ☐

Non-accelerated filer ☒

Accelerated filer ☐

Smaller reporting company ☒

Emerging growth company ☐

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

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

Number of common shares outstanding as of July 12, 2023: 5,018,573

Art’s-Way Manufacturing Co., Inc.

Index

Page No.

PART I – FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets May 31, 2023 and November 30, 2022	1
	Condensed Consolidated Statements of Operations Three-month and six-month periods ended May 31, 2023 and May 31, 2022	2
	Condensed Consolidated Statements of Stockholders’ Equity Six-month periods ended May 31, 2023 and May 31, 2022	3
	Condensed Consolidated Statements of Cash Flows Six-month periods ended May 31, 2023 and May 31, 2022	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
PART II – OTHER INFORMATION		23
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
	SIGNATURES	25

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ART’S-WAY MANUFACTURING CO., INC.

Condensed Consolidated Balance Sheets

	(Unaudited)
	May 31, 2023			November 30, 2022
Assets
Current assets:
Cash	$	2,298		$	5,055
Accounts receivable-customers, net of allowance for doubtful accounts of $36,684 and $34,699 in 2023 and 2022, respectively		3,936,349			2,722,298
Inventories, net		11,382,211			10,611,552
Cost and profit in excess of billings		322,339			450,906
Other current assets		220,380			343,618
Total current assets		15,863,577			14,133,429
Property, plant, and equipment, net		6,293,148			6,178,917
Assets held for lease, net		209,172			400,325
Deferred income taxes, net		2,438,182			2,605,395
Other assets		666,258			630,248
Total assets	$	25,470,337		$	23,948,314
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,257,058		$	2,630,966
Customer deposits		561,820			828,565
Billings in excess of cost and profit		782,733			328,041
Income taxes payable		5,000			3,500
Accrued expenses		1,234,662			1,283,204
Line of credit		4,704,059			3,924,500
Current portion of finance lease liabilities		236,385			170,835
Current portion of long-term debt		106,305			97,678
Total current liabilities		9,888,022			9,267,289
Long-term liabilities
Long-term portion of operating lease liabilities		18,796			24,016
Long-term portion of finance lease liabilities		844,279			602,131
Long-term debt, excluding current portion		2,846,086			2,904,241
Total liabilities		13,597,183			12,797,677
Commitments and Contingencies (Notes 8, 9, 10 and 13)
Stockholders’ equity:
Undesignated preferred stock - $0.01 par value. Authorized 500,000 shares on May 31, 2023 and November 30, 2022; issued and outstanding 0 shares on May 31, 2023 and November 30, 2022.
Common stock – $0.01 par value. Authorized 9,500,000 shares on May 31, 2023 and November 30, 2022; issued 5,110,921 on May 31, 2023 and 5,013,671 on November 30, 2022		51,109			50,137
Additional paid-in capital		4,683,838			4,547,172
Retained earnings		7,403,158			6,754,284
Treasury stock, at cost (92,348 shares on May 31, 2023 and 64,574 on November 30, 2022)		(264,951	)		(200,956	)
Total stockholders’ equity		11,873,154			11,150,637
Total liabilities and stockholders’ equity	$	25,470,337		$	23,948,314

See accompanying notes to condensed consolidated financial statements.

ART’S-WAY MANUFACTURING CO., INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended						Six Months Ended
	May 31, 2023			May 31, 2022			May 31, 2023			May 31, 2022
Sales	$	9,007,874		$	7,275,353		$	16,902,659		$	12,888,420
Cost of goods sold		6,662,313			5,082,195			12,222,882			9,503,119
Gross profit		2,330,654			2,193,158			4,679,777			3,385,301
Expenses
Engineering		140,497			143,943			268,793			278,014
Selling		576,836			630,772			1,171,101			1,117,928
General and administrative		1,194,711			1,097,350			2,272,686			2,105,143
Total expenses		1,912,044			1,872,065			3,712,580			3,501,085
Income (Loss) from operations		418,610			321,093			967,196			(115,784	)
Other income (expense):
Interest expense		(163,021	)		(97,392	)		(290,527	)		(174,096	)
Other		132,513			(1,454	)		144,905			(3,005	)
Total other income (expense)		(30,428	)		(98,846	)		(145,622	)		(177,101	)
Income (Loss) before income taxes		388,183			222,247			821,574			(292,885	)
Income tax expense (benefit)		81,518			46,894			172,700			(61,749	)
Net Income (Loss)		306,664			175,353			648,874			(231,136	)

See accompanying notes to condensed consolidated financial statements.

ART’S-WAY MANUFACTURING CO., INC.
Condensed Consolidated Statements of Stockholders' Equity
Six Months Ended May 31, 2023 and May 31, 2022
(Unaudited)

	Common Stock				Additional					Treasury Stock
	Number of				paid-in		Retained			Number of
	shares		Par value		capital		earnings			shares		Amount			Total

Balance, November 30, 2021		4,583,504	$	45,835	$	3,760,649	$	6,656,487			44,532	$	(108,524	)	$	10,354,447
Stock based compensation		101,167		1,012		156,453		-			20,042		(92,432	)		65,033
Common stock purchase agreement		20,000		200		117,000										117,200
Net (loss)		-		-		-		(231,136	)		-		-			(231,136	)
Balance, May 31, 2022		4,704,671		47,047		4,034,102		6,425,351			64,574		(200,956	)		10,305,544

	Common Stock				Additional				Treasury Stock
	Number of				paid-in		Retained		Number of
	shares		Par value		capital		earnings		shares		Amount			Total

Balance, November 30, 2022		5,013,671	$	50,137	$	4,547,172	$	6,754,284		64,574	$	(200,956	)	$	11,150,637
Stock based compensation		97,250		972		136,666		-		27,774		(63,995	)		73,643
Net income		-		-		-		648,874		-		-			648,874
Balance, May 31, 2023		5,110,921		51,109		4,683,838		7,403,158		92,348		(264,951	)		11,873,154

See accompanying notes to condensed consolidated financial statements.

ART’S-WAY MANUFACTURING CO., INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	Six Months Ended
	May 31, 2023			May 31, 2022
Cash flows from operations:
Net income (loss)	$	648,874		$	(231,136	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock based compensation		137,638			157,465
Decrease in obsolete inventory reserves		(25,899	)		(197,613	)
(Gain)/loss on disposal of property, plant, and equipment		(97,616	)		3,971
Depreciation and amortization expense		488,806			350,435
Accrued interest on deferred debt payments		-			8,520
Increase (decrease) in allowance for doubtful accounts		1,986			(3,127	)
Deferred income taxes		167,213			(63,744	)
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		(1,216,037	)		185,551
Inventories		(744,760	)		(1,479,479	)
Other assets		120,158			(619,103	)
Increase (decrease) in:
Accounts payable		(373,908	)		787,195
Contracts in progress, net		583,259			(541,716	)
Customer deposits		(266,745	)		1,541,000
Income taxes payable		1,500			(500	)
Accrued expenses		(47,941	)		(178,916	)
Net cash used in operating activities		(623,472	)		(281,197	)
Cash flows from investing activities:
Purchases of property, plant, and equipment		(639,833	)		(509,097	)
Net proceeds from sale of assets		286,815			9,300
Net cash used in investing activities		(353,018	)		(499,797	)
Cash flows from financing activities:
Net change in line of credit		779,559			628,695
Proceeds from finance lease obligations		397,536			350,000
Principal payments on finance lease obligations		(89,839	)		(38,317	)
Repayment of term debt		(49,528	)		(47,289	)
Cost of equity issuance		-			(17,346	)
Repurchases of common stock		(63,995	)		(92,432	)
Net cash provided by financing activities		973,733			783,311
Net increase (decrease) in cash		(2,757	)		2,317
Cash at beginning of period		5,055			2,658
Cash at end of period	$	2,298		$	4,975

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	268,997		$	155,385
Income taxes		2,841			800

Supplemental disclosures of non-cash operating activities:
Right-of-use (ROU) assets acquired (included in other assets)	$	117,302		$	389,300
Common stock purchase agreement shares issued (included in other assets)		-			117,200
Amortization of operating lease ROU assets (included in other assets)		5,820			6,349

See accompanying notes to condensed consolidated financial statements.

Notes to Unaudited Condensed Consolidated Financial Statements

Description of the Company

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

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

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

On June 7, 2023, the Company announced it will discontinue its Tools business segment. Runoff operations will be ongoing through July 14, 2023, whereafter, a limited number of staff members will be employed to assist in the liquidation process. The Tools segment is included as continuing operations in our financial statements as of and for the periods ending May 31, 2023 as remaining orders and ancillary operations are being fulfilled. This segment will be considered a discontinued operation when the plant and office facilities are closed, or it meets the criteria as held for sale.

Summary of Significant Accounting Policies

Statement Presentation

The foregoing condensed consolidated financial statements of the Company are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and operating results for the interim periods. The financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2022. The results of operations for the three and six months ended May 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2023.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the three and six months ended May 31, 2023. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

Measurement of Credit Losses on Financial Instruments

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

Disaggregation of Revenue

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

	Three Months Ended May 31, 2023
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	5,491,000	$	-	$	-	$	5,491,000
Farm equipment service parts		779,000		-		-		779,000
Steel cutting tools and inserts		-		-		776,000		776,000
Modular buildings		-		1,802,000		-		1,802,000
Modular building lease income		-		32,000		-		32,000
Other		98,000		22,000		8,000		128,000
	$	6,368,000	$	1,856,000	$	784,000	$	9,008,000

	Three Months Ended May 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	4,530,000	$	-	$	-	$	4,530,000
Farm equipment service parts		676,000		-		-		676,000
Steel cutting tools and inserts		-		-		738,000		738,000
Modular buildings		-		1,157,000		-		1,157,000
Modular building lease income		-		-		-		-
Other		110,000		52,000		12,000		174,000
	$	5,316,000	$	1,209,000	$	750,000	$	7,275,000

	Six Months Ended May 31, 2023
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	10,223,000	$	-	$	-	$	10,223,000
Farm equipment service parts		1,409,000		-		-		1,409,000
Steel cutting tools and inserts		-		-		1,574,000		1,574,000
Modular buildings		-		3,402,000		-		3,402,000
Modular building lease income		-		64,000		-		64,000
Other		181,000		32,000		18,000		231,000
	$	11,813,000	$	3,498,000	$	1,592,000	$	16,903,000

	Six Months Ended May 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	8,045,000	$	-	$	-	$	8,045,000
Farm equipment service parts		1,234,000		-		-		1,234,000
Steel cutting tools and inserts		-		-		1,312,000		1,312,000
Modular buildings		-		2,009,000		-		2,009,000
Modular building lease income		-		-		-		-
Other		198,000		68,000		22,000		288,000
	$	9,477,000	$	2,077,000	$	1,334,000	$	12,888,000

The Company offered floorplan terms in its Agricultural Products segment during its Fall of 2021 and 2022 early order program to incentivize customers to stock farm equipment on their lots for fiscal 2022 and fiscal 2023. 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 cash flows compared with historical cash flows.

On May 31, 2023, the Company had approximately $773,000 in receivables on the floorplan program with a due date greater than 30 days compared to $725,000 on May 31, 2022.

Contract Receivables, Contract Assets and Contract Liabilities

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

	May 31, 2023		November 30, 2022
Receivables	$	3,936,000	$	2,722,000
Assets		322,000		451,000
Liabilities		1,345,000		1,157,000

The amount of revenue recognized in the first six months of fiscal 2023 that was included in a contract liability on November 30, 2022 was approximately $1,145,000 compared to $559,000 in the same period of fiscal 2022. The beginning contract receivables, assets and liabilities on December 1, 2021 were approximately $2,663,000; $177,000 and $559,000, respectively.

Net Income (Loss) Per Share of Common Stock

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

Basic and diluted net income (loss) per share have been computed based on the following as of May 31, 2023 and May 31, 2022:

	For the Three Months Ended
	May 31, 2023		May 31, 2022
Numerator for basic and diluted net income per share:

Net income	$	306,664	$	175,353

Denominator:
For basic net income per share - weighted average common shares outstanding		5,014,050		4,629,331
Effect of dilutive stock options		-		-
For diluted net income per share - weighted average common shares outstanding		5,014,050		4,629,331


Net Income per share - Basic:
Net Income per share	$	0.06	$	0.04

Net Income per share - Diluted:
Net Income per share	$	0.06	$	0.04

	For the Six Months Ended
	May 31, 2023		May 31, 2022
Numerator for basic and diluted net income (loss) per share:

Net income (loss)	$	648,874	$	(231,136	)

Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,995,708		4,599,743
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,995,708		4,599,743


Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.13	$	(0.05	)

Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.13	$	(0.05	)

Inventory

Major classes of inventory are:

	May 31, 2023			November 30, 2022
Raw materials	$	9,387,172		$	8,700,719
Work in process		343,206			624,781
Finished goods		3,328,295			3,029,099
Total Gross Inventory	$	13,058,673		$	12,354,599
Less: Reserves		(1,676,462	)		(1,743,047	)
Net Inventory	$	11,382,211		$	10,611,552

Accrued Expenses

Major components of accrued expenses are:

	May 31, 2023		November 30, 2022
Salaries, wages, and commissions	$	691,905	$	755,708
Accrued warranty expense		253,444		193,301
Other		289,313		334,195
	$	1,234,662	$	1,283,204

Assets Held for Lease

Major components of assets held for lease are:

	May 31, 2023		November 30, 2022
Modular Buildings	$	209,172	$	400,325
Total assets held for lease	$	209,172	$	400,325

There were approximately $32,000 and $64,000 rents recognized from assets held for lease included in sales on the Condensed Consolidated Statements of Operations during the three and six months ended May 31, 2023, respectively, compared to zero for the same periods ending May 31, 2022.

The Company has $37,606 of future minimum lease receipts expected to be recognized in fiscal 2023 from assets held for lease as of May 31, 2023.

The Company recognized a gain of $114,156 on the sale of an asset held for lease in the three and six months ended May 31, 2023 compared to zero for the same periods ending May 31, 2022.

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. The accrued warranty balance is included in accrued expenses as shown in Note 7 “Accrued Expenses.” Changes in the Company’s product warranty liability for the three and six months ended May 31, 2023 and May 31, 2022 are as follows:

	Three Months Ended
	May 31, 2023			May 31, 2022
Balance, beginning	$	194,464		$	115,062
Provision charged to expense		115,739			73,088
Less amounts charged-off		(56,759	)		(98,601	)
Balance, ending	$	253,444		$	89,549

	Six Months Ended
	May 31, 2023			May 31, 2022
Balance, beginning	$	193,301		$	202,850
Provision charged to expense		231,335			94,712
Less amounts charged-off		(171,192	)		(208,013	)
Balance, ending	$	253,444		$	89,549

10)

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”) with Bank Midwest. On May 31, 2023, the balance of the Line of Credit was $4,704,059 with $295,941 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 May 31, 2023, 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 1.25% 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 9.50% per annum. The Line of Credit matures on March 30, 2024 and requires monthly interest-only payments. The Line of Credit is governed by the terms of a Promissory Note, dated March 28, 2023, 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 interest rate was reset to a fixed rate of 7% based on prime plus 0.75% on the reset date. The interest rate floor is set at 4.15% per annum and the interest rate may only be adjusted by Bank Midwest once every five years. Monthly payments of $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 $289,797 on the maturity date of May 15, 2027. Any unpaid principal amount borrowed on the Roof Term Loan accrues interest at a rate of 7.0% 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 and by a Change of Terms Agreement dated March 30, 2023 which fixed the interest rate terms of the original Promissory Note.

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 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, were due monthly beginning December 18, 2022 (thirty months from the date of the EIDLs) and December 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 30 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 subordinate to Bank Midwest’s security interest. 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.

On June 7, 2023 the Company announced it will perform runoff operations of the Tools business and proceed with an orderly liquidation of the Tools segment assets. The Company will be required to pay the balance of the EIDL loan associated with the Tools segment upon liquidation and dissolution of the business. The principal balance of this loan was $162,388 at May 31, 2023. The Company will also be required to pay off the balance of the Bank Midwest Roof Loan in the event the real estate is sold for the Tools segment. The principal balance of this loan at May 31, 2023 is $342,132.

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

	May 31, 2023		November 30, 2022
Bank Midwest loan payable in monthly installments of $19,648 including interest at 7.00%, due October 1, 2037	$	2,123,271	$	2,165,554
Bank Midwest loan payable in monthly installments of $2,972 including interest at 7.00%, due May 15, 2027		342,132		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		162,388		163,793
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		162,373		163,728
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		162,227		163,912
Total term debt	$	2,952,391	$	3,001,919
Less current portion of term debt		106,305		97,678
Term debt, excluding current portion	$	2,846,086	$	2,904,241

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

Year	Amount
2023	$	60,485
2024		111,753
2025		120,190
2026		128,691
2027		420,029
2028 and thereafter		2,111,243
	$	2,952,391

11)

Income Taxes

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

The Company has net operating losses and tax credits that are expected to offset 100% of its 2023 fiscal year tax liability and does not expect to have significant cash tax cost in the near future.

12)

Related Party Transactions

During the three and six months ended May 31, 2023, and May 31, 2022, the Company did not recognize any revenues from transactions with a related party, and no amounts in accounts receivable balances were due from a related party. From time to time, the Company purchases various supplies from related parties, which are companies in which Marc McConnell, the Chairman of the Company’s Board of Directors, has an ownership interest and also serves as President. J. Ward McConnell Jr.’s estate, the J. Ward McConnell, Jr. Living Trust, is paid a monthly fee to guarantee a portion of the Company’s term debt in accordance with the USDA guarantee obtained on the Company’s term debt. In the three and six months ended May 31, 2023, the Company recognized $3,893 and $8,063 of expense for transactions with related parties, respectively, compared to $6,203 and $15,552 for the three and six months ended May 31, 2022. As of May 31, 2023, accrued expenses contained a balance of $1,326 owed to a related party compared to $1,423 on May 31, 2022.

13)

Leases

The components of operating leases on the Condensed Consolidated Balance Sheets on May 31, 2023 and November 30, 2022 were as follows:

	May 31, 2023		November 30, 2022
Operating lease right-of-use assets (in other assets)	$	29,111		34,931

Current portion of operating lease liabilities (in accrued expenses)	$	10,315		10,915
Long-term portion of operating lease liabilities		18,796		24,016
Total operating lease liabilities	$	29,111		34,931

The components of finance leases on the Condensed Consolidated Balance Sheets on May 31, 2023 and November 30, 2022 were as follows:

	May 31, 2023		November 30, 2022
Finance lease right-of-use assets (net of amortization in other assets)	$	581,456	$	540,052

Current portion of finance lease liabilities	$	236,385	$	170,835
Long-term portion of finance lease liabilities		844,279		602,131
Total finance lease liabilities	$	1,080,664	$	772,966

14)

Equity Incentive Plan and Stock Based Compensation

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

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

Shares issued under the 2020 Plan for the three months ended May 31, 2023 and 2022 are as follows:

	For the Three Months Ended
	May 31, 2023		May 31, 2022
Shares issued to directors (immediate vesting)		10,000		10,000
Shares issued to directors, employees, and consultants (three year vesting)		-		-
Total shares issued		10,000		10,000

	For the Six Months Ended
	May 31, 2023		May 31, 2022
Shares issued to directors (immediate vesting)		15,000		15,000
Shares issued to directors, employees, and consultants (three year vesting)		82,250		94,500
Unvested shares forfeit upon termination		-		(8,333	)
Total shares issued		97,250		101,167

15)

Common Stock Purchase Agreement

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

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”). The Company shares, including the Commitment Shares, were 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.

As required by the Purchase Agreement, 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 believed 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 $134,000 of expense related to equity issuance in the six months ended May 31, 2022 in the form of 20,000 commitment shares valued at approximately $117,000, attorney fees for the negotiation and execution of the Purchase Agreement and the preparation and filing of the registration statement. These equity issuance costs are included in prepaid assets at May 31, 2022 and reduced proceeds received under the common stock purchase agreement in fiscal 2022.

Below is a summary of shares purchased by Alumni Capital under the Purchase Agreement:

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

16)

Disclosures About the Fair Value of Financial Instruments

The fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. On May 31, 2023 and November 30, 2022, the carrying amount approximated fair value for cash, accounts receivable, accounts payable, notes payable to bank, finance lease liabilities and other current and long-term liabilities. The carrying amounts of current assets and liabilities approximate fair value because of the short maturity of these instruments. The fair value of the finance lease liabilities also approximate recorded value as that is based on discounting future cash flows at rates implicit in the lease. The rates implicit in the lease do not materially differ from current market rates. The fair value of the Company’s term loans payable also approximates recorded value because the interest rates charged under the loan terms are not substantially different from current interest rates.

17)

Segment Information

As of May 31, 2023, the Company has three reportable segments: Agricultural Products, Modular Buildings and Tools. The Agricultural Products segment manufactures and sells farm equipment and related replacement parts under the Art’s-Way Manufacturing label. The Modular Buildings segment manufactures and installs modular buildings for various uses, commonly animal containment and research laboratories. The Tools segment manufactures steel cutting tools and inserts. On June 7, 2023, the Company announced it will discontinue its Tools segment as described in “Item 1 - Notes to Condensed Consolidated Financial Statements - Note 1 Description of the Company.”

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

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

	Three Months Ended May 31, 2023
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	6,368,000	$	1,856,000	$	784,000		$	9,008,000
Income (loss) from operations		316,000		117,000		(14,000	)	$	419,000
Income (loss) before tax		197,000		220,000		(29,000	)	$	388,000
Total Assets		19,776,000		3,399,000		2,295,000		$	25,470,000
Capital expenditures		249,000		78,000		-		$	327,000
Depreciation & Amortization		125,000		81,000		44,000		$	250,000

	Three Months Ended May 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	5,316,000	$	1,209,000		$	750,000		$	7,275,000
Income (loss) from operations		447,000		(86,000	)		(40,000	)	$	321,000
Income (loss) before tax		366,000		(93,000	)		(51,000	)	$	222,000
Total Assets		18,389,000		2,998,000			2,520,000		$	23,907,000
Capital expenditures		321,000		10,000			4,000		$	335,000
Depreciation & Amortization		117,000		33,000			32,000		$	182,000

	Six Months Ended May 31, 2023
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	11,813,000	$	3,498,000	$	1,592,000		$	16,903,000
Income (loss) from operations	$	818,000	$	159,000	$	(9,000	)	$	967,000
Income (loss) before tax	$	604,000	$	257,000	$	(39,000	)	$	822,000
Total Assets	$	19,776,000	$	3,399,000	$	2,295,000		$	25,470,000
Capital expenditures	$	501,000	$	123,000	$	16,000		$	640,000
Depreciation & Amortization	$	250,000	$	158,000	$	81,000		$	489,000

	Six Months Ended May 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	9,477,000	$	2,077,000		$	1,334,000		$	12,888,000
Income (loss) from operations	$	318,000	$	(308,000	)	$	(126,000	)	$	(116,000	)
Income (loss) before tax	$	180,000	$	(323,000	)	$	(150,000	)	$	(293,000	)
Total Assets	$	18,389,000	$	2,998,000		$	2,520,000		$	23,907,000
Capital expenditures	$	474,000	$	24,000		$	11,000		$	509,000
Depreciation & Amortization	$	218,000	$	67,000		$	65,000		$	350,000

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

18)

Subsequent Events

Management evaluated all other activity of the Company and concluded that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements other than the announcement to discontinue the Tools segment in “Item 1 - Notes to Condensed Consolidated Financial Statements - Note 1 Description of the Company.”

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

Forward-Looking Statements

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q (this “report”) and the audited consolidated financial statements and related notes thereto included in Part II, Item 8, “Financial Statements and Supplementary Data,” as well as Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended November 30, 2022. Some of the statements in this report may be forward-looking statements that reflect our current view on future events, future business, industry and other conditions, our future performance, and our plans and expectations for future operations and actions. In some cases you can identify forward-looking statements by the use of words such as “may,” “should,” “anticipate,” “believe,” “expect,” “plan,” “future,” “intend,” “could,” “estimate,” “predict,” “hope,” “potential,” “continue,” or the negative of these terms or other similar expressions. Many of these forward-looking statements are located in this report under Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but they may appear in other sections as well. Forward-looking statements in this report generally relate to: (i) our expectations with respect to order backlog; (ii) our beliefs regarding the sufficiency of working capital and cash flows; (iii) our expectation that we will continue to be able to renew or obtain financing on reasonable terms when necessary as well as our continued positive relationship with our creditors and lenders; (iv) our beliefs regarding production capabilities; (v) our intentions and beliefs relating to our costs, business strategies, and future performance; (vi) our beliefs regarding the impact and potential actions with respect to discontinuing our Tools segment, including without limitation, beliefs about customer interest in purchasing inventory or other assets, expenses to be incurred in connection with such discontinuation, potential cash generated in connection with such discontinuation activities, staffing needed and timing of runoff activities, and fulfillment of sales orders; (vii) our beliefs regarding the implementation of our accounting ERP system; (viii) our expected financial results, including without limitation, our expected results for the Modular and Tools segments; and (ix) our expectations concerning our primary capital and cash flow needs.

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

Critical Accounting Policies

Our critical accounting policies involving the more significant judgments and assumptions used in the preparation of our financial statements as of May 31, 2023 remain unchanged from November 30, 2022. Disclosure of these critical accounting policies is incorporated by reference from Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended November 30, 2022.

Results of Operations

Net Sales and Cost of Sales

Our consolidated corporate sales for the three- and six-month periods ended May 31, 2023 were $9,008,000 and $16,903,000, respectively, compared to $7,275,000 and $12,888,000 during the same respective periods in fiscal 2022, a $1,733,000, or 23.8%, increase for the three months and a $4,015,000, or 31.1%, increase for the six months. We saw increased revenue and demand in all three business segments for the three and six months ended May 31, 2023. Consolidated gross margin for the three-month period ended May 31, 2023 was 25.9% compared to 30.1% for the same period in fiscal 2022. Consolidated gross margin for the six-month period ended May 31, 2023 was 27.7% compared to 26.3% for the same period in fiscal 2022.

Our second quarter sales in our Agricultural Products segment were $6,368,000 compared to $5,316,000 during the same period of fiscal 2022, an increase of $1,052,000, or 19.8%. Our year-to-date agricultural product sales were $11,813,000 compared to $9,477,000 during the same period in fiscal 2022, an increase of $2,336,000, or 24.6%. Successful execution of our production plan in fiscal 2023 has led to strong increases in the revenue for our beet, grinders, manure spreaders and bale processing equipment year on year. While some supply chain challenges still exist, proper planning has allowed us to overcome most of these issues. We continue to see improved throughput in our production facility due to automation advances including the utilization of robotic weld cells and from the alleviation of bottleneck constraints with the addition of a high-definition plasma cutter. Our demand has remained steady for the first six months of fiscal 2023 as commodity prices continue to be strong and have not seen an indication that we will see a pullback in fiscal 2023 at this time. Gross margin for our agricultural products segment for the three-month period ended May 31, 2023 was 28.3% compared to 35.5% for the same period in fiscal 2022. Gross margin for our agricultural products segment for the six-month period ended May 31, 2023 was 31.0% compared to 31.3% for the same period in fiscal 2022. Our product mix, primarily beet harvesting equipment, is the reason our gross profit is down for the three months ending May 31, 2023 compared to the same period in fiscal 2022. Our beet harvesting equipment is sold at a lower margin than some of our product lines and was a significant portion of our revenue for the three months ended May 31, 2023. Our beet production run typically occurs in the third quarter of our fiscal year, however, we were able to move our production timeline up in fiscal 2023 to better accommodate our customers’ needs.

Our second quarter sales in our Modular Buildings segment were $1,856,000 compared to $1,209,000 for the same period in fiscal 2022, an increase of $647,000, or 53.5%. Our year-to-date sales in our Modular Buildings segment were $3,498,000 compared to $2,077,000 for the same period in fiscal 2022, an increase of $1,421,000, or 68.4%. While fiscal 2023 sales are up significantly, the first six months to fiscal 2022 were unusually slow for this business segment. Our sales team has capitalized on the strong commodity prices in the agriculture sector over the past two fiscal years. Agricultural building sales made up over 50% of gross revenues in the Modular Buildings segment in fiscal years 2023 and 2022 compared to less than 10% in fiscal 2021. Coupling the strong agricultural market with a few large research modular contracts has made for a successful first six months of fiscal 2023. Gross margin for the three- and six-month periods ended May 31, 2023 was 20.7% and 20.2%, respectively, compared to 15.8% and 11.2% for the same respective periods in fiscal 2022. Our gross margin in the three- and six-month periods of fiscal 2023 has increased due to additional markup we enacted to cover rising costs of overhead from inflationary forces. The increased sales of the Modular Buildings segment also has made it easier to absorb our fixed overhead costs.

As announced in a press release on June 7, 2023, we are discontinuing our Tools segment with the last day of normal operations on July 14, 2023. Our team is working through remaining orders that can be fulfilled without additional inventory purchases and will begin an orderly liquidation process in the weeks following production shutdown. The liquidation process will include sale of remaining inventory, auctioning off machinery and equipment and the sale of real estate. The Company estimates cash generation of approximately $950,000 from the liquidation of receivables, inventory and other assets (excluding real estate) to fund estimated liquidation costs of $200,000. These numbers assume the majority of open sales orders at June 7, 2023 are fulfilled before production ceases on July 14, 2023. Our Tools segment had sales of $784,000 and $1,592,000 during the three- and six-month periods ended May 31, 2023, respectively, compared to $750,000 and $1,334,000 for the same respective periods in fiscal 2022, a 4.5% increase and a 19.3% increase, respectively. Approximately $95,000 of the increased sales for the three months ended May 31, 2023 were related to an inventory buyback for an OEM customer. This customer is required to buy back any inventory we have on hand when we shut down, which was approximately $162,000 as of May 31, 2023.

Expenses

Our second quarter consolidated selling expenses were $577,000 compared to $631,000 for the same period in fiscal 2022. Our year-to-date selling expenses were $1,172,000 in fiscal 2023 compared to $1,118,000 for the same period in fiscal 2022. We saw a decrease in selling expenses for three months ended May 31, 2023 compared to fiscal 2022 due to less marketing staff in fiscal 2023 and from a decrease in commissions as we leveraged internal sales representatives to sell our beet equipment, which made up a large percentage of our Q2 fiscal 2023 sales. For the six months ended May 31, 2023, our selling expenses are up due to the large commissionable sales increases in our Modular Building and Agricultural Products segments. Selling expenses as a percentage of sales were 6.4% for the three and 6.9% six-month periods ended May 31, 2023, compared to 8.7% for the same respective periods in fiscal 2022.

Consolidated engineering expenses were $140,000 and $269,000 for the three- and six-month periods ended May 31, 2023, respectively, compared to $144,000 and $278,000 for the same respective periods in fiscal 2022. The decrease in engineering expenses year on year is due to decreased participation on the Company health plan in fiscal 2023. Engineering expenses as a percentage of sales were 1.6% for the three- and six-month periods ended May 31, 2023, respectively, compared to 2.0% and 2.2% for the same respective periods in fiscal 2022.

Consolidated administrative expenses for the three- and six-month periods ended May 31, 2023 were $1,195,000 and $2,273,000, respectively, compared to $1,097,000 and $2,105,000 for the same respective periods in fiscal 2022. Administrative expenses as a percentage of sales were 13.3% and 13.4% for the three- and six-month periods ended May 31, 2023, respectively, compared to 15.1% and 16.3% for the same respective periods in fiscal 2022. While administrative expenses are up period over period, they have decreased steadily as a percentage of sales. The increased overall amount of administrative expenses is due primarily to addition of staff in accounting and quality assurance and additional expense related to the implementation of a new accounting ERP system, which is expected to go-live date in the second half of fiscal 2023.

Net income (loss)

Consolidated net income was $307,000 for the three-month period ended May 31, 2023, compared to $175,000 for the same period in fiscal 2022. Our consolidated net income for the six months ended May 31, 2023, was $649,000 compared to a net loss of $(231,000) in the same period in fiscal 2022. Our Agricultural Products and Modular Buildings segments recorded profitability for the three- and six-months ending May 31, 2023. We attribute the positive results in fiscal 2023 to strong demand for our products paired with successful production execution.

Order Backlog

The consolidated order backlog net of discounts as of July 7, 2023 was $10,359,000 compared to $10,378,000 as of July 7, 2022. The Agricultural Products segment order backlog was $6,499,000 as of July 7, 2023 compared to $8,538,000 in fiscal 2022. The decrease in our agricultural products segment is due to the ability of our production crew to finish our beet equipment run in the early summer months of fiscal 2023, which led to large revenue increases for the six months ended May 31, 2023. The backlog for the Modular Buildings segment was $3,480,000 as of July 7, 2023, compared to $1,056,000 in fiscal 2022, an increase of 229%. The Modular Buildings segment has a large research project in back log as of July 7, 2023 along with a steady mix of agriculture buildings. The backlog for the Tools segment was $380,000 as of July 7, 2023 compared to $783,000 in fiscal 2022. The decrease in the Tools segment backlog is due to our team turning down incoming sales orders after the announcement to discontinue production on July 14, 2023. Our order backlog is not necessarily indicative of future revenue to be generated from such orders due to the possibility of order cancellations and dealer discount arrangements we may enter into from time to time.

Liquidity and Capital Resources

Our primary source of funds for the six months ended May 31, 2023 was cash generated by financing activities. We utilized our line of credit and proceeds from a finance lease to increase our inventory levels to meet continued customer demand and combat supply chain delays. We also utilized our floor plan program to generate additional sales for the first six months of fiscal 2023 which led to a cash outflow of approximately $1.2 million from the increase of receivables. Our contracts in progress in the Modular Buildings segment generated approximately $583,000 in cash in the first six months of fiscal 2023. We expect our primary capital needs for the remainder of fiscal 2023 to relate to operating costs, purchases of equipment that improve our operations, and the retirement of debt. We expect the liquidation of our Tools segment, collection of accounts receivable and reduction of inventory levels to provide additional cash that we expect will be used for the above capital needs and debt reduction.

We have a $5,000,000 revolving line of credit with Bank Midwest that, as of May 31, 2023, had an outstanding principal balance of $4,704,059. This line of credit was renewed on March 30, 2023 and is scheduled to mature on March 30, 2024.

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The persons serving as our principal executive officer and principal financial officer have evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period subject to this report. Based on this evaluation, the persons serving as our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of May 31, 2023. Our management has concluded that the consolidated financial statements included in this report present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States.

Changes in Internal Control over Financial Reporting

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

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

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

Item 1A. Risk Factors.

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

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

The following table presents the information with respect to purchases made by us of our common stock during the second quarter of fiscal 2023:

	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs
March 1 to March 31, 2023		19,649	$	2.22		N/A		N/A
April 1 to April 30, 2023		-	$	-		N/A		N/A
May 1 to May 31, 2023		-	$	-		N/A		N/A
Total		19,649	$	2.22

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

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. 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	Promissory Note, between Bank Midwest and Art’s-Way Manufacturing Co., Inc., dated March 28, 2022 – filed herewith.
10.2	Change in Terms Agreement - Promissory Note, between Bank Midwest and Art’s-Way Manufacturing Co., Inc., dated March 29, 2022 – filed herewith.
31.1	Certificate of Chief Executive Officer pursuant to 17 CFR 13a-14(a) – filed herewith.
31.2	Certificate of Chief Financial Officer pursuant to 17 CFR 13a-14(a) – filed herewith.
32.1	Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 - filed herewith.
32.2	Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 - filed herewith.
101	The following materials from this report, formatted in iXBRL (Inline Extensible Business Reporting Language) are filed herewith: (i) condensed consolidated balance sheets, (ii) condensed consolidated statement of operations, (iii) condensed consolidated statements of cash flows, and (iv) the notes to the condensed consolidated financial statements.
104	Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101).

SIGNATURES

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

	ART’S-WAY MANUFACTURING CO., INC.



Date: July 13, 2023	By: /s/ David A. King
	David A. King
	President and Chief Executive Officer

Date: July 13, 2023	By: /s/ Michael W. Woods
	Michael W. Woods
	Chief Financial Officer

Exhibit 10.1

*0339+0000720+040010122925*

PROMISSORY NOTE

Principal

$5,000,000.00

Loan Date

03-29-2023

Maturity

03-30-2024

Loan No

040010122925

Call / Coll

RC-C 4a / 43

Account

720

Officer

NRS

Initials

References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing "***" has been omitted due to text length limitations.

Borrower:

Art's-Way Manufacturing Co., Inc.

5556 Highway 9

Armstrong, IA 50514-7566

Lender:

Bank Midwest Armstrong Branch PO Box 136

500 6th Street

Armstrong, IA 50514

Principal Amount: $5,000,000.00

Date of Note: March 29, 2023

PROMISE TO PAY. Art's-Way Manufacturing Co., Inc. ("Borrower") promises to pay to Bank Midwest ("Lender"), or order, in lawful money of the United States of America, the principal amount of Five Million & 00/100 Dollars ($5,000,000.00) or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on March 30, 2024. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning March 31, 2023, with all subsequent interest payments to be due on the same day of each month after that. Unless otherwise agreed or required by applicable law, payments will be applied first to any escrow or reserve account payments as required under any mortgage, deed of trust, or other security instrument or security agreement securing this Note; then to any accrued unpaid interest; then to principal; and then to any late charges. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. All payments must be made in U.S. dollars and must be received by Lender consistent with any written payment instructions provided by Lender. If a payment is made consistent with Lender's payment instructions but received after 5:30 PM Central Time, Lender will credit Borrower's payment on the next business day.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the Wall Street Journal Prime Rate as published in the Wall Street Journal Money Rates section (the "Index"). The Index is not necessarily the lowest rate charged by Lender on its loans. Lender will tell Borrower the current Index rate upon Borrower's request. The interest rate change will not occur more often than each one (1) day. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 8.000% per annum. Interest on the unpaid principal balance of this Note will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using a rate of 1.250 percentage points over the Index (the "Margin"), adjusted if necessary for any minimum and maximum rate limitations described below, resulting in an initial rate of 9.250% per annum based on a year of 360 days. If Lender determines, in its sole discretion, that the Index has become unavailable or unreliable, either temporarily, indefinitely, or permanently, during the term of this Note, Lender may amend this Note by designating a substantially similar substitute index. Lender may also amend and adjust the Margin to accompany the substitute index. The change to the Margin may be a positive or negative value, or zero. In making these amendments, Lender may take into consideration any then-prevailing market convention for selecting a substitute index and margin for the specific Index that is unavailable or unreliable. Such an amendment to the terms of this Note will become effective and bind Borrower 10 business days after Lender gives written notice to Borrower without any action or consent of the Borrower. NOTICE: Under no circumstances will the interest rate on this Note be less than 4.250% per annum or more than the maximum rate allowed by applicable law.

INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using this method.

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, early payments will reduce the principal balance due. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: Bank Midwest, Armstrong Branch, PO Box 136, 500 6th Street, Armstrong, IA 50514.

LATE CHARGE. If a payment is 30 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled payment or $8.50, whichever is greater.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the total sum due under this Note will continue to accrue interest at the interest rate under this Note. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

DEFAULT. Each of the following shall constitute an event of default ("Event of Default") under this Note:

Payment Default. Borrower fails to make any payment when due under this Note.

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Loan No: 040010122925

PROMISSORY NOTE

(Continued)

Page 2

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired.

Insecurity. Lender in good faith believes itself insecure.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including without limitation all attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.

GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of Iowa without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Iowa.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on the indebtedness against any and all such accounts.

COLLATERAL. Borrower acknowledges this Note is secured by any and all security documents, including, but not limited to, all Security Agreements, Supplemental Security Agreements, all Guaranties, Real Estate Mortgages and Assignment of Rents.

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested either orally or in writing by Borrower or as provided in this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. The following person or persons are authorized to request advances and authorize payments under the line of credit until Lender receives from Borrower, at Lender's address shown above, written notice of revocation of such authority: David King, CEO of Art's-Way Manufacturing Co., Inc.; and Michael Woods, CFO of Art's-Way Manufacturing Co., Inc. Borrower agrees to be liable for all sums either: (A) advanced in accordance with the instructions of an authorized person or (B) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (A) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (B) Borrower or any guarantor ceases doing business or is insolvent; (C) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; (D) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (E) Lender in good faith believes itself insecure.

PURPOSE OF LOAN. The specific purpose of this loan is: 2023 Operating Line of Credit. PRIOR NOTE. Renewal of Loan#40010106019.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and assigns, and shall inure to the benefit of Lender and its successors and assigns.

SHARING CUSTOMER INFORMATION WITH AFFILIATES. Borrower acknowledges and agrees that Lender may share Borrower's financial information with any affiliate of Bank Midwest. Lender agrees that it will require those affiliates to maintain the privacy of such information.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several.

Loan No: 040010122925

PROMISSORY NOTE

(Continued)

Page 3

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.

BORROWER:

ART'S-WAY MANUFACTURING CO., INC.

By:		By:
	David King, CEO of Art's-Way Manufacturing Co., Inc.		Michael Woods, CFO of Art's-Way Manufacturing Co., Inc.

LENDER:

BANK MIDWEST

X
	Nicole Simpson, Market Leader/VP Ag-Comm Lender

Exhibit 10.2

*0339+0000720+040010109647*

CHANGE IN TERMS AGREEMENT

Principal

$350,000.00

Loan Date

05-13-2022

Maturity

05-15-2027

Loan No

040010109647

Call / Coll

RC-C 4a / 43

Account

720

Officer

NRS

Initials

References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing "***" has been omitted due to text length limitations.

Borrower:

Art's-Way Manufacturing Co., Inc.

PO Box 288

Armstrong, IA 50514-0288

Lender:

Bank Midwest Armstrong Branch PO Box 136

500 6th Street

Armstrong, IA 50514

Principal Amount: $350,000.00

Date of Agreement: March 29, 2023

DESCRIPTION OF EXISTING INDEBTEDNESS. Promissory note# 40010109647 dated 5/13/2022 in the amount of $350,000.00 with a current balance of $343,999.64.

DESCRIPTION OF CHANGE IN TERMS. Loan is being modified to change the following loan terms:

1).

Interest rate is changed to 7.00%

2).

All other terms remain the same.

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.

BORROWER:

ART'S-WAY MANUFACTURING CO., INC.

By:		By:
	David King, CEO of Art's-Way Manufacturing Co., Inc.		Michael Woods, CFO of Art's-Way Manufacturing Co., Inc.

LENDER:

BANK MIDWEST

X
	Nicole Simpson, Market Leader/VP Ag-Comm Lender

Exhibit 31.1

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

(SECTION 302 CERTIFICATION)

I, David A. King, certify that:

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

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

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

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:

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;

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;

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

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):

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

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:	July 13, 2023	/s/ David A. King
		David A. King
		President and Chief Executive Officer

Exhibit 31.2

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

(SECTION 302 CERTIFICATION)

I, Michael W. Woods, certify that:

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

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

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

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):

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:	July 13, 2023	/s/ Michael W. Woods
		Michael W. Woods
		Chief Financial Officer

Exhibit 32.1

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

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

In connection with the quarterly report on Form 10-Q of Art’s-Way Manufacturing Co., Inc. (the “Company”) for the fiscal quarter ended May 31, 2023, 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:

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

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


Date:	July 13, 2023	/s/ David A. King
		David A. King
		President and Chief Executive Officer

Exhibit 32.2

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

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

In connection with the quarterly report on Form 10-Q of Art’s-Way Manufacturing Co., Inc. (the “Company”) for the fiscal quarter ended May 31, 2023, 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:

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

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


Date:	July 13, 2023	/s/ Michael W. Woods
		Michael W. Woods
		Chief Financial Officer

Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	May 31, 2023	Jul. 12, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	May 31, 2023
Document Transition Report	false
Entity File Number	000-05131
Entity Registrant Name	ART’S-WAY MANUFACTURING CO., INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	42-0920725
Entity Address, Address Line One	5556 Highway 9
Entity Address, City or Town	Armstrong
Entity Address, State or Province	IA
Entity Address, Postal Zip Code	50514
City Area Code	712
Local Phone Number	208-8467
Title of 12(b) Security	Common stock $0.01 par value
Trading Symbol	ARTW
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		5,018,573
Entity Central Index Key	0000007623
Current Fiscal Year End Date	--11-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	May 31, 2023	Nov. 30, 2022
Current assets:
Cash	$ 2,298	$ 5,055
Accounts receivable-customers, net of allowance for doubtful accounts of $36,684 and $34,699 in 2023 and 2022, respectively	3,936,349	2,722,298
Inventories, net	11,382,211	10,611,552
Cost and profit in excess of billings	322,339	450,906
Other current assets	220,380	343,618
Total current assets	15,863,577	14,133,429
Property, plant, and equipment, net	6,293,148	6,178,917
Assets held for lease, net	209,172	400,325
Deferred income taxes, net	2,438,182	2,605,395
Other assets	666,258	630,248
Total assets	25,470,337	23,948,314
Current liabilities:
Accounts payable	2,257,058	2,630,966
Customer deposits	561,820	828,565
Billings in excess of cost and profit	782,733	328,041
Income taxes payable	5,000	3,500
Accrued expenses	1,234,662	1,283,204
Line of credit	4,704,059	3,924,500
Current portion of finance lease liabilities	236,385	170,835
Current portion of long-term debt	106,305	97,678
Total current liabilities	9,888,022	9,267,289
Long-term liabilities
Long-term portion of operating lease liabilities	18,796	24,016
Long-term portion of finance lease liabilities	844,279	602,131
Long-term debt, excluding current portion	2,846,086	2,904,241
Total liabilities	13,597,183	12,797,677
Stockholders’ equity:
Common stock – $0.01 par value. Authorized 9,500,000 shares on May 31, 2023 and November 30, 2022; issued 5,110,921 on May 31, 2023 and 5,013,671 on November 30, 2022	51,109	50,137
Additional paid-in capital	4,683,838	4,547,172
Retained earnings	7,403,158	6,754,284
Treasury stock, at cost (72,699 shares in 2023 and 64,574 in 2022)	(264,951)	(200,956)
Total stockholders’ equity	11,873,154	11,150,637
Total liabilities and stockholders’ equity	$ 25,470,337	$ 23,948,314

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	May 31, 2023	Nov. 30, 2022
Accounts Receivable, Allowance for Credit Loss, Current	$ 36,684	$ 34,699
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	500,000	500,000
Preferred stock, authorized (in shares)	500,000	500,000
Preferred Stock, Shares Issued (in shares)	0	0
Preferred Stock, Shares Outstanding (in shares)	0	0
Common Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares Authorized (in shares)	9,500,000	9,500,000
Common Stock, Shares, Issued (in shares)	5,110,921	5,013,671
Treasury Stock, Common, Shares (in shares)	92,348	64,574

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2023	May 31, 2022
Sales	$ 9,007,874	$ 7,275,353	$ 16,902,659	$ 12,888,420
Cost of goods sold	6,662,313	5,082,195	12,222,882	9,503,119
Gross profit	2,330,654	2,193,158	4,679,777	3,385,301
Expenses
Engineering	140,497	143,943	268,793	278,014
Selling	576,836	630,772	1,171,101	1,117,928
General and administrative	1,194,711	1,097,350	2,272,686	2,105,143
Total expenses	1,912,044	1,872,065	3,712,580	3,501,085
Income (loss) from operations	418,610	321,093	967,196	(115,784)
Other income (expense):
Interest expense	(163,021)	(97,392)	(290,527)	(174,096)
Other	132,513	(1,454)	144,905	(3,005)
Total other income (expense)	(30,428)	(98,846)	(145,622)	(177,101)
Income (loss) before income taxes	388,183	222,247	821,574	(292,885)
Income tax expense	81,518	46,894	172,700	(61,749)
Net Income (loss)	$ 306,664	$ 175,353	$ 648,874	$ (231,136)

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock, Common [Member]	Total
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)	101,167			20,042
Stock based compensation	$ 1,012	156,453	0	$ (92,432)	65,033
Common stock purchase agreement (in shares)	20,000
Common stock purchase agreement	$ 200	117,000			117,200
Net income (loss)	$ 0	0	(231,136)	$ 0	(231,136)
Balance (in shares) at May. 31, 2022	4,704,671			64,574
Balance at May. 31, 2022	$ 47,047	4,034,102	6,425,351	$ (200,956)	10,305,544
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
Stock based compensation (in shares)	97,250			27,774
Stock based compensation	$ 972	136,666	0	$ (63,995)	73,643
Net income (loss)	$ 0	0	648,874	$ 0	648,874
Balance (in shares) at May. 31, 2023	5,110,921			92,348
Balance at May. 31, 2023	$ 51,109	$ 4,683,838	$ 7,403,158	$ (264,951)	$ 11,873,154

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	May 31, 2023	May 31, 2022
Cash flows from operations:
Net income (loss)	$ 648,874	$ (231,136)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock based compensation	137,638	157,465
Decrease in obsolete inventory reserves	(25,899)	(197,613)
Gain on disposal of property, plant, and equipment	(97,616)	3,971
Depreciation and amortization expense	488,806	350,435
Accrued interest on deferred debt payments	0	8,520
Increase (Decrease) in allowance for doubtful accounts	1,986	(3,127)
Deferred income taxes	167,213	(63,744)
Changes in assets and liabilities:
Accounts receivable	(1,216,037)	185,551
Inventories	(744,760)	(1,479,479)
Other assets	120,158	(619,103)
Accounts payable	(373,908)	787,195
Contracts in progress, net	583,259	(541,716)
Customer deposits	(266,745)	1,541,000
Income taxes payable	1,500	(500)
Accrued expenses	(47,941)	(178,916)
Net cash provided in operating activities	(623,472)	(281,197)
Cash flows from investing activities:
Purchases of property, plant, and equipment	(639,833)	(509,097)
Net proceeds from sale of assets	286,815	9,300
Net cash used in investing activities	(353,018)	(499,797)
Cash flows from financing activities:
Net change in line of credit	779,559	628,695
Proceeds from finance lease obligations	397,536	350,000
Principal payments on finance lease obligations	(89,839)	(38,317)
Repayment of term debt	(49,528)	(47,289)
Cost of equity issuance	0	(17,346)
Repurchases of common stock	(63,995)	(92,432)
Net cash used in financing activities	973,733	783,311
Net increase (decrease) in cash	(2,757)	2,317
Cash at beginning of period	5,055	2,658
Cash at end of period	2,298	4,975
Supplemental disclosures of cash flow information:
Interest	268,997	155,385
Income taxes	2,841	800
Supplemental disclosures of non-cash operating activities:
Right-of-use (ROU) assets acquired (included in other assets)	117,302	389,300
Common stock purchase agreement shares issued (included in other assets)	0	117,200
Amortization of operating lease ROU assets (included in other assets)	$ 5,820	$ 6,349

Note 1 - Description of the Company

6 Months Ended

May 31, 2023

Notes to Financial Statements

Nature of Operations [Text Block]

Description of the Company

Note 2 - Summary of Significant Accounting Policies

6 Months Ended

May 31, 2023

Notes to Financial Statements

Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Statement Presentation

Estimates

Recently Issued Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

Measurement of Credit Losses on Financial Instruments

Note 3 - Disaggregation of Revenue

6 Months Ended

May 31, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Disaggregation of Revenue

	Three Months Ended May 31, 2023
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	5,491,000	$	-	$	-	$	5,491,000
Farm equipment service parts		779,000		-		-		779,000
Steel cutting tools and inserts		-		-		776,000		776,000
Modular buildings		-		1,802,000		-		1,802,000
Modular building lease income		-		32,000		-		32,000
Other		98,000		22,000		8,000		128,000
	$	6,368,000	$	1,856,000	$	784,000	$	9,008,000

	Three Months Ended May 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	4,530,000	$	-	$	-	$	4,530,000
Farm equipment service parts		676,000		-		-		676,000
Steel cutting tools and inserts		-		-		738,000		738,000
Modular buildings		-		1,157,000		-		1,157,000
Modular building lease income		-		-		-		-
Other		110,000		52,000		12,000		174,000
	$	5,316,000	$	1,209,000	$	750,000	$	7,275,000

	Six Months Ended May 31, 2023
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	10,223,000	$	-	$	-	$	10,223,000
Farm equipment service parts		1,409,000		-		-		1,409,000
Steel cutting tools and inserts		-		-		1,574,000		1,574,000
Modular buildings		-		3,402,000		-		3,402,000
Modular building lease income		-		64,000		-		64,000
Other		181,000		32,000		18,000		231,000
	$	11,813,000	$	3,498,000	$	1,592,000	$	16,903,000

	Six Months Ended May 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	8,045,000	$	-	$	-	$	8,045,000
Farm equipment service parts		1,234,000		-		-		1,234,000
Steel cutting tools and inserts		-		-		1,312,000		1,312,000
Modular buildings		-		2,009,000		-		2,009,000
Modular building lease income		-		-		-		-
Other		198,000		68,000		22,000		288,000
	$	9,477,000	$	2,077,000	$	1,334,000	$	12,888,000

On May 31, 2023, the Company had approximately $773,000 in receivables on the floorplan program with a due date greater than 30 days compared to $725,000 on May 31, 2022.

Note 4 - Contract Receivables, Contract Assets and Contract Liabilities

6 Months Ended

May 31, 2023

Notes to Financial Statements

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

Contract Receivables, Contract Assets and Contract Liabilities

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

	May 31, 2023		November 30, 2022
Receivables	$	3,936,000	$	2,722,000
Assets		322,000		451,000
Liabilities		1,345,000		1,157,000

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

6 Months Ended

May 31, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

Net Income (Loss) Per Share of Common Stock

Basic and diluted net income (loss) per share have been computed based on the following as of May 31, 2023 and May 31, 2022:

	For the Three Months Ended
	May 31, 2023		May 31, 2022
Numerator for basic and diluted net income per share:

Net income	$	306,664	$	175,353

Denominator:
For basic net income per share - weighted average common shares outstanding		5,014,050		4,629,331
Effect of dilutive stock options		-		-
For diluted net income per share - weighted average common shares outstanding		5,014,050		4,629,331


Net Income per share - Basic:
Net Income per share	$	0.06	$	0.04

Net Income per share - Diluted:
Net Income per share	$	0.06	$	0.04

	For the Six Months Ended
	May 31, 2023		May 31, 2022
Numerator for basic and diluted net income (loss) per share:

Net income (loss)	$	648,874	$	(231,136	)

Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,995,708		4,599,743
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,995,708		4,599,743


Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.13	$	(0.05	)

Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.13	$	(0.05	)

Note 6 - Inventory

6 Months Ended

May 31, 2023

Notes to Financial Statements

Inventory Disclosure [Text Block]

Inventory

Major classes of inventory are:

	May 31, 2023			November 30, 2022
Raw materials	$	9,387,172		$	8,700,719
Work in process		343,206			624,781
Finished goods		3,328,295			3,029,099
Total Gross Inventory	$	13,058,673		$	12,354,599
Less: Reserves		(1,676,462	)		(1,743,047	)
Net Inventory	$	11,382,211		$	10,611,552

Note 7 - Accrued Expenses

6 Months Ended

May 31, 2023

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Accrued Expenses

Major components of accrued expenses are:

	May 31, 2023		November 30, 2022
Salaries, wages, and commissions	$	691,905	$	755,708
Accrued warranty expense		253,444		193,301
Other		289,313		334,195
	$	1,234,662	$	1,283,204

Note 8 - Assets Held for Lease

6 Months Ended

May 31, 2023

Notes to Financial Statements

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

Assets Held for Lease

Major components of assets held for lease are:

	May 31, 2023		November 30, 2022
Modular Buildings	$	209,172	$	400,325
Total assets held for lease	$	209,172	$	400,325

The Company has $37,606 of future minimum lease receipts expected to be recognized in fiscal 2023 from assets held for lease as of May 31, 2023.

The Company recognized a gain of $114,156 on the sale of an asset held for lease in the three and six months ended May 31, 2023 compared to zero for the same periods ending May 31, 2022.

Note 9 - Product Warranty

6 Months Ended

May 31, 2023

Notes to Financial Statements

Product Warranty Disclosure [Text Block]

Product Warranty

	Three Months Ended
	May 31, 2023			May 31, 2022
Balance, beginning	$	194,464		$	115,062
Provision charged to expense		115,739			73,088
Less amounts charged-off		(56,759	)		(98,601	)
Balance, ending	$	253,444		$	89,549

	Six Months Ended
	May 31, 2023			May 31, 2022
Balance, beginning	$	193,301		$	202,850
Provision charged to expense		231,335			94,712
Less amounts charged-off		(171,192	)		(208,013	)
Balance, ending	$	253,444		$	89,549

Note 10 - Loan and Credit Agreements

6 Months Ended

May 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

10)

Loan and Credit Agreements

Bank Midwest Revolving Lines of Credit and Term Loans

SBA Economic Injury Disaster Loans

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

	May 31, 2023		November 30, 2022
Bank Midwest loan payable in monthly installments of $19,648 including interest at 7.00%, due October 1, 2037	$	2,123,271	$	2,165,554
Bank Midwest loan payable in monthly installments of $2,972 including interest at 7.00%, due May 15, 2027		342,132		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		162,388		163,793
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		162,373		163,728
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		162,227		163,912
Total term debt	$	2,952,391	$	3,001,919
Less current portion of term debt		106,305		97,678
Term debt, excluding current portion	$	2,846,086	$	2,904,241

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

Year	Amount
2023	$	60,485
2024		111,753
2025		120,190
2026		128,691
2027		420,029
2028 and thereafter		2,111,243
	$	2,952,391

Note 11 - Income Taxes

6 Months Ended

May 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

11)

Income Taxes

The Company has net operating losses and tax credits that are expected to offset 100% of its 2023 fiscal year tax liability and does not expect to have significant cash tax cost in the near future.

Note 12 - Related Party Transactions

6 Months Ended

May 31, 2023

Notes to Financial Statements

12)

Related Party Transactions

Note 13 - Leases

6 Months Ended

May 31, 2023

Notes to Financial Statements

Leases [Text Block]

13)

Leases

The components of operating leases on the Condensed Consolidated Balance Sheets on May 31, 2023 and November 30, 2022 were as follows:

	May 31, 2023		November 30, 2022
Operating lease right-of-use assets (in other assets)	$	29,111		34,931

Current portion of operating lease liabilities (in accrued expenses)	$	10,315		10,915
Long-term portion of operating lease liabilities		18,796		24,016
Total operating lease liabilities	$	29,111		34,931

The components of finance leases on the Condensed Consolidated Balance Sheets on May 31, 2023 and November 30, 2022 were as follows:

	May 31, 2023		November 30, 2022
Finance lease right-of-use assets (net of amortization in other assets)	$	581,456	$	540,052

Current portion of finance lease liabilities	$	236,385	$	170,835
Long-term portion of finance lease liabilities		844,279		602,131
Total finance lease liabilities	$	1,080,664	$	772,966

Note 14 - Equity Incentive Plan and Stock Based Compensation

6 Months Ended

May 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

14)

Equity Incentive Plan and Stock Based Compensation

Shares issued under the 2020 Plan for the three months ended May 31, 2023 and 2022 are as follows:

	For the Three Months Ended
	May 31, 2023		May 31, 2022
Shares issued to directors (immediate vesting)		10,000		10,000
Shares issued to directors, employees, and consultants (three year vesting)		-		-
Total shares issued		10,000		10,000

	For the Six Months Ended
	May 31, 2023		May 31, 2022
Shares issued to directors (immediate vesting)		15,000		15,000
Shares issued to directors, employees, and consultants (three year vesting)		82,250		94,500
Unvested shares forfeit upon termination		-		(8,333	)
Total shares issued		97,250		101,167

Note 15 - Common Stock Purchase Agreement

6 Months Ended

May 31, 2023

Notes to Financial Statements

Equity [Text Block]

15)

Common Stock Purchase Agreement

Below is a summary of shares purchased by Alumni Capital under the Purchase Agreement:

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

Note 16 - Disclosures About the Fair Value of Financial Instruments

6 Months Ended

May 31, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

16)

Disclosures About the Fair Value of Financial Instruments

Note 17 - Segment Information

6 Months Ended

May 31, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

17)

Segment Information

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

	Three Months Ended May 31, 2023
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	6,368,000	$	1,856,000	$	784,000		$	9,008,000
Income (loss) from operations		316,000		117,000		(14,000	)	$	419,000
Income (loss) before tax		197,000		220,000		(29,000	)	$	388,000
Total Assets		19,776,000		3,399,000		2,295,000		$	25,470,000
Capital expenditures		249,000		78,000		-		$	327,000
Depreciation & Amortization		125,000		81,000		44,000		$	250,000

	Three Months Ended May 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	5,316,000	$	1,209,000		$	750,000		$	7,275,000
Income (loss) from operations		447,000		(86,000	)		(40,000	)	$	321,000
Income (loss) before tax		366,000		(93,000	)		(51,000	)	$	222,000
Total Assets		18,389,000		2,998,000			2,520,000		$	23,907,000
Capital expenditures		321,000		10,000			4,000		$	335,000
Depreciation & Amortization		117,000		33,000			32,000		$	182,000

	Six Months Ended May 31, 2023
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	11,813,000	$	3,498,000	$	1,592,000		$	16,903,000
Income (loss) from operations	$	818,000	$	159,000	$	(9,000	)	$	967,000
Income (loss) before tax	$	604,000	$	257,000	$	(39,000	)	$	822,000
Total Assets	$	19,776,000	$	3,399,000	$	2,295,000		$	25,470,000
Capital expenditures	$	501,000	$	123,000	$	16,000		$	640,000
Depreciation & Amortization	$	250,000	$	158,000	$	81,000		$	489,000

	Six Months Ended May 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	9,477,000	$	2,077,000		$	1,334,000		$	12,888,000
Income (loss) from operations	$	318,000	$	(308,000	)	$	(126,000	)	$	(116,000	)
Income (loss) before tax	$	180,000	$	(323,000	)	$	(150,000	)	$	(293,000	)
Total Assets	$	18,389,000	$	2,998,000		$	2,520,000		$	23,907,000
Capital expenditures	$	474,000	$	24,000		$	11,000		$	509,000
Depreciation & Amortization	$	218,000	$	67,000		$	65,000		$	350,000

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

Note 18 - Subsequent Events

6 Months Ended

May 31, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

18)

Subsequent Events

Significant Accounting Policies (Policies)	6 Months Ended
Significant Accounting Policies (Policies)	May 31, 2023
Accounting Policies [Abstract]
Basis of Accounting, Policy [Policy Text Block]	Statement Presentation The foregoing condensed consolidated financial statements of the Company are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the Company’s financial position and operating results for the interim periods. The financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2022. The results of operations for the three and six months ended May 31, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending November 30, 2023.
Use of Estimates, Policy [Policy Text Block]	Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the three and six months ended May 31, 2023. Actual results could differ from those estimates.
New Accounting Pronouncements, Policy [Policy Text Block]	Recently Issued Accounting Pronouncements Accounting Pronouncements Not Yet Adopted Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 adds a current expected credit loss (“CECL”) impairment model to U.S. GAAP that is based on expected losses rather than incurred losses. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within the year of adoption. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt ASU 2016-13 in fiscal 2024. The Company does not expect the application of the CECL impairment model to have a significant impact on its allowance for uncollectible amounts for accounts receivable.

Note 3 - Disaggregation of Revenue (Tables)

6 Months Ended

May 31, 2023

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended May 31, 2023
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	5,491,000	$	-	$	-	$	5,491,000
Farm equipment service parts		779,000		-		-		779,000
Steel cutting tools and inserts		-		-		776,000		776,000
Modular buildings		-		1,802,000		-		1,802,000
Modular building lease income		-		32,000		-		32,000
Other		98,000		22,000		8,000		128,000
	$	6,368,000	$	1,856,000	$	784,000	$	9,008,000

	Three Months Ended May 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	4,530,000	$	-	$	-	$	4,530,000
Farm equipment service parts		676,000		-		-		676,000
Steel cutting tools and inserts		-		-		738,000		738,000
Modular buildings		-		1,157,000		-		1,157,000
Modular building lease income		-		-		-		-
Other		110,000		52,000		12,000		174,000
	$	5,316,000	$	1,209,000	$	750,000	$	7,275,000

	Six Months Ended May 31, 2023
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	10,223,000	$	-	$	-	$	10,223,000
Farm equipment service parts		1,409,000		-		-		1,409,000
Steel cutting tools and inserts		-		-		1,574,000		1,574,000
Modular buildings		-		3,402,000		-		3,402,000
Modular building lease income		-		64,000		-		64,000
Other		181,000		32,000		18,000		231,000
	$	11,813,000	$	3,498,000	$	1,592,000	$	16,903,000

	Six Months Ended May 31, 2022
	Agricultural		Modular Buildings		Tools		Total
Farm equipment	$	8,045,000	$	-	$	-	$	8,045,000
Farm equipment service parts		1,234,000		-		-		1,234,000
Steel cutting tools and inserts		-		-		1,312,000		1,312,000
Modular buildings		-		2,009,000		-		2,009,000
Modular building lease income		-		-		-		-
Other		198,000		68,000		22,000		288,000
	$	9,477,000	$	2,077,000	$	1,334,000	$	12,888,000

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

6 Months Ended

May 31, 2023

Notes Tables

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

	May 31, 2023		November 30, 2022
Receivables	$	3,936,000	$	2,722,000
Assets		322,000		451,000
Liabilities		1,345,000		1,157,000

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

6 Months Ended

May 31, 2023

Notes Tables

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

	For the Three Months Ended
	May 31, 2023		May 31, 2022
Numerator for basic and diluted net income per share:

Net income	$	306,664	$	175,353

Denominator:
For basic net income per share - weighted average common shares outstanding		5,014,050		4,629,331
Effect of dilutive stock options		-		-
For diluted net income per share - weighted average common shares outstanding		5,014,050		4,629,331


Net Income per share - Basic:
Net Income per share	$	0.06	$	0.04

Net Income per share - Diluted:
Net Income per share	$	0.06	$	0.04

	For the Six Months Ended
	May 31, 2023		May 31, 2022
Numerator for basic and diluted net income (loss) per share:

Net income (loss)	$	648,874	$	(231,136	)

Denominator:
For basic net income (loss) per share - weighted average common shares outstanding		4,995,708		4,599,743
Effect of dilutive stock options		-		-
For diluted net income (loss) per share - weighted average common shares outstanding		4,995,708		4,599,743


Net Income (Loss) per share - Basic:
Net Income (Loss) per share	$	0.13	$	(0.05	)

Net Income (Loss) per share - Diluted:
Net Income (Loss) per share	$	0.13	$	(0.05	)

Note 6 - Inventory (Tables)

6 Months Ended

May 31, 2023

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	May 31, 2023			November 30, 2022
Raw materials	$	9,387,172		$	8,700,719
Work in process		343,206			624,781
Finished goods		3,328,295			3,029,099
Total Gross Inventory	$	13,058,673		$	12,354,599
Less: Reserves		(1,676,462	)		(1,743,047	)
Net Inventory	$	11,382,211		$	10,611,552

Note 7 - Accrued Expenses (Tables)

6 Months Ended

May 31, 2023

Notes Tables

Schedule of Accrued Liabilities [Table Text Block]

	May 31, 2023		November 30, 2022
Salaries, wages, and commissions	$	691,905	$	755,708
Accrued warranty expense		253,444		193,301
Other		289,313		334,195
	$	1,234,662	$	1,283,204

Note 8 - Assets Held for Lease (Tables)

6 Months Ended

May 31, 2023

Notes Tables

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

	May 31, 2023		November 30, 2022
Modular Buildings	$	209,172	$	400,325
Total assets held for lease	$	209,172	$	400,325

Note 9 - Product Warranty (Tables)

6 Months Ended

May 31, 2023

Notes Tables

Schedule of Product Warranty Liability [Table Text Block]

	Three Months Ended
	May 31, 2023			May 31, 2022
Balance, beginning	$	194,464		$	115,062
Provision charged to expense		115,739			73,088
Less amounts charged-off		(56,759	)		(98,601	)
Balance, ending	$	253,444		$	89,549

	Six Months Ended
	May 31, 2023			May 31, 2022
Balance, beginning	$	193,301		$	202,850
Provision charged to expense		231,335			94,712
Less amounts charged-off		(171,192	)		(208,013	)
Balance, ending	$	253,444		$	89,549

Note 10 - Loan and Credit Agreements (Tables)

6 Months Ended

May 31, 2023

Notes Tables

Schedule of Debt [Table Text Block]

	May 31, 2023		November 30, 2022
Bank Midwest loan payable in monthly installments of $19,648 including interest at 7.00%, due October 1, 2037	$	2,123,271	$	2,165,554
Bank Midwest loan payable in monthly installments of $2,972 including interest at 7.00%, due May 15, 2027		342,132		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		162,388		163,793
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		162,373		163,728
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		162,227		163,912
Total term debt	$	2,952,391	$	3,001,919
Less current portion of term debt		106,305		97,678
Term debt, excluding current portion	$	2,846,086	$	2,904,241

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

Year	Amount
2023	$	60,485
2024		111,753
2025		120,190
2026		128,691
2027		420,029
2028 and thereafter		2,111,243
	$	2,952,391

Note 13 - Leases (Tables)

6 Months Ended

May 31, 2023

Notes Tables

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

	May 31, 2023		November 30, 2022
Operating lease right-of-use assets (in other assets)	$	29,111		34,931

Current portion of operating lease liabilities (in accrued expenses)	$	10,315		10,915
Long-term portion of operating lease liabilities		18,796		24,016
Total operating lease liabilities	$	29,111		34,931

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

	May 31, 2023		November 30, 2022
Finance lease right-of-use assets (net of amortization in other assets)	$	581,456	$	540,052

Current portion of finance lease liabilities	$	236,385	$	170,835
Long-term portion of finance lease liabilities		844,279		602,131
Total finance lease liabilities	$	1,080,664	$	772,966

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

6 Months Ended

May 31, 2023

Notes Tables

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

	For the Three Months Ended
	May 31, 2023		May 31, 2022
Shares issued to directors (immediate vesting)		10,000		10,000
Shares issued to directors, employees, and consultants (three year vesting)		-		-
Total shares issued		10,000		10,000

	For the Six Months Ended
	May 31, 2023		May 31, 2022
Shares issued to directors (immediate vesting)		15,000		15,000
Shares issued to directors, employees, and consultants (three year vesting)		82,250		94,500
Unvested shares forfeit upon termination		-		(8,333	)
Total shares issued		97,250		101,167

Note 15 - Common Stock Purchase Agreement (Tables)

6 Months Ended

May 31, 2023

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

Note 17 - Segment Information (Tables)

6 Months Ended

May 31, 2023

Notes Tables

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

	Three Months Ended May 31, 2023
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	6,368,000	$	1,856,000	$	784,000		$	9,008,000
Income (loss) from operations		316,000		117,000		(14,000	)	$	419,000
Income (loss) before tax		197,000		220,000		(29,000	)	$	388,000
Total Assets		19,776,000		3,399,000		2,295,000		$	25,470,000
Capital expenditures		249,000		78,000		-		$	327,000
Depreciation & Amortization		125,000		81,000		44,000		$	250,000

	Three Months Ended May 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	5,316,000	$	1,209,000		$	750,000		$	7,275,000
Income (loss) from operations		447,000		(86,000	)		(40,000	)	$	321,000
Income (loss) before tax		366,000		(93,000	)		(51,000	)	$	222,000
Total Assets		18,389,000		2,998,000			2,520,000		$	23,907,000
Capital expenditures		321,000		10,000			4,000		$	335,000
Depreciation & Amortization		117,000		33,000			32,000		$	182,000

	Six Months Ended May 31, 2023
	Agricultural Products		Modular Buildings		Tools			Consolidated
Revenue from external customers	$	11,813,000	$	3,498,000	$	1,592,000		$	16,903,000
Income (loss) from operations	$	818,000	$	159,000	$	(9,000	)	$	967,000
Income (loss) before tax	$	604,000	$	257,000	$	(39,000	)	$	822,000
Total Assets	$	19,776,000	$	3,399,000	$	2,295,000		$	25,470,000
Capital expenditures	$	501,000	$	123,000	$	16,000		$	640,000
Depreciation & Amortization	$	250,000	$	158,000	$	81,000		$	489,000

	Six Months Ended May 31, 2022
	Agricultural Products		Modular Buildings			Tools			Consolidated
Revenue from external customers	$	9,477,000	$	2,077,000		$	1,334,000		$	12,888,000
Income (loss) from operations	$	318,000	$	(308,000	)	$	(126,000	)	$	(116,000	)
Income (loss) before tax	$	180,000	$	(323,000	)	$	(150,000	)	$	(293,000	)
Total Assets	$	18,389,000	$	2,998,000		$	2,520,000		$	23,907,000
Capital expenditures	$	474,000	$	24,000		$	11,000		$	509,000
Depreciation & Amortization	$	218,000	$	67,000		$	65,000		$	350,000

Note 1 - Description of the Company (Details Textual)	6 Months Ended
Note 1 - Description of the Company (Details Textual)	May 31, 2023
Number of Operating Segments	3

Note 3 - Disaggregation of Revenue (Details Textual) - USD ($)	May 31, 2023	May 31, 2022
Agricultural Products, Floorplan Program [Member]
Contract with Customer, Receivable, after Allowance for Credit Loss, Current, Total	$ 773,000	$ 725,000

Note 3 - Disaggregation of Revenue - Disaggregated Revenue From External Customer (Details) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2023	May 31, 2022
Revenue	$ 9,008,000	$ 7,275,000	$ 16,903,000	$ 12,888,000
Farm equipment	9,008,000	7,275,000	16,903,000	12,888,000
Farm Equipment [Member]
Revenue	5,491,000	4,530,000	10,223,000	8,045,000
Farm equipment	5,491,000	4,530,000	10,223,000	8,045,000
Farm Equipment Service Parts [Member]
Revenue	779,000	676,000	1,409,000
Farm equipment	779,000	676,000	1,409,000
Steel Cutting Tools and Inserts [Member]
Revenue	776,000	738,000	1,574,000	1,312,000
Farm equipment	776,000	738,000	1,574,000	1,312,000
Modular Buildings [Member]
Revenue	1,802,000	1,157,000	3,402,000	2,009,000
Farm equipment	1,802,000	1,157,000	3,402,000	2,009,000
Modular Buildings Lease Income [Member]
Revenue	32,000	0	64,000	0
Farm equipment	32,000	0	64,000	0
Product and Service, Other [Member]
Revenue	128,000	174,000	231,000	288,000
Farm equipment	128,000	174,000	231,000	288,000
Agricultural Products [Member]
Revenue	6,368,000	5,316,000	11,813,000	9,477,000
Farm equipment	6,368,000	5,316,000	11,813,000	9,477,000
Agricultural Products [Member] \| Farm Equipment [Member]
Revenue	5,491,000	4,530,000	10,223,000	8,045,000
Farm equipment	5,491,000	4,530,000	10,223,000	8,045,000
Agricultural Products [Member] \| Farm Equipment Service Parts [Member]
Revenue	779,000	676,000	1,409,000	1,234,000
Farm equipment	779,000	676,000	1,409,000	1,234,000
Agricultural Products [Member] \| Steel Cutting Tools and Inserts [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Agricultural Products [Member] \| Modular Buildings [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Agricultural Products [Member] \| Modular Buildings Lease Income [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Agricultural Products [Member] \| Product and Service, Other [Member]
Revenue	98,000	110,000	181,000	198,000
Farm equipment	98,000	110,000	181,000	198,000
Modular Buildings [Member]
Revenue	1,856,000	1,209,000	3,498,000	2,077,000
Farm equipment	1,856,000	1,209,000	3,498,000	2,077,000
Modular Buildings [Member] \| Farm Equipment [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Modular Buildings [Member] \| Farm Equipment Service Parts [Member]
Revenue	0	0		0
Farm equipment	0	0		0
Modular Buildings [Member] \| Steel Cutting Tools and Inserts [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Modular Buildings [Member] \| Modular Buildings [Member]
Revenue	1,802,000	1,157,000	3,402,000	2,009,000
Farm equipment	1,802,000	1,157,000	3,402,000	2,009,000
Modular Buildings [Member] \| Modular Buildings Lease Income [Member]
Revenue	32,000	0	64,000	0
Farm equipment	32,000	0	64,000	0
Modular Buildings [Member] \| Product and Service, Other [Member]
Revenue	22,000	52,000	32,000	68,000
Farm equipment	22,000	52,000	32,000	68,000
Tools [Member]
Revenue	784,000	750,000	1,592,000	1,334,000
Farm equipment	784,000	750,000	1,592,000	1,334,000
Tools [Member] \| Farm Equipment [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Tools [Member] \| Farm Equipment Service Parts [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Tools [Member] \| Steel Cutting Tools and Inserts [Member]
Revenue	776,000	738,000	1,574,000	1,312,000
Farm equipment	776,000	738,000	1,574,000	1,312,000
Tools [Member] \| Modular Buildings [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Tools [Member] \| Modular Buildings Lease Income [Member]
Revenue	0	0	0	0
Farm equipment	0	0	0	0
Tools [Member] \| Product and Service, Other [Member]
Revenue	8,000	12,000	18,000	22,000
Farm equipment	$ 8,000	$ 12,000	18,000	22,000
Farm Equipment Service Parts [Member]
Revenue				1,234,000
Farm equipment				$ 1,234,000
Farm Equipment Service Parts [Member] \| Farm Equipment Service Parts [Member]
Revenue			0
Farm equipment			$ 0

Note 4 - Contract Receivables, Contract Assets and Contract Liabilities (Details Textual) - USD ($)	6 Months Ended
	May 31, 2023	May 31, 2022	Nov. 30, 2022	Dec. 01, 2021
Contract with Customer, Liability, Revenue Recognized	$ 1,145,000	$ 559,000
Construction Contractor, Receivable, Excluding Contract Retainage	3,936,000		$ 2,722,000	$ 2,663,000
Contract with Customer, Asset, after Allowance for Credit Loss	322,000		451,000	177,000
Contract with Customer, Liability	$ 1,345,000		$ 1,157,000	$ 559,000

Note 4 - Contract Receivables, Contract Assets and Contract Liabilities - Contract With Customers (Details) - USD ($)	May 31, 2023	Nov. 30, 2022	Dec. 01, 2021
Receivables	$ 3,936,000	$ 2,722,000	$ 2,663,000
Assets	322,000	451,000	177,000
Liabilities	$ 1,345,000	$ 1,157,000	$ 559,000

Note 5 - Net Income (Loss) Per Share of Common Stock- Basic and Diluted Earnings Per Common Share (Details) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2023	May 31, 2022
Numerator for basic and diluted net income (loss) per share:
Net income (loss)	$ 306,664	$ 175,353	$ 648,874	$ (231,136)
Denominator:
For basic net income (loss) per share - weighted average common shares outstanding (in shares)	5,014,050	4,629,331	4,995,708	4,599,743
Effect of dilutive stock options (in shares)	0	0	0	0
For diluted net income (loss) per share - weighted average common shares outstanding (in shares)	5,014,050	4,629,331	4,995,708	4,599,743
Net Income (Loss) per share - Basic:
Net Income (Loss) per share (in dollars per share)	$ 0.06	$ 0.04	$ 0.13	$ (0.05)
Net Income (Loss) per share - Diluted:
Net Income (Loss) per share (in dollars per share)	$ 0.06	$ 0.04	$ 0.13	$ (0.05)

Note 6 - Inventory - Major Classes of Inventory (Details) - USD ($)	May 31, 2023	Nov. 30, 2022
Raw materials	$ 9,387,172	$ 8,700,719
Work in process	343,206	624,781
Finished goods	3,328,295	3,029,099
Total Gross Inventory	13,058,673	12,354,599
Less: Reserves	1,676,462	1,743,047
Net Inventory	$ 11,382,211	$ 10,611,552

Note 7 - Accrued Expenses - Major Components of Accrued Expenses (Details) - USD ($)	May 31, 2023	Nov. 30, 2022
Salaries, wages, and commissions	$ 691,905	$ 755,708
Accrued warranty expense	253,444	193,301
Other	289,313	334,195
Accrued Liabilities, Current	$ 1,234,662	$ 1,283,204

Note 8 - Assets Held for Lease (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2023	May 31, 2022
Operating Lease, Lease Income, Total				$ 0
Property Plant and Equipment, Lessor Asset Under Operating Lease, Next Rolling 12 Months	$ 37,606		$ 37,606
Gain (Loss) on Sale of Leased Assets, Net, Operating Leases	114,156	$ 0	114,156	$ 0
Sales [Member]
Operating Lease, Lease Income, Total	$ 32,000	$ 0	$ 64,000

Note 8 - Assets Held for Lease - Summary of Assets Held for Lease (Details) - USD ($)	May 31, 2023	Nov. 30, 2022
Modular Buildings	$ 209,172	$ 400,325
Modular Buildings [Member]
Modular Buildings	$ 209,172	$ 400,325

Note 9 - Product Warranty (Details Textual)	6 Months Ended
Note 9 - Product Warranty (Details Textual)	May 31, 2023
Standard Product Warrant Term	1 year

Note 9 - Product Warranty - Changes in Product Warranty Liability (Details) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2023	May 31, 2022
Balance, beginning	$ 194,464	$ 115,062	$ 193,301	$ 202,850
Settlements / adjustments	115,739	73,088	(231,335)	(94,712)
Provision charged to expense	(115,739)	(73,088)	231,335	94,712
Warranties issued	(56,759)	(98,601)	(171,192)	(208,013)
Less amounts charged-off	(56,759)	(98,601)	(171,192)	(208,013)
Balance, ending	$ 253,444	$ 89,549	$ 253,444	$ 89,549

Note 10 - Loan and Credit Agreements (Details Textual)				6 Months Ended	12 Months Ended
Note 10 - Loan and Credit Agreements (Details Textual)	Jun. 24, 2020 USD ($)	Jun. 18, 2020 USD ($)	Sep. 28, 2017 USD ($)	May 31, 2023 USD ($)	Nov. 30, 2022 USD ($)	Sep. 28, 2022	May 17, 2022 USD ($)
Long-Term Debt, Total				$ 2,952,391	$ 3,001,919
Term Loan Due October 2037 [Member]
Long-Term Debt, Total				$ 2,123,271	$ 2,165,554
Debt Instrument, Interest Rate, Stated Percentage				7.00%	7.00%
Debt Instrument, Periodic Payment				$ 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	$ 731
Proceeds from Issuance of Debt		$ 150,000
EIDL Assistance Program [Member]
Long-Term Debt, Total				162,388
Bank Midwest [Member]
Long-Term Line of Credit				4,704,059
Line of Credit Facility, Remaining Borrowing Capacity				$ 295,941
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
Bank Midwest [Member] \| Term Loan Due October 2037 [Member]
Long-Term Debt, Total				$ 2,600,000
Debt Instrument, Periodic Payment				$ 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] \| Roof Term Loan [Member]
Long-Term Debt, Total				$ 342,132			$ 350,000
Debt Instrument, Interest Rate, Stated Percentage				7.00%
Debt Instrument, Periodic Payment				$ 2,972
Debt Instrument, Number of Periodic Payment							59
Debt Instrument, Estimated Balloon Payments				289,797
Bank Midwest [Member] \| Reserve Line of Credit [Member]
Long-Term Debt, Total							$ 350,000
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				1.25%
Line of Credit Facility, Interest Rate During Period				9.50%
Bank Midwest [Member] \| Term Loan Due October 2037 [Member]
Debt Instrument, Interest Rate, Stated Percentage				7.00%		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%

Note 10 - Loan and Credit Agreements - Summary of Term Debt (Details) - USD ($)	May 31, 2023	Nov. 30, 2022
Long-Term Debt, Total	$ 2,952,391	$ 3,001,919
Less current portion of term debt	106,305	97,678
Term debt, excluding current portion	2,846,086	2,904,241
Term Loan Due October 2037 [Member]
Long-Term Debt, Total	2,123,271	2,165,554
Bank Midwest Loan 2 [Member]
Long-Term Debt, Total	342,132	344,932
SBA Loan One [Member]
Long-Term Debt, Total	162,388	163,793
SBA Loan Two [Member]
Long-Term Debt, Total	162,373	163,728
SBA Loan Three [Member]
Long-Term Debt, Total	$ 162,227	$ 163,912

Note 10 - Loan and Credit Agreements - Summary of Term Debt (Details) (Parentheticals) - USD ($)	6 Months Ended	12 Months Ended
	May 31, 2023	Nov. 30, 2022
Term Loan Due October 2037 [Member]
Debt Instrument, Periodic Payment	$ 19,648	$ 19,648
Debt Instrument, Interest Rate, Stated Percentage	7.00%	7.00%
Debt Instrument, Maturity Date	Oct. 01, 2037	Oct. 01, 2037
Debt Instrument, Interest Rate, Stated Percentage	7.00%	7.00%
Bank Midwest Loan 2 [Member]
Debt Instrument, Periodic Payment	$ 2,972	$ 2,972
Debt Instrument, Interest Rate, Stated Percentage	7.00%
Debt Instrument, Interest Rate, Stated Percentage	7.00%
SBA Loan One [Member]
Debt Instrument, Periodic Payment	$ 731	$ 731
Debt Instrument, Interest Rate, Stated Percentage	3.75%	3.75%
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	$ 731	$ 731
Debt Instrument, Interest Rate, Stated Percentage	3.75%	3.75%
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	$ 731	$ 731
Debt Instrument, Interest Rate, Stated Percentage	3.75%	3.75%
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

Note 10 - Loan and Credit Agreements - Summary of Minimum Maturities of Term Debt (Details) - USD ($)	May 31, 2023	Nov. 30, 2022
2023	$ 60,485
2024	111,753
2025	120,190
2026	128,691
2027	420,029
2028 and thereafter	2,111,243
Long-Term Debt	$ 2,952,391	$ 3,001,919

Note 11 - Income Taxes (Details Textual)	Nov. 30, 2023
Forecast [Member]
Net Operating Losses and Tax Credit, Offset Tax Liability, Percentage	100.00%

Note 12 - Related Party Transactions (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2023	May 31, 2022	Nov. 30, 2022
Revenue from Contract with Customer, Including Assessed Tax	$ 9,008,000	$ 7,275,000	$ 16,903,000	$ 12,888,000
Accrued Liabilities, Current	1,234,662		1,234,662		$ 1,283,204
Related Party [Member]
Revenue from Contract with Customer, Including Assessed Tax	0	0		0
Accounts Receivable, after Allowance for Credit Loss	0	0	0	0
Operating Costs and Expenses	3,893	6,203	8,063	15,552
Accrued Liabilities, Current	$ 1,326	$ 1,423	$ 1,326	$ 1,423

Note 13 - Leases - Components of Operating Lease Liabilities (Details) - USD ($)	May 31, 2023	Nov. 30, 2022
Operating lease right-of-use assets (other assets)	$ 29,111	$ 34,931
Current portion of operating lease liabilities (accrued expenses)	10,315	10,915
Long-term portion of operating lease liabilities	18,796	24,016
Total operating lease liabilities	$ 29,111	$ 34,931

Note 13 - Leases - (Details) - USD ($)	May 31, 2023	Nov. 30, 2022
Finance lease right-of-use assets (net of amortization in other assets)	$ 581,456	$ 540,052
Current portion of finance lease liabilities	236,385	170,835
Long-term portion of finance lease liabilities	844,279	602,131
Total finance lease liabilities	$ 1,080,664	$ 772,966

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

Note 14 - Equity Incentive Plan and Stock Based Compensation - Summary of Shares Issued (Details) - shares	3 Months Ended		6 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2023	May 31, 2022
Shares issued (in shares)	10,000	10,000	97,250	101,167
Unvested shares forfeit upon termination (in shares)			0	(8,333)
Director [Member] \| Vesting Immediately [Member]
Shares issued (in shares)	10,000	10,000	15,000	15,000
Employees, Directors, and Consultants [Member] \| Awards with Three-year Vesting [Member]
Shares issued (in shares)	0	0	82,250	94,500

Note 15 - Common Stock Purchase Agreement (Details Textual) - USD ($)							6 Months Ended
	Sep. 23, 2022	Aug. 23, 2022	Aug. 15, 2022	Aug. 03, 2022	Jul. 25, 2022	Mar. 29, 2022	May 31, 2023	May 31, 2022	Nov. 30, 2022
Common Stock, Par or Stated Value Per Share						$ 0.01	$ 0.01		$ 0.01
Stock Issued During Period, Value, New Issues								$ 117,200
Alumni Capital [Member]
Common Stock Purchase Agreement, Maximum Gross Proceeds from Issuance or Sale of Equity						$ 3,000,000
Stock Issued During Period, Shares, New Issues (in shares)	65,000	65,000	50,000	50,000	50,000	20,000	280,000	20,000
Common Stock Purchase Agreement, Shares to be Issued						20,000
Equity Issuance Cost, Total								$ 134,000
Stock Issued During Period, Value, New Issues								$ 117,000

Note 15 - Common Stock Purchase Agreement - Summary of Shares Purchased by Alumni Capital (Details) - Alumni Capital [Member] - USD ($)							6 Months Ended
	Sep. 23, 2022	Aug. 23, 2022	Aug. 15, 2022	Aug. 03, 2022	Jul. 25, 2022	Mar. 29, 2022	May 31, 2023	May 31, 2022
Common stock purchase agreement (in shares)	65,000	65,000	50,000	50,000	50,000	20,000	280,000	20,000
7/25/2022 (in dollars per share)	$ 1.76	$ 1.99	$ 2.00	$ 1.98	$ 2.07
7/25/2022	$ 114,120	$ 129,253	$ 99,910	$ 98,940	$ 103,305		$ 545,528

Note 17 - Segment Information (Details Textual)	6 Months Ended
Note 17 - Segment Information (Details Textual)	May 31, 2023
Number of Reportable Segments	3

Note 17 - Segment Information - Segment Reporting Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2023	May 31, 2022	Nov. 30, 2022
Revenue from external customers	$ 9,007,874	$ 7,275,353	$ 16,902,659	$ 12,888,420
Income (loss) from operations	418,610	321,093	967,196	(115,784)
Total Assets	25,470,337		25,470,337		$ 23,948,314
Capital expenditures			639,833	509,097
Depreciation & Amortization			488,806	350,435
Operating Segments [Member]
Revenue from external customers	9,008,000	7,275,000	16,903,000	12,888,000
Income (loss) from operations	419,000	321,000	967,000	(116,000)
Income (loss) before tax	388,000	222,000	822,000	(293,000)
Total Assets	25,470,000	23,907,000	25,470,000	23,907,000
Capital expenditures	327,000	335,000	640,000	509,000
Depreciation & Amortization	250,000	182,000	489,000	350,000
Operating Segments [Member] \| Agricultural Products [Member]
Revenue from external customers	6,368,000	5,316,000	11,813,000	9,477,000
Income (loss) from operations	316,000	447,000	818,000	318,000
Income (loss) before tax	197,000	366,000	604,000	180,000
Total Assets	19,776,000	18,389,000	19,776,000	18,389,000
Capital expenditures	249,000	321,000	501,000	474,000
Depreciation & Amortization	125,000	117,000	250,000	218,000
Operating Segments [Member] \| Modular Buildings [Member]
Revenue from external customers	1,856,000	1,209,000	3,498,000	2,077,000
Income (loss) from operations	117,000	(86,000)	159,000	(308,000)
Income (loss) before tax	220,000	(93,000)	257,000	(323,000)
Total Assets	3,399,000	2,998,000	3,399,000	2,998,000
Capital expenditures	78,000	10,000	123,000	24,000
Depreciation & Amortization	81,000	33,000	158,000	67,000
Operating Segments [Member] \| Tools [Member]
Revenue from external customers	784,000	750,000	1,592,000	1,334,000
Income (loss) from operations	(14,000)	(40,000)	(9,000)	(126,000)
Income (loss) before tax	(29,000)	(51,000)	(39,000)	(150,000)
Total Assets	2,295,000	2,520,000	2,295,000	2,520,000
Capital expenditures	0	4,000	16,000	11,000
Depreciation & Amortization	$ 44,000	$ 32,000	$ 81,000	$ 65,000

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