ARTS WAY MANUFACTURING CO INC 8-K

What Happened
Art’s-Way Manufacturing Co., Inc. announced on December 19, 2025 that it entered into a Solar System Purchase Agreement with Midwest Solar Installers for the sale and installation of a solar energy system at the company’s principal offices. The contract price is $1,402,336 (subject to final site survey, engineering review, and any agreed change orders). The company paid a 5% deposit at signing.

Key Details

• Contract price: $1,402,336 (subject to final site/engineering review and written change orders).
• Payment schedule: 5% paid at signing; 65% due no later than three days before scheduled equipment delivery; 30% due within three days after passing final electrical inspection.
• Collateral: Midwest Solar Installers holds a security interest in the solar equipment to secure payment.
• Estimated benefit: Company expects the system to eliminate 100% of electricity costs for ~30 years (estimated equipment life), based on current electricity costs of ~ $155,000/year and assuming excess energy is put back on the local grid.
• Incentives/financing: Company applied for a USDA Rural Energy for America Program (REAP) grant (potentially covering 25% of eligible costs) and up to 50% in USDA loan guarantees; eligible for a 30% Investment Tax Credit (limited by future taxable income). Deposit refundable if the USDA grant is not awarded (less documented expenses) if the company elects not to proceed.
• Termination & protections: Agreement includes mutual termination rights in specific circumstances (e.g., proposed price increases or required infrastructure changes), mutual indemnification for third‑party claims (excluding each party’s own negligence, willful misconduct, or fraud), and customary limitation of liability provisions.

Why It Matters
This is a material capital project that could materially reduce Art’s‑Way’s ongoing electricity expense (current ~ $155k/year) and provide tax and grant financing benefits if approved. The $1.4M contract and associated payment and collateral terms are concrete near‑term cash and operational commitments investors should note. The outcome of the USDA REAP application and any change orders after engineering review will affect final cost, timing and the company’s cash outlay.