[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended August 31, 2020, reflect a year-over-year increase in sales but a wider net loss [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of August 31, 2020, total assets were $19.32 million, a slight decrease from $19.35 million, while total liabilities increased significantly to $9.02 million, leading to a decrease in total stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Aug 31, 2020 | Nov 30, 2019 | Change | | :--- | :--- | :--- | :--- | | Total Current Assets | $11,088 | $11,407 | ($319) | | Total Assets | $19,320 | $19,347 | ($27) | | Total Current Liabilities | $5,022 | $5,203 | ($181) | | Total Liabilities | $9,019 | $7,553 | $1,466 | | Total Stockholders' Equity | $10,300 | $11,794 | ($1,494) | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the nine months ended August 31, 2020, sales increased by 10.2% to $16.94 million, but the net loss widened to $(1.66) million due to higher operating expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Nine Months Ended Aug 31, 2020 | Nine Months Ended Aug 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Sales | $16,937 | $15,375 | +10.2% | | Gross Profit | $2,897 | $2,569 | +12.8% | | Loss from Operations | $(1,908) | $(1,397) | +36.6% | | Net Loss | $(1,663) | $(1,251) | +32.9% | | Net Loss Per Share | $(0.38) | $(0.29) | +31.0% | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended August 31, 2020, net cash used in operating activities was $(359) thousand, a significant shift from the prior year, while financing activities provided $792 thousand, largely from new term debt Cash Flow Summary (in thousands) | Cash Flow Activity | Nine Months Ended Aug 31, 2020 | Nine Months Ended Aug 31, 2019 | | :--- | :--- | :--- | | Net cash (used in) operating activities | $(359) | $377 | | Net cash provided by (used in) investing activities | $(432) | $532 | | Net cash provided by (used in) financing activities | $792 | $(907) | | Net increase in cash | $1 | $2 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's structure, accounting policies, and financial components, including the acquisition of PPP and EIDL loans due to COVID-19 and a new equity incentive plan - The company is organized into **three operating segments**: Agricultural Products (farm equipment), Modular Buildings (animal containment and labs), and Tools (steel cutting tools)[15](index=15&type=chunk)[83](index=83&type=chunk) - The COVID-19 pandemic impacted second and third-quarter 2020 results, causing a temporary **17% workforce reduction** due to self-quarantine, though all staff had returned by the end of May 2020[17](index=17&type=chunk) - In April 2020, the company obtained a **$1,242,900 loan** under the Paycheck Protection Program (PPP), which may be partially or fully forgiven[52](index=52&type=chunk) - In June 2020, the company secured **three Economic Injury Disaster Loans (EIDL) totaling $450,000** for working capital purposes, with a **3.75% interest rate** and a **30-year term**[58](index=58&type=chunk) - The Art's-Way Manufacturing Co., Inc. 2020 Equity Incentive Plan was approved, replacing the 2011 plan and adding **500,000 shares** for issuance[78](index=78&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a 10.2% increase in consolidated sales for the first nine months of fiscal 2020, driven by growth across all three segments, despite a wider net loss due to increased administrative expenses Consolidated Sales Performance (in thousands) | Period | FY 2020 | FY 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three Months | $6,465 | $5,504 | $961 | +17.5% | | Nine Months | $16,937 | $15,375 | $1,562 | +10.2% | - Administrative expenses increased significantly for the nine-month period to **$3.2 million** from **$2.5 million** in the prior year, due to non-recurring costs including management recruitment (**$133k**), dual CEO/director salaries during transition (**$68k**), and pandemic-related employee rewards (**$197k**)[102](index=102&type=chunk) - The consolidated order backlog as of October 6, 2020, was **$3.54 million**, a significant decrease from **$7.56 million** a year prior, mainly due to progress on a large modular building contract[106](index=106&type=chunk) - The company's primary source of funds for the nine months was financing activities, including a PPP loan and three EIDL loans, with management expecting a significant portion of the PPP loan to be forgiven[113](index=113&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Art's-Way is not required to provide this disclosure - The company is not required to provide disclosure for this item as it qualifies as a smaller reporting company[117](index=117&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of August 31, 2020, due to an ongoing material weakness related to estimating completed subcontract work in the modular buildings segment - Disclosure controls and procedures were deemed **not effective** as of August 31, 2020, due to an ongoing material weakness[117](index=117&type=chunk) - The material weakness relates to the estimation of completed subcontract work on modular building contracts, first identified as of November 30, 2019[118](index=118&type=chunk) - New internal controls were implemented in Q1 2020 to remediate the weakness, including enhanced review and sign-off procedures for receiving transactions and large subcontract work, though remediation is not yet considered complete as testing has not been performed[119](index=119&type=chunk) [PART II – OTHER INFORMATION](index=29&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material pending legal proceedings - The company reports no material pending legal proceedings[120](index=120&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Art's-Way is not required to provide this disclosure - The company is not required to provide disclosure for this item as it qualifies as a smaller reporting company[121](index=121&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None reported[121](index=121&type=chunk) [Defaults Upon Senior Securities](index=30&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None reported[121](index=121&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including promissory notes related to SBA loans, a consulting agreement, and officer certifications

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, 2020 or ☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ Commission File No. 000-05131 ART'S-WAY MANUFACTURING CO., INC. (Exact name of registrant as specified in its charter) DELAWARE 42-0920725 (Sta ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock $.01 par value ARTW The Nasdaq Stock Market LLC FORM 10-Q (Mark One) [x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended February 29, 2020 or [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Ex ...

Revenue Segments - Agricultural Products segment accounted for 59.0% of net revenue in the 2019 fiscal year, down from 72.7% in 2018[12] - Modular Buildings segment contributed 31.7% to net revenue in 2019, significantly up from 15.8% in 2018[13] - Tools segment represented 9.3% of net revenue in 2019, a decrease from 11.5% in 2018[14] - Consolidated net sales for the fiscal year 2019 totaled $22,889,000, a 16.0% increase from $19,727,000 in 2018, driven by a 133.5% increase in the Modular Buildings segment[81] - Agricultural Products segment sales decreased by $836,000, or 5.8%, to $13,508,000 in 2019, primarily due to decreased demand for portable feed equipment[85] - Modular Buildings segment net sales increased by $4,151,000, or 133.5%, to $7,260,000 in 2019, attributed to increased operating lease activity and progress on an $8.5 million project[87] - Tools segment net sales decreased by $153,000, or 6.7%, to $2,121,000 in 2019, primarily due to the loss of a large volume customer[88] Financial Performance - Consolidated gross profit as a percentage of net sales was 17.2% in 2019, compared to 17.8% in 2018, with variations across segments[81] - Consolidated operating expenses decreased by 17.9% to $5,424,000 in 2019, with the Agricultural Products segment accounting for $3,796,000 of total expenses[81] - Agricultural Products segment operating expenses decreased by $1,163,000, or 23.5%, to $3,796,000 in 2019, reflecting reduced selling expenses and one-time non-cash expenses in 2018[86] - Consolidated net loss for continuing operations was $(1,420,000) in 2019, a decrease in loss of $1,916,000 compared to $(3,336,000) in 2018[83] - The net loss for the year ended November 30, 2019, was $1,419,586, significantly improved from a net loss of $3,386,902 in 2018, reflecting a reduction of about 58%[112] - Cash provided by operating activities for continuing operations was $807,753 in 2019, compared to cash used of $(1,026,522) in 2018[116] Assets and Liabilities - Total liabilities decreased by $735,000 compared to the 2018 fiscal year, with total borrowings reduced by $1,241,000 in fiscal year 2019[66] - Current assets decreased from $12,145,158 in November 30, 2018 to $11,407,230 in November 30, 2019, while current liabilities decreased from $5,765,381 to $5,202,764, resulting in working capital of $6,204,466[98] - Total assets decreased from $21,325,474 in November 30, 2018 to $19,346,938 in November 30, 2019[107] - Long-term debt, excluding the current portion, decreased from $2,523,018 to $2,350,592[107] - The Company has a total term debt of $2,435,993 as of November 30, 2019, down from $2,750,477 in the previous year, reflecting a decrease of approximately 11.4%[192] Operational Developments - The company introduced the 8215 grinder mixer with a capacity of 215 bushels, the largest in the industry, during the 2019 fiscal year[28] - New manure spreaders, the X700 and X900, were put into mass production in 2019, featuring a guillotine slop gate for accurate metering[28] - Development of a sonar leveling axle for sugar beet harvesters was completed in 2019 to enhance harvesting capabilities[28] - The company has engaged in continuous improvement projects, including warehouse reorganization and cost-cutting measures, to enhance operational effectiveness[65] Customer and Sales Information - One customer accounted for over 21% of consolidated revenues during the 2019 fiscal year due to a large contract in the Modular Buildings segment[43] - Sales to OEM customers accounted for approximately 1% of consolidated sales in the 2019 fiscal year, down from 5% in 2018[42] - International sales accounted for 5.0% of consolidated sales during the 2019 fiscal year[26] Tax and Regulatory Matters - Effective tax rate for continuing operations increased to 19.7% in 2019 from 13.3% in 2018, due to a one-time adjustment to the deferred tax asset[84] - The statutory federal income tax rate remains at 21.0% for both November 30, 2019, and November 30, 2018[207] - The Company reported a total income tax expense of $(349,234) for the fiscal year ending November 30, 2019, compared to $(526,740) in 2018, showing a reduction of approximately 33.6%[206] Research and Development - Research and development costs for fiscal year 2019 were $149,000, down from $178,000 in 2018, reflecting a reduction of about 16.3%[151] Inventory and Receivables - Total gross inventory decreased to $11,553,499 from $13,148,910, with net inventory at $8,778,507 compared to $10,257,102 for the same period[170] - Contract receivables as of November 30, 2019, were $115,000, down from $159,000 in 2018, a decrease of about 27.7%[149] - Contract assets increased significantly to $727,000 in 2019 from $99,000 in 2018, representing a growth of approximately 634.3%[149] - Contract liabilities decreased to $89,000 in 2019 from $185,000 in 2018, a decline of about 51.9%[149] Future Outlook - The company anticipates that further increases in the value of agricultural production will benefit its business, while decreases may harm financial results[90] - The company believes its current cash and financing arrangements provide sufficient cash to finance operations for the next 12 months[98]