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) July 27, 1999
BUTLER NATIONAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 0-1678 41-0834293
(State of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
19920 West 161st Street, Olathe, Kansas 66062
(Address of Principal Executive Office)(Zip Code)
Registrant's telephone number, including area code: (913) 780-9595
Former Name, former address and former fiscal year if changed since last
report:
Not Applicable
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Item 5. Other events.
Butler National Corporation reported that on July 27, 1999, the
Company issued a press release regarding the settlement of affairs of
discontinued food distribution subsidiary, RF, Inc. See exhibit 99.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On July 27, 1999, the Company reported the status of the $1,000
Series B 6% Cumulative Convertible Preferred Stock since the original
issues in 1996 and 1997. The Company issued a face value of $1,250,000 of
Convertible Debentures and $1,500,000 of Convertible Preferred Stock. As of
July 27, 1999, the outstanding face values are $618,000 and $551,000
respectively. Shares of common stock issued are 904,832 and 3,170,185
respectively (See Table 1). The shares were issued to accredited investors.
The transactions were executed in reliance upon the exemption from
registration afforded by Regulation S as promulgated by the Securities and
Exchange Commission, under the Securities Act of 1933, as amended.
Table 1.
<TABLE>
CLASS B CONVERTIBLE PREFERRED:
Shares of
Date Face Value Comm Issued
<S> <C> <C> <C>
Original Issue Dec-97 $1,500,000
Total Class B Conv Pref Issued $1,500,000
Converted to Common Stock (715,000) 1,389,099
through May 21, 1998
Balance outstanding May 21, 1998: $ 785,000 1,389,099
Converted after May 21, 1998:
through April 30, 1999 ( 92,000) 617,956
Balance at April 30, 1999 $ 693,000 2,007,055
Converted April 30, 1999
through May 17, 1999 ( 60,000) 434,782
Balance at May 17, 1999 $ 633,000 2,441,837
Converted May 17, 1999
through July 27, 1999 (82,000) 728,348
Balance at July 27, 1999 $ 551,000 3,170,185
CONVERTIBLE DEBENTURE
Original Issue Jun-96 $ 750,000
Nov-96 500,000
Total conv. deb. 1,250,000
Converted to Common Stock
through May 21, 1998 (600,000) 737,992
Balance outstanding May 21, 1998 $ 650,000 737,992
Converted after May 21, 1998:
through April 30, 1999 - -
Balance at April 30, 1999 $ 650,000 737,992
Converted April 30, 1999
through May 17, 1999 ( 32,000) 166,840
Balance at May 17, 1999 $ 618,000 904,832
Converted May 17, 1999
through July 27, 1999 - -
Balance at July 27, 1999 $ 618,000 904,832
TOTAL CLASS B CONV. PREFERRED AND CONVERTIBLE DEBENTURE
Original Issue Jun-96 $ 750,000
Nov-96 500,000
Dec-97 1,500,000
Total Issued $ 2,750,000
Total Converted to Common Stock
through May 21, 1998 (1,315,000) 2,127,091
Total balance outstanding May 21, 1998 $ 1,435,000 2,127,091
Total Converted after May 21, 1998
through April 30, 1999 $ (92,000) 617,956
Total balance at April 30, 1999 $ 1,343,000 2,745,047
Total Converted April 30, 1999
through May 17, 1999 (92,000) 601,622
Total Balance at May 17, 1999 $ 1,251,000 3,346,669
Total Converted May 17, 1999
through July 27, 1999 $ 82,000 728,348
Total Balance at July 27, 1999 $ 1,169,000 4,075,017
</TABLE>
<PAGE>
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 authorized.
Butler National Corporation
(Registrant)
July 27, 1999 /S/Clark D. Stewart
(Date) Clark D. Stewart, President
and Chief Executive Officer
July 27, 1999 /S/Robert E. Leisure
(Date) Robert E. Leisure
Chief Financial Officer
Exhibit 99
FOR IMMEDIATE RELEASE July 27, 1999
Butler National Corporation (OTCBB: BUKS) Completes Settlement of Affairs
of Discontinued Food Distribution Subsidiary, RF, Inc.
(OLATHE, KS) July 27, 1999 - Butler National Corporation (OTCBB: BUKS)
reported that on July 20, 1999, the Company completed all the terms of a
settlement agreement with the Trustee and the United States Bankruptcy Court
regarding the involuntary bankruptcy of its discontinued and former Food
Distribution Subsidiary, RF, Inc.
Highlights of the report include:
As discussed at the last Annual Meeting of the Shareholders and as
reported from time-to-time in its Annual Report on Form 10-K, Form 8-K, and
related news articles, the Company discontinued its Food Distribution business
segment including RF, Inc. ("RFI") and Valu Foods, Inc. ("VFI") because of an
involuntary bankruptcy filing against RF, Inc. and other considerations.
Settlement with the Trustee and the Court completes the affairs of this
business segment.
As of April 30, 1998, the operations of RFI were deconsolidated due to
the Chapter 7 involuntary bankruptcy liquidation of the wholly owned
subsidiary. The entire investment in RFI and VFI was written-off as a loss on
discontinued operations.
Since fiscal 1998, approximately nine months of management's time has
been focused on the resolution of the RFI bankruptcy matter and the protection
of Butler National's assets. This effort was very expensive to the Company in
terms of management time, professional fees and the diversion of management's
attention away from the daily operation of the core businesses as well as the
analysis of business opportunities related to the core businesses.
In the fall of 1998, the RFI bankruptcy trustee filed an action
alleging a number of claims against the Company and its officers including a
claim for repayment of preferential payments to the bankruptcy estate.
The bankruptcy judge determined that RFI was not solvent at April 30,
1997, and therefore, the Company was liable to the RFI estate for $430,000 in
preferential payments made to the Company in fiscal 1998. Although management
of the Company strongly disagreed with the judge's ruling, the Company had
already expended professional fees of approximately $380,000 and considerable
corporate payroll and other expenses directly related to the RFI matter.
Therefore, continued appeals of this matter were not in the best interest of
the shareholders of the Company. As a result, the Company settled with the
Trustee by paying $250,000 to the Court.
Because the Company guaranteed the RFI debt to the bank, the Company
assumed an additional liability of $908,209. The Company does not expect to
recover a material amount from the disposal of the assets and has expensed
approximately $2,000,000 as a loss from discontinued operations.
Management Comments:
"This settlement is the final action related to the discontinued Food
Distribution segment. This segment has required a considerable and
disproportional amount of management time and attention over the past three
years to protect the assets of the shareholders. We can now focus our efforts
on the daily opportunities for more profitable operations of the Company as
well as the separation between Butler's core business and the spin off of the
gaming operations. We believe that by taking the strategic step to operate
each segment as a business unit, allowing each company to focus on its own
businesses and markets therefore enhancing their ability to achieve their full
potential we can unlock greater value for each of these businesses and the
shareholders of Butler National," commented Clark D. Stewart, President of the
Company.
Our Business:
Butler National Corporation operates in the aerospace and services
business segments. The Services segment includes electronic monitoring of
water pumping stations, temporary employee services, Indian gaming management
services and administrative management services. Aerospace includes the
manufacture of airborne electronic switching equipment for Boeing (McDonnell
Douglas) and structural modification of business aircraft.
Forward Looking Information:
The information set forth above may include "forward-looking" information
as outlined in the recently enacted Private Securities Litigation Reform Act
of 1995. The Cautionary Statements filed by the Company as Exhibit 99 of its
FORM 10-Q filing are incorporated herein by reference and investors are
specifically referred to such Cautionary Statements for a discussion of
factors which could affect the Company's operations and forward-looking
statements contained herein.
FOR MORE INFORMATION, OR FOR A COMPLETE COPY OF BUTLER NATIONAL'S LATEST 10-Q,
CONTACT:
William A. Griffith, Investor Relations Phone (913)
780-9595
Butler National Corporation Fax (913)
780-5088
19920 West 161st Street butlernational.com
Olathe, KS 66062
