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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 30, 1998
Tollycraft Yacht Corporation
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
0-21087 86-0849925
(Commission File Number) (I.R.S. Employer Identification
No.)
2200 Clinton Avenue, Kelso, Washington 98626
(Address of principal executive offices, including Zip Code)
(360) 414-5910
(Registrant's telephone number, including Area Code)
(Former name or former address, if changed since last report)
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Item 5. Other Events.
TOLLYCRAFT ANNOUNCED JUNE 30, 1998 THAT IT HAS COMPLETED ITS
NEGOTIATIONS WITH TWO OF ITS LARGEST CREDITORS TO CONVERT ITS
TOTAL DEBT OF APPROXIMENTLY $14,000,000 TO EQUITY. THIS CONVERSION
WILL REPRESENT 100% PAYMENT TO ALL OF ITS CREDITORS AS OF JUNE
30TH, 1998. THE CONVERSION WILL BE IN THE FORM OF FREE TRADING
PREFERRED SHARES OF TOLLYCRAFT STOCK. IN ADDITION TO THE SHARES
BEING ISSUED EACH CREDITOR WILL RECEIVE WARRANTS TO PURCHASE
ADDITIONAL COMMON SHARES OF TOLLYCRAFT STOCK. THE WARRANT PACKAGE
WILL BE AVAILABLE TO PREFERRED SHAREHOLDERS AS OF SPECIFIC DATES
OVER THE NEXT 36 MONTHS.
THIS COMPLETES STEP TWO OF A THREE STEP PLAN FOR TOLLY TO MOVE
FORWARD ON A PROFITABLE LEVEL OF OPERATION AND TO CONTINUE ITS
SUCCESS WELL INTO THE 21ST CENTURY.
THE COMPANIES FIRST STEP WAS THE RELOCATION OF ITS PRODUCTION
FACILITY TO MEXICO AND THE SIGNING OF A JOINT VENTURE AGREEMENT
WITH A MEXICAN PARTNER. THE SECOND WAS THE DEBT CONVERSION AND THE
THIRD WILL BE THE CAPITAL RAISE OF $2,500,000. THESE FUNDS WILL BE
USED FOR THE OPERATIONAL ASPECTS OF THE BUSINESS HERE IN THE
UNITED STATES AND THE RELOCATION OF THE CORPORATE OFFICES TO
FLORIDA FROM THE STATE OF WASHINGTON WHERE IT HAS OPERATED FOR THE
LAST 65 YEARS. TOLLYCRAFT HAS RECEIVED ASSURANCES THAT A "BEST
EFFORTS" OFFERRING WILL BEGIN AS SOON AS STEPS ONE AND TWO HAVE
BEEN CONCLUDED.
THE MEXICAN MANUFACTURING FACILITY WILL BE USED TO PRODUCE OTHER
LINES OF VESSELS IN ADDITION TO TOLLYCRAFT'S CURRENT BACKLOG.
TOLLYCRAFT INTENDS ON ACQUIRING A TOOLING MACHINE FOR THE
PRODUCTION OF ITS MOLDS AND FOR USE BY OTHER BOAT COMPANIES TO
INSURE THE LATEST IN DESIGN AND MANUFACTURING.
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 hereunto duly authorized.
TOLLYCRAFT YACHT CORPORATION
By: /s/ Peter D. Hobbs
_____________________________
Peter D. Hobbs, Chairman
Dated: June 30, 199
